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With the last words barely written about the Deputy Presidents semi-private trip to Dubai in December (see National Administration), the nations attention had already moved focus from her jet stream trails to other corruption battles. Some are being fought inside and outside the court in the run up to the mid-2006 corruption trial of her predecessor Jacob Zuma (See National Administration). Then just as Parliament was to open it appeared that the chief whistleblower in the Parliamentary travelgate scam was under fire from the legislature – this while another 100 elected representatives are being investigated for criminal abuse of the parliamentary travel voucher system (See National Administration).

Our collective attention span is short, and scandals abound. In last weeks local government elections approach – millions of South Africans used the ‘Power of X’ (the IEC’s marketing slogan) to rid the country of corrupt and inefficient politicians (see Local Government) or reward those who are accountable and act with integrity. The fact that we have embarked on the third democratic provincial election with no allegations of corruption leveled against Pantsi Tlakula, Dr. Brigalia Bam and their team at the IEC, is proof that public institutions can thrive where integrity is nurtured.

Almost every political party campaigned on an anti-corruption and service delivery ticket. However, it’s the way in which they campaigned that begs the question whether we are starting to get what local level elections are about wrong?

If most political party mandarins are to be believed, South Africans elected a president when they headed to the polls on March 1. The first phase of the election campaigns in many of the metropoles and other areas focused on the face of the commander in chief, the leader, the president of a party. In hotly contested areas such as Cape Town, opposition parties have introduced the “mayoral candidate” -- either solo or in a familial portrait shot such as the Independent Democrats’s (ID) Patricia de Lille and her hotelier. Many voters were, no doubt, surprised that they weren’t confronted with the dour photo of Connie Mulder on their ballot paper. Instead, they looked at photos of women and men that many have not set eyes on, other than a brief encounter at the local spaza shop or corner café.

In a remarkably short space of time, South African politics has come to resemble American politics in both national and local elections. Politics matters, but it’s the brand that sells. Have the parties and their slick advertising gurus missed the point about democracy at a local level altogether?

Printing a million identical posters in Pretoria and sending them to the nine corners of our nation cuts costs and creates a good profile of the party. However, it does little to help voters discern why Vusi X or Magdalene Y should be their voice at a local level? Does this inspire citizens, who do not feel that any major party represents their interests, to vote on election day?

Importantly, it also decreases the ability of communities to hold elected leaders to account. This is a vital ingredient in ensuring that local politicians stay clean and don’t dip their hands into the tender cookie jar. When everyone knows who you are, it’s more likely that your four new garages and golf club membership will raise eyebrows in your neighbourhood where you were once known as the politician in the old beat-up bakkie. Candidates also stand the risk of becoming increasingly accountable to party structures that, in turn, pander to the interests of donors who fund national poster campaigns. This all serves to muffle the voice of the electorate.

In focusing on the party and not on local candidates, the major political groupings risk duplicating an inherent weakness of the national and provincial party list system at a local level. Ironically, they do this in the one level of government that allows citizens to choose their candidate and not rely on the political parties, central committees to pick their favoured politicians. If this is a trend, it’s a worrying one that we need to correct in future elections and a reminder that political parties need to find an impasse between the narrow interests of party headquarters and a bigger picture approach to ensuring that the democratic project remains a viable one.

More than any other election since 1994, the most recent local government elections have seen almost every large political party, and many independent candidates, aspire to the title of “graft-buster”. Combating corruption and improving service delivery was imprinted in party manifestos and echoed in campaign rallies around the country.

Corruption is not the only challenge facing effective public service delivery, but the frequency of corruption scandals at the local level (which could run into hundreds of millions of rands annually) indicates that we may be facing a serious problem. How have political parties responded to an issue that bedevils each one of them in turn? None provides a magic silver bullet, nor could they, but they go some way towards prioratising the issue. But, it will take more than vague policy to tackle graft at the site of service delivery. Now is the time to scrutinise politicians against promises they made in the run-up to the elections. The democratic right to vote is a hard fought for right – but the true ‘power of X’ is holding elected leaders to account for the 1800 days that separate us from March 1st 2006 and the next local government election.

 

Editorial Note: The ISS Corruption & Governance Programme has recently commenced a new 18-month project that will monitor the impact of corruption on service delivery. This project funded by DANIDA through the Danish Embassy will ensure that Umqol’uphandle- SA Corruption Briefing will once again appear in your e-mail inbox on a monthly basis. Please feel free to distribute the newsletter widely. We apologise for the fact that the December/January edition is only being delivered to you today. However, Eskom’s intermittent power cuts affected our electronic newsletter publishers as much as the rest of the Western Cape. The February edition of Umqol’uphandle follows next week.

