COSATU condemns sensationalist and untruthful journalism

The Congress of South African Trade Unions has noted the report in the Mail & Guardian, 1 April 2010, "Mrs Vavi, the pension funds and the bribe". The General Secretary had already responded, with the following answers to questions put to him by the M&G reporter, Matuma Letsoalo, but which was only published with big cuts in the paper:

Are you aware of the fact that your wife Noluthando is contracted to SA Quantum and receives R60 000 a month for doing marketing for the company [SA Quantum] within the labour Union movement, Cosatu and its affiliates?

Yes I am aware that my wife is doing consultancy work for SA Quantum.  The agreement signed between SA Quantum and her states that she "undertakes to:

1. Furnish professional consulting services in respect of marketing, distribution and servicing strategies into the employee benefits market;

2. Keep quantum informed on developments, trends, political dynamics and key role players in order to improve Quantum's understanding of the market; and

3. Improve Quantum's effectiveness in distribution employees' benefits solutions into the market."

In this direct quote from the contract, nowhere is it stated that she will do "marketing of the company in the labour union movement, COSATU and its affiliates", as your question seeks to imply. In my view there is no conflict of interest at all.  COSATU has no relationship with SA Quantum and if it did that would constitute a conflict of interest indeed. The provident funds of workers are controlled by workers and employers who have a 50-50 representation in the board in terms of the law. My wife has no relationship with any of the provident fund boards. I have no direct relationship with and provident fund board that has a relationship in SA Quantum. As far as I know no union is able to dictate to the boards of the provident funds in which company their monies should be administered. These decisions are left to the boards controlled by workers and employers.

Given that you are the general secretary of COSATU, don't you think the business that your wife is doing with a company that does business with COSATU and its affiliates constitute a conflict of interest?

As stated above, SA Quantum has no business relationship with COSATU and I am not even aware which COSATU unions have their provident funds/pension funds administered by SA Quantum. I assume that there should be some who have a relationship. In that case there is no way she can influence the decisions of the provident fund boards in terms of where they invest their money or who should administer their provident funds.

After COSATU first called for a lifestyle audit for public representatives, you publicly declared some of your assets, including the Morningside house, but did not mention anything about Zwelothando. Do you have any reason why you did not mention this?  
Zwelothando is a company owned 100% by my wife and not me. Secondly I answered all questions to me by the Star journalist honestly and truthfully. I did not hide any interest. I have no personal business interest. I am not registered in any company as a director. You can verify this with CIPRO.  Noluthando has a consultancy company called Zwelothando. She had that interest by the time we were married. I married her not because of her consultancy interests or business interests. I am not going to instruct her to withdraw from consultancy or even business because she is married to me. I don't seek to control anyone in that manner. The only interest I have is that there should be no conflict of interest with COSATU and/or with government. This is so precisely because if she was to win any contract with COSATU and/or government this will raise a question as to whether she won it because she has my surname or is related to me instead of winning it above board. I have an agreement with her that she should never do any business with either COSATU or government. I am satisfied that SA Quantum indeed has no relationship with COSATU and therefore the conflict of interest issues does not arise.

Don't you think it would have been appropriate for you to declare this publicly as well? Did you declare your wife's business interests in SA Quantum to Cosatu and its affiliates, who are doing business with the company?

I have answered this question already. I did not declare because COSATU does not have any business relationship with SA Quantum. I am not aware of any relationship between SA Quantum and COSATU affiliated unions. Even if there is, as I assume there would be, the driving question to me is whether any observer would reasonably believe that I have in any way influenced worker provident funds to enter into a business relationship with SA Quantum. The answer is clear that such a possibility does not exist, as all provident funds board have a 50-50 representation between workers and the employers.

It is clear from the tribute you delivered at the funeral of former SA Quantum CEO Abraham Nduru in 8 December 2009, that you personally had close ties with directors of SA Quantum, which did business with your wife. How do you explain this?

I have known, and in fact have worked with, Abe Nduru for many years as indicated in my tribute at his funeral. I don't know any other director of SA Quantum as your question suggest. Please read the speech again and see if it suggests that I know the other directors as well.

Do you find it comfortable with your wife involved in business, while you on the other hand are pushing the communists' agenda? What was your relationship with Nduru like? SA Quantum CEO Veon Bock offered us R120 000 not to write the story about SA Quantum's business dealings with Zwelothando Consulting, a name which appear to be a contraction of her first name and your first name. Already Bock gave us a payment of R40 000 and promised to give us the balance by the end of April. This is to us a clear cover up for you and your wife. What is your reaction to this?

