In the late 1980’s and early 1990’s, at a time when apartheid continued its bloody march towards oblivion there was a long queue of corrupt officials –starting at local traffic departments and ending amongst the Generals and dour looking cabinet ministers - making there way to the corruption trough. However one of the most striking images of corruption from that period was not the billions of rands no doubt lost to corruption in dirty dealings between corporate SA and the National Party regime. Rather it is the image of toilets in the veld – built to serve an imaginary community who lived far away from the rows of ablution facilities. Never flushed, there sole purpose was to line the pockets of wealthy developers.

Fast-forward to the Free State in 2004. A province that in the past year has seen protests over alleged corruption impeding service delivery in towns such as Harrismith end in violent confrontation with the police. It is here that a private developer was paid R5million by the provincial government for building six toilets (See Local Government). That amounts to R833 000 a toilet – a sum that is likely to make the most corrupt international arms trader blush. A forensic report submitted to the MEC for local government in the province will hopefully result in further official action. This is little comfort for the tens of thousands of Free State citizens who still rely on the unhygienic bucket system. However, it is an indication that corrupt developers are finding it more difficult to get away with such practice. Other anti-corruption initiatives at local government have reportedly seen the eThekwini municipality saving R46 million in the past three years that would otherwise have been lost corruption and theft (See Research & Reform). Proof that a pro-active approach has its benefits.

However reform initiatives often come with a double-edged sword. A new initiative by Home Affairs proposes to include the fingerprints of 30 million South Africans on a central database within the next 18 months (See Research & Reform). In a country where citizens are often ‘married’ without their consent or thousands of ‘ghosts’ receive social welfare grants (See Social Justice) there is broad support for initiatives aimed at tackling identity fraud and corruption related to this practice. However, as citizens in the USA will attest the so-called ‘war on terror’ has come with a cost to civil liberties. National fingerprint databases have drawn fire in more established democracies where individual data protection is regarded as an important democratic right. This South African initiative may be a necessary tool required to combat graft however, without being alarmist, we need to ensure that such a database both exposes the corrupt but also protects the rights of the majority in line with the Constitution.

One area of public service that does require urgent policy intervention is that of post-employment restrictions for senior civil servants. Along with the private funding of political parties this remains an area open to abuse. As the row over Telkom ownership grows (see National Administration) it is hoped that Minister Geraldine Fraser-Moloketi, who is spearheading much of government’s anti-corruption efforts, will prioritise the finalisation of such policy early in the new year.

As we move towards the close of 2004 we are also taking stock. During the past year our readership has grown to over 700 subscribers and according to a readers survey undertaken earlier this year approximately 5000 readers receive copies forwarded by colleagues and friends. Our website archive is also proving popular amongst journalists, researchers and policy makers. In the course of 2005, based on your overwhelmingly positive feedback, we hope to make some improvements to Umqol’uphandle. In addition we are now finalising the ISS Internet portal on Corruption that will be launched early next year - more details will follow in January. Finally – many thanks to DANIDA, which through the Embassy of Denmark has provided the funding for the first 21 editions of Umqol’uphandle – SA Corruption Briefing.

We would like to wish all our readers a peaceful holiday season
and a good start to 2005.

Following civil society proposals for post-employment restrictions on senior public servants, the Department of Public Service and Administration (DPSA) is - according to a report by Moshoeshoe Monare – “pushing through a policy to prevent public servants from abusing their offices to enable them to pursue private business interests once they leave the civil service.” Cosatu has lead criticism on the practice following revelations that Andile Ngcaba, former Director-General in the Department of Communications is heading up a consortium that is set to buy a stake in Telkom (financed by the Public Servants Pension Company – PIC). Cosatu charged that without a law governing post-employment restrictions: “…there will be a serious risk that (they) will at best have a serious conflict of interests and, at worst, be involved in outright corruption by using their political contacts to enrich themselves.” The ANC however has declared that it was within the rights of former civil servants and politicians to seize the business opportunities presented to them. But, according to the Institute for Democracy in South Africa, “a cooling-off period code should prevent conflict of interests but not prevent people from using skills acquired in the public service.”
Full Article in Cape Times (11 November 2004)