Harry Charlton, former chief financial officer of Parliament, lost his job on 10 January 2006. The axing followed a disciplinary hearing where 15 misconduct allegations were levelled against him. Charlton, who was central to the ongoing travel fraud investigations, argues that the charges had been trumped up to discredit him as he continued to press for more action on the abuse of MP’s travel warrants. Charlton plans to sue for defamation. He is also to approach the Council for Conciliation, Mediation and Arbitration (CCMA) for his reinstatement.

New information obtained from Charlton and liquidators by the Mail & Guardian indicates that Parliament may be owed as much as R36-million (more than double previously published estimates) by travel agents and MPs for fraudulent travel claims. The scandal is growing as investigators are working through a new list of 100 names that could implicate senior MPs (including two cabinet members), members of the whippery and parliamentary office-bearers. Four people, of which two are serving ANC MPs, have been added to the list of 21 Travelgate accused who will go on trial in he Cape High Court in July. The list now includes 17 current members of Parliament and 8 former members.

The Deputy President, Phumzile Mlambo-Ngcuka, used an SA Air Force jet at a cost of between R400 000 and R700 000 for a holiday to the United Arab Emirates in December 2005. While denying that the trip was official, the Presidency added that interactions and visits relating to project management skills development, which would boost South Africa’s accelerated growth initiative, took place on the trip. Mlambo-Ngcuka was accompanied on her trip by her husband, Bulelani Ngcuka, and her friend, Thutukile Mazibuko-Skweyiya.

The Presidency stated that, “the Deputy President [did not] infringe any law, regulation or policy prescript”. In contrast, corruption watchdog, the Public Services Accountability Monitor (PSAM), argued that Mlambo-Ngcuka’s trip was in “clear violation of regulatory prescripts”. Presidential spokesperson, Murphy Morobe, added that no specific stipulations for the deputy President were in place in the Cabinet guidelines. Christelle Terreblanche from the Cape Times reports that South African civil society researchers have, for a number of years now, warned that the Executive Members’ Ethics Act and the Ministerial Handbook should be enforced through proper oversight or a sanction mechanism. Public Protector Lawrence Mushwana’s office said that preliminary investigations were started and that he was waiting for Parliament’s Standing Committee on Public Accounts to get back to him on the matter.

Cape Times (23 January 2006), Mail & Guardian (13 January 2006)

Sam Sole and Stefaans Brümmer of the Mail & Guardian (M&G) argue that the Deputy President’s UAE trip leaves questions relating to the private interests of those who accompanied her unanswered. Mazibuko-Skweyiya’s presence was officially ascribed to her voluntary contribution to an Asgisa (Accelerated and Shared Growth Initiative) programme on infrastructure project management skills. The M&G notes that the private interests of Mlambo-Ngcuka, Bulelani Ngcuka (her public-official-turned-business-man husband) and Thutukile Mazibuko-Skweyiya (her public official-turned-magnate friend), are uncomfortably close in at least two areas. Firstly, both Ngcuka and Mazibuko-Skweyiya are shareholders in the financial services conglomerate, Old Mutual. The Old Mutual subsidiary, Old Mutual Properties has been described as “the most significant property manager and developer in South Africa”. Among its services are project management. In 2004, Ngcuka’s investment group registered an offshoot, Amabubesi Project Management. Amabubesi joined another company in becoming the majority shareholders in construction giant Basil Reed. Then, in 1993, Mazibuko-Skweyiya considered joining the Imvume group of Oilgate’s Sando Majali. Majali was close to Mlambo-Ngcuka’s brother. In 2005 the M&G exposed how Mazibuko-Skweyiya and Mlambo received transfers from Imvume.
Full article in the Mail & Guardian (20 to 26 January 2006)

The investigation into a controversial R800-million loan from the state-owned Land Bank to Pamodzi (a company to which two senior ANC members are linked) is expected to be concluded early in 2006, according to the Star. The ANC secretary-general Kgalema Motlanthe and former Northern Cape premier Manne Dipico own shares in Pamodzi through a trust. Boyd Webb and Angela Quintal of the Star highlight how attention has again been drawn to the alleged loan irregularities in relation to the so-called hoax e-mail campaign (investigated by Inspector-General Zolile Ngcakani) aimed at discrediting senior ANC and government officials. Amongst other things, the e-mails and transcripts of chatroom discussions discuss the alleged plans of a pro-Mbeki ANC group to cripple Motlanthe financially, in an attempt to prevent him from becoming South Africa’s next president. The chief executive of a Durban-based company was allegedly linked to the so-called hoax e-mails by “incriminating evidence” found in his Johannesburg home. He is also allegedly linked to Motlanthe through the Pamodzi deal. Motlanthe denied knowing or having any business links with the businessman. He added that he had co-operated with the Public Protector’s office in relation to the Pamodzi loan.
Full Article in The Star 6/12/2005

