McKenzie’s clusters: The new frontier for State Capture?

The ink has not even dried on the Ministerial Directive, yet the entire CCI dream is already crumbling in scandal.

In a blistering parliamentary exchange, the Minister of Sport, Arts and Culture, Gayton McKenzie was forced to admit that his brand-new Sector Clusters designed to be the bedrock of the industry have already been infiltrated by financial mismanagement and criminal conduct.

The revelation came when Eugene Mthethwa, a member of Parliament and Economic Freedom Fighters (EFF) demanded to know how these structures will survive political shifts and, more pressingly, how they have managed to lose money before even fully taking flight.

Numerous sources have alleged that one of the directors in the Events and Technical Association of South Africa cluster (ETASA) (name withheld) stole approximately R100,000.

"He simply took the bank card and withdrew the money for his personal use. Well, we’re not surprised, he's one of the well known, senior CCIFSA member and this isn’t the first time he has embezzled government funds. He’s done it before and nothing ever happens to him," a source told Public Dispatch.

In a pointed inquiry Mthethwa asked:

"What measures has he put in place to ensure that the Creative and Cultural Sector Cluster boards he will be launching will exist beyond his term of office and under which regulatory framework are the boards established.”

But the real sting lay in the follow-up

“Whether he has been informed that some of the boards have mismanaged the first tranche of funds through fraud… if so… what consequence management has he imposed…

This was not a polite inquiry. It was a dagger aimed at the heart of McKenzie’s flagship project, the 17 CCI Sector Clusters, launched at Nirox Sculpture Park under the theme 'Unified voices, creative futures.'

Mthethwa has long sounded alarms over DSAC’s track record of mismanagement, forensic audits into entities like the Cultural and Creative Industries Federation of SA (CCIFSA), and irregular expenditure in the broader creative sector.

Fraud confirmed

The Minister’s answer is pure deflection, loaded with legal speak, but fatally weakened by a single explosive admission.

"Yes. The Department was informed of an incident in which a board member of one Sector Cluster engaged in conduct constituting mismanagement of funds. The Sector Cluster in question is the Events and Technical Association of South Africa (ETASA). The mismanagement relates to the conduct of one individual board member, not the cluster board as a whole,

"The following consequence management steps have been taken:

• Suspension: the board member in question has been suspended from the ETASA board by the cluster’s interim board.

• Criminal charge: a criminal case has been opened and registered under case number CAS/119/3/2026 at the Douglasdale Police Station…

• Companies and Intellectual Property Commission (CIPC) removal process: ETASA has initiated a process with the CIPC to remove the implicated individual…"

He revealed that the two law firms advised against suing the individual (name withheld) for the stolen funds because legal costs may exceed the recoverable amount.

"ETASA consulted two law firms regarding civil recovery options. Both firms advised that legal costs may exceed the recoverable amount… Interim governance stabilisation: an interim Chairperson has been appointed…” Mckenzie said.

Despite McKenzie’s boast that the clusters will last beyond any Minister, the first batch of funding has already been mismanaged

The regulatory facade

McKenzie’s answer is loaded with laws and regulations claiming rock-solid control, all of which failed to prevent the ETASA breach:

• Companies Act 71 of 2008: Each cluster is registered as a Non-Profit Company (NPC), granting independent legal status that supposedly persists beyond ministerial terms.

• Public Finance Management Act (PFMA): Funds are conditional transfers, subject to Treasury Regulations and strict public finance rules.

• King IV Report on Corporate Governance: Mandated adherence to best-practice principles.

• Ministerial Directive (dated 26 March 2026): Issued the day before launch, this binding document sets the governance, financial management and compliance framework. It remains in force until replaced and gives DSAC explicit oversight tools, including the suspension of funding.

• DSAC Policies: The CCI Sector Cluster Charter, Terms of Reference approved by the Accounting Officer, and alignment with the Cabinet-approved CCI Masterplan.

Despite all these laws and safeguards, fraud struck the very first tranche. The reply admits the Department actively monitored ETASA, demanded board resolutions and an action plan, and keeps funding under review. Yet the implicated individual was only suspended after the incident by the cluster’s own interim board, not the Minister.

Furthermore, Criminal charges are pursued not because of ministerial muscle, but because civil recovery was deemed too costly.

Parliamentary concerns and sector-wide fury: systemic rot or isolated incident?

Mthethwa is not alone. Portfolio Committee debates have repeatedly highlighted DSAC’s governance crises from CCIFSA probes to National Arts Council (NAC) mismanagement and unpaid bonuses, Athletics South Africa (ASA), Performing Arts Centre of the Free State (PACOFS), National Film and Video Foundation (NFVF), Downtown Music Hub to name a few. Artists’ groups have accused the clusters of being rushed vehicles for political control rather than genuine sector empowerment.

Is ETASA the tip of the iceberg? McKenzie claims it is just one rogue individual, not the board. But in a creative sector rotten with corruption, elite capture and mismanagement of funds the situation is disastrous.

Taxpayers paying for jobs and growth in the creative economy are witnessing their money allegedly embezzled.

Reform or repeat?

Mthethwa’s question was simple, can these structures outlive political power and operate with integrity? The Minister’s answer, while detailed, reveals a system that is legally fragmented, politically anchored, financially exposed and already compromised. What emerges is not just a story of one rogue board member, but a warning signal.

Without binding legislation, stronger enforcement of the PFMA, and real accountability mechanisms beyond suspension and criminal referral, the CCI Sector Clusters risk becoming yet another chapter in South Africa’s long history of well-intentioned structures undone by weak governance.

The creative sector deserves better than directives and damage control. It demands law, transparency, and consequence.