Police deployed as S.Africa cleans up Malema base
* Malema's home province in dire financial straits
* Treasury intervention team given armed escort
* Political stakes high in Malema appeal
* He has close connections but no direct Limpopo role
By Ed Stoddard
JOHANNESBURG, Jan 22 (Reuters) - Armed police guards are protecting a South African treasury team sent to fix the finances of a bankrupt province that is a base for firebrand ANC youth leader Julius Malema, a sign of political tensions ahead of an appeal that will decide his fate.
Malema, the leader of the ruling African National Congress' Youth League, is fighting for his political life with an appeal that starts on Monday against his 5-year suspension handed down in November by the party for bringing it into disrepute.
If the 30-year-old party rebel succeeds in his appeal and remains in the movement, he could be an obstacle to the re-election of President Jacob Zuma as ANC leader at the end of this year. Malema has been a fierce, uninhibited critic of Zuma.
The northern province of Limpopo which is Malema's powerbase is undergoing a national treasury intervention to clean up its dire financial state, an action which has increased resentment among Malema allies already angry over his suspension.
National police spokesman Lindela Mashigo confirmed a report in the Sunday Times newspaper that the 30-strong Treasury crisis team was being escorted by armed police as the federal government took control of the finances of Limpopo.
"I can confirm that it is true," he told Reuters, but offered no further details.
The Sunday Times quoted Finance Minister Pravin Gordhan as saying the guards were a "precautionary measure".
Limpopo ANC leaders have said they believe the intervention is a bid to quash anti-Zuma critics. This reflects bitter divisions within the ruling party that has governed since coming to power in South Africa's first post-apartheid elections in 1994. The ANC recently celebrated its foundation centenary.
Gordhan, who this week described Limpopo as "technically bankrupt", was quoted by the Sunday Times as saying the guards were a "precautionary measure".
The newspaper also quoted a treasury official as saying the members of the team themselves had requested the security in the face of hostility from the staff in the departments they have been deployed to manage.
Pretoria last month assumed authority over nearly every area of administration in the troubled northern province after it asked for a 1 billion rand ($125 million) overdraft to pay civil servants' salaries.
ALLEGED GRAFT, MISMANAGEMENT
Limpopo has long been plagued by allegations of mismanagement on a grand scale and corruption, especially in the award of government contracts.
These allegations have focused on Malema and his political allies in the province and the youth leader faces a criminal probe into his finances and lavish lifestyle.
Malema, who has denied allegations of graft, has no direct position in Limpopo's provincial government.
But he is closely connected to senior politicians there and South African media reports have centered on a trust fund where it has been alleged Malema received kick-backs in exchange for securing government contracts.
Police last year confirmed they were investigating the trust fund.
Corruption is a serious concern in Africa's largest economy and the poor state of government services at the local level, often blamed on the diversion of funds for graft, has frequently sparked violent protests in poor townships.
The treasury intervention in Limpopo and the tensions surrounding it have raised the political stakes of Malema's appeal against his suspension.
If the panel made up of senior ANC officials upholds the previous sentence, Malema would be stripped of his position as president of the ANC Youth League and ostracised by the party the dominates South African politics.
Analysts expect the appeal panel to uphold the previous decision and its ruling is expected in the next few weeks.
Malema, who still retains a strong popular following especially in Limpopo, rose to prominence with populist calls to nationalise mines and seize white-owned farms, unnerving investors but raising his stature among poor blacks.
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