The South African National Anti-Corruption Forum (NACF) is considering a report by the Institute for Security Studies (ISS) on alleged large-scale corruption committed between 1976 and 1994 under the Apartheid government, with a possible view to a kind of Truth and Reconciliation Commission for corruption. This is according to a news report by Fin24’s Adriaan Basson and Jan-Jan Joubert. The ISS report, which has been approved by representatives of a number of civil society organisations, was handed to the chairperson of the forum, Minister for Public Service and Administration, Geraldine Fraser-Moleketi. The document, which is being distributed among various interest groups as a discussion document, recommends that a number of people, bodies and events be investigated, including the Broederbond, the governments of former presidents PW Botha and FW de Klerk and the South African Reserve Bank. According to the report, the country may have lost billions of rand due to large-scale corruption under Apartheid. The questions posed in this report have not been answered by the TRC or any organ of the democratically elected government. The NACF is expected to make its decision about the report known in April 2006.

Full article on Fin24 (9 December 2005)

Properties worth R1,4 billion were to be sold in a secret transaction that transgresses the Public Finance Management Act, according to Jimmy Seepe from the City Press. The Act requires accounting authorities to subject the sale of state assets to a process that would “maintain an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective”. Seepe reports that an offer by a black empowerment consortium was turned down as the Trust noted that another company had been secured as the buyer. The transaction, between the Transnet Retirement Fund Property Trust (an independent and separate legal entity from Transnet) and the Johannesburg-based company, Pangbourne, is claimed to contravene the Act by not following appropriate tender procedures. There is concern that the Trust planned to dispose of the property before March 2006 when the Property Charter that will come into effect will require all companies that go to the property market to reserve a 15 percent stake for BEE firms. Transnet spokesperson John Dludlu declined to comment on reasons for not putting the deal out to tender. He invited any party that feels aggrieved to make a formal complaint.
Full article in City Press (4 December 2005)

According to the Mail & Guardian, the Ministry of Justice received (by the end of November 2005) a forwarded legal opinion from the State Attorney’s office regarding the report on the United Nations inquiry into the controversial Iraqi “oil-for-food” programme. Several overseas companies and individuals are facing charges or investigations as a result of the report, which was released in October 2005. The report also included a case study on the relationship between the Iraqi regime and Imvume Management, the South African company with close ties to the ruling African National Congress. While Imvume denied paying illegal surcharges or kickbacks, the report alleges that payment of such a levy was in fact made on behalf of the company. According to a spokesperson of the Ministry of Justice, the issue (of what action needs to be taken following the report) is being discussed between the ministry and the Office of the Deputy President. No time frame was provided for a formal response.
Full article in Mail & Guardian (9 December 2005)

On 25 January 2006 the Mail & Guardian (M&G) filed a court challenge to Public Protector Lawrence Mushwana’s findings on the Oilgate scandal. The M&G wants the Pretoria High court to review Mushwana’s report (released in July 2005), set it aside and order him to redo it. They argue that the action from the Public Protector in this regard was neither unbiased nor diligent. The M&G exposed the channelling of R11-million in public money through Imvume Management (“effectively a front company for the ANC”) to the ANC before the 2004 elections, through an advance from oil parastatal PetroSA. Mushwana argued that he had no jurisdiction to investigate this flow of money that fell in the private domain. The M&G argues that this failure to consider “private issues”, such as the relationship between Imvume and the ANC, materially influenced his findings. They insist that an understanding of this relationship is crucial to other elements of the scandal. The legal challenge will rely on the provisions of the Promotion of Administrative Justice Act, the Public Protector Act and the Constitution.

The City Press reports that more than 1000 government officials in Limpopo have pocketed R75,5 million from state tenders awarded to front companies under their control in the last financial year. The official response from the Limpopo legislature indicate that 1009 officials from the health and social development department (including senior managers) own private companies that specialise in delivering services to government. Only 74 of the 1009 officials declared their interest or asked for permission to do paid work outside their primary employment. Health and social development spokesperson Phuti Seloba said that, by December 2005, none of the officials had been suspended or dismissed, but that the “guilty officials will be severely dealt with”.
Full article in City Press (4 December 2005)

According to the Business Day, the North West agricultural department had collapsed due to fraud and corruption. Parliament learnt that the department was unlikely to spend more than 2% of its R140m budget this year. Capacity problems continue to be a constraint on spending in most provinces, but the North West agricultural department seems to be the worst off. According to the North West finance MEC, Maureen Modiselle, the department lacked capacity in planning and project management and was unable to retain professionals. The department was paralysed by the suspension and arrest of several key directors and chief directors on charges of fraud and corruption. During 2005, ten senior staff were suspended, with some already arrested for the irregular disbursement of agricultural support funds.

