A fortnight before the SA elections politicians mount platforms across the country to describe 'the glass' that represents the countries anti-corruption efforts as either almost full or nearly empty. What is for certain is that the water that quenches their thirst after a long day of electioneering, even if only served with ten year old whisky, is likely to have been collected in massive dams that span Lesotho's mountains.

South African's - at least those who can afford to pay for the water - are the beneficiaries of this massive scheme that has not come without a price for Lesotho. Large multinational companies bribed the corrupt former head of the Lesotho Highlands Development Authority. The response by the Maseru Attorney General was to assemble a team of experts and pursue both bribe payers and bribe takers relentlessly (See Top SADC Story). What we are only starting to understand is that what is unfolding in Lesotho may turn out to be the test case of how to prosecute international corporate corruption in future. To do this effectively they however need the financial support to continue these expensive court cases and it is time that South Africa and the international community come to the party. The World Bank in particular, which backed this project since it was first mooted by the Botha regime in the 1980's, needs to make good on the signals it made at the time of the ISS Three Strikes Against Graft Seminar (15-17 March) that it will consider debarring the Canadian firm Acres from future bank contracts.

This together with two case studies discussed at the ISS seminar on South Africa and Mozambique is proof that the causes of grand corruption can be confronted. Whether tackling the murderer's of Mozambique's fearless corruption busting journalist Carlos Cardoso or corruption in the SA arms deal - there are clear signs that civil society (including the media) the state and key oversight institutions can contribute towards combating corruption under difficult circumstances. They responded to the loss of life and real impact that corruption has on the poor who are forced to pay a tax in undelivered services for every kickback paid. It would however be foolish to presume that all three cases represent complete success stories. We should now learn from both our successes and failures and the seminar has presented a set of recommendations and observations that could prove useful in this regard (See profile).

As much as these case studies represent hope in the region - and we can't underestimate the importance of this - we have just started to tame this beast. The recently released ISS SA National Victims of Crime Survey (See Research) indicated that 5,6% of SA citizens have been the victim of corruption. We have seen a dramatic increase on the last poll in 1998. These statistics, based on a representative sample of the countries urban and rural population in all nine provinces- will be released as a full length report in the weeks following the SA elections (more details will follow in Umqol'uphandle). On the other hand a Business Day poll of perceptions of corruption in SA amongst urban South Africans indicates that 50% believe that corruption is on the up since the first democratic elections in 1994 (See Research Section). Perceptions we know are formed by many factors of which actual victimisation is just one. It is indeed nearly impossible to compare corruption in two completely different contexts (post and pre 1994) - and so therefore the Business Day pollsters could have imagined the outcome of this poll prior to embarking on such an exercise.

Matters of perception aside - one imagines that Minister Zola Skweyiya had the victims of corruption in mind when he announced a new welfare bill that is designed to centralise the distribution of social grants at a national level (See Reform). Reports indicate that the majority of South Africans have lost R15 billion to the corrupt few over the past ten years - social welfare grants intended for the most vulnerable in our society. One of the measures of our success as a twenty year old democracy will be to what extent we are able to implement measures to turn this tide - based on the lessons learnt from the hard knocks we have taken in the past ten years.

Tackling corruption is not even about making the poor rich, its' about survival for many. The wealthy and powerful amongst us take note.

An auditor's report commissioned by the Manufacturing, Engineering and Related Services Sectoral Training Authority (Merseta) executive council reveals gross violations "by the Seta's management of procurement policy, employment procedures and corporate governance structures involving amounts of up to R5-million," reports Vicki Robinson. Among other allegations, the current Merseta CEO, Jessie Maluleke, has been accused of hiring companies with no authorisation from the executive committee or hiring irregardless of the executive's ruling; hiring companies without a contract or bribing them before the signing of the contract; and in some cases hiring "companies that were "invalid entities" - companies that are not registered with the Registrar of Companies."

Speaking at the ISS 'Three Strikes Against Graft' seminar on combating corruption in Southern Africa, Auditor General Shauket Fakie pointed to a series of flaws in the multi-agency investigation into the arms deal. However he still maintained that the probe produced a good report and was the "best we could have done under the circumstances." The investigation weaknesses Fakie identified include the flouting of certain government principles, the lack of 'proper signed minutes' and the failure of members to disclose a conflict of interest.

