2013 Corruption Snapshots

By Kavisha Pillay

2013 has been a year tainted with allegations of corruption of all kinds, many of which made newspaper headlines across the country. Corruption Watch takes a look at this year’s big corruption-related stories.

JANUARY

 North West legal fees – 2 January

The North West’s standing committee on public accounts (Scopa) announced that it will probe the alleged misuse of state funds on legal fees.

• The chairperson of Scopa, Hlomane Chauke, said the probe would focus on the misuse of state funds by the former finance MEC, the current MEC, and the acting finance department head.
• The three implicated individuals failed to give the committee a clear account of procurement processes followed in appointing Morake Attorneys, which was paid over R15.4-million for a disciplinary hearing.
• The Hawks, the auditor-general’s office, the public service commission and the public protector were to conduct an investigation.

Nkandla – 27 January

Minister of Public Works Thulas Nxesi confirmed that R206-million of taxpayers’ money was spent on upgrades of the President’s private Nkandla homestead.

• In November 2012, a task team was established by the Department of Public Works to investigate the upgrades to Nkandla.
• The investigation highlighted a range of irregularities that could have inflated the price by millions of rands, but because Nkandla was listed as a national key point, said Nxesi, the findings of the report could not be made public for security reasons.
• The report has been handed to the Special Investigating Unit (SIU), the auditor-general, the public protector and the South African Police Service to investigate any misconduct.
• Parliament’s joint standing committee on intelligence (JSCI) released a report on 14 November in which it stated that there was indeed widespread corruption in the processes carried out around the homestead’s upgrades. The JSCI said that there was much flouting of procurement procedures, and that foreign nationals were employed – which is not allowed in terms of government safety regulations.
• On 8 November the security clusters of the state filed a court order to prevent the public protector from releasing her report on Nkandla. The bid was abandoned on 14 November.
• The Mail & Guardian published details from the public protector’s provisional report on 29 November – the report claims that President Zuma received substantial personal benefits from the multi-million rand upgrade to his home. 

Mvula Trust – 29 January

In 2012, Corruption Watch was approached by a whistleblower who alleged that rural development NGO Mvula Trust has obtained a government tender irregularly.

• The tender formed part of the job creation initiative of the Department of Co-operative Governance and Traditional Affairs (Cogta), called the Community Work Programme (CWP).
• In late March, Cogta minister, Richard Baloyi, finally acknowledged that all was not right with Mvula Trust and the multibillion-rand CWP, and announced that a full-scale investigation would be undertaken by his department.
• A company subcontracted by Mvula Trust illegally to implement a leading programme that would fight poverty and create jobs is threatening to pull out of the CWP, which could result in thousands of people losing their jobs.
• In May, Corruption Watch was given permission to make written submissions to an enquiry initiated by Cogta to investigate further a number of allegations of illegality and complaints about the CWP.

“Mrs M” – 30 January

Public Protector Thuli Madonsela found that there was maladministration in the Justice Department regarding the treatment of a whistleblower.

• Madonsela said Mrs M approached her office in 2010 saying she was victimised and harassed in the first few months of her employment after she discovered that fellow employees were misappropriating funds.
• Soon after her discovery, Mrs M suffered occupational stress as a result of victimisation.
• Doctors said she should be transferred to another office in the department but this was not done and in March 2012 the department stopped paying Mrs M’s salary.
• There was conciliation, together with officials from the office of the public protector, and it was agreed that she should be reinstated. However, she was not reinstated and the department denied it had agreed to do so.
• On 30 January, the director-general of the department agreed to reinstate Mrs M and moved her to another unit.

FEBRUARY

Shauwn Mpisane – 6 February

Durban businesswoman Shauwn Mpisane faced 53 charges of fraud, forgery, and uttering of a forged document in order to secure government multi-million rand tenders from the Department of Public Works.

• Mpisane is accused of submitting forged documents to obtain Construction Industry Board grading which were then used to win five public works department tenders worth R140-million.  