The Sunday Times reports that the office of Free State Premier Beatrice Marshoff spent nearly R20 000 in taxpayers’ money on programmes printed for the funeral of Noby Ngombane. Ngombane was head of Marshoff’s policy coordination unit as well as a confidant and advisor to the Premier. He was gunned down at his home in Bloemfontein in March 2005. The payment to Handisa Printers was authorised by the Free State Director-General, Charles Nwaila. Gerhard Koorts, provincial manager of the Public Servants’ Association, said there were “no civil service regulations authorising such payments”. Ben van Niekerk, the province’s Auditor-General is investigating the matter.
Full article in Sunday Times (18 December 2005)

The Citizen reports that former Western Cape premier Peter Marais and co-accused David Malatsi had their bids rejected for discharge on two accounts of corruption totalling R400 000 by the Cape Town regional magistrate, Andre le Grange. Malatsi was discharged on a third corruption count due to a lack of evidence, but he still has to answer to four fraud and theft charges. The joint corruption charges relate to payments made into bank accounts of the New National Party (NNP) in 2002 by Italian developer Riccardo Agusta. In 2002 Marais was the Western Cape leader of the NNP. The State claims the payments were bribes to smooth an approval process for a golf estate development of Agusta. Agusta already paid a R1m fine after concluding a plea bargain with the Scorpions. The case was postponed to 22 February 2006.
Full article in Citizen (15 December 2005)

Business Day’s Hopewell Radebe reports that more than 100 municipal councillors and officials in Gauteng’s 15 municipalities have been dismissed or forced to resign in the past five years. These dismissals and resignations followed investigations of fraud, corruption and absenteeism. The most common offences, according to local government MEC Qedani Mahlangu, were maladministration, fraud and corruption. Mahlangu is expected to release figures of the cost that each municipality incurred as a result. Her department is busy completing its five-year review on local government, which will be released before the local poll on 1 March 2006.

A tender scandal involving a controversial R80m contract to build 5000 houses has prompted the North West Housing Department to take over the housing function from Mafikeng Local Municipality. Provincial Housing MEC Phenye Vilakazi said that his department would handle all government-subsidised housing projects until further notice. The announcement follows the suspension of Mafikeng’s acting municipal manager, Sello Mogodiri, due to the negative publicity arising from the tender scandal.
Full article in Citizen 15/12/2005

The Ehlanzeni, Nelspruit mayor, Jeri Ngomane was found guilty on three out of four corruption charges. The Mail & Guardian reports that he has subsequently been “sentenced” to the suspension of his ANC membership for five years and ordered to resign before the local government elections in March. The disciplinary hearing was based on a report by auditing firm KPMG. The report found wholesale corruption and nepotism in the municipality, specifically that women romantically linked to Ngomane had won contracts for council projects. Ngomane apparently intended to appeal against the decision.
Full article in Mail & Guardian (9 December 2005)

An internal investigation led to the suspension of a municipal manager and a junior official in the Nkomazi council in Malelane, Mpumalanga. According to the City Press, the manager Simon Thani and Henry Mashele allegedly enriched themselves from a R13 million pit toilet contract. An auditor-general’s report found that they did not follow proper procedures in the project, which was intended to build 4 842 pit toilets in 23 rural villages for R2 729 each. The report indicates that the company given the contract was not on the tender shortlist, nor was it registered with the Registrar of Companies. Thani allegedly gave the company an advance payment of R1, 9 million, approximately 60 days before official appointment. He is also accused of paying a company in advance for doing an audit of the toilets. The company left some toilets partially built and did not build others at all. Thani apparently cancelled the contracts of two of the companies that were initially hired. He has denied any wrongdoing on his part.
Full article in City Press (15 January 2006)

News24’s Sizwe SamaYende reports that the Mpumalanga local government MEC, Jabu Mahlangu, would decide the fate of 13 ANC councillors implicated in wide-scale corruption that brought the Thaba Chweu municipality to the brink of financial collapse. The 13 councillors make up more than half of the 23 Lydenburg-based councillors. The politicians are likely to be charged for abusing their cellphones and other council properties, and misconduct in breach of the councillors code of conduct. Grace Castle was appointed as a caretaker administrator of the municipality. Six employees have already been suspended following disciplinary hearings on various corruption charges. It is estimated that employees at the municipality could be stealing at least R100 000 a month. Since Castle’s appointment, Thaba Chweu has recouped almost R1m from rates and service defaulters.

