"The moment when something which has been kept hidden, becomes exposed"

Issue No 009
20 October 2003

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Showing the red card

Preying on the poor, the elderly, the sick, the disabled - corruption in our social development departments not only undermines service delivery but also has a measurable impact on these people's lives. As a report in the Sunday Times illustrates (See Social Justice: They should be fired), this practice could cost South Africans a whopping billion rand a year. There is urgent need to speed up the pace for reform in combating graft in social development departments. Equally worrying are reports that R17 million earmarked for housing development in the Western Cape has gone into the wrong pockets - although action has been promised it could not come sooner given the massive housing backlog in the province.

The establishment of a single national anti-corruption hotline by the Public Service Commission (See reform) could positively assist victims to speak out, encouraging a 'culture of shame' within the public service of corrupt practice. This is of course reliant on public awareness of the hotline once established and confidence in the effectiveness of such a hotline. Promising signs have also emerged from the Satchwell Commission (see reform) that similar ongoing abuse of public funds in the Road Accident Fund could be tackled by Parliaments multi-party committee on transport ensuring that victims and not intermediaries are the funds ultimate beneficiaries.

The United Nations also finalised the Draft UN Convention on Corruption earlier this month (See reform). Once ratified by thirty countries it will provide a global benchmark for anti-corruption laws. It however, does not include provisions on private-private corruption and party funding (which apparently found no favour with the US delegation). The recently passed African Union Convention (See Umqol' 008) does however deal with both and it is hoped that Parliament will pass the Prevention of Corrupt Activities act before the 2004 election which will give South Africa a potent anti-corruption instrument if implemented. This law is however, unlikely to cover the necessary regulation of private funding of political parties (see reform).

The red herrings are running!

Residents of Kwazulu-Natals coastline are familiar with the sardine run but the last month has hailed a possible red herring run in unsuspecting Bloemfontein. The nation is gripped by the political intrigue regarding allegations of Bulelani Ngcukas'past as an apartheid era spy (See National Admin.). Similar allegations made against the current Premier of the Western Cape Marthinus van Schalkwyk in media reports in the mid-1990's concerning his role as a student 'informant' at RAU have seemingly neither been investigated nor denied. This makes the piece-meal approach by the Hefer Commission questionable as the most appropriate manner to deal with the issue. Ngcuka may of course have been a spy- but what is troubling is that his band of accusers Mac Maharaj, Brett Kebble (see industries), Deputy President Zuma and Shabir Shaik are all being investigated by the same Prosecuting Authority which Ngcuka heads up on charges related to corruption. Judge Joos Hefer - a strange choice given his record as apartheid era hanging judge - will deliver judgement on this matter. Ngcuka may have been a spy but the question, which needs to be asked of his detractors, is 'How did this compromise his ability to lead the National Prosecuting Authority and impact on investigations and prosecutions by the DSO (Scorpions) or the NDPP?' Until this is revealed and proven conclusively we may be drawn into an unnecessary and possibly very lengthy sideshow which will not make allegations of corruption surrounding the arms deal go away. We would be wise to watch this space.

PUBLIC SERVICE

NATIONAL ADMINISTRATION

State Loss of R4m to Crooked Officials

According to the Public Service Commission "a total of 434 government officials were charged with financial misconduct involving a loss to the state of at least R4m in the year to end-March 2002", Business Day reports. A report on financial misconduct, recently tabled in Parliament, reported on misconduct cases that breached the Public Finance Management Act. The"Public Service Commission has a database to capture information on all cases of misconduct in government", however since only 19% of the departments have provided details of financial loss suffered as a result of misconduct, losses to the state could be higher. It's reported that "of the 434 officials charged, criminal proceedings were instituted in 91 cases and five officials were found not guilty, while in 209 cases, officials were dismissed". Of the officials charged 342 were junior officials, 30 were middle management employees and five were senior mangers. More than half of the reported cases related to claims, embezzlement, misappropriation of funds and false statements and only R177 834 of the R4,2m misappropriated was recovered. Governmental departments, suffered differently, with the defence department reporting the most cases of financial misconduct (67), followed by the labour department (65); the home affairs department (39) and the KwaZulu-Natal transport department (34). Overall the labour department suffered losses of R1,4m.
Full Article in Business Day: allafrica.com...

