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Investigative attempts to recoup money and trace assets worth billions of rand, lost during the reign of the late Brett Kebble, have once again shone the spotlight on his political and business associates. Did they knowingly participate in his alleged fraudulent transactions or were they merely unsuspecting victims of Kebble’s larcenous schemes? The latter is a common refrain heard from those involved with the fallen fraud baron. Is it conceivable that Kebble could have managed the protracted looting spree and concealment of insolvency without their intentional or inadvertent participation? Some big names have already drawn substantive media coverage.

Though the full cast of characters may not yet have emerged it is clear Kebble had a carefully crafted network of contacts. Not particularly surprising is the role of certain prominent officials within the ANC Youth League (some of whom are not strangers to controversy). Suspects in this saga include the League’s National Executive Committee member Songezo Mjongile, Andile Nkuhlu and former member Lunga Ncwana. The trio were part of the Phikoloso consortium, a Kebble brainchild now found to have been a sham transaction.

Although no strangers to the weighty empowerment deals concocted by Kebble they have dissociated themselves from his legacy. These individuals only represent a tiny proportion of the vast network that supported the Kebble empire. Anecdotal evidence suggests that Kebble sought political influence through a broad, carefully chosen list of political heavyweights. These include Popo Molefe, former North West premier who is alleged to have received a R600 000 ‘loan’ from Kebble’s company, Tuscan Moods. Also mentioned is former ANC MP Andrew Mlangeni who may have unwittingly tarnished his impeccable struggle credentials by publicly disclosing the bountiful receipt of a multi-million rand mansion, and a luxury Mercedes, courtesy of Kebble.

The National Prosecuting Authority (NPA) is probing the affairs of George Poole, former secretary of Johannesburg Consolidated Investments (JCI), one of the companies Kebble headed, who is also claimed to have assisted Kebble in siphoning off shares. JCI is in the process of claiming a whopping sum of R41,4 million from Poole who allegedly sold shares in dubious transactions. Also expected to face the music are Hennie Buitenberg, top director JCI, Matodzi and Rand Gold Exploration (R&E) Roger Kebble, Brett’s father, and chair of the boards of directors, as well as John Stratton, an Australian who worked closely with Kebble. Auditing firm, PricewaterhouseCoopers (PwC), which is alleged to have ‘blindly’ signed off R&E’s suspect financial statements in 2003 may also be in the prosecution pipeline. A preliminary probe, undertaken by the Independent Regulatory Board of Auditors (IRBA), is already underway. The Kebble saga may come to mirror events that unfolded during investigations into the collapse of the US energy giant Enron where auditors were brought to justice along with the wayward executives.

Whether the alleged beneficiaries of Kebble’s “loans” and “donations” were in fact merely misled may ultimately be revealed if an inquiry is called under Section 152 of the Insolvency Act. This piece of law allows the presiding officer to subpoena individuals including those who allegedly received payments from Kebble. This could for the first time reveal the true nature and extent of Kebbles network of well connected South Africans. While Kebble has passed away, he leaves a legacy of one of the allegedly largest white-collar frauds in South Africa’s history. Could this have been avoided? How can we better regulate the influence of money in politics? Will Kebbles accomplices be brought to book? These are the tough questions South Africans must grapple with in the months ahead if we are serious about tackling corporate crime.

A report to Parliament by Auditor-General Shauket Fakie on an investigation into declaration of interests by government employees caused a stir. Fakie found that 14 Cabinet ministers (including Deputy President Phumzile-Mlambo Ngcuka) and deputy ministers and 1 678 provincial ministers and senior public service managers had not fully disclosed their financial interests in the 2003/04 financial year in accordance with the Executive Members Ethics Act and the Public Service Regulations. Designated officials, including government deputy directors-general, directors-general, senior management officials and those in the sphere of awarding tenders, are obliged to disclose their business interests. The report did not name the offenders, but a City Press investigation revealed that it includes Education Minister Naledi Pandor, Public Works Minister Stella Sigcau, and Social Development Minister Zola Skweyiya. Parliament’s Standing Committee on Public Accounts (Scopa) is to call the Public Service Commission to present its plans for dealing with the matter.

