"Almost every project is conceived because it offers certain people a chance to make money."
This amazing admission was made in January 2007 by then-ANC secretary general Kgalema Motlanthe in an interview in the Financial Mail on the ANC's business interests.
It lays bare the rot behind so much of the tender controversies and service delivery failures by non-performing companies.
I have concluded that corruption is pervasive in Gauteng, despite the public perception that it is a better run province than others.
The corruption is more hidden and highly sophisticated, with top level collusion, siphoning off vast amounts of money into private bank accounts.
Political appointments grease the wheels of this corruption machine.
This isn't free competitive capitalism that can uplift the people. It's "comrade capitalism", where buddies are looked after at the expense of the poor.
The Carl Niehaus saga illustrates how a dishonest and spendthrift man landed top jobs because of his political connections.
He was irregularly appointed by Paul Mashatile as the CEO of the Gauteng Economic Development Agency (GEDA) in April 2005 (April Fool's day, appropriately enough!)
If he had been properly interviewed, and reference checks done, his fake degrees and trail of debts would have been discovered.
Moss Ngoasheng, who chaired the GEDA board, only learnt about Niehaus' appointment when he read it in the newspaper, and resigned in disgust.
Mashatile then appointed Keith Khosa as acting board chairman, despite the fact that Khosa was the senior official in the Finance department with oversight over GEDA, an outrageous conflict of interest.
When Niehaus' fraud was discovered, he was not only allowed to resign without being charged, but thanked for his services at a staff meeting and given a farewell lunch at a swanky restaurant.
The businessman allegedly implicated was also let off the hook.
Mashatile says that there was no reason to report Niehaus because "there was no money lost", but this is a poor excuse as a crime was still committed with the intention to defraud.
This is certainly not the way to fight corruption, which is why the charge that I have laid against Niehaus, Mashatile and others will be an important test case for accountability.
According to a victim survey by the Institute for Security Studies, Gauteng is the corruption capital of South Africa .
45% of the Gauteng respondents said they had been asked for a bribe in 2007, up from 34% in 2003. This is more than double the reported rate in any other province.
Many bribes may be small, but over time the impact can be devastating in undermining trust in the state and planting the seeds for violent destabilisation, especially if bigwigs are seen to get away with it.
This has happened in Kenya where Transparency International reports that kitu kidogo (a "little something") features in 54% of the average Kenyan's dealings with institutions.
South Africa has slipped from its 36th world-wide place in 2002 in the Transparency International Corruption Perceptions Index, to 54th last year, scoring 4.9 out of ten.
This is a disturbing trend that hinders investment as honest businesses do not want to pay bribes and won't apply for tenders if they feel that it has already been decided beforehand.
Last year, the Gauteng provincial government launched the Gauteng Fund which is meant to provide private investors with "preferential access" to all projects by municipalities and government departments before these are put out to tender.
R28-million has already been spent on consultants, travel and salaries for the fund and a further R500-million contributed as seed capital.
According to Len Verwey of the Institute for Democracy in South Africa (Idasa), this fund "in effect promises to use public power to secure private gains ... It has potential conflicts of interest as well as kickbacks and the like written all over it."
By restricting competition, this fund could easily lead to higher prices and therefore less delivery for the poor.
It looks like a legalized form of corruption that is the slippery slope to a "vampire state" where the business and government elite join forces in looting the treasury for their own benefit.
This article first appeared in Rising Tide a weekly e-mail letter by Jack Bloom, Democratic Alliance leader in the Gauteng legislature, February 23 2009