While parliament is in the process of liquidating four of the six travelagencies fingered in the multimillion-rand travel voucher scam, a new way of allegedly defrauding the travel voucher system has emerged. The most recent case is that of ANC chief whip in the National Council of Provinces and Member of Parliament’s ethics committee, Beauty Dlulane, who is now in row with Parliament for refusing to reimburse R8000 for petrol. Christelle Terreblanche reports that Dlulane supposedly incurred the expense through “eight road trips of 450km each, to and from Umtata between October 22 and November 6 this year while on stop-overs in East London on air flights between Cape Town and either Durban or Johannesburg.” It is argued that East London and Umtata are 173km apart and therefore a return trip would be 346km – 100km less than the 450km Dlulane claims. Secondly, the average time to complete the return journey by road would, according to official travel advisers, be three hours and 22 minutes, which means that Dlulane would have to travel at about 260km an hour to in order to make the next flight – a near impossibility. In addition, “[p]arliamentary rules also require that Dlulane to have flown to Johannesburg from Umtata instead of going back to East London to fly to Johannesburg.”
Full Article in the Sunday Independent (December 12 2004)

Testifying in the fraud and corruption trial of businessman Schabir Shaik, Independent Democrats leader Patricia de Lille told the Durban high court that she had received documents and information relating to corruption in the arms deal. Issued and signed by concerned ANC members, the documents contained a number of allegations including the claim that “Shaik had raised money for the ANC in Malaysia, that he had worked closely with businessman Vivian Reddy and that they were a front for Zuma.” De Lille had raised the matter in Parliament because she “wanted to help government root out the bad apples.”

Mpumalanga Economic Empowerment Corporation (MEEC) director Nora Fakude-Nkuna is reportedly being probed for allegedly obtaining a R2,8 million low-interest loan from the Mpumalanga government for a vehicle dealership, Interstate Clearing, owned by her close relatives. Justin Arenstein reports that “[t]he Interstate Clearing dealership lists its business address as Shop 55 in the Promenade Centre in Nelspruit … [while] its actual business address is in Phalaborwa in neighbouring Limpopo, and is therefore ineligible for financial assistance from the MEEC or other Mpumalanga government agency.” The investigation comes after MEEC whistleblowers presented independent forensic auditors PriceWaterhouseCooper with documents relating to the loan.
Full Article in City Press (7 November 2004)

In her latest move to root out corruption and improve service delivery in the provincial administration, Eastern Cape premier Nosimo Balindlela is in the process of “setting up a commission of inquiry into allegations of fraud and the flouting of tender procedures by senior government officials.” Hopewell Radebe reports that Balindlela was consulting provincial judicial officials to assist in identifying a judge to head the commission whose mandate “would include looking into departments plagued by consistent overspending and mismanagement.”

A report of an investigation into a bucket system eradication project has revealed that Dikgolabolokwe, a free state company “commissioned to build more than 300 toilets in under-developed areas as part of the government’s project to eradicate the bucket system”, grossly inflated the figures of completed toilets. Ramokgopa, owner of Dikgolabolokwe, had told the municipality “he had built toilets in several townships of Theunissen (64 toilets), Winburg (120), Brandfort (15) and Verkeerdevlei (50) as well as 25 flush-borne toilets in Brandfort. Citing a key finding of the report Jimmy Seepe, notes that the company, which was paid more than R5 million, built only six toilets. It is alleged that the company “pocketed millions of rands without delivering on its mandate.” The report has recommended that the two municipal officials who authorised the R5 318 325 million payment should be charged with gross negligence since they “could have avoided such a fruitless and extravagant expenditure.”
Full Article in City Press (07 November 2004)

Brian Nakedi, suspended North West municipal manager, is to face a disciplinary hearing over 128 counts of corruption, laid by the Mafikeng municipal council. According to a report by Siza Ngqwebo the long list of charges against Nakedi includes the allegation that “he unilaterally increased his salary from R450 000 to R669 240”; employed 71 unauthorised contract workers at a cost of R2 278 382 to the council; exceeded the council’s remuneration guidelines for temporary staff; and bought a R439 785, 26 Mercedes-Benz ML3210 in November 2002 for the former mayor Jane Matsomela without the council’s approval. Nakedi has disputed all the charges claiming that there are people who have a personal vendetta against him.
Full Article in the Sowetan Sunday World (07 November 2004)