Parliament’s ethics committee argued that the report was based on “outdated information from the companies and Intellectual Property registration Office (Cipro)”, a database of all registered companies and their directorships. Fakie hit back by suggesting claims that his report was based on outdated information or on technical omissions were disingenuous. He said that the Registrar of Members’ Interests in Parliament, Fazela Mohamed, and the Presidency’s Frank Chikane (both criticised the report) were given the list of ministers, deputy ministers and companies to check them against their own records. He also argued that he made sure that everyone had the opportunity to respond to the report before it was finalised.

The report also revealed that more than 50 000 civil servants have interests in private companies, with more than 16 000 holding directorships. The report suggests that these non-designated employees should also disclose their directorships and memberships of private entities. Furthermore, Fakie found that a “number of entities in which government employees were directors or members had had transactions with the government”. He launched a separate audit into public servants’ benefit from state tenders, due to the “extent and materiality of these transactions”.
Full articles in City Press (19 March 2006), Mail & Guardian (31 March to 6 April) and Fin24 (23 March 2006)

The Star reports that liquidators in the Travelgate saga are trying to recoup R500 000 from the Pan Africanist Congress (PAC). As part of Star Travel’s liquidation hearing PAC leader Motsoko Pheko was grilled about his role in the allegedly fraudulent use of parliamentary travel vouchers. About 30 SAA air tickets, some in Pheko’s name and a few in the name of his dependants, were scrutinised. Under tough questioning Pheko maintained that his conscience was clean. He told magistrate Kaila Pillay, “If the vouchers were abused they were certainly not abused by me”. Twenty-five current and former MPs – not including Pheko – are to go on trial in July in connection with the voucher scam.
Full article in The Star (7 April 2006)

Parliament has received two conflicting National Assembly portfolio committee reports on the Oilgate scandal, one by the Minerals and Energy Committee (which endorsed public protector Lawrence Mushwana’s findings) and the other by the Standing Committee on Public Accounts (Scopa). Both reports consider a R15m advance payment by PetroSA to Imvume for the purchase of oil condensate. Imvume is alleged to have used R11m for a donation to the ANC. Mushwana found the actions of oil company PetroSA in making a loan to Imvume Management “in terms of the legal and policy prescripts that applied to PetroSA”. Scopa, in turn, found the loan to have been improper and also that Imvume misled PetroSA regarding the advance. Linda Ensor of the Business Day reports that the Democratic Alliance has recommended that the minerals and energy committee reconsider Mushwana’s report in light of Scopa’s findings. Parliament accepted the minerals and energy report and is due to consider the Scopa report shortly.

The ANC is suing the Mail & Guardian (M&G) for defamation following Oilgate articles published by the paper since February 2004. Separately, in January 2006, the M&G applied to the High Court to have Public Protector Lawrence Mushwana’s report on Oilgate set aside arguing that he failed to conduct a proper probe, was biased and misconstrued his powers. Mushwana appointed the legal firm Mahlangu Nkomo Mabandla Rashimbilani (MNMR) to defend his office. MNMR is also representing the ANC in its case against the M&G. Mushwana denies that his independence is being undermined by the fact that he is using the same lawyers as the ANC, claiming that the two cases did not “deal with the same issues”. In turn, the Mail & Guardian argues that a substantial part of Mushwana’s report does in fact cover the same terrain as the ANC case.
Full article in the Mail & Guardian (10 March 2006)

The City Press’ Jimmy Seepe reports that ANC secretary-general Kgalema Motlanthe was cleared by Public Protector Lawrence Mushwana of any wrongdoing regarding allegations that he influenced the award of an R800m Land Bank loan to Pamodzi Investment Holdings. Mushwana found “[there] were sufficient reasons provided (by Pamodzi) to the bank to grant the loan” and ruled that “the decision of the board of the Land Bank to approve the loan of R800 million was reasonable, in accordance with its mandate and objects and did not amount to maladministration.”
Full article in the City Press (5 March 2006)

The Department of Environmental Affairs and Tourism released a report that accuses the national roads agency of manipulating a multibillion-rand highway project. Commissioned by the government in 2004, the scathing report details numerous flaws with the controversial proposed R6 billion N2 Toll Road between Durban and East London. According to the City Press the report, among other things, concludes that there was lack of independence on the part of the environmental consultants and also accused the roads agency of “manipulating” the bidding process to overcome the glaring conflict of interest between the environmental consultants and the consortium. It also notes that ‘the motive for the project was financial gain rather than the provision of developmental infrastructure for surrounding communities.’
Full article in the City Press (26 March 2006).
Full article in the Sunday Times

