Who coughed up the money for Zuma’s Nkandla houses?

Who coughed up the money for Zuma’s Nkandla houses?

President Jacob Zuma could not afford the five houses he had built at his homestead since 2009 – three of which cost R19.5‑million – an amaBhungane investigation has concluded. This raises the question of who coughed up the money.

It also suggests that the real Nkandla scandal is yet to emerge, given that Zuma has a history of plugging the gap between his income and expenditure with donations and soft loans from friends, family and benefactors (See “A history of hand-outs” below).

This comes at a time when opposition parties are pressing the new Parliament to respond to public protector Thuli Madonsela’s damning Nkandla report – and at a time when the Special Investigating Unit (SIU) is closing in on contractors who may have benefited improperly.

Although the cattle kraal, chicken coop, fire pool and retaining walls were the target of Madonsela’s opprobrium, the five new structures that Zuma claims he had built for himself have so far largely escaped scrutiny.

Although they were a private project, they became entwined in the controversial R246-million state-funded security upgrades because Zuma’s private contractors were also employed by the state.

The protector was unable to make a finding about the houses, partly because the president appeared to flout the law by ignoring her questions. Zuma has always denied the state paid for them, but a close analysis indicates he must have received a helping hand.

Information unearthed by amaBhungane discloses that Zuma’s builder, Moneymine Enterprises, quoted a price of R19.5-million for the first three of the five houses that were built. The figure was extracted by combing through the 12 000 pages of public works documents obtained through access-to-information litigation last year.

Zuma denied to Madonsela that he had any bond for the first three houses. But in any case, commercial loan repayments on R19.5-million would be unaffordable on – and consume most of – his R2-million-plus annual salary (See “The phantom bond that does not measure up”).

How, then, did he afford the lavish extensions?

Neither the president nor any of his contractors has been willing to say how he paid for the “private” work done at Nkandla, and the presidency again did not respond to questions about this.

The president’s lack of candour raises red flags, exacerbated by the obfuscation and evasion proffered by his lawyers and supporters (See “The timing of an intertwining” below).

Ultimately, the evidence suggests, Zuma can only have paid for his private houses in two ways – either by cross-subsidisation or through a benefactor. Both are problematic.

Option one: Hidden subsidy

The work on the president’s private residences could have been cross-subsidised in some way by the state’s huge expenditure on the “public” part of the Nkandla project (See “Following the paper trail for JZ’s pads” below).

Both the department of public works and the building contractors at times conflated the “public” and the “private” work at Nkandla.

In one document, Zuma’s builders described the department as the “client” in respect of the private contract they were completing for him.

The department strenuously denies that it ever entered into any formal arrangement with the contractors it inherited from Zuma to pay for, or subsidise, Zuma’s private construction.

The contractor concerned, Money­mine, did not respond to questions about whether Money­mine may have privately subsidised Zuma.

Option two: Hidden benefit

The president may have received some undisclosed benefit or loan that has allowed him to afford the R19.5-million-plus outlay.

But a benefit or loan ought to have been disclosed in his Cabinet declaration of interests.

No such disclosure is made in the publicly accessible information of Zuma’s register for the years in which the houses were built.

Madonsela, who accessed the private portion of Zuma’s register during her investigation, makes no allusion in her report to there being any such declaration by him…

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