Army's books in dissaray

News 24.com reports that "Several irregularities relating to housing and personnel issues have come to light in the defence force's annual report and the accompanying report from the auditor general" (Shaukit Fakie) that was published in September. The Auditor General , said "it was impossible to obtain a decent list of disciplinary action against perpetrators in the defence force, because the details provided were incomplete or wrong. The defence force could offer no explanatory documentation on debts owed and assets belonging to the defence force estimated at R10.9bn. The defence force's list of houses and buildings did not agree with that of the department of public works. Some defence force houses, which were written off as uninhabitable, were still occupied without the defence force being aware of this fact. Several properties, which were supposed to have been made available to defence force personnel, were being rented out to civilians at R250 per month - water and electricity included. Soldiers had to pay 7% of their salaries for similar properties and this amount was more than what civilians were being charged. No receipts were issued to civilians and there was no register of occupants available.
Full Article at News24.com ...

No Evidence of How Minister Pulled the Strings

Rob Rose, of Business Day argues that "the recent allegations of corruption and nepotism against Justice Minister Penuell Maduna by his deputy director-general Mike Tshishonga, do nothing more but underlie problems that plague the liquidations industry". Tshishonga, has accused Maduna of "undermining the rule of law" by intervening in certain liquidations, notably the messy winding up of retail Apparel Group (RAG). Rob Rose, contends that "Tshishonga's accusations against Maduna are predicated on perceived nepotism regarding Enver Motala, whom Maduna appointed to the RAG liquidation at the behest of the South African Revenue Service". Tshishonga alleges, that Motala has, since his appointment, been granted 27 % of liquidations by the master's office in Pretoria in the last six months. But Thsishonga has failed to explain how Maduna has supposedly pulled the strings, given that the minister does not actually appoint liquidators - that is the job of the master of the court. Maduna has countered these claims by arguing that he intervened in RAG only when the revenue service appealed to him as the head of the master's office to appoint Motala on its behalf. "Revenue believed to be owed to RAG was almost R300m, but this claim was disputed by other creditors, so the master of the court declined to appoint Motala. Only then did Maduna step in".
Full Article in Business Day: www.armsdeal-vpo.co.za...

To read a transcript of the letter exchange between Justice Minister Penuel Maduna and Mining Tycoon Brett Kebble, details Kebbles allegations of impropriety by both Ngcuka andMaduna see: "Kebble's postcards from the edge: treat with caution"
Full article in Business Day: www.bday.co.za...

France-SA Bid to Bring Arms Chiefs to SA Court: Scorpion negotiating a deal, which may be bad news for Shaik and Zuma

Tim Cohen of Business Day, reports that "the Scorpion are negotiating a complex, dual-country amnesty agreement with French authorities to cover key figures in the arms deal, in an effort to strengthen their investigation into SA's R40bn arms deal", sources close to the investigation said. The possible conclusion of an agreement could have serious ramification for Durban businessman Schabir Shaik, who has been charged with corruption in connenction with the arms deal, and could even result in the charges being extended to include Deputy President Zuma. Cohen, reports that the"deal involves giving two key figures, Alain Thetard and Jean Paul Perrier, indemnity against prosecution simultaneously in both France and South Africa, on condition they testify in the Shaik trial, or possibly answer questions in relation to the case". "The Scorpions efforts have been boosted by the appointment by the French government of Edith Boisette, a financial specialist to assist with the case". Boisette is familiar with the intricacies of the deal, and is reportedly close to holding a formal hearing into the issue, and this may prompt the two employees to cut a deal.
Full Article in Business Day: allafrica.com...

Mbeki Has Zuma's Fate in Hand

News24.com reports that "Public Protector Lawrence Mushwana has handed a report on deputy president Jacob Zuma's alleged breach of the executive ethics code to President Thabo Mbeki". News 24, explains that "the Zuma investigation followed a request by Democratic Alliance chief whip Douglas Gibson that the public protector should probe whether Zuma had declared money he had allegedly received from businessmen (Schabir Shaik)". The President's Office has acknowledged receipt of the aforementioned document by stating that "the report containing the findings was handed to President Mbeki on October 12". In terms of the Executive Members' Ethics Act, the president must table the report and his comments on it in the national assembly within 14 days.
Full article in News24.com: www.news24.com...