The Cape Times reported another City of Cape Town tender scandal. A Johannesburg consultant, Thabo Mokwena, was hired by the City of Cape Town to drive a prestigious city development at a cost of over R6 million without a proper tender process. The consultant’s appointment was approved in just five days. Also, Mokwena, who was appointed as chief consultant, was also the one who made the original presentation to the city on behalf of the Department of Mineral and Energy Affairs. Until October 2005, Mokwena was the chief executive officer of the South African Local Government Association, Salga. Salga has overall oversight of the country’s municipalities. The project, managing a multi-million rand development that aims to transform the Foreshore into an African jewellery centre, was approved by the executive mayoral committee, Mayco, and therefore by the executive mayor, Nomaindia Mfeketo. Although the project is a joint project between the City and the Department of Minerals and Energy, the city council is responsible for the costs until a developer has been appointed. Mokwena was not available for comment.

Jimmy Seshoka, an ANC Youth League chairperson, has blown the whistle on the mayor of Mookgophong Municipality (formerly Naboomspruit, Limpopo) Jack Rakgwale, the municipal manager Piet Modiba and manager of social services Herman Sebata. The three were allegedly involved in falsifying about 500 membership cards in the ANC’s local election candidates list in a bid to secure prime positions on the list for themselves, the Star reports.

Corruption and service delivery seem to be the key issues in the campaigns for the local government elections on 1 March 2006. This follows a year of widespread protests at local level against perceptions of corruption in councils as well as the sacking and prosecution of Jacob Zuma on allegations of corruption. Having corruption as a key issue in the campaigns essentially moves discussion into the public domain (instead of only in the realm of policy makers).

The ANC launched its campaign with a call to all members of the party to unite in fighting corruption. All ANC candidates in the local government elections will have to take an oath that, amongst other things, commits them to “fight against corruption in any guise or form”. ANC councillors are also expected to sign a code of conduct that requires them to report back regularly to their constituencies and to fight corruption. The ANC’s election manifesto takes a strong stand against corruption at provincial level. The other leg of the campaign is improved service delivery. The ANC started acting on the promise to weed out all corrupt councillors and council officials by purging some candidates found guilty of corruption from candidate lists. The ANC national executive council announced that it would axe 60% of incumbent councillors in the municipal elections in a clean-up effort aimed at restoring public confidence in local government. The media and opposition were quick to point out where such candidates ”slipped the net” to remain on the lists. Some ANC members announced that, if they failed to make it onto the ANC lists, they would stand as independents.

The opposition DA’s campaign stands on the same two legs of fighting corruption and improving service delivery. Their election manifesto calls for the establishment of an ombudsman at each local authority with powers to investigate allegations of corruption and to end kick-backs for officials. This forms one of the proposals in the DA’s 12-point plan to combat corruption in municipalities countrywide. The anticorruption plan also proposes the creation of a special auditing department in each council to monitor and enforce guidelines on tendering. All DA councillors have to sign a commitment to implement the manifesto.

The African Christian Democratic Party similarly vowed to root out corrupt tender and procurement deals as part of its election manifesto. So far parties however have been quiet on the issue of party funding. Transparency International rated South Africa as among the least transparent on the issue.

The Sunday Independent reports how Noluthando Gosa resigned from the board of the SABC in December 2005 after making allegations of widespread corruption (in particular serious breaches of the public finance management act) and a lack of corporate governance to the auditor-general. Gosa cited frustration with the failure of her colleagues to act on four separate forensic reports that found irregularities relating to the commissioning of programmes, unauthorised expenditure and free distribution of SABC education material. Despite suggestions for open, transparent debate about these issues, it had not come up in board meetings. The chairperson of the organisation Eddie Funde responded by saying that the forensic process was driven by the board in the interest of good governance and transparency and that, where necessary, matters would be referred to the appropriate investigative agencies.
Full article in Sunday Independent (11 December 2005)

The fugitive businessman Billy Rautenbach left South Africa in 2000 when a warrant for his arrest was issued on charges of fraud, theft and corruption relating to his control of the South African operation of the Hyundai Motor Corporation. Rautenbach is known to have links with several high profile businessmen and politicians in Zimbabwe and the Democratic Republic of the Congo (DRC). According to the Mail & Guardian it now seems that a dispute between business partners has exposed the continued involvement of Rautenbach in the exploitation of mineral resources in DRC. This involvement was revealed in a court case in the tax haven of the British Virgin Islands (BVI) where some of Rautenbach’s companies are registered. Rautebach’s South African attorney, Nicoleen Fourie did not respond to questions e-mailed to her.

