State capture

State capture is a type of systemic political corruption in which private interests significantly influence a state's decision-making processes to their own advantage.

The term 'state capture' was first used by the World Bank (c 2000) to describe the situation in central Asian countries making the transition from Soviet communism. Specifically it was applied to situations where small corrupt groups used their influence over government officials to appropriate government decision making in order to strengthen their own economic positions; these groups would later become known as oligarchs.[1]

Allegations of state capture have led to protests against the government in Bulgaria in 2013-2014 and Romania in 2017,[2] and have caused an ongoing controversy in South Africa beginning in 2016.

Defining state capture

The classical definition of state capture refers to the way formal procedures (such as laws and social norms) and government bureaucracy are manipulated by private individuals and firms so as to influence state policies and laws in their favour. State capture seeks to influence the formation of laws to protect and promote influential private interests. In this way it differs from most other forms of corruption which instead seek selective enforcement of already existing laws.[3]

State capture may not be illegal, depending on determination by the captured state itself,[4] and might be attempted through private lobbying and influence. The influence may be through a range of state institutions, including the legislature, executive, ministries and the judiciary, or through a corrupt electoral process. It is similar to regulatory capture but differs in the scale and variety of influenced areas and, unlike regulatory capture, the private influence is never overt.[5] The private influences cannot be discovered by lawful processes, since the legislative process, judiciary, electoral process, and/or executive powers have been subverted.

A distinguishing factor from corruption is that, while in cases of corruption the outcome (of policy or regulatory decision) is not certain, in cases of state capture the outcome is known and is highly likely to be beneficial to the captors of the state.

Also, in cases of corruption (even rampant) there is plurality and competition of 'corruptors' to influence the outcome of the policy or distribution of resources. However, in state capture, decision-makers are usually more in a position of agents to the principals (captors) who function either in monopolistic or oligopolistic (non-competitive) fashion.

State capture examples

Bulgaria

Protests in Bulgaria in 2013–14 against the Oresharski cabinet were prompted by allegations that it came to power due to the actions of an oligarchic structure (formerly allied to Boyko Borisov) which used underhand manouevres to discredit the GERB party.[6]

Latin America

Instances where politics have been ostensibly deformed by the power of drug barons in Colombia and Mexico are also considered as examples of state capture.[1]

South Africa

A COSATU protester in Cape Town holding a protest placard calling for the prosecution of "all people involved in the state capture activities." The protest was organised and held by COSATU to protest against government corruption and state capture in the administration of South African President Jacob Zuma.[7]
The pattern [of state capture] is a simple one. "You remove management, and put in compliant management. You remove boards, and put in boards that are compliant. The rest is very easy. That has been the scenario at state-owned enterprises.
- Mcebisi Jonas, former Deputy Finance Minister; explaining the process of state capture.[8]

In 2016 there were allegations of an overly close and potentially corrupt relationship between the wealthy Gupta family and the South African president Jacob Zuma, his family and leading members of the African National Congress (ANC).[9][10][11][12] South African Opposition parties have made claims of "State Capture" following allegations that the Guptas, said to be close to President Jacob Zuma, his family and other ANC leaders, had insinuated themselves into a position where they could offer Cabinet positions and influence the running of government.[13] These allegations were made in light of revelations by former ANC MP Vytjie Mentor and Deputy Finance Minister Mcebisi Jonas that they had been offered Cabinet positions by the Guptas at the family's home in Saxonwold, Johannesburg.[14]

Mentor claimed that in 2010 the Guptas had offered her the position of Minister of Public Enterprises, provided that she arranged for South African Airways to drop their India route, allowing a Gupta linked company (Jet Airways) to take on the route.[15][16] She said she declined the offer, which occurred at the Guptas' Saxonwold residence, while President Zuma was in another room. This came a few days before a cabinet reshuffle in which minister Barbara Hogan (then Minister of Public Enterprises) was dismissed by Zuma. The Gupta family agreed that the meeting took place and agreed offering Vytijie a ministerial position.[17] President Zuma claimed that he had no recollection of Vytjie Mentor.[18]

Deputy Finance Minister Mcebisi Jonas said he had been offered a ministerial position by the Guptas shortly before the dismissal of Finance Minister Nhlanhla Nene in December 2015, but had rejected the offer as "it makes a mockery of our hard-earned democracy‚ the trust of our people and no one apart from the President of the Republic appoints ministers".[19] The Gupta family denied offering Jonas the job of Finance Minister.[20]