PROVINCIAL ADMINISTRATION

Bisho Departments And Legislature Fail to Report On Misconduct Cases
The Eastern Cape News reports that "...only three Eastern Cape provincial departments - Health, the Treasury and Safety and Security - have responded to the Public Service Accountabilty Monitor's (PSAM) request issued in May for information regarding reported cases of misconduct, corruption and maladministration. Nine other departments and the Legislature have not yet responded to the PSAM request. 409 cases of misconduct, corruption and maladministration had been reported at the time the PSAM issued it's request on 18 May. PSAM praised the three departments for responding to the request and said that these departments had provided the PSAM with the opportunity of informing the public of their progress in handling cases of corruption and mismanagement. "They have given the PSAM the chance to begin transforming the current negative perception of government's approach to corruption and maladministration". However, PSAM strongly criticised the nine departments and the Legislature which failed to respond to the request. "By failing to supply the PSAM with information they have been unable to prove to the public at large that they are serious about tackling the problems of corruption and maladministration".
Full Article in AllAfrica.com: allafrica.com...

Taxpayers Foot MEC's Five Star Bill

Sunday Times reports that "taxpayers forked out R22 710 for a provincial minister and his wife to stay in a five-star luxury while attending" a party political conference. "The Auditor-General's office wants to know why nearly R4 000 a night was splashed out on a hotel bill for Northern Cape Transport MEC John Block and his wife, Noluthando?" It is reported, that "the couple were booked into room 110 at the Cape Grace Hotel as Block, then deputy chairman of the ANC in the Northern Cape, attended the ANC's 51st national conference in Stellensbosch from December 16 to 20 last year". Ironically the ANC claims they covered accommodation costs for all delegates attending the Stellenbosch meeting. In its investigation the Sunday Times also reported that:

"Noluthando Block runs a nail parlour in Kimberley.



Two air tickests, costing R4821, for N Block and one of her beautician employees to fly from Kimberley to Johannesburg will also come under scrutiny during the audit."

Full Article in Sunday Times: www.sundaytimes.co.za...

LOCAL ADMINISTRATION

No Love in This 'Tender Trap'

News 24 reporter, Sizwe Samayende reports that "a R8,5m water project that was supposed to radically transform impoverished Sekhukhuneland in Limpopo has instead sparked tender wars, political infighting, corruption allegations and crippled the district municipality". It is discerned from the documents leaked from the municipality that this secret war for the lucrative tender pitted powerful economic factions and their political champions against each other. "There are already casualties in this internecine war in the person of "municipal manager Loraine Malebo', who has been suspended for two months without charges. Malebo has reportedly clashed with executive mayor Dickson Masemola on governance issues in the past. It seems that the genesis of this secret war, appears to be the R8,5m Olifantspoort South bulk water supply project in Fetakgomo. "Mantjie & Alex Civils (MAC), whose director...is a long-time associate of Masemola, roped in political support in its bid for the contract". Malebo has alleged that "in spite of expert advice, the council wanted to accept MAC's tender, even though the company had failed to provide bank guarantees, lacked experience in steel pipe construction, and had underestimated prices for materials". The contract, was eventually awarded to Meetse Civils, the consultant's first choice, but the war was not over.
Full Article in News24.com online: www.news24.com...

R2,8m Deal for Boss's Wife: City Power Chief's Gets Plugged in to Mega-Profit

Makhudu Sefara of The Star, reports that "the wife of the chief executive of Johannesburg's City Power is co-owner of a company that received payments totalling R2,8 million from the electricity utility". The Star's investigation has found that "Melita Molobane Mohlala has a 20 % shareholding in Phumelela Interiors cc, which she co-owns with Johannesburg businesswoman Thembi Zweni". Her husband is Kenneth Mogwailane Mohlala. The Star has established that "City Power granted a R1,6 million tender to the company on June 6 2002 for the provision of furniture to its offices in the eight regions in the Greater Johannesburg area". Further payments amounting to R1,2 million to Phumelela were made following work done by the company. "Zweni declared that she co-owns Phumelela with Melita Mohlala and that her company received a tender from City Power and further work through a quote based procurement". City Power chairperson Niven Pillay confirmed the existence of the tender and further payments". Pillay said "of course there is conflict of interest (when a woman gets business from a company headed by her husband). But the issue for us is how you manage conflict". Pillay further confirmed that Mogwailane Mohlala had acknowledged that his wife was a co-owner of Phumelela and this was further disclosed in the tender document submitted by Phumelela. Pillay confirmed "the fact that she was his wife weighed against their tender, other technical and commerical considerations including the fact that they were the cheapest, weighed in their favour". The Star also recently revealed that City Power awarded tenders worth more than R100 million to Alstom SA subsidiaries at a time when Andries Tshabalala was chairperson of City Power as well as an executive director of Alstom.
Full Article in The Star (7 October 2003): www.iol.co.za...