MARCH

Miriam Segabutla – 2 March

The former health and social services MEC in Limpopo, Miriam Segabutla, was released on R15 000 bail after she was accused of tender fraud amounting to R15-million.

• Segabutla was arrested following the awarding of tenders to companies that were closely linked to her.
• The public protector investigated and found that she created a conflict of interest between her official responsibilities and private interests.
• The ANC called on Segabutla to not participate in any of the ruling party’s structures and the top leaders are yet to decide on how to deal with the issue.
• Corruption Watch had also conducted its own investigation and submitted its finds to the relevant authorities.
• Segabutla’s court case was postponed to 27 March 2014.

Free State website – 6 March

The Free State provincial government splurged R40-million of its budget on developing a website. The province would determine whether it received value for money in the website deal, said Premier Ace Magashule.

• The story was aggravated when Magashule was accused of channelling millions of state rands to the same company that built the online platform.

• According to allegations, the Letlaka Group – which benefitted from the website – was paid tens of millions of rands for work that was not properly put out to tender.

John Block trial – 7 March

Northern Cape’s ANC chairperson and finance MEC, John Block, as well as other leading figures in the province faced multiple criminal charges, ranging from corruption to fraud and money laundering involving R48-million.

• The charges relate to the purchasing of a portable water purification unit at inflated prices.
• Despite the corruption charges, Block was re-elected chairperson and the Northern Cape ANC.
• Block and his co-accused appeared in court in March 2013 and the case has been postponed to 3 February 2014

DPW Pretoria head office upgrades – 7 March

The Department of Public Works paid more than five times the price originally quoted for renovations to its Pretoria head office.

• Public Works minister Thulas Nxesi said the renovations were initially estimated at R59-million but the department ended up paying R325-million on completion.
• A deputy director-general was dismissed, while a former acting director-general and head of property management face disciplinary action.
• The SIU investigation found that R27-million had been spent on renovations, with R4.7-million paid to suppliers without supporting documents.
• It also found that bills of quantity were excessively inflated and supply chain prescripts were not complied with in appointing service providers.

Tina Joemat-Pettersson – 14 March

President Zuma slapped Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson on the wrist for spending R1.6-million of public funds on lengthy stays at lavish hotels.

• Public Protector Thuli Madonsela last year found Joemat-Pettersson guilty of breaching the executive ethics code by spending more than R420 000 at a Johannesburg guesthouse during the Fifa World Cup in 2010 and another R151 000 of taxpayers’ money to fly her children home from a holiday in Sweden, among other transgressions.
• Zuma’s reprimand followed a recommendation by Madonsela that he take action against her.
• “I had an opportunity to engage with Minister Joemat-Pettersson on the findings of the public protector. After careful consideration of the public protector's findings on the matter, as well as Minister Joemat-Pettersson’s submission on the matter, I have reprimanded [her] for her violation of the executive ethics code,” Zuma wrote in his letter to National Assembly Speaker Max Sisulu.

Social grant fraud – 22 March

Pretoria News reported that the re-registration for social grants by the Department of Social Development had uncovered massive fraud involving nearly R60-million, while only R1.1-million was recovered.

• According to figures released by the South African Social Security Agency chief executive, Virginia Petersen, many agency staff members faced disciplinary action for their roles in grant fraud, which involved just over R59m.
• 52 employees were suspended and 25 dismissed, while seven were fired before or during disciplinary proceedings.
• In one instance, a number of employees were arrested for being in possession of 127 unregistered social security cards, R37 000 in cash and Cash Paymaster Services machines, used to dispense the grants.

APRIL

Dr JS Moroka contract – 12 April

A procurement officer employed at Dr JS Moroka local municipality in Mpumalanga came under investigation following a Corruption Watch investigation that exposed an irregular awarding of a contract  at an inflated price to her husband.

• Greg Dinwoodie, an accounting officer that supplies the municipality with water testing equipment, blew the whistle on procurement fraud at the municipality.
• Corruption Watch investigated, and as a result, three officials were suspended from the municipality.