Niko Shafer became associated with questionable schemes to exploit the mineral wealth of Liberia and the Democratic Republic of the Congo (DRC) through his contact with the governments of former Liberian president Charles Taylor and Laurent Kabila of the DRC. Now the Mail & Guardian reports that the repeat offender is again facing charges of theft, corruption and contraventions of the Companies Act (a charge which flows “from the allegation that Shefer continued to act as a director of various companies, despite having been convicted and imprisoned for fraud, rendering ineligible to serve on a company board”) in the Pretoria High Court. The circumstances of this case seem to go back to 1997 when Shefer claimed to act as the Consul General of Liberia in South Africa. He convinced the South African Police Service (SAPS) to donate uniforms to the Liberian government. Sam Sole notes that “two donations, uniforms and material worth R33-million, were approved, but Shefer allegedly sold the donated goods or kept them for sale.” In a 1999 interview about his creative methods of conducting business in Africa Shefer reportedly boasted: “I move with cash. I can buy the president a Mercedes 600. How can a normal person justify that? How do they explain that to shareholders? I do not need board meetings. I am the board.” Shefer has denied any wrongdoing.

The case of Peter Ghavalas, a businessman charged with relation to the laundering of pension fund surpluses worth at least R175m, will end in after six years in March 2006 with the prosecution of Ghavalas. Ghavalas is faced with charges of laundering funds that could have been paid out to as many as 500 pensioners of the Picbel Group Provident Fund and others. The case is a culmination of deliberate efforts by authorities to protect the rights of pension fund members. According to the Business Day, Ghavalas is confident that he will be acquitted, due to, amongst other things, the fact that the current Pension Act is different to the one of the 1990s. Ghavalas is out on R1-million bail.

Business Day reports that the construction Ceta is facing alleged charges of fraud and mismanagement worth an estimated R150 million. Forensic auditors LMD Africa is investigating the construction industry education and training authority. The authority’s council believes that up to 40% of the money claimed from it for training was claimed fraudulently. The alleged fraud ranges from claims for “ghost” trainees and charges for courses that turned out to be shorter than the specified time, to unacceptably high instructor-trainee ratios.
Full article in Business Day (9 December 2005)

The Sunday Times reports that a company in which the convicted fraudster Shabir Shaik owns a 33.33% stake was irregularly awarded a multimillion-rand state tender to produce drivers’ licences. The company, Prodiba, won a five-year extension of a R650-million tender for the production of credit-card format licences without having to tender for it and without an opportunity being given for other companies to bid through an open process. Auditor-General Shauket Faukie has ordered a probe into all financial transactions, including payments to Prodiba, in the licences contract. The Transport Department’s financial statements for the last financial year have been qualified due the mismanagement of the contract.
Full article in Sunday Times (4 December 2005)

The Durban High Court ordered Shabir Shaik (the businessman and former financial advisor to former deputy president Jacob Zuma who was sentenced last year to an effective 15yrs in prison on two corruption charges and a fraud charged) to pay back R34-million to the State. News24 reports that the National Prosecuting Authority (NPA) is pleased with the ruling and commented that it “sends a very clear message that the Prevention of Organised Crime Act is a very effective piece of legislation that can and will be used by the state to confiscate proceeds of crimes”.

Barbara Hogan, ruling ANC MP, former chairperson of National Assembly finance portfolio committee and chairperson of the joint ad hoc committee on corporate governance, expressed concern over the poor state of corporate ethics in South Africa at present. This remark was supported by a report from Busa (Business Unity South Africa) that indicated a growth in economic crimes in the South African business environment. Surveys by KPMG and PriceWaterhouseCoopers (PWC) support and expand upon this issue.

The Cape High Court on 16 January 2006 ruled that refugee applications at the Department of Home Affairs had to be accepted “within a reasonable time”. This came amidst claims by Cape Town’s refugee community that ‘bribes are regularly paid in the city to hasten the process of attaining asylum seekers’ permits and other documents.’ Apart from an application backlog and an apparent lack of capacity, the department also faces claims of corruption, according to the Cape Argus. A Home Affairs official responded that the allegations of corruption had not been reported to the department and that such allegations can only be investigated once reported.
Full article in Cape Argus (17 January 2006)

According to the Sunday Independent, social development minister Zola Skweyiya said that out of 41 000 civil servants who received grants, it has been established so far that 15 000 had been receiving them unlawfully. After the expiry of an amnesty period in early 2005, the government has been involved in a comprehensive probe into social grant fraud. A number of civil servants have already appeared in courts around the country in connection with welfare fraud.
Full article in Sunday Independent (18 December 2005)

According to BuaNews four housing contractors face criminal and civil charges for allegedly defrauding Mpumalanga’s local government and housing department of more than R400 000. The contractors are accused of claiming money for shoddy work or invoicing for RDP houses that they did not build. As a result, the department MEC Jabu Mahlangu froze any new construction jobs for RDP houses in the 2005/2006 financial year and instructed his own official to ensure that the existing projects are properly completed. As investigations continue, more contractors are expected to be charged.