Extravagant Mayor Now Wants a New Top Range Wabenzi

Sizwe Samayende reports in News24 that "one of Mpumalanga's top executive mayors, Busi Mdluli, is shopping for a new luxury car, less than a month after Local Government MEC, Mohammed Bhabha began a probe into her spending habits". Samayende, notes that "the Gert Sibande district council, one of the three biggest municipalities in the province, has invited tenders from local dealers to deliver a R450 000 top of the range car "suitable for the status of the executive mayor" before the end of the month". This controversial move by the Mayor has invited sharp criticism from opposition councillors. "Bhabha's investigation into the Mayor's spending habits was prompted by Mdluli's splurging of more than R100 000 of taxpayers' money on car rentals and cellphone costs". This extravagant behaviour is alleged to be well documented in the council's finance department, which is littered with Mdluli's squandering of R125 000 of taxpayers' money between May 2002 and March this year by renting top of the range Mercedes Benz cars. It is reported that "a hired Mercedes Benz C180 cost the taxpayer R24 00 for 14 days, while Mdluli's official vehicle's mirror was being replaced and its boot was being repaired". The repairs cost the taxpayer another additional R6 000. It is alleged that "between 15 May and June 14 last year, she rented yet another luxury car for R71 000". It is further alleged that "in some months Mdluli exceeded the cellphone call limit (of R2500) by over R9 000" Conversely, it is further reported that "Mdluli's mayoral committee members have awarded themselves illegal vehicle loans worth close to R1 million and they pay a scant 8,5 percent interest on the collective R870 998 loan". The mayors extravagant spending habits and the councillors' vehicle loan schemes have been slammed by the South African Local Government Association (SALGA), the Auditor General and Bhabha.
Full Article in News24 online: www.news24.com...

INDUSTRIES

Ethos of King Code Needs to Permeate Private Sector

Christine Qunta writes in Business Day that" by its very nature , corporate governance codes are guidelines to ensure ethical corporate practices and conduct" . She contends that "the King report on corporate governance, issued in 1994, became an important reference point for firms wishing to order their affairs in a transparent, ethical manner". Ms Qunta laments the apartheid eras' lack of respect for law - not only in state institutions and enterprises, but also in the private sector - an atmosphere of lack of transparency, and unethical practices. She argues that "legislative framework created by government and the inauguration of the new constitution has enabled government institutions to start to expose corrupt public sector practices". "The new ethos of transparency promoted by the democratic government has had a spillover into the private sector and the way firms and parastatals are being run". She argues that "if the agencies set up to fight unethical practices and the media were to be as vigilant in respect of the private sector as the public sector, implementation of the provisions of the Companies Act and compliance with the King corporate governance code would increase dramatically resulting in a cleaner, more efficient business sector".
Full Article in Business Day: www.bday.co.za...

Businessmen Guilty in R100m Oil Fraud

Ronnie Morris, reports that "four businessmen, three of them former senior managers at Soekor, the state oil and gas exploration company, were recently convicted in the Bellville regional court of fraud involving about R100 million". The conviction of David Park-Ross, Douw Holtzhause, Mattie Ooshuzen and Louis "Faan" Steyn, comes almost 10 years to the day after the matter was first reported to the Office for Serious Economic Offences (OSEO) - the forerunner to the Scorpions. In addition, Park Ross, and Steyn were found guilty of corruption and they will be sentenced in January. Accroding to Morris, "the men were arrested in July 2000 and the trial started in October 2001, amidst the investigation Park-Ross partially succeeded in a high court challenge to OSEO's search and seizure powers, but failed in his bid to gain access to information held by the prosecuting authority". "This case has since become one of the most quoted cases in applications for acces to information held by the state.". Full article in Business Report http://www.businessreport.co.za/index.php?fSectionId=&fArticleId=255255
Full article in Business Report: www.businessreport.co.za...