City Press reports that Sello “Chicco” Twala, a top music promotor and musician, has been caught in a governmental tender irregularity. Twala was awarded a R644 000 tender by the national department of transport to produce an album for the department’s Easter holidays’ ‘Arrive Alive’ campaign. It later emerged that the tender was not publicly advertised, to allow other musicians to bid – thus breaching government policy which stipulates that any tender worth more than R100 000 must be publicly advertised. The national head of safety promotions responded that they were under deadline pressure. He added that Twala is the only black artist that owns a CD production plant and that the deal was thus advancing the Black Economic Empowerment (BEE) policy. However this piece of information was news to Mr. Twala who insists that he does not own a CD production plant.
Full article in the City Press (23 April 2006)

Land earmarked for a new squatter settlement was sold to Mpumalanga’s Delmas municipality for R7m. The municipality’s evaluators had valued the land at R1.6 million. According to the City Press a Gauteng company, ZA Tyre Recyclers Properties, initially offered the land for R5m, but later claimed it was a typing error. Municipal manager Tefo Kadi approved the R7m purchase. Mpumalanga premier Thabang Makwetla’s spokesperson confirmed that an anonymous whistleblower faxed a letter of complaint to the premier’s office. The premier has been urged to investigate whether the price was in fact irregularly inflated.
Full article in City Press (2 April 2006)

The Mpumalanga Economic Empowerment Corporation (MEEC) allegedly lost millions of rands of taxpayers’ money under the management of former MEEC boss, Ernest Khosa. Nico Fouche of The Citizen reports how a Section 417 inquiry into two companies, Equistock Investments and Savannah Forestry Equipment, in the process of liquidation hopes to shed light on what happened. The companies are suspected to have received suspicious loans from the MEEC totalling more than R2.4m, money that allegedly found its way into the hands of the companies’ financial director, Halden Murray. The whistle-blower turned State witness is the former managing director and shareholder of both liquidating companies.
Full article in The Citizen (7 April 2006)

Six officials of the department of agriculture, conservation and environment have been suspended and four directors arrested following a forensic investigation into corruption. The latest episode, according to the Mail & Guardian, relates to the firing of suspended North West agriculture department head, Emily Mogajane, by the province’s premier, Edna Molewa. Mogajane was axed for allegedly polarising the management and staff of the department and issuing negative statements about government in the media. Molewa claims service delivery suffered because of the dispute between Mogajane and the government. Mogajane has hit back by filing to have her dismissal set aside. Mogajane is currently under the National Prosecuting Authority’s protection, after she provided information on corruption in the North West. Molewa’s spokesperson dismissed the insinuation that Mogajane’s dismissal by the province undermines the fight against corruption in the department.

A R790m tender contract between Cash Paymaster Services (CPS) and the Limpopo provincial department of health and welfare was declared unlawful. Judge Ferdi Preller of the Pretoria High Court ruled that bidders who lost to CPS were illegally and arbitrarily denied an opportunity to make a profit. CPS had as one of its shareholders Northern Corporate Investment Holdings (Nicoh), which channelled funds to the ANC at the time it was granted the tender. City Press reports that Premier Sello Moloto’s administration was refused leave to appeal. The appeal refusal meant that the provincial government had to make frantic attempts to ensure the province’s 1,2 million social security recipients receive their grants.
Full article in the City Press (26 March 2006)

A prominent Polokwane businessman was one of the exposed ghost workers targeted by the Limpopo government’s campaign to clamp down on corrupt claimants. According to the M&G the man has taken about R500 000 in wages from the education department, despite having resigned as a teacher seven years ago. The money is to be recovered, invested in service-delivery programmes, and criminal charges pressed. Several Limpopo government officials will also be charged with misconduct for authorising cheques for thousands of ghost workers.
Full article in the M&G (13 March 2006)

The two most senior officials of the Bitou town council in Plettenberg Bay indulged in a 16-month spending spree to the tune of R326 000 using secretly issued “municipal” credit cards. This came to light in a report by the Special Investigations Unit, which recommended criminal proceedings against Bitou municipal manager George Seitisho and former executive mayor Euan Wildeman. The investigation followed a request by Parliament’s Standing Committee on Public Accounts (Scopa) in 2004 after the annual Auditor-General’s report raised concerns about the credit cards. The City Press reports that the credit cards were used extensively in South Africa and abroad to buy everything from CDs and tiles to French champagne.