President Mbeki received the final report of the Jali commission set up in 2001 to probe prison corruption and maladministration, on 12 January 2006, as News24 reports. The report comprises five volumes of about 1 500 pages and was compiled after 105 weeks of hearings involving 516 witnesses. Mbeki said he was still to study the document and that a decision would be made thereafter on whether the report would be released publicly.

Vusumuzi ka Nzapheza of the Citizen reports that the prisoners’ rights organisation, Sapohr, declared 2006 an “anti-corruption year”. Sapohr president, Golden Miles Bhudu, said the group would focus on highlighting the plight of those in over-full jails. He argues that the choked system has produced, amongst other things, wide corruption, nepotism and lawlessness. Sapohr attributed the overcrowding to “unnecessary arrests and unaffordable bail”.
Full article in Citizen (23 January 2006)

News24 reports that officials from the Independent Complains Directorate (ICD) raided the Pietermaritzburg police station in KwaZulu-Natal. The raid formed part of their investigation into alleged corruption at the station. ICD spokesperson Steve Mabona said documents were confiscated and three senior police officers were under investigation for allegedly defrauding the state of about R100 000. The investigations appear to be at an advanced stage and the case docket will be forwarded to the director of public prosecutions for a decision on prosecution.
Full article on News24 (14 December 2005)

Eight police officers, mostly reservists attached to the West Metropole crime reaction unit and including a superintendent and several inspectors, face 23 corruption charges. The officers allegedly “swooped on houses” and stole large sums of money and appliances. The accused, who were released on bail, have been suspended. They indicated in their affidavits that they would plead not guilty. The Cape Argus reports that the case has been postponed to 28 April 2006 for further investigation. The officers were released on bail.

The Citizen reports on the workshops organised by the United Nations Office on Drugs and Crime (UNODC) and the Department of Justice and Constitutional Development to raise awareness of activities against corruption in celebration of International Anti-Corruption Day, 9 December 2005. The workshops were held at the Pretoria North Magistrate’s Court. The department said that it had, with the assistance of the UNODC, commissioned research at various courts in the country regarding capacity and aspects relating to corruption. The research ‘found that between 40% and 60% of court users rated the quality of services as being very good’ barring the fact that cases often dragged too long.
Full article in Citizen (12 December 2005)

Finance Week reports that the latest Transparency International polls show that South Africans see politicians and the police as the two most corrupt groups in the country. 67% of South Africans also believe that corruption has gotten worse over the last three years. Furthermore, South Africa’s legal system fared relatively poorly with a rating of 3,3 where 1 is not corrupt at all and 5 is extremely corrupt. The media, tax, military, customs and business all fare tolerably by international benchmarks. Fewer than 10% of South Africans say that they’ve paid a bribe in any form in the last 12 months.
Full article in Finance Week (21 December 2005)

According to the 2005 PriceWaterhouseCoopers (PWC) global economic crime survey over 80% of South African companies have fallen victim to fraud in the last two years and 15% lost between R6,5m and R65m. More than half of all company fraudsters in South Africa are senior and middle managers. Half the perpetrators do it at their own companies and more than half believe they are not doing anything wrong. The survey also shows a 17% increase in commercial crime in South Africa since 2003, a rise that is partly attributable to better vigilance.

The United Nations Convention against Corruption, the first legally binding instrument that fights corruption in the private and public sectors, came into force on 14 December 2005. The document that was adopted by the UN General Assembly in October 2003 has been signed by 140 countries and ratified by 38. As the Citizen reports, the executive director of the UN Office on Drugs and Crime (UNODC) Antonio Maria Costa said that, “the tough new provisions on asset recovery represent a major breakthrough”.
Full article in Citizen (15 December 2005)

The Office of Company and Intellectual Property Enforcement (OCIPE) launched its first large-scale investigation on11 January 2006, according to the Citizen. Barry Sergeant notes that this marked ‘a potential quantum leap in upgrading the country’s levels of investor protection.’ Three entities, known as Garek, Matric and Rsi, will be investigated under section 258(2) of the Companies Act. OCIPE, a unit of the Department of Trade and Industry, is set to add to the effectiveness of South Africa’s law enforcement agents operating in the area of corporate malfeasance. OCIPE received some muscle in the form of an increase in its head count in mid-2005 from 2 to 15, mostly highly skilled professionals. In practice, the Scorpions, Financial Services Board (FSB) and OCIPE had completed investigations that are likely to succeed in court to the prosecuting division of the National Prosecuting Authority (NPA).

