SOUTH AFRICA DROPS ZUMA GRAFT CHARGES

DAILY NATION
NAIROBI, KENYA
Monday, April 6 2009

PRETORIA, Monday
South African prosecutors dropped corruption charges on Monday against ruling party leader Jacob Zuma, who is expected to become president, ending a long legal battle that had raised doubts over his ability to govern.

Acting chief prosecutor Mokotedi Mpshe said the former head of the elite Scorpions anti-crime unit had manipulated the legal system and said "abuses" uncovered in taped conversations were behind the decision to drop the charges.

The National Prosecuting Authority (NPA) said the case was closed and no further charges would be brought against Zuma, whose ANC party is widely expected to win an April 22 election and choose him as president of Africa's biggest economic power.

However some analysts said dropping the charges on a technicality without establishing Zuma's innocence meant the eight-year-old allegations of corruption, fraud, money laundering and racketeering would continue to dog him.

"Mr. Zuma is not going to have his day in court now...," said University of Johannesburg political analyst Adam Habib. "The scandal and the corruption charge will forever taint the administration and it will forever be compromised."

The case has been closely followed by investors looking for political stability as the economy teeters on the brink of recession and has raised questions about the independence of South Africa's judiciary.

INVESTOR RELIEF
The ANC said the decision was a victory for the rule of law.
"Never again should we allow institutions of government to surrender their professional independence by engaging in parties and political battles. Never again should we allow persecution for one individual for such a long period of time," ANC Secretary General Gwede Mantashe told a news conference.

The rand currency firmed slightly, trading at 8.9850 against the dollar at 1127 GMT, from 9.01 before the announcement.

Investors welcomed the move because it removed political uncertainty and virtually ensures that Zuma, who has vowed to stick to the ANC's business-friendly policies, will become the next president.

"(This) means people will be looking at policy continuity in the short-term," said Jon Harrison, emerging foreign exchange strategist at Dresdner Kleinwort in London.

Some analysts argue Zuma will now be able to focus on dealing with the ripple effects of the global financial crisis in Africa's biggest economy, as well as tackling poverty, crime and HIV/AIDS, without graft charges hanging over him.

Longer term, however, the decision may deepen concerns about the independence of South Africa's legal system and damage the country's image with investors and abroad. South Africa portrays itself as a model of human rights and democracy.

Zuma, who denies wrongdoing, has said he was the victim of a political conspiracy while his opponents have accused the ANC of back-room deals to clear his name.

The decision comes just over two weeks before the election, in which the ANC faces an unprecedented challenge from the new Congress of the People (COPE) party, which hopes to lure voters uneasy with the ANC's record on corruption.

Underlining what he called the "manipulation" of the legal system, Mpshe read out excerpts of taped conversations between then Scorpions chief, Leonard McCarthy, and former NPA head Bulelani Ngcuka.
In the expletive-laden recordings, the pair discussed timing the charges against Zuma to cause political damage.

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Mpshe told a news conference there was no conclusive evidence that former President Thabo Mbeki -- Zuma's arch foe -- was involved, saying it was not clear whether a "big man" mentioned in the conversations was indeed Mbeki.

McCarthy, appointed in May to head the World Bank's anti-corruption unit, described himself in one recording as a "Thabo man" involved in hatching a Mbeki comeback after the former president was ousted as ANC leader by Zuma.

"We are still wiping the blood from our faces, or egg, or egg and blood from our faces," McCarthy was recorded as saying.

Prosecutors said the decision did not amount to an acquittal of Zuma, and the charges would only be formally withdrawn after a court hearing.