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       SHADOW STATE

       SHADOW STATE

       THE POLITICS OF STATE CAPTURE

       IVOR CHIPKIN & MARK SWILLING

       WITH

      HAROON BHORAT | MBONGISENI BUTHELEZI | SIKHULEKILE DUMA HANNAH FRIEDENSTEIN | LUMKILE MONDI | CAMAREN PETER NICKY PRINS | MZUKISI QOBO

      Published in South Africa by:

      Wits University Press

      1 Jan Smuts Avenue

      Johannesburg 2001

       www.witspress.co.za

      Copyright © Ivor Chipkin, Mark Swilling, Haroon Bhorat, Mbongiseni Buthelezi, Sikhulekile Duma, Hannah Friedenstein (pseudonym), Lumkile Mondi, Camaren Peter, Nicky Prins and Mzukisi Qobo 2018

      Foreword © Mcebisi Jonas

      Afterword © Ferial Haffajee

      Published edition © Wits University Press 2018

      First published 2018

      http://dx.doi.org.10.18772/22018072125

      978-1-77614-212-5 (Print)

      978-1-77614-213-2 (Web PDF)

      978-1-77614-214-9 (EPUB)

      All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of the publisher, except in accordance with the provisions of the Copyright Act, Act 98 of 1978.

      Copy editor: Pat Tucker

      Proofreader: Lee Smith

      Indexer: Mirie van Rooyen

      Cover design: Fire and Lion

      Typesetter: Newgen

      Typeset in 9.5 point ScalaPro

       Contents

       List of figures and tables

       Acronyms and abbreviations

       Key terms

       Acknowledgements

       Foreword Mcebisi Jonas

       Prologue

       Introduction

       Chapter 1Structuring the Capture of the State

       Chapter 2The Politics of Betrayal

       Chapter 3Power, Authority and Audacity: How the Shadow State Was Built

       Chapter 4Repurposing Governance

       Chapter 5Conclusion

       AfterwordFerial Haffajee

       Contributors

       Index

       List of figures and tables

       Figures

       Figure 1.1. Generalised model of a patronage network that extracts and administers rents

       Figure 2.1. Number of fraud and corruption cases related directly to state and SOE procurement (2010–2016)

       Figure 3.1. Financial flows via the shadow state

       Tables

       Table 1.1. Known outflows from Gupta-linked companies and individuals

       Table 2.1. Value of fraud and corruption charges against Transnet, Eskom and SASSA (2010–2013)

       Table 4.1. Value of South African SOE procurement (2010–2011)

       Table 4.2. South African government guarantee exposure (2014/15–2016/17)

       Acronyms and abbreviations

ACSA Airports Company South Africa
ANC African National Congress
ANCYL African National Congress Youth League
ASGISA Accelerated and Shared Growth Initiative for South Africa
B-BBEE broad-based black economic empowerment
BBC Black Business Council
BEE black economic empowerment
BLSA Business Leadership South Africa
CEO chief executive officer
Cosatu Congress of South African Trade Unions
CSIR Council for Scientific and Industrial Research
DTI Department of Trade and Industry
Gear Growth, Employment and Redistribution
IDC Industrial Development Corporation

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