Dina Pule – 22 April

In 2012, a Sunday Times investigation exposed shady dealings at the ICT Indaba, alleging that Communications Minister Dina Pule leaned on telecommunications companies to sponsor the event from which Phosa Mngqibisa, with whom she has a supposed romantic link, earned R6-million for four days’ worth of work.

• Sponsorship funds amounting to R25.7-million disappeared and were mismanaged.
• The newspaper also claimed that Pule spent R2.6-million on a recruitment deal that led to the appointment of individuals, all of whom had a private relationship with Mngqibisa, to key government parastatals.
• An ethics committee hearing into Pule’s conduct began in Parliament in May and subsequently found Pule guilty of failing to declare her relationship with Mngqibisa.
• The committee recommended that Pule be fined 30 days’ salary and 15 days’ suspension from all the committees in Parliament.

PetroSA – 26 April

The Hawks confirmed they were investigating financial misconduct in the state oil company, PetroSA.

• The Mail & Guardian reported that managers at PetroSA ordered irregular payments of R200-million and risked an additional R800m in potential liabilities.
•  The allegations against PetroSA came after it bought Sabre Oil & Gas Holdings, which is involved in prospecting in the Jubilee oil fields in Ghana.
• Several “negotiators” involved in the deal are also being investigated for allegedly receiving multimillion-rand kickbacks.
• Six PetroSA officials are under observation by the Hawks’ crimes against the state unit and Interpol.

Gupta jet at Waterkloof – 30 April

The media broke the story that a private jet chartered by the Gupta family carrying over 200 wedding guests landed at the Waterkloof Air Force Base without following normal procedures.

• Chief of state protocol Bruce Koloane was suspended for his involvement in clearing the landing for the private plane. Koloane was also said to have name-dropped to secure the landing clearance, saying that he was under pressure from “Number 1”.
• Justice Minister Jeff Radebe said Koloane and Lieutenant-Colonel Christine Anderson manipulated processes and “shared a common purpose and acted in concert”.
• In September, three members of the SA National Defence Force appeared in court to answer charges relating to the landing of the private aircraft.

MAY

Border policeman – 7 May

The Hawks reports that nine police officers were arrested, along with seven other people, for fraud and corruption at the Caledonspoort border post in the Free State.

• The officials allegedly allowed people to enter the country from Lesotho without documents and charged them R150 each.
• Spokesman Captain Paul Ramaloko said of the seven, six were immigration officers and one an official from the Health Department.
• The officials were able to make over R100 000 a day.

JUNE

SAPS R500m police lease deal – 3 June

The police lease deal that led to the sacking of former police commissioner Bheki Cele landed another public servant in hot water.

• Sam Vukela, a senior Department of Public Works official who awarded a R500m lease deal to property mogul Roux Shabangu following a 10-minute meeting with the police, was found guilty.
• Vukela awarded the deal to Shabangu on 14 May 2010 after he met Lieutenant-General Hamilton Hlela, where the need for police accommodation and parking was discussed.
• An internal public works hearing found Vukela guilty on three counts of financial misconduct.

Corruption in school grounds – 4 June

Corruption Watch received a complaint from a group of teachers at Thubelihle Intermediate School in White City, Soweto, alleging that the principal, Nonzwakazi Usiba, and former chair of the school governing body, Isaac Ngwenya, were tangled in corrupt activities. It was suspected that Usiba and Ngwenya were involved in misusing the school’s funds.

• Corruption Watch found mass evidence of fraud in the schools finances and commissioned an independent auditing firm who subsequently backed our findings.
• The evidence pointed fingers directly at Usiba and Ngwenya being implicated in the wrongdoings.
• In August, Corruption Watch opened a police case against Usiba at Moroka Police Station in Soweto, and the case is now sitting with the Commercial Crimes Unit.
• The principal attempted to wriggle herself out of the rot and avoid taking responsibility for her corrupt activity by resigning with immediate effect. However, Usiba was not let off the hook easily due to the GED forcing her to keep her post until the investigation is complete.
• Usiba is currently suspended.