Vicki Robinson reports how a group of senior councillors and officials of the Mangaung municipality in the Free State ran an “organised corruption syndicate” allegedly looting the municipality of more than ten percent of its R1.5 billion budget. The mayor, Papi Mokoena, was fired by the ANC in October 2005 and in April 2006 the chief operating officer Mzwandile Silwana and the city manager Majalefa Matlole were also dismissed. In July 2005 the Scorpions arrested the then-mayor, his wife, his political advisor, the city manager, the chief operating officer and then-speaker of the municipality. They appeared in court on 13 April 2006 where the defence teams opposed a State application for a further postponement. Robinson also reports on claims that the newly elected Mangaung mayor, Gertrude Mothupi, who is the sister of provincial ANC Secretary Lobe, attempted to stifle the council investigation into corruption. This was allegedly an attempt to conceal Lobe’s role in the network of corruption. The case continues.

In a separate development a forensic investigation revealed a scam involving an unauthorised transaction that would cost the Mangaung municipality R79 million for a property independently valued at between R14 million and R25 million. According to the Mail & Guardian the land was sold by the municipality for a pittance after striking a deal to buy it back in developed form. There was no tender. The deal, which was approved by Chief Operating officer Mzwandile Silwana and city manager Mojalefa Matlole, and involving apparent friends, came to light in a forensic study commissioned by the municipality.
Full articles in the City Press (9 April 2006) and News24.com (13 April 2006)

Isaac Bambo, a traffic officer at the Mhala licence station in Bushbuckridge, Limpopo, resigned after being suspended on theft and corruption charges, as reported in the City Press. Bambo is accused of stealing a coding system from the station and issuing fraudulent learners and driver’s licences. Criminal charges have been opened. The paper adds that the traffic station is still undergoing renovations after it was burnt down last year during an investigation into corruption. It is believed that the fire was set in order to destroy evidence.
Full article in the City Press (26 February 2006)

The outgoing Speaker in the Rustenburg Local Municipality is facing charges for fraud and corruption. The fraud case involves the alleged sale of cell phones intended for local councillors, and the corruption case the granting of a catering tender by the council. The cell phone case, which led to the arrest of two women working in the Speakers’ office, also implicates a church minister.
Full article in The Citizen (16 March 2006)

Police arrested suspects involved in an alleged scandal in the Mkhanyakude district, KwaZulu-Natal. Buanews reports how government commended the police on their swift action on this case involving R6m in missing funds earmarked for water and sanitation projects. In December 2005 a separate investigation was launched following allegations of mismanagement of the Municipal Infrastructure Grant (MIG).

The Mail & Guardian reports how the complex paper trail left by the murdered Brett Kebble shows how his expensive lifestyle was all paid for by others. A forensic investigation into the Kebble empire identified recoverable assets of R1.5 billion, while R900 million is still unaccounted for. About R400 million seems to have been stolen from Randgold & Exploration (R&E) and another R500 million from JCI. Kebble appears to have treated R&E, JCI and Western Areas as one and their assets as his own. Kebble was fired from his executive positions at all three companies in August 2005, a month before he was murdered. The executor of his estate believes that it is “hopelessly insolvent”, so creditors do not have much hope of recovering their assets there. Ciaran Ryan reports that the next step - an inquiry under Section 152 of the Insolvency Act - would allow the presiding officer to subpoena suspected beneficiaries of Kebble’s largesse. Ryan argues, “Given Kebble’s proximity to people in political power, it’s safe to assume this corporate scandal will eventually ricochet through the corridors of the Union Buildings in Pretoria”.

The first tremor was felt as R&E launched a sequestration application against former JCI “investor relations manager” George Poole. According to the application the former North West premier Popo Molefe received R600 000 from one of the front companies set up by Kebble and Poole. The Mail & Guardian reports that the shelf company, Tuscan Mood 1224, was allegedly used to launder the proceeds of more than R125 million in assets stolen from the JCI group. It was also revealed that Kebble, via Poole, paid about R4 million towards the cost of the ANC Youth League (ANCYL) national conference in 2004. The R4 million was allegedly derived from misappropriated shares. It seems that Kebble (and his cronies) used money to buy influence and protection.