Democratic Alliance (DA) provincial chairperson Kent Morkel who is accused of receiving a R10 000 bribe from micro-finance company Gems in order to secure stop orders in favour of the company from municipality employees, now admits receiving the money. However this comes with a caveat: it was a consultancy fee, not a bribe. Nazma Dreyer reports that Morkel’s admission comes “after the Cape High Court accepted plea bargain by Gems, which included an admission that they had bribed Morkel.” The Gems plea bargain also fingered thirty-three Samwu (South African Municipal Workers Union) officials who have since been dismissed for accepting bribes.
Full Article in the Cape Times (12 November 2004)

Undercover police investigators have arrested former executive mayor at the Delmas municipal council, Juby Makhabane, after catching him and his colleague councillor Norman Mogapi on surveillance camera soliciting an R80 000 bribe from a tender applicant in return for ensuring that the applicant’s “bid to buy council property would be approved “at a substantial discount.”” A report by Justin Arenstein reveals that earlier this year Makhabane had been axed as Delman’s executive mayor after a forensic audit revealed that R173 000 had been embezzled from his discretionary budget two years ago.
Full Article in The Star (03 November 2004)

Geoff Midlane, managing director of a security company, Stallions Investigations, has revealed that white-collar crime siphons off “more than R40-billion a year – about R8-billion more than was brought in by foreign tourists.” However Herman de Beer, director in the forensics division of KPMG noted that fraud was impossible to quantify given the secretive nature of such activity. Midlane contends that management accounts for 50% of all such offences. Steven Powell, head of forensics at the law firm Sonnenberg Hoffman and Gambolik, added that a large portion of corporate fraud and corruption largely remained undetected and investigators often stumbled upon it by accident. Powell however observed that this is set to change following the passing of the Prevention and Combating of Corrupt Activities Act, which makes it “an offence for company directors or persons in position of authority not to report corruption…”

Designed to help look after people while sick, temporary disability grants in the Eastern Cape Province have been prey to able-bodied unemployed individuals and syndicates who defrauded the system to access the grants. Dineo Matomela reports that the department of social welfare, together with the Scorpions, are due to arrest four members of a social grant syndicate, and so far “eight people from Zwide, KwaNobuhle and Rholihlahla were arrested in connection with a social grant scam …”

Reacting to the tide of social grant corruption that has swept upon its quarters, the embattled Social Welfare Department in KwaZulu-Natal is to publicly launch an anti-fraud campaign to net the grant fraudsters. According to a report by Sipho Khumalo the department’s Special Investigations Directorate and Crime Intelligence Units “have found that it was losing close to R30 million a year in fraudulent claims on its various social grants …” As a result of the Department’s effort to step up the fight against the scourge, 1000 people face possible arrests. The renewed efforts to fight against fraudulent claims follows “in the wake of the discovery that, among others, more than 5 000 people were fraudulently receiving old age pensions, costing taxpayers about R17 million.” These include close to 1000 “ghost pensioners” who claimed old age pensions for people who have passed away. In addition the department has found that it is paying more than R1.6 million in child grants to 6000 ‘ghost children’. According to Social welfare MEC Nyanga Ngubane Departmental investigations reveal the involvement of “…doctors, departmental staff, syndicates and agents who sell fraudulent medical certificates, clinic cards, birth certificates and identity books.”
Full Article in Mercury (15 November 2004)

Following bloody shootings in Pretoria’s C-Max jail, SA Prisoners’ Organisation for Human Rights (Sapohr) and political parties have called for a “crackdown on prison corruption such as the smuggling of weapons.” While Sapohr called for a probe into weapons smuggling in jails, the Inkatha Freedom Party (IFP) “demanded that C-Max officials clearly guilty of negligence be suspended without fail.” This comes after a prisoner at C-Max, “a maximum security prison designed specifically to hold violent and disruptive prisoners classified as dangerous, had obtained a firearm and used it to kill a fellow inmate, prison head Sam Gomba and a warder before turning the gun on himself.”
Full Article in the Citizen (09 November 2004)