I have stated in other interviews such as in Destiny magazine, November/December 2009, that sometimes that makes me feel uncomfortable. This is so because some people would not buy a suggestion that I have nothing to do with my wife's business activities and yet I seriously never ever attempted to micromanage her. I did not her ask to enter business. This is her own initiative. I am not going to divorce her though because she has business interests. I had enough of that. Our relationship is not founded on whether she has a business interests or that I am the leader of COSATU. As I said, the only protection I have is that she should never conflict me through getting into business deals with COSATU or even with the government. So far she has not done that.  Regarding Abe Nduru, as I have said above, I have known him since the days he was working for NBC. See my speech which traces the relationship between COSATU and Abe Nduru.

Regarding the alleged attempt to silence Mail and Guardian, I must state categorically that it has absolutely nothing to do with me and the person best suited to answer your question will be the one who offered you money. Veon Bock has no reason to protect either me or Zwelothando in this regard. There is no conflict of interests; there is no scandal. Lastly Zwelothando is not a contraction of my name Zwelinzima and that of my wife Noluthando. It is a name on its own with a completely different meaning. Zwelinzima means this world is difficult/heavy/tough and Noluthando means love. Zwelothando means a country of love.

[Ends]

Conveniently the Mail & Guardian chose not to run this full response to their questions, despite the General Secretary asking them to do so, through a text message to Mr Matuma Letsoalo. 

The article is a typical example of journalists being used to fight factional battles. Mr Matuma Letsoalo has a long documented history as a journalist being used by factions in COSATU to tarnish the name of its leaders, in particular its General Secretary.

We wish to point the following inaccuracies, sensationalism, innuendos and outright lies in the article:

1.    The headline of the story is: "Mrs Vavi, the pension funds and the bribe". Whilst this headline seems to be an honest summary and caption of the story, anyone reading the headline and street posters today, without reading the article, will go home wrongly thinking that Mrs Vavi is involved in some scandal to do with pension funds and that she may have also be involved in bribery. This is sensationalism at its worst.

2.    Despite the correction printed above, the article, throughout and in particular in the first paragraph, makes a damaging claim that Noluthando Vavi "is being paid R60 000 a month to market financial products to union members".  Mr Matuma prints this despite being in possession of the contract signed by Mrs Noluthando Vavi and SA Quantum that categorically states the terms of the agreement between the parties. There is no single line in that agreement that says Mrs Vavi will be "marketing financial products to union members". This is being done deliberately to suggest improper conduct on the part of Mrs Vavi and by association the COSATU General Secretary, who is the real target of what is clearly a smear campaign.

3.    The article claims that Veon Bock, CEO of SA Quantum, told the Mail & Guardian that "she was engaged specifically to market its products which include pension and other employee benefits to labour unions, particularly COSATU unions". The article further make the claim that "she has already helped secure direct and indirect business with two of COSATU's biggest unions, the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA), which together account for about 500 000 of COSATU's membership".

4.    Whilst we cannot vouch for what was said in the discussion between Mr Veon Bock and Mr Matuma Letsoalo, we are in possession of Mr Motsoalo's written questions to him and Mr Veon Bock's written responses. At no stage does Mr Bock make the above assertions - that "she has already helped secure direct and indirect businesses with the two of COSATU's biggest unions..."

5.    The article then mischievously, inappropriately, and with a clear view to mislead unsuspecting readers, makes a link between the speech the General Secretary made at the funeral of Abie Nduru and the decisions of the Metal Industry Benefit Fund. The speech, which is available on the COSATU website, traces the relationship between the General Secretary and Abe Nduru, not as a personal relationship, but one that existed between Mr Nduru and COSATU. This relationship predates the existence of SA Quantum. Yet the article seeks to suggest that Mr Nduru or SA Quantum or even Mrs Vavi benefited from such a relationship. There is no shred of evidence to suggest that COSATU, the General Secretary or his wife ever tried to influence the Metal Industry Benefit Fund to have a business relationship with SA Quantum, as implied in the article.

6.    The article then goes further to say that "Bock told the Mail & Guardian that Noluthando had been instrumental in securing a contract with TEBA Bank, owned by members of the NUM, Zwelinzima Vavi's former union". Again in the written reply to Mr Letsoalo's questions Mr Bock did not make this claim, simply because it is not true that Mrs Vavi was instrumental in securing any contract between SA Quantum and TEBA Bank. This lie is being told in order to suggest that there is a conflict of interest that is not there.

7.    The article, consistent with its political purpose, then claims that "nevertheless the close political and personal proximity of the key players has raised concerns that the Vavis are profiting from the suggestion - however implicit - that any deal proposed by Noluthando is backed by her husband and COSATU". It is true that COSATU General Secretary enjoys a close relationship with the General Secretaries of NUM and NUMSA, but equally he enjoys the same relationship with the leaders of all COSATU unions. It is not true that he lobbied for the election of General Secretaries of the two unions. And even if that was true, there is no relationship between that and the innuendos in the article.