Reporting on the Auditor General's presentation at the ISS 'Three Strikes Against Graft' Seminar, Guy Jepson highlights Fakie's concession regarding the setback, which the death of former defence minister Joe Modise had brought to the investigation into allegations of corruptions in the multibillion-rand arms deal. According to Fakie "the minister was a key role player in some of the issues [they] would have liked to get evidence on. He died two weeks later." Fakies' otherwise upbeat perspective on the investigation contrasted sharply with that given by Gavin Woods (former SCOPA chair). Woods highlighted the way in which members of the executive undermined the investigation and told the conference that the the weapons procurement process was "riddled with dishonest and compromised procedures."
Full Article in ThisDay (17 March 2004)

Rienna Charles, a provincial deputy director-general, has been released on R30 000 bail following her surrender to the Scorpions on numerous charges of fraud and criminal mismanagement, reports Justin Arenstein. Charles' surrender is a culmination of "a two-year investigation into her alleged subversion of government tender procedures while heading Mpumalanga's Health Department." Her case has been joined to the trial of her brother-in-law, Mpumalanga tycoon Percy Siboza. Charles stands accused of "abusing her authority to enrich Siboza by illegally approving at least two major contracts totalling R3,6 million for electrical generators at government hospitals".

Matshube Mfoloe reports that top director in the North West department of Transport, Piki Mangope, was reinstated, albeit in the junior position of deputy director following his earlier dismissal on charges of misappropriating more than R150 000 - money that belonged to Arga Plates, "a company that was contracted by the department to print and issue motorists with personalised Northwest number plates." DA opposition spokesperson in the North West, criticised the reinstatement as "a slap on the wrist" that "(undermines) premier Popo Molefe's tough stance against corruption in the public service." Frans Vilikazi, MEC for Transport in the province has admitted that Mangope demonstrated "a total disregard" for proper administration and accountability.
Full Article in Sowetan (02 March 2004)

Members of the joint Scorpions-SA police service task team seized a luxury home and three cars belonging to Peter Bower, a director of Khulani Chemicals. Steve Matthewson reports that Bower is charged with defrauding the provincial health department of R2,3 million, which he secured by submitting the department with an invoice for R2,3 million "though his company had supplied only R23 000 worth of chemicals..."
Full Article in This Day (17 March 2004)

Busi Mdluli, mayor of the Gert Sibande District Municipality in Mpumalanga faces "allegations of corruption, mal-administration and the misuse of council funds and cell-phone allowances." Justice Mohale reports that the Gert Sibande community brought these allegations to the attention of the Mpumalanga MEC for local government, Mohammed Bhabha, who was "prompted ... to assign a firm of auditors to investigate the authenticity of the allegations." The seven-month investigation implicated Mdluli in several acts of corruption, including: abusing her council-owned cell-phone (whose account stood at R162 487), flouting tender procurement procedures, misusing a hired vehicle (incurring a debt of more than R172 000), using the mayoral vehicle for private business, and abusing her mayoral powers by "deliberately" disregarding proper procurement procedures"
Full Article in Sowetan (5 March 2004)

The Sunday Times has uncovered a link between two of the ANC's most powerful officials - secretary-general Kgalema Motlanthe and the party's treasurer-general Mendi Msimang - and the controversial Johannesburg businessman and head of Imvume Resources, Sandi Majali. The latter is among the 270 individuals around the world who have been implicated "in an alleged sanctions-busting scam involving oil from former Iraqi dictator Saddam Hussein's regime." The Sunday Times is confident it can confirm that the trio travelled to Iraq via Dubai in July 2002 on flight EK764 where they spent more than ten days; Iraq via Dubai on flight EK464 on November 2001 where they spent 11 days; and Kinshasa in the Democratic Republic of Congo on flight RK731 in June 2001 where they spent four days. Msimang and Montlanthe have confirmed accompanying Majali to Iraq but denied having a special relationship with Majali or helping him broker the oil deal. Also implicated in the oil scandal probe are three more South African companies: "Montenga Trading, then headed by Majali, which received four million barrels of oil; Mvelaphanda, headed by former Gauteng Premier Tokyo S exwale, four million barrels; and Omni Oil, which received four millions barrels and is headed by Cape Town businessman Rodney Hemphill, one of Majali's former business partners."
Full Articles in Sunday Times (22&29 February 2004)