Captain Ravichandarn “Tony” Naidoo, and Inspectors William Kgathi and Sathisagren “Dean” Govender of the Johannesburg Serious and Violent Crimes Unit have been arrested and their assets face seizure by the Asset Forfeiture Unit (AFU). Gill Gifford and Bridgeti Sekati report that the trio has been charged with theft, assault and defeating the ends of justice, as they allegedly “took property – mostly cash and jewellery – from suspects they were investigating.” The arrest is a culmination of investigation launched two months ago by the Fedisa Provincial Task Team – a special unit targeting cash-in transit and bank robbers.
Full Article in Cape Times (16 November 2004)

Writing in the Star, MP and DA spokesperson Roy Jankielsohn argues for a professional and well-resourced police force as a necessary corrective to the recent upsurge of instances of reported corruption, extortion and abuse of power by the police. Jankeilsohn notes that “[a] professional police force would reduce the likelihood of corruption occurring by firstly enhancing anti-corruption measures, and secondly by improving the poor conditions of service for SAPS members which often serve as an inducement for SAPS members to engage in corrupt activities.” Jankeilsohn also calls for the establishment of an internal investigating unit, which “should be well-resourced and insulated from the rest of the SAPS.” The SAPS established an anti-corruption unit in 1996 but this was closed down in 2001 and replaced by internal ‘peer’ investigations.

Finance Minister Trevor Manuel has published “three new draft regulations to modernise procurement in municipalities and to reduce corruption” in the Government Gazette. Bernard Sathekge reports that these regulations, “which will operate under the Municipal Finance Management Act, will significantly overhaul the way municipalities procure goods and services, engage in public-private partnership and invest in municipal funds.” Under these supply chain management regulations, “any gifts, rewards, favours and sponsorships offered to a municipality by a supplier in cash or in kind” are prohibited.
Full Article in Citizen (03 November 2004)

The Department of Home Affairs envisages establishing a centralised database to store more than 30-million fingerprint records within 18 months. According to a report by Hopewell Radebe, this centralised system is a move to curb corruption and the fraudulent usage of stolen identity documents. The centralised system will, amongst other things, “help the department to verify a number of illegal activities including fake marriages”, pick up the “real identities of South Africans who have changed their identity document numbers in order to escape detection by credit bureaus, or to hide their criminal records”, and “fraudulent applications for citizenship, work permits or refugee status.”

Durban City Manager Mike Sutcliffe has disclosed to the city’s executive committee that during the past three years, the eThekwini Municipality saved more than R46 million of ratepayers’ money, and in the same period 33 council employees were dismissed. According to Philani Makhanya Sutcliffe was reporting on the progress of the investigation conducted by the Office of the Ombudsman in a crackdown against theft, fraud and corruption within the municipality. According to the document tabled before the executive committee the city has saved R1.8 million this year, and R30 million in 2003.
Full Article in Mercury (17 November 2004)

In 2003 the Transparency International Global Corruption Barometer ranked South Africa as “one of the most pessimistic nations on earth” due to the fact that “at least 50% of the country’s citizens thought corruption would get worse, while only 30% felt things would be better in the coming year”. However, Transparency International’s 2004 Global Corruption Barometer, released records a radical change of trends. According to a report by Rob Rose the 2004 survey has found that “40% of South Africans are now confident that corruption will decrease – while only 37% believe that things will worsen.” Compared to the global average South Africans were far more optimistic – “45% of people surveyed in other countries expected corruption to increase, while only 17% thought the opposite.” As was the case last year the South African respondents bucked the global trend of placing political parties as the sector perceived to be most corrupt – instead reserving top position for the South African Police Service. In contrast the Media and South African Revenue Service faired much better.

See Umqol 22 for the next profile.

There are no announcements in this issue.

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.org.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.org.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".