The Day the Deal Went Sour

Busness Day reports that "it is well known in mining circles that deal-making is mining entrepreneur Brett Kebble's first love - in business at least, and possibly outside too". But one of the deals in which Kebble was involved in 1999, went horribly wrong. "...Kebble was supposed to involve the construction of a simplified, logical structure for the many mining houses in which the Kebble family had a minority stake". "The intention was to buy a single company, and then to use it as a vehicle to buy out minorities in a series of other companies through a process of share-swapping and cash payments". "At a formal level this necessarily involved an offter by the vehicle to buy the companies that would eventually become subsidiaries. "The state's case against Kebble, his father Roger and the then financial director of JCI, Hennie Buytendach, is that they illegally borrowed about R114m from a company the group partly owned, Western Areas. The money was loaned to Durban Roodeport Deep, where Roger Kebble was then chairman, and was allegedly used to drive up the share price of Randfontein, while at the same time short-selling Harmony shares to force its share price down. The intended effect was to make Harmony's offer appear less attractive than JCI's. Business Day states, that "Brett Kebble was censured by the Western Areas board and stepped down, but returned as CE a year later. The case, which came to trial this month in the Johannesburg High Court, has trundled on for four years, as the sides apparently struggle to agree on a plea-bargaining settlement.
Full Article in Business Day: allafrica.com...

Receiver Abandons IT Tender Amid Scandal

Sanchia Temkin in Business Day, reports that "a corruption scandal has forced the South African Revenue Services to abandon a R100m information technology tender and start the process from scratch". Temkin further reports, that "revenue official Tasneem Carrim said in this instance, one of the bidders was approached by the owner of a small business, who claimed he could arrange the outcome of the tender process in the bidder's favour" . But the offer was brought to the attention of revenue's anti-corruption unit, which investigated the case and passed it on to the prosecuting authorities for further investigation. Bidding companies had been briefed on the probe and were asked to assist in ensuring the highest level of ethical conduct in their interaction with revenue personnel, declared Revenue Spokesman Sechaba Nkosi. Nkosi further "warned businesses in the information technology sector against trying to influence the outcome of the bidding process unfairly". "Those found to be doing so would be pursued by national directorate of public prosecutions". Nkosi stated "businesses found guilty of this practice will also be immediately blacklisted".
Full Article in Business Day: allafrica.com...

'Count Corruption' to pay R1m

The Roodefontein saga claimed its first victim last week when developer Count Riccardo Agusta pleaded guilty to corruption. "In terms of a plea-bargain agreement with the Scorpions which was accepted by the Cape High Court, the 52-year-old Italian was fined R1m, which he is to pay within 72 hours. Agusta was charged after it emerged that last year he donated a total of R400 000 to the New National Party in an apparent bid to pave the way for planning approval of the Roodefontein golf estate development near Plettenberg Bay. "Count Agusta accepts... that his payments to the NNP in the circumstances set out herein, constitute contravention of the stringent requirements of South Africa's Corruption Act," said Thursday's plea agreement. Agusta admitted that he "unlawfully and corruptly" gave or offered the money to then-NNP provincial leader and Western Cape then-premier Peter Marais, to provincial environmental affairs and development MEC David Malatsi, or to the NNP. The aim was "to influence the said Marais and/or Malatsi and/or the NNP to commit or omit to do any act... to remove the obstacles in the path of approval of the Roodefontein development".
Full Article in News24.com: www.news24.com...

SOCIAL JUSTICE

Welfare: They Should be Fired - Corrupt Officials steal R1-Billion a year from the poor and the disabled

Futhi Ntshingila of the Sunday Times reports, that "corruption, mismanagement and greed within the social development department is causing untold suffering amongst the elederly, disabled and those who depend on government grants". KwaZulu-Natal and the Eastern Cape have been fingered as the biggest culprits, with 78 arrests coming from these two provinces alone. Ntshingila reports that "this gross corruption impacts negatively on the lives of the disabled such as Gugu Dlamini, who has been battling to get a grant from the Department of Social Development since 1999". Shocking facts have revealed that:

R1bn stolen from welfare's R34bn budget in a year.



91 civil servants arrested for fraud and corruption between January and June this year.



78 of these were arrested in KwaZulu Natal and the Eastern Cape.



One Eastern Cape Syndicate stole R20m.

Ntshingila, reports that these allegations of corruption in the social development department, have compelled Minister Zola Skweyiya to confirm that massive fraud was taking place. "There is a need for decisive action. I have instructed the department to develop a strategy to begin to make sure that we deal with it so that the people who are poor are not affected negatively by this" the Minister said. According to Ntshingila, "Skweyiya further affirmed that KwaZulu Natal and the Eastern Cape arrests were the result of the department's corruption-busting strategy". "We are arresting them because we are beginning to identify the officials who are corrupt. Were are going to reclaim the money from their pension funds... (members of the) public know some of these officials and we are assuring them that they will be protected if they give us information" Minister Skweyiya said.
Full Report on Sunday Times: www.sundaytimes.co.za...