In May 2017, Jacob Zuma denied the allegation of blocking an attempt to set up a commission of inquiry to probe state capture.[21]

The Guptas' alleged "state capture" was investigated by Public Protector Thuli Madonsela. President Zuma and Minister Des van Rooyen applied for a court order to prevent the publication of the report on 14 October 2016, Madonsela's last day in office.[22] Van Rooyen's application was dismissed, and the President withdrew his application, leading to the release of the report on 2 November 2016. The report recommended establishment of a judicial commission of enquiry into the issues identified,[23] including a full probe of Zuma's dealings with the Guptas, with findings to be published within 180 days.

Zuma and Van Rooyen denied any wrongdoing.[24] The Guptas' lawyer disputed the evidence in the report,[25][26] and the family welcomed the opportunity to challenge the report's findings in an official inquiry.[27][28]

On 25 November 2016, Zuma announced that the Presidency would be reviewing the contents of the state capture report.[29] He said it "was done in a funny way" with "no fairness at all," and argued he was not given enough time to respond to the public protector.[30]

On 11 September 2017 the former Finance Minister, Pravin Gordhan, estimated the cost of state capture at 250 billion Rand, in a presentation at the University of Cape Town Graduate School of Business.[31]

On 13 November 2017, in an exclusive interview with ANN7 (belonging to the Gupta Family), South African President Jacob Zuma said 'State Capture' was a fancy word used by media houses for propaganda proliferation. He said that a real state capture would include seizure of the three arms of the constitution - Legislative, Executive and Judiciary - which has never been the case in South Africa.[32]

The book How to Steal a City details state capture within the Nelson Mandela Bay Metropolitan Municipality in South Africa and takes place during the Zuma government.

Hungary

The captured state of Hungary started after 2010. The former main opposition party won the 2/3rd of the mandates in the parliamentary election. The manipulation of the constitutional law and the Constitutional Court became possible. The parliamentary election laws was later tailored also to the purpose of the new governmental party. Step by step, the different institutional applications, competitions, and tenders have been won almost exclusively by organisations and individuals loyal to the government. The winners have been frequently the relatives of the governmental staff or connected with them. The managements of different institutions have been filled with persons loyal to the government. Independent applicants have been rejected without explanation or by created formal causes. The incomes of the government independent media had been dried up. These have been ceased with scarce exemptions.[33][34] The subventions and advertisement expenditures of the state owned and government loyal companies have been directed to the purpose of the widely accessible propagandistic state media and to the government loyal press. The majority of the Hungarian population can only access government influenced radio stations. Only a single government independent television channel have been tolerated as a source of unfiltered news. The propaganda applies classical "Machiavellian" cunnings. It regularly use war termini, and show up two typical imaginary public enemies: "migrants" and "George Soros".[35] Altogether these proceedings provided additional 2/3rd victories for the governmental party[36][37] and more unrestricted possibilities for the administration.

