UK Labor peer and veteran anti-apartheid campaigner Peter Hain has called on US President Joe Biden to follow Britain in banning the US-based global management consultancy Bain & Company from future government contracts.
Britain’s move was caused by Bain’s alleged links to corruption in South Africa under the presidency of Jacob Zuma. The company has denied the allegations.
In a letter to Biden, a copy of which was seen by The Guardian, Hain wrote that POTUS should “act on this matter and establish a clear precedent that will signal to all US global companies, consultancies, lawyers, auditors and financial advisers that collusion with corrupt politicians and their business cronies in other countries will not be tolerated.”
“I urge the US government to […] institute a ban on Bain working for any public sector organization in your country, at least until the current judicial process over Bain’s nefarious role in South Africa has completed its full course," the Labour peer pointed out.
He also referred to Bain’s global managing partner Manny, who Hain said underplays his company’s corruption-related actions at the South African Revenue Service (SARS) as “mistakes.”
“But that contemptuously belittles the immense social and economic damage Bain’s behavior has caused ordinary South Africans already suffering from crippling inequality and poverty under apartheid, as well as the industrial-scale looting and cronyism during the Zuma decade in which Bain was complicit,” Hain noted.
The remarks come about a month after Stephen York, Bain’s managing partner in South Africa, said that the company is “ashamed” of its role in destabilizing South Africa’s tax agency.
“We apologize to you. Bain made serious mistakes in the procurement and execution of our work at SARS”, York added as he denied, however, the consultancy being complicit in corruption.
This followed the UK banning Bain last month from government contracts for three years over the firm’s purported involvement in a South African corruption scandal.
A Cabinet Office spokesman said that after reviewing Bain's role and taking account of the "evidence and conclusions of the South African Government Commission." Minister for Government Efficiency Jacob Rees-Mogg considered Bain to be "guilty of grave professional misconduct."
"This decision has been taken in light of Bain's responsibility as a global brand for its South Africa division and the company's failure to clarify the facts and circumstances of its involvement," the spokesperson emphasized.
The South African Government Commission chaired by Raymond Zondo, who currently serves as the country’s chief justice, previously concluded that Bain acted "unlawfully" and, along with other private sector companies, colluded in "the clearest example of state capture.”
The company was also accused of undermining the SARS through consultancy work that allegedly benefited Mr. Zuma's allies.
The developments were preceded by Peter Hain’s speech at the House of Lords, where he argued that Bain used its expertise “not to enhance the functioning of a world-renowned tax authority as SARS was acknowledged, but to disable its ability to collect tax and pursue tax evaders, all in the service of their corrupt paymasters.”
"The very company who possessed the expertise to bolster South Africa's defenses against the ravages of state capture, in fact weakened these defenses and profited from it”, Hain claimed.