The Zondo Inquiry chose not to make findings about how a captured NPA was used to target Jacob Zuma's political foes and ignore damning evidence against his allies - and, Karyn Maughan writes, the state's refusal to confront that dark past is at the heart of its present failures.
Six months ago, Gupta family advocate Mike Hellens warned the National Prosecuting Authority that it did not have enough evidence to prove its case of fraud and money laundering against his clients - and said the highly anticipated first "state capture" trial would end up being an "international embarrassment".
As it turned out, he was right.
Days after the NPA railed against the Dubai Appeal Court's refusal to extradite Atul and Rajesh Gupta from the UAE to face trial in South Africa, one of the two cases that the state intended to try the brothers for collapsed. Spectacularly.
And, while NPA's Investigating Directorate head Andrea Johnson insists that the summary acquittal of all of the accused in the R24.9 million Nulane fraud and money-laundering trial "has no bearing on our ability to prosecute other state capture cases", Free State High Court in Bloemfontein Acting Judge Nompumelelo Gusha's scathing assessment of the state's case says otherwise.
Gusha did not hold back when she explained why she had granted section 174 discharges to all but one of the Nulane accused without requiring a single one of them to defend themselves.
READ | 'A comedy of errors': How NPA's Nulane state capture case fell apart, to the Gupta family's joy
The final accused, former Free State agriculture department official Limakatso Moorosi, closed her case without leading any defence and was acquitted. Her lawyers have previously indicated that she intends to sue the NPA for malicious prosecution.
Describing the state's investigation as a "comedy of errors", Gusha listed - in mortifying detail - the litany of incompetence, poor interrogation of evidence, half-baked financial analysis and weak witness testimony that had defined the Nulane prosecution, which had once been hyped as a "slam dunk" case.
Rather than proving its various charges against the accused beyond a reasonable doubt, the NPA did not even manage to persuade Gusha that they had a case to answer.
"Taking into account that a little more than R24 million of taxpayers money was at stake, the lackadaisical manner in which this matter was investigated is truly to be lamented," the judge said.
This latest prosecutorial failure has again raised serious questions about whether the NPA, which pursued multiple politically motivated cases against then President Jacob Zuma's foes during the state capture era, is actually capable of getting convictions in high-level fraud, corruption and organised crime matters.
"To the extent that there are notable deficiencies with the Zondo Commission, among the prime defects must be that it failed to look assiduously into the National Prosecuting Authority and the police. The hollowing out of both those institutions were key to state capture," Nicole Fritz from the Helen Suzman Foundation told News24.
"Failure to address that hollowing out, the removal of capacity in some cases and in some cases appointing individuals who were there to thwart and undermine the constitutional functions of those bodies, means that there can be no real redress or repair of what was orchestrated under state capture", she adds.
The HSF further states, in a submission to civil society about the state capture Inquiry:
We need look no further than the NPA's recent disastrous failure to prosecute its first state capture trial against Nulane Investments to see the importance of well-functioning investigative and prosecutorial institutions. While it is too soon to say that the Nulane failure can be placed at the feet of state capture at the NPA and/or SAPS, the Commission's failure to investigate it in the first place has left civil society - and the South African public at large - unable to make an informed assessment.
In other words, the NPA - an institution which allowed itself to be turned into a political weapon during the state capture era - has never been forced to account for those abuses publicly. As a result, there is no real way of telling whether the Nulane prosecution failure was the consequence of incompetence or malice. Or both.
This is what we do know:
Between 2011 and 2012, the Free State Department of Agriculture paid R24.9 million to Nulane Investment, a company owned and controlled by former Transnet Board member and alleged Gupta ally Iqbal Sharma, for a feasibility study for the province's flagship Mohoma Mobung project championed by the province's then Premier Ace Magashule.
Nulane Investment had no staff, but the department successfully motivated for a deviation from procurement rules to appoint it to perform the feasibility study. Nulane then subcontracted Deloitte, at a cost of R1.5-million, to do that work.
It was also the state's case that, after being appointed by the Free State agriculture department, Nulane Investment changed the findings of the Deloitte-authored study to identify Paras - an Indian dairy farm allegedly linked to the Guptas - as the most suitable implementing partner for setting up a milk processing plant in Vrede, Free State.
READ | ANALYSIS: Inside SA's first state capture trial: The players, the case and the consequences
The resultant R288 million Vrede Dairy Project scam, which would see millions of rands intended for poor black dairy farmers allegedly being diverted to the Guptas and their associates, was then born. That alleged fraud and money laundering is itself now the subject of another criminal trial, in which former mineral resources minister Mosebenzi Zwane has been charged.
In its efforts to show that the Gupta brothers were involved in the alleged laundering of the Nulane proceeds, the state had subpoenaed the family's ABSA bank records - and argued that Atul Gupta's status as the "systems manager" of these accounts meant he was involved and responsible for all their transactions.