See also

References

  1. 1 2 Crabtree, John; Durand, Francisco (2017). Peru: Elite Power and Political Capture. London, United Kingdom: Zed Books Ltd. p. 1. ISBN 978-1-78360-904-8.
  2. ↑ "Romanian Democracy at Grave Danger".
  3. ↑ Edwards, Duane C. (1 May 2017). "Corruption and State Capture under two Regimes in Guyana" (PDF). ResearchGate. University of the West Indies. Retrieved 23 May 2017.
  4. ↑ Kaufmann, Daniel; Vicente, Pedro C. "Legal Corruption (October 2005)" (PDF). Retrieved 7 April 2017.
  5. ↑ World Bank (2000). Anticorruption in Transition: Contribution to the Policy Debate. World Bank Publications. ISBN 9780821348024.
  6. ↑ "Политическата криза и дневният ред на промяната (pp.1–2)" (PDF) (in Bulgarian). iris.bg. 17 June 2013. Archived from the original (PDF) on 27 June 2013. Retrieved 2 March 2014.
  7. ↑ "Cosatu Protest: Future of the alliance on the line | Daily Maverick". www.dailymaverick.co.za. Retrieved 2017-09-27.
  8. ↑ Cairns, Patrick (12 October 2017). "Jonas: All institutions in SA are under threat". Moneyweb.co.za. Retrieved 2017-10-12.
  9. ↑ "Zuma allies 'break ranks' with him over Guptas". Rand Daily Mail. 1 February 2016. Retrieved 9 February 2016.
  10. ↑ Wild, Franz (17 December 2015). "Gupta family seen as symbol of Zuma's failing rule". Sunday Times. Retrieved 9 February 2016.
  11. ↑ "Who are the Guptas?". BBC. 14 May 2013. Retrieved 7 February 2016.
  12. ↑ Munusamy, Ranjeni (1 February 2016). "Keeping Up with the Guptas: What's behind the anti-Saxonwold revolt". Daily Maverick. Retrieved 9 February 2016.
  13. ↑ "Parliament must deal with 'state capture' – DA". News24.com. 27 March 2016. Retrieved 30 March 2016.
  14. ↑ "Zuma defends relationship with Guptas – report". News24.com. 23 March 2016. Retrieved 30 March 2016.
  15. ↑ "Vytjie Mentor: I can prove Zuma was with me in the Gupta house". Rand Daily Mail. 17 March 2016. Retrieved 10 April 2016.
  16. ↑ "'Zuma said it's OK Ntombazana,' says former ANC MP Vytjie Mentor". Times Live. 18 March 2016.
  17. ↑ Khoza, Amanda (15 March 2016). "Gupta family denies offering former ANC MP top job". news24. Retrieved 24 June 2016.
  18. ↑ Khoza, Amanda; Tandwa, Lizeka (15 March 2016). "Zuma has 'no recollection' of Mentor - Presidency". news24. Retrieved 24 June 2016.
  19. ↑ "Full statement by Deputy Finance Minister Mcebisi Jonas on Gupta job offer". The Sowetan. 16 March 2016.
  20. ↑ "Gupta family denies offering Jonas South Africa's finance minister role". Reuters. 16 March 2016. Retrieved 24 June 2016.
  21. ↑ "Zuma denies blocking state capture probe | IOL News". Retrieved 2017-10-16.
  22. ↑ "Zuma halts Madonsela's state capture report". eNCA. 13 October 2016.
  23. ↑ "State Capture Report: What John Cena Wants Inquiry to Probe". EWN. 3 November 2016.
  24. ↑ Parkinson, Joe; Steinhauser, Gabriele (6 November 2016). "South Africa report cites 'worrying' signs of government corruption". Wall Street Journal. Retrieved 1 December 2016.
  25. ↑ "#StateCapture report: Molefe-Gupta ties revealed | IOL". Retrieved 2016-12-25.
  26. ↑ Editorial, Reuters. "South Africa's Guptas to challenge influence-peddling report at inquiry". Reuters India. Retrieved 2016-12-25.
  27. ↑ Macharia, James (3 Nov 2016). "South Africa's Guptas to challenge state capture report at inquiry". CNBC Africa. Retrieved 1 December 2016.
  28. ↑ Dzonzi, Mike Cohen, Thembisile Augustine. "Gupta bombshell: Zuma on the ropes after Gordhan's gloves come off". The M&G Online. Retrieved 2016-12-25.
  29. ↑ "Zuma to take state capture report on review". CityPress. Retrieved 2016-12-08.
  30. ↑ Williams, Denise. "Zuma to launch a review on Madonsela's state capture report". The Citizen. Retrieved 2016-12-08.
  31. ↑ reporter, Citizen. "R250bn lost to state capture in the last three years, says Gordhan". The Citizen. Retrieved 2017-11-29.
  32. ↑ Africa News Network 7 TV (2017-11-13), #StraightTalk: ANN7 exclusive interview with Pres Jacob Zuma, retrieved 2017-11-21
  33. ↑ "Hungary's largest paper Nepszabadsag shuts, alleging pressure". BBC. 11 October 2016. Retrieved 8 August 2018.
  34. ↑ "Major Hungarian opposition newspaper to close after Orban victory". Reuters. 10 April 2018. Retrieved 8 August 2018.
  35. ↑ "George Soros and his network are doing everything possible to overthrow governments that are resisting immigration". kormany.hu Cabinet Office of the Prime Minister. 10 March 2018. Retrieved 8 August 2018.
  36. ↑ Hungarian parliamentary election, 2014
  37. ↑ Hungarian parliamentary election, 2018
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