Also see http://allafrica.com/stories/200402290004.html

and http://allafrica.com/stories/200402230965.html

According to statistics, which the Life Offices Association released for the first time, "insurance fraud cost the South African life insurance industry R214m in the first nine months of last year [2003]." Chris van Gass reports that the figures, obtained from all major insurance companies in South Africa, indicated that a major threat to the industry was fraud relating to HIV, "where blood samples from people who were HIV-negative were passed off as samples of HIV-positive people in order to obtain insurance cover." Executive director of the Life Offices Association, Gerhard Joubert, identified the highest incidence of fraud in KwaZulu-Natal, followed by Gauteng, "where top-end and higher policy value fraud occurred."
Full Article in Business Day (8 March 2004)

Also see http://allafrica.com/stories/200403080839.html

A R1 million transfer to a foreign bank account raised suspicions with regard to its origins. The transfer brought an intense police investigation on the homes, business premises and several bank accounts belonging to a senior official at the technical division of South African Airways (SAA). City Press reports that the official, (who "has allegedly been suspended and will face a disciplinary hearing,") was implicated in "a routine internal audit by SAA [which] raised suspicions of kickbacks by suppliers to staff responsible for purchases."
Full Article in City Press (29 February 2004)

Also see http://www.news24.com/News24/South_Africa/News/0,6119,2-7-1442_1491233,00.html

Following THISDAY reports on how prominent Youth League leaders formed a sophisticated network of companies to partake in empowerment deals, the Lembede board suspended its chief executive, Songeza Mjongile. According to Themba Langa, chairperson of Lembede Holdings (an ANC Youth League investment company) Mjongile had contravened company regulations by failing to reveal his conflict of interests to the Lembede board.
Full Article in This Day (24 March 2004)

Writing in This Day Marlene Burger highlights "the execrable conditions that have become endemic in South Africa's 251 prisons." Termed 'plantations of toxicity' prisons throughout the country are said to "give the lie to government's promises to transform apartheid's "human ware-houses" into rehabilitation centres from which princes of darkness will emerge as shining lights." Burger asserts that 'there is little reason to believe' that the report into corruption and mal-administration in South African prisons - which the Jali Commission will submit in a couple of month's time - "will differ from a 1998 report by the Public Service Commission that accused the government of having lost control of the correctional services department."
Full Article in This Day (25 February 2004)

The national department of social development has revealed that social grant scams cost the state an approximate R2-billion per annum, according to a report by Madoda Dyonana. This has prompted the provincial social development department of the Eastern Cape to undertake a large-scale probe in an effort to verify the authenticity of the numerous disability grant forms received by the department. Recent initiatives to tackle this practice in the Eastern Cape include the arrest of the medical superintendent of Empilisweni and Umlamli Hospitals in Sterkspruit, Dr Leod Zondo, who is "alleged to have made up to R23 000 a day signing bogus disability grant forms for healthy people, allowing them to claim R740 a month from the State".
Full Article in the Herald (23 February 2004)

Also see http://www.news24.com/News24/South_Africa/Politics/0,,2-7-12_1489313,00.html

A R1, 2 billion presidential project earmarked for the Bekkersdal community in the west of Johannesburg is subject to a police probe following the disappearance of R403 million from development funds. Michael Schmidt reports that a Bekkersdal community leader, Jimmy Nkomo, lodged a complaint to the Independent Complaints Directorate (IDC) - now monitoring the police investigation - regarding alleged misappropriation of funds in various instances, including: "R281 500 from the old-age home, R3, 015 million from social service projects and R378, 3 million in provincial funds from the Westonaria town council for new housing projects."
Full Article in This Day (11 March 2004)

The Aids Consortium, a non-profit organisation consisting of approximately 1000 community-based organisations concerned with HIV and Aids, has had its top management suspended following a special investigation into its financial matters. Jillian Green reports that, so far, massive mismanagements of donor funds to the value of about R1,1 million have been uncovered. The investigation, which began in December, found that: "donor funds were not being used for the purpose agreed to by the donors"; and that skills and knowledge of finances, governance and management of the organisation were lacking in the executive committee.