But, it later emerged in the cross-examination of former ABSA official Linda Channing this was not necessarily the case, as there were multiple account operators authorised to do transactions on the Gupta accounts. She said that while ABSA could have provided the state with information about who had ordered specific transactions, this had not been requested from the bank.
That, however, was just one of the state's many problems with this case:
- Almost all of the documents relevant to Free State agriculture department's contract with Nulane were either missing or were ruled inadmissible - largely because of the police's decision to use a warrant to obtain computer printouts from the department rather than to seize its hard drives and have the documents authenticated by experts.
- Police officials who testified about the seizure of relevant documents admitted that they failed to follow even the most basic steps to ensure that the chain of evidence was preserved
- The state relied on a letter allegedly sent to the department by the Gupta-linked Worlds Window Impex India Pvt. Ltd company to make its case that the deviation that enabled Nulane's appointment had been fraudulently granted - without establishing that the October 2011 letter, which misspelt the company's name, was actually genuine.
- Police investigators also admitted that they had never sought to contact Worlds Window about the letter, even though it contained contact information.
- The state's 204 witness, Free State agriculture department official Shadrack Cezula, insisted that he had made an innocent "error of judgment" when he acquiesced to demands by the department's then CFO Seipati Dhlamini to motivate for the Nulane deviation - while attempting to get immunity from prosecution for fraud. Gusha said he appeared "hell-bent" on avoiding culpability.
- Cezula also provided no corroboration for his account of how the Nulane deviation had been compiled and granted
- Gusha also found that Cezula's evidence did nothing to prove the state's case that there was a concerted conspiracy to defraud the Free State agriculture department by the implicated officials and Nulane representatives.
- While Deloitte officials testified that the report they produced for Nulane was altered after they provided it to the company, the state led no evidence about who could have been responsible for making those changes.
- During the state's failed efforts to show that the Gupta network had laundered the proceeds of the Nulane scam, the prosecution's own financial expert admitted that they had made mistakes in their assessment of the Gupta network's finances and conceded that there was nothing untoward about its money transfers. Gusha said this signalled the "death knell" of the money-laundering case against Gupta associate Ronica Ragavan and the family's Islandsite Investments company.
After detailing each of these deficiencies, Gusha discharged the accused - a decision that killed any possibility of the NPA being able to persuade United Arab Emirates prosecutors to challenge the Dubai Appeal Court's dismissal of its application for the extradition of Atul and Rajesh Gupta.
READ | UAE refuses Gupta extradition request on a technicality, but NPA says SA 'ticked all the boxes'
Gusha's decision should also raise the alarm about the state's prospects of obtaining convictions in the Vrede Dairy Project scam case, which is being pursued by the Nulane prosecution team. The Gupta brothers had been sought on both the Nulane and Vrede cases.
For former prosecutor and DA MP Glynnis Breytenbach, these outcomes may well have been very different - if the NPA had addressed the rot and incompetence that had so profoundly damaged its operations during the state capture era.
"I think it would be different because the insidious influences that certainly still exist in the NPA would be gone. We all know who they are. Even [National Director of Public Prosecutions] Shamila [Batohi] knows who they are - and she should have fired them the first day she walked into office. Of course, they would have litigated, but let them," she said.
She [Batohi] made a big mistake by keeping them, because they continue to undermine her.
Breytenbach herself has been acquitted of a spurious case launched against her by the NPA after she pushed for the prosecution of Zuma loyalist and crime intelligence boss Richard Mdluli.
She remains adamant that the prosecutors who pursued politically motivated charges should face the consequences and blames "weak leadership" for the NPA's failure to take action against the vast majority of these implicated officials. On the flip side, she adds, a lack of training has meant that the pool of prosecutors able to pursue big commercial crime prosecutions has shrunk dramatically.
Worse still, Breytenbach says, the state advocates who can take such cases on are too scared to do so. That fear of failure may be what has resulted in the NPA being colloquially referred to as the "National Postponement Authority".
"The fear of failure is the overriding factor," Breytenbach says.
While the NPA received legal advice that it did not have to postpone cases while the accused sought to review the decision to prosecute them and should demand that the accused seek an interdict to prevent the trial from proceeding, the state has chosen not to act on it.
Instead, the NPA - seemingly incapable of getting the state capture convictions that a corruption-ravaged South Africa is so desperate for - has been content to allow these cases to drag on eternally, with no start in sight and no end imaginable.
Its failure in the Nulane trial and Gupta extradition have, however, shown that - should the state finally get the chance to put those it accuses of the blatant misuse of taxpayer's money on trial - it may not have the ability to make a single charge stick.
The NPA is now on trial. And it may not be able to defend itself.
- Karyn Maughan is a senior legal journalist at News24.
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