Housing: Corruption, Waste Theft of Housing Money - R17m Squandered

Nazmer Dreyer of the Cape Times, reports that "details of the forensic audit report claiming corruption and financial mismanagement to the tune of R17 million in the Western Cape province's housing department have been released. The forensic audit,which was commissioned by the MEC for housing Nomatyala Hangana, found widespread financial irregularities within the department over a two year period. Hangana has lamented that "we could have built so many houses with R17 million. I will not tolerate... coruption, wastage, underspending or stealing from the government". The report "found irregular payments were made to account administrators amounting to millions of rands and irregular payments were made to facilitators although no work was carried out". It is reported that one facilitator, was paid twice for a service he had already been paid for by the national department of housing. Payments were made without a contract outlining performance requirements and tariffs. Building work was signed off without site visits being done, and when it was, structural defects were ignored. Recordkeeping and management information systems for low-cost housing were found to be inadequate and in disarray. Dreyer further alleges that "this corruption scandal occurs in the backdrop of 350 000 and 400 000 housing backlog in the Province and with 20 000 units built this year, but 40 000 to 45 000 more were needed to fight the backlog". The MEC and the Premier's Office have promised strong measures against those suspected and are currently deciding whether to bring in the Scorpions or not.
Full Article on Cape Times (7 October 2003): www.iol.co.za...

Health: North West Health Spending 'Irregular'

The Sowetan reports, that unauthorised spending by the North West department of Health totalling R46 million for the year ended March 31 has been detected by the provincial auditior general. The report tabled in the provincial legislature, described some of the figures as

ruitless, unauthorised and wasteful", which include:



Unauthorsied expenditure of more than R46 million.



Irregular expenditure of more that R49 million.



Non-compliance with North West Tender Board regulations to the tune of more than R5 million, and



Personnel costs of more than R8 million.

The auditor general Brian Madliwa, was unable to verify the transfer of more than R19 million because details of these could not be supplied by the department.
Full Article in Sowetan (06/10/2003) ...

Education: Salaries of a number of high ranking university officials are being probed

Buddy Naidu of the Sunday Times reports that "the Vice-Chancellor of the University of Durban-Westville Dr Saths Cooper, has been overpaid R126 666 over eight months". "The Sunday Times has a copy of Cooper's wage slip for August, which shows that since starting work at the university in January, he had received an over-payment of R15 843 per month". In response to these allegations, Dr Saths Cooper whose package is worth more than R1,2 million a year, has declared he had never bothered to study his salary slip and was unaware that he was overpaid. He contended that "he only discovered the over-payment after media reports about his salary package, and that he had then informed the council and asked management to investigate". Mr Cooper, was happy to declare that "the full amount has since been deducted". Cooper declared "for me to check my pay slip was irrelevant because I'm not a guy who chases every rand. I've asked for the entire amount to be offset and it's been remedied". "It is expected that the University's council will haul Cooper over the coals because of his salary and also a report by Pricewaterhouse Coopers, which investigated 11 issues of governance at the university which will be discussed."
Full Article in Sunday Times: www.sundaytimes.co.za...

CRIME AND JUSTICE

Police: Report fingers top police Secretariat

The Mail & Guardian reports that "Safety and Security Minister Charles Nqakula has defended his department's unwillingness to release publicly the recommendations of the Public Service Commission report, which recommends that the head of police secretariat Len Rasegatla be removed from his post for gross incompetence and failure to perform duties". "The police secretariat is a civilian oversight body established in terms of the Constitution and is funded by taxpayers to the tune of R2,25 million for its maintenance in the past financial year" . "The report accuses Rasegatla of gross dereliction of duty since he has all but surrendered his powers to his executive assistant, Solomon Maila- who is in turn accused of being a sex pest", and personal use government transport for personal ends". Nqakula who received the report in April, told diplormats and local and international media representatives recently that that the Report was not for public consumption, but was rather leaked to the media against his department's wishes.
Full Article in Mail & Guardian (10-16 October 2003) ...