Also see http://www.journ-aids.org/reports/20040315h.htm

The ISS National Victims of Crime Survey (2004) suggests that housebreaking and corruption are South Africa's two most common crimes, reports Caroline Hooper-Box. Comparing this finding with results from the first victim survey conducted in South Africa in 1998, the Institute for Security Studies (ISS), noted that the past five years have seen a marginal decrease in crime (with the exception of housebreaking), despite the fact that robberies and s exual assaults were often under-reported. The survey is based on interviews with a representative sample of 4862 people over the age of 16 drawn from both rural and urban areas in all nine of the countries provinces. 5,6% of respondents reported being asked by a government official for a bribe in the form of money, a favour or a present in return for a service the official was legally required to perform. This was most evident in encounters with traffic officials, followed by the police, and when interacting with officials for employment opportunities".
Full Article in Sunday Independent (7 March 2004)

and for a related article see http://www.southafrica.info/what_happening/news/crimestas-040304.htm

Also see the ISS website http://www.iss.co.za

A survey probing the perception of corruption in government and amongst politicians carried out towards the end of 2003 for Business Day's Barometer by research house ACNielsen has revealed that fifty percent of "the adult urban population believes that government and politicians are more corrupt now than they were before 1994 - and even under the Nelson Mandela government." The survey does chart the difference in the way various racial groups perceive corruption in government, with whites and coloureds being slightly more pessimistic - although all groups believe that it is on the rise. 12% of the respondents claimed to be the actual victims of corruption and 9% know of workplace corruption affecting one or more of there workplace colleagues. Politicians score worst of all (73%) followed by the police (68%), provincial government (69%) and local government at 68%. Business people score 50% while traditional authorities (32%) and faith-based groups (24%) are perceived as being least corrupt.
Full Article in Business Day (23 March 2004)

Also see http://allafrica.com/stories/200403230265.html

The National Council of Provinces has approved two new welfare bills in a bid to curb the massive leakages in welfare funds. The Social Security Bill will centralise the function of distributing social grants at a national level through the social security agency to enable government to better track problems. This comes after national government discovered the disappearance of 15 billion rands over ten years - funds that were intended to cover child, old age and disability grants. Social Welfare Minister, Zola Skweyiya, attributed this to criminal syndicates that "operate almost everywhere - syndicates that operate specifically in the poorest parts of our country."
Full article in the Citizen (26 February 2004)

Barry Gilder, new director general of the department of Home Affairs, has announced an impending implementation of a double-barrelled strategy to tackle the two major forms of corruption, which the department faces: the "criminal syndicates that bribe officials and convenience corruption where clients get better service from officials by bribing them." According to a report by Cornia Pretorious, one part of Gilder's strategy involves establishing a counter-corruption directorate to supplement the work of the police and the National Intelligence Agency in dealing with the criminal syndicates that have infiltrated the department and to educate the public and officials about the effects of corruption. Other proposals are also being considered that would improve the department's systems to identify corrupt practices.
Full Article in This Day (27 February 2004)

Over 100 delegates from Mozambique, Lesotho and South Africa gathered at a seminar organised by the ISS Anti-corruption project at the Indaba Hotel in Gauteng, South Africa from 15-17 March 2004 in order to assess the impact & nature of three groundbreaking corruption cases in Lesotho, Mozambique & South Africa. Representing civil society, prosecuting authorities, anti-corruption agencies, international financial institutions, the public and private sector as well as the media - these anti-corruption practitioners discussed three groundbreaking corruption cases. All three cases represent the positive action taken by various sectors in society to tackle the common scourge of corruption-while recognising both the human and financial cost of combating graft as well the limitations inherent in a successful resolution all three cases.

Key observations and recommendations that emerged from these deliberations focused on the following topics:

Prosecuting the Cardoso murder- A turning point for anti-graft efforts in Mozambique?

• Investigations, Prosecutions & the Public Sector

• Privatisation

• Media

• Civil Society

The Arms Deal- Have the pillars of South Africa's democracy passed the test?

• The Office of the Auditor-General

• Parliament & the Executive

• Civil Society

• Media

• Procurement

The Lesotho Highlands Water Project-Corruption & Bribery Trials: Breaking-ground globally?

• Domestic initiatives to investigate & prosecute corruption

• International initiatives to investigate & prosecute corruption

• Following the money trails

• The role of civil society

• Environmental Impact Assessments (EIA) & Procurement reform

• The Role of International Finance Institutions

The full list of recommendations as well as the three case studies presented at this seminar can be downloaded from the ISS website: http://www.issafrica.org
Additional papers will be published together with these documents as an ISS Monograph later this year.

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
Andile Sokomani(ISS Research Assistant)
Pilisa Gaushe (Manager: ISS Corruption Resource Centre)

Visit the SA Online Corruption Information Centre:
http://www.issafrica.org/corruption

please email: umqoled@issct.co.za

"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".