8.    In introducing the story "On how the deal (bribery) went down", Mr Letsoalo states that "COSATU General Secretary insists his wife's role in the marketing financial products is no scandal. But the company that pays her to do it clearly disagrees".  The article does not back up this assertion. Mr Letsoalo merely concludes that by paying a bribe, the company was admitting guilt to some wrong doing. This is wrong and actually it amounts to character assassination.

COSATU condemns strongly the attempt by Mr Veon Bock to bribe journalists doing their work. This is clearly unethical and it amounts to an attack on media freedom. The General Secretary also condemned this in his response above, a condemnation which strategically Mr Letsoalo decided not to print.

The only sin committed by COSATU is to take a strong stance against corruption. This article, together with earlier attempts to tarnish the name of the COSATU leadership will not deter us from campaigning to rid South Africa of corruption. The General Secretary has come under immense personalised attack from those who have something to hide from lifestyle audits. Recently he was said to own a R6-million house. When this was proven to be a lie, it was said that he abused a COSATU credit card. No evidence was produced, and when these forces were challenged, then they spread a rumour that his wife has won government tenders everywhere. Yet they have not produced a shred of evidence to back this up. Then it was said he has a two-month-old baby out of wedlock. To this day they have not produced the baby or the mother. Quite clearly there is an attempt to discredit him as the principal spokesperson of COSATU. They will not succeed in silencing us!

Veon Bock's responses to Mail & Guardian:

Matuma,

Below are my responses to your questions. As indicated to you before, our clients are Retirement Funds and not Trade Unions. Retirement Funds are run by independent Boards of Trustees made up on a 50/50 basis by members and employer representatives.

I therefore want you to read my response against this background.

Regards,

Veon

Dear Mr Bock It is with regret to inform you that we are intending to publish the story on Friday on both your attempt to bribe me and the original story about your company- SA Quantum- payment to Cosatu general secretary Zwelinzima Vavi's wife- Norah Noluthando Vavi. The intention from the start in my accepting payment from you was in order to expose your attempted bribe. Now, I would like you to answer the following questions for me;

·    If there is nothing wrong with SA Quantum doing business with Zwelinzima Vavi's wife- Norah Noluthando Vavi, why would you go to the extent of offering me R120 000 [and in fact paying me R40 000 in cash as the first instalment on Saturday March 27 2010] in what clearly appears to be a cover up for the Vavis?

I deny paying you the sum of R40,000 in cash or offering you R120,000.  The agreement with Mrs. Vavi, which was entered into by the Late Mr Abe Nduru is above board and at no stage did Mrs. Vavi consult or market the services of SA Quantum to COSATU affiliated Retirement Funds nor is a condition of the agreement that Mrs. Vavi consult or market the services of SA Quantum to COSATU affiliated Retirement Funds.

·    Why should I not consider the agreement to pay me R120 and the actual R40 payment as an attempt to bribe me and as criminal act?

I deny that an agreement of this nature exists.

·    Why out of all people did SA Quantum chose Vavi's wife to do marketing for the company within the labour federation?

Mrs. Vavi is an independent business woman and has a right to earn a living, as do any other individual. Why did the Mail & Guardian employ you?

·    How much has SA Quantum paid Zwelothando since it entered in a contract with Vavi's wife?

I quote clause 4 of the agreement: "4.1. In consideration for the rendering of the services contemplated in clause 3, Quantum shall pay Zwelothando a consulting fee amounting to 5% (five percent) of first year income on business generated for Quatum by Zwelothando. No consulting fees shall be paid unless all the retainers are paid in full." Furthermore clause 5 of the agreement states that: "Zwelothando is not, and will never be deemed to be an employee of Quantum."

·    Why would it be wrong for me to assume that the payment by SA Quantum to Zwelothando, constitute a kick back or an attempt to influence Cosatu or its affiliates through Cosatu or Vavi- to channel business opportunities to SA Quantum?

As explained to you before, Mr Vavi does not exercise control over Boards of Trustees of Retirement Funds, which are our clients and independent legal structures outside of COSATU. The Boards of Trustees are made up on a  50/50 basis of members' representatives/employer representatives.

·    During our first meeting, you stated that SA Quantum was doing business with Numsa, NUM and Theba Bank, which is owned by the mine workers union [NUM]. Which other Cosatu unions are you [SA Quantum] doing business with within Cosatu?

As indicated to you before, we do not deal with COSATU or any of its affiliates. We deal only with Retirement Funds, which are independent of COSATU and they make use of various service providers. I would appreciate it if you could respond to my questions before 10am on Wednesday, for deadline reasons Best Regards Matuma Letsoalo   

[Ends]

Statement issued by COSATU, April 1 2010

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