Judiciary: Magistrate & Co. appear for fraud

Gershwin Chuenyane reports in The Sowetan that a "suspended Pretoria magistrate and court interpreter faced more than 60 counts for fraud, theft and corruption in the Specialised Commercial Crime Court...They are accused of taking bribes to either withdraw charges against or acquit a number of traffic offenders. ...They were nabbed when it was discovered that individuals who appeared on court records had not set foot in court, according to the charge sheet."
Full article in the Sowetan (30 September 2003) ...

Research: SA Firms 'at Risk Over Sloppy Ethics'

"Only 57% of companies listed on the JSE Securities Exchange SA have an effective code of ethics despite the exchange's requirements, according to the Business Ethics Survey 2002 released by the Ethics Institute of South Africa. The survey comes in the wake of the second King report on corporate governance and cases of corporate governance failures such as that of Enron in the United States. According to the survey, a score of 57% probably meant that many organisations paid mere lip service to ethics management, which constituted a significant ethical risk for South African companies". "Willem Landman CEO of the Ethics Institute of South Africa, has said that despite the listing requirement, a quarter of top management surveyed either said their organisation didi not have a code of ethics or that they did not know if a code existed". The survey commented that corporate SA had some work to do in respect of effective ethical compliance. "To improve these scores by inculcating a culture of responsibility amongst employees of corporate SA, rather than settling for a system of corporate ethics where it was sufficient to follow the rules or account for a series of tick boxes".
Full Article in Business Day (13/10/2003): www.bday.co.za...

Reform: Work Completed on UN Treaty to Fight Corruption Worldwide

"The work on a United Nations Treaty to combat corruption worldwide, including the return of assets obtained through bribery and embezzlement to the country of orgin, has been completed, with Secretary General Kofi Annan hailing it as a milestone in improving the lives of millions of people around the planet". "This Convention can make a real difference to the quality of life of millions of people around the world" Mr Annan said in a message to the ad hoc committee in Vienna drawing up the Treaty delivered by the UN Office on Drugs and Crime (UNODC). "Upon adoption, the Treaty is envisaged to enhance cooperation between governments and help standardize the way in which individual countries deal with corruption in their national legislation". The Treaty, which obligates member states to return assets obtained through bribery and embezzlement to the country of origin represents a new fundamental principal in international treaties. It is a ground breaking document for countries like Nigeria and Phillipines where corruption has lead to to the depletion of national wealth, with former dictators having stolen hundreds of millions, or even billions, of dollars. "The Convention prescribes preventive measures, such as norms of conduct for public officials, greater transparency based on public access to information on government businesses, and stricter procurement regulations and measures against money laundering".
Full Article in the UN News Centre Online: www.un.org...

Reform: Anti-Corruption Hotline Set Up for Public Service

Business Day reports, that "government has declared that a single anticorruption hotline is to be established for the public service". The cabinet reached consensus on this issue in order to ensure that the public could actively take part in identifying civil servants suspected of corruption, fraud or behaviour that transgresses the Public Service ethics and principles enshrined in chapter 8 of the 1996 Constitution spokesman Joel Netshitenzhe has said. The proposed centre will be housed at the Public Service Commission, with cases referred to various agencies.
Brief on Business Day (19/9/2003) ...

Reform: Fund Reforms Should Save State Billions

The Business Day reports, that "key loopholes in the law governing the Accident Fund, which costs government billions annually are to be closed following the report of the Satchwell Commission". Judge Kathy Satchwell through the Commission has recommended some ground-breaking changes into the Accident Fund, that effectively cut out the middleman (lawyers in criminal jurisprudence) and take away some R3bn from the legal industry. The Satchwell Commission has also recommended that the system of a lump sum payment will also be scrapped and monthly payments introduced. This will minimize abuse and will result in the payment of costs to accident victims only. Foreign nationals who are injured in South Africa, will no longer be paid in their own currencies, but in rands. This move is envisaged to lower the costs of the fund due to the rand/foreign exchange rate, which puts a significant strain on the Fund's resources.
Full Article in Business Day (10 October 2003): allafrica.com...

Reform: Whistle-Blowers Face Chill Wind of Revenge: Legal expert wants a review of law to protect those who expose corruption

According to "Advocate Gilbert Swats of Ernst & Young, South Africa's whistle blower legislation fails to provide the whistle blower with job security after reproting malpractice in the workplace". "Swats believes, that a review of the Protected Disclosures Act, on whether it affords appropriate protection in the workplace is long overdue. Since it leaves employees vulnerable, especially if they are not aware of the legal requirements for "protected disclosure" as outlined in the act". The Protected Disclosures Act, came into force in February 2001.