JULY

SAPS most corrupt public body in SA – 9 July

The Global Corruption Barometer released by Transparency International revealed that South Africans viewed the police service as the most corrupt institution in the country.

• 83% of respondents in a survey had this view of the police.
• Of the 74% of respondents who came into contact with a police official in the past year, 36% were asked to pay a bribe.
• Lieutenant General Solomon Makgale pointed out flaws in the survey noting that “one must wonder if a survey amongst 1000 urban respondents is a true representation of the overall country’s perception.”

Manase report finally made public – 23 July

The long awaited report by Manase and Associates was finally released, detailing corruption and maladministration in the eThekwini municipality.

• According to the report, eThekwini spent over R500-million into an in-house revenue billing system.
• The contract for the project was awarded irregularly to Ramco/Citi Works, and a municipal official involved in the process subsequently landed a top job at the same company.
•  Another concern was the long duration of the project. The costs had ballooned from an estimated R90-million to R150-million at inception 10 years ago, to R505-million now.
• The report also revealed that, other than the millions paid to Ramco/Citi Works, consultants were paid R118.76-million to supplement the work done by the company.

AUGUST

The rot in Pikitup – 5 August

A corruption probe into dodgy tenders worth R360-million at Pikitup was trashed after the state-owned waste utility mysteriously pulled the plug on the investigation.

• The Sunday Times established that Pikitup paid audit firm EY (formerly Ernst & Young) R6-million to investigate tender rigging – then halted the probe in October 2012 before it could prepare a final report.
• An explosive draft report obtained during a joint investigation with Corruption Watch implicated top officials at Pikitup.
• Pikitup claimed the report was handed to the Hawks early this year for further investigation. But this was disputed by Hawks spokesman Paul Ramaloko. "No arrest has been made, but investigations are under way whilst awaiting [the audit] report," he said.

IEC Chair caught in dirty lease deals – 26 August

The public protector found the chairwoman of the Independent Electoral Commission, Pansy Tlakula, guilty of improper conduct and maladministration.

• According to the investigation, Tlakula, failed to disclose her business relationship with her co-director, who had a common interest in Lehotsa Investments.
• There were further allegations of a conflict of interest between Tlakula and Parliament's finance portfolio committee chairperson, Thaba Mufamadi, who is chairperson of Manaka Property Investments, a company that owns a 20% stake in Abland. Tlakula and Mufamadi are co-directors in Lehotsa Investments (Pty) Limited.
• Advance payments amounting to R1 653 215.46 were made by the IEC to Abland for the Riverside Office Park premises.
• Madonsela also found that over R6-million was paid for the IEC's old offices that stood empty between October 2010 and July 2011.

SEPTEMBER

R10-billion tender appeal – 10 September

Corruption Watch appeared in the Constitutional Court, as a friend of the court, in the case of Allpay Consolidated Investment Holdings (Allpay) and Others v The South Africa Social Security Agency (SASSA) and Others.

• At the heart of the case was the award of a R10-billion tender by SASSA to a private company, Cash Paymaster Services (CPS) for the distribution of social grants.  Allpay was one of the losing bidders – the company sought to review and set aside the tender in the lower courts,
• In late November, Judge Johan Froneman handed down a unanimous judgment, which found that the decision to award the tender to CPS was constitutionally invalid.

OCTOBER

CW probe leads to tender suspension – 6 October

Corruption Watch investigated a R182-million contract between the Mpumalanga Department of Health and a private service provider, Mkhago Health Care Services.

• Upon investigation it was found that in June 2013, the department awarded Mkhago a one-year contract to circumcise 260 000 boys and men in the province, at a cost of R700 per circumcision. The total would be worth a whopping R182-million if all 260 000 circumcisions were performed.
• By law all contracts over R500 000 are to be awarded through a public competitive bidding process. In the case of Mkhago, Corruption Watch found that the company presented a business proposal and won the contract without having to go through the required tender process.
• As a result of the probe, the Department of Health has suspended the contract with Mkhago Health Care Services.

Former Joburg City Parks MD arrested for corruption – 8 October

The Hawks arrested a former City Parks managing director for fraud and corruption involving R57-million.