New legislation in the form of the Auditing Profession Bill, which has been approved by the national council of provinces, is expected to become law in the first half of 2006. This legislation has widened the definition of what constitutes a material irregularity at a company and has set out heavy penalties for auditors if they do not report these transgressions. As a result, the Cape Times reports that the Public Accountants’ and Auditors’ Board (PAAB) anticipates a flood of reports of material irregularities from its members.

The National Anti-corruption Forum (NACF) cited the achievements of some of their goals of 2005 at their last meeting for 2005. The Citizen reports on the meeting. Amongst the achievements were mentioned the National Anti-corruption Programme (NAP) following the National Anti-corruption summit of March 2005, the development of a draft of an Ethics Pledge for leaders of all sectors, the planned undertaking of an Ethics Environmental Scan and the planned release of a user-friendly guide to the Prevention and Combating of Corrupt Activities Bill. The NACF also said that they would study the report on Apartheid grand corruption as well as prepare a submission on fighting corruption for the purposes of the self-assessment phase of the African Peer Review Mechanism.
Full article in Citizen (1 December 2005)

News24 reports that Mpumalanga is establishing a full-time watchdog to monitor and clamp down on corruption in its municipalities. This special interventions directorate of eight members will be based in the provincial local government and housing department. Its goal will be to pro-actively identify irregularities and provide remedies before harm is done.

Business Day reports that a new information technology (IT) system used by the Johannesburg metro police has the added bonus of helping to curb police corruption. The system is used to apprehend motorists with outstanding fines. When the system is used to confirm outstanding warrants of arrest or fines, but no action is taken, the management system will pick it up and query it. The system however cannot prevent officials from soliciting bribes from motorists caught for traffic offences, for which there is dependence on complaints from the public and undercover sting operations.

Please see the next edition of Umqol'uphandle - SA Corruption Briefing for a profile of an organisation or institution tasked with tackling corruption.

•  The Transparency International Global Corruption Barometer 2005 was released on global corruption day, 9 December 2005. The Barometer also monitors trends of the views of South Africans on the impact of corruption on various sectors of society

•  The Transparency International Global Corruption Report was released on 1 February 2006. The focus of the 2006 GCR is on “Corruption in Health” and also features a brief assessment of corruption in South Africa.

The Institute for Security Studies (ISS) is an applied policy non-profit research organisation with a focus on human security issues on the African continent.

This e-briefing is produced by the Cape Town based ISS Corruption and Governance Programme, and funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark as well as the Norwegian Development Agency (NORAD) through the Embassy of Norway.

Editorial Team:
Hennie van Vuuren (Head: Corruption & Governance Programme)
hvanvuuren@issafrica.org - Tel: 021 4617211
Andile Sokomani (Researcher: Anti-Corruption Strategies)
asokomani@issafrica.org
Pilisa Gaushe (Manager: ISS Cape Town Corruption Resource Centre)
pgaushe@issafrica.org
Mari-Lise du Preez (ISS Research Intern)

Visit the Southern African Internet Portal on Corruption
http://www.ipocafrica.org
please email: umqoled@issafrica.org

"Corruption and misadministration are inconsistent with the rule of law and the fundamental values of our Constitution. They undermine the constitutional commitment to human dignity, the achievement of equality and the advancement of human rights and freedoms. They are the antithesis of the open, accountable, democratic government required by the Constitution. If allowed to go unchecked and unpunished they will pose a serious threat to our democratic state". President of the SA Constitutional Court (Judge Arthur Chaskalson), 2000

Umqol uphandle - SA Corruption Briefing, a monthly free e-briefing, aims to document and inform on instances of corruption in South Africa and the SADC region and assist in raising the debate around effective anti-corruption strategies - with a South African perspective. Published by the ISS - Organised Crime and Corruption Programme, Umqol uphandle highlights the results of relevant research, initiatives to combat corruption as well as a snapshot of recent corruption related stories, which have appeared in the media. Each edition features the top corruption related story from the SADC region as well as a short profile on a key anti-corruption agency, organisation or instrument.

Umqol uphandle is inspired by a Xhosa proverb meaning "the moment when something which has been hidden is revealed".