The Act aimed to facilitate the disclosure of information about impropriety.



Also aimed to protect whistle blowers from 'occupational detriment'



Disclosures can be internal, to a member of executive, prescrived bodies or general disclosure.



Remedies: the same as that for unfair dismissal - CCMA or court process.



Reality: workers find themselves fighting lengthy battles to be reinstated or transferred.

He argues "a discussion is long overdue between business and government about whether the act needs to be revisited from a legislative point of view, or if business should be encouranged to develop a culture which offers security to employees who expose corruption". "Swats believes the act act has been very successful with whistle-blowing to an anonymous tip-off line, where employees can report corruption without having to identify themselves". Swats, however laments the thinness of the grounds on which the whistle-blower is protected by the Act and these grounds specify that the witness will be protected by the Act: if the disclosure is not made for personal gain; will not be victimised or overlooked for promotion; a cover up is likely, there is not prescribed regulator, the matter has already been raised internally or with a prescribed regulator; or the impropriety in question is exceptionally serious.
Full Article in Business Day: www.bday.co.za...

Reform: Cheque Book Politics Erodes Ballot: Parties should declare sources of funding

Judith February argues in the Cape Times that "It seems that one thing that which SA's major political parties agree on is not wanting to say who secretly funds their myriad activities. At least at this juncture less than a year away from a general election. In SA there is no regulation of private funding to political parties. What this means is that donors may give as much as they want, in secret, to the political party of their choice." "The regulation of party funding seeks to minimise undue influence of money on politics, while simultaneously recognising that money is an important feature of the modern political landscape. "...in a country as unequal as South Africa, allowing the wealthy to buy influence by donating as much in secret as they wish may result in the drowning out of the voices of the poor and marginalised, who are unable to buy such influence". "When wealth is allowed to buy influence and access by unregulated secret donation, or the perception of such, the effect on political rights and participatory democracy could lead to the average citizen's voice being silenced". The regulation of party funding is envisaged to lead to the levelling of the playing field between the rich and poor in terms of their influence on public policy.
Full Article in the Cape Times (14 Oct. 2003) ...

NGO: The Open Democracy Advice Centre (ODAC)

The Open Democracy Advice Centre non-profit NGO based in Cape Town which has as its mission to promote open and transparent democracy; foster a culture of corporate and government accountability; and assist people in South Africa to realise their human rights. ODAC seeks to achieve its mission through supporting the effective implementation of rights and laws that enable access to, and disclosure of, information. These are key to preventing and combatting corruption.

ODAC, a legal advice centre, was established during 2001 to offer training and advisory services on the Protected Disclosures Act (PDA) and the Promotion of Access to Information Act (POATIA). The PDA, also colloquially referred to as the whistleblowers act, applies to every employee in the public and private sectors. The PDA protects employees from being victimised where they raise bona fide concerns relating to, financial misconduct, health and safety risks, environmental damage and, corruption and misconduct. ODAC offers training and assistance on the why, how and what of putting in place a Whistleblower Policy, as well as tailor-made training on the PDA and POATIA. The Promotion of Access to Information Act (POATIA) gives effect to the constitutional right of access to information held by the state and private entities. POATIA gives information on the type of records that may be requested; which persons are responsible for dealing with requests for access; how records are to be requested, people and institutions exempted from the Act; what information has to be given, must not be given and might be given; and how long it must take to provide such information and at what cost.

ODAC also hosts a helpline (0800-lalela) that provides free, independent and confidential advice to individuals, organizations and businesses who have concerns about malpractice in the workplace. This includes corruption, fraud, crime, danger to health and safety, damage to the environment, discrimination, illegal activity, and failure to comply with legal requirements.
To use the confidential Help Line call : 0800 525352 (0800 LALELA)
To find out more about ODAC visit: www.opendemocracy.org.za...

Please forward announcements you may have concerning conferences, seminars and publications to: umqoled@issct.co.za

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 SA Anti-Corruption Strategies component which is located within the ISS Organised Crime and Corruption programme in Cape Town and funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark.

Editorial Team:
Hennie van Vuuren (Senior Researcher: Anti-Corruption Strategies)
hvanvuuren@issct.co.za - Tel: 021 4617211
Musa Marawu (Research Intern)
Pilisa Gaushe (Manager: ISS Corruption Resource Centre)

For more about ISS please visit our website at: www.issafrica.org...
To contact us, or if you should have any comments,
please email: umqoled@issct.co.za