• The former MD was arrested with another individual for fraud and corruption that occurred between 2006 -2012.
• The case related to a contract awarded by City Parks to Jozi Mart to supply trees. According to the Hawks, the company presented itself as a nursery and was subsequently awarded the tender.
• The implicated pair presented themselves as a nursery. They bought trees from other nurseries for R70 and selling them to City Parks for R700.
• The former MD was accused of not declaring his position as a shareholder within Jozi Mart.

NOVEMBER

Culprits arrested for illegally soliciting funds from Sassa – 15 November

The ANC’s Pule Mabe was arrested with two others on charges ranging from theft, to fraud and money laundering.

• His co-accused are Paseka Letsatsi, head of communications of the South African Social Security Agency (Sassa), and Surprise Kabedi Ramosa, reportedly one of Mabe's business partners.
• It is alleged that Letsatsi illegally solicited funds from Sassa, which were then given to companies owned by Mabe and Ramosa.
• The three were released on bail of R10 000 each and are due to appear at the high court in Pretoria in February 2014

DECEMBER

Public protector reports back on disgraced ministers – 12 December

At a media briefing, Public Protector Thuli Madonsela released investigative reports into the alleged corrupt behaviour by ministers Dina Pule and Tina Joemat-Pettersson, as well as maladministration by the Eastern Cape Department of Education.

• In investigating Dina Pule and the case of the ICT Indaba, Madonsela found that Pule authorised the donation of R10-million of her department’s money to the event and this was improper and amounted to maladministration.
• It emerged from Madonsela’s report that R15-million contributed by MTN was illegally diverted by Phosane Mngqibisa, Pule’s boyfriend. He was appointed as one of the service providers, and had moved R6-million into his company account.
• Pule had also lied about that relationship, said Madonsela, because for a long time she denied that they were in a relationship but finally she admitted the truth to the public protector.
• The public protector said that Pule must pay back all the state funds that were spent on Mngqibisa and mentioned that.
• In investigating Joemat-Pettersson, Madonsela found that there was fishy business in the awarding of the R800-million tender, which was for the manning and maintenance of state-owned marine patrol vessels for a period of five years, to Sekunjalo Investment Holdings.
• Madonsela noted that the awarding of the tender amounted to maladministration as it did not comply with the department’s supply chain management process, and was therefore improper.
• Madonsela recommended that President Zuma take disciplinary action against Joemat-Pettersson for her “reckless dealing with state money and services, resulting in fruitless and wasteful expenditure, loss of confidence in the fisheries industry in SA, and alleged decimation of fisheries resources in SA”.
• In investigating the Eastern Cape Department of Education, Madonsela found that the provincial department of education had failed to deliver the workbooks on time or at all, or that the books were printed in the wrong languages. This amounted to “clear maladministration”.
• Basic education minister Angie Motshekga was not to blame, she said, but the responsibility falls on the basic education director-general and provincial head of the department, as they had failed to co-ordinate processes, and failed the pupils as well.

Task team report on Nkandla – 19 December

Results of an investigation by a ministerial task team into the security upgrades at President Zuma’s Nkandla residence was released at a media briefing. A summary of the task team’s findings include :

• Allegations that the president had used state resources to build or upgrade his personal dwellings are unfounded;
• The actual security installation cost approximately R71-million. Approximately R135-million was spent on operational needs and basic facilities and services such as water, power, accommodation etc., which were needed to support the security upgrade for SAPS and defence personnel.
• The task team uncovered supply chain irregularities in relation to the appointment of service providers and procurement of goods and services. For instance, large variation in orders and the high percentage spent on consultancy fees point to the possibility of over-pricing and collusion.

Based on the task team’s report, the following actions are currently underway:

• Nxesi engaged with the Special Investigating Unit and the auditor-general for further forensic and criminal investigation.
• President Zuma has signed the proclamation empowering the SIU to institute further investigations.
• Nxesi has written to the minister of police requesting SAPS to investigate any possible criminal acts.