Brett Kebble was known for his proclaimed dedication to Black Economic Empowerment (BEE). However, according Barry Sergeant Kebble has been shown up to be a BEE fraudster after his death. The forensic investigation into the affairs of R&E exposed at least two cases of BEE fraud. In one case, Randgold & Exploration (R&E) issued shares worth R260 million to a BEE entity, Equitant. This turned out to be the alter ego of two other BEE entities, Viking Pony and Phikoloso. All three companies were Kebble creations. Forensics found that the quid pro quo for these shares were valuable shareholdings, which were found to be fictitious and supported by false broker notes. Of the original R260 million worth of shares issued and sold for cash, practically not a cent went to BEE. Certain ANCYL members (including a national executive committee member) were party to this deal. This is but one example of several that allegedly show how BEE deals were fronts used by Kebble to conceal stolen cash.

The National Prosecuting Authority’s crime-fighting unit, the Scorpions, said that they would act decisively to ensure that those who assisted Kebble in the apparent theft of over R2 billion of shareholders’ money would be brought to book. Those investigated could include ANCYL members, former directors of Randgold & Exploration (R&E) and JCI, the JCI’s former company secretary (Poole) and even the auditing firm PricewaterhouseCoopers (PwC). PwC signed off R&E’s 2003 financial statements, which said the company made a profit of R177 million. The revised accounts proved that the company in fact sustained a loss of R159 million for that year. The Independent Regulatory Boards of Auditors (IRBA) launched a preliminary investigation into the failure of PwC to uncover the fraud. The Sunday Times points out that, in the Enron scandal, auditors were brought to book along with fraudulent executives. They add that the “failures of corporate governance are not only the fault of auditors – but the clean-up has to start somewhere”.
Full articles in the Sunday Times (9 April 2006)

The criminal trial of four individuals in the LeisureNet scandal started on 3 April. Peter Gardener and Rodney Mitchell, the joint chief executives, face charges of fraud, money laundering, income tax evasion and contraventions of the Companies Act involving R16 million. The liquidated group’s former in-house architect and the state’s key witness Dawid Rabie agreed with what Judge Dirk Uijs described as “a concoction of lies” meant to mislead the statutory Companies Act inquiry held after LeisureNet’s collapse in 2000. Business Day reports that the lies concern offshore payments made to Mitchell and Gardener and then repaid to Rabie.

In related news, LeisureNet’s former international treasurer Wendy Addison claims in a new book that the allegedly criminal activities of the company’s directors ruined much of her life. Addison testified about how money was siphoned from shareholders at a commission of inquiry into the company’s collapse in 2001. According to the Sunday Times Addison claims she struggled to get another job because companies “were not prepared to jeopardise their relationship with their clients by placing a whistle-blowing treasurer of a liquidated public company”.
Full article in the Sunday Times (16 April 2006)

Sanchia Temkin and Chantelle Benjamin of the Business Day report on two groundbreaking judgements by the Supreme Court of Appeal involving the Promotion of Access to Information Act and tender processes. In its first decision the court ruled that a tender bidder was entitled to commercial information about a competing bidder. This followed a request by a disgruntled bidder, SA Metal Machinery, for the National Ports Authority to ‘provide it with copies of documents contained in the winning bid submitted by Interwaste for a two-year contract for the removal of galley waste from ships in Cape Town harbour.’ In a second judgement the court upheld an earlier decision that gave an unsuccessful tenderer, Intertrade Two access to tender process information held by the Eastern Cape’s roads and public works department. The information was related to the adjudication of a tender process. Both rulings support transparency in the adjudication of tender processes.

Karyn Maughan of The Star reports that controversial South African multimillionaire and convicted fraudster, Niko Shefer, has been ordered to answer questions relating to his involvement in the “shadowy DRC mining industry”, in court. The Pretoria High Court order also promises to uncover the involvement of local mining industry figures (from the South African Metorex, its DRC operation and its minority partner) in the Democratic Republic of the Congo’s state mining company, Gecamines. Shefer is connected to Metorex both through Ruashi mining (Metorex’s DRC operation) and Sentinelle (the minority partner).

Eight housing projects in Khayelitsha and other areas of Cape Town have been halted due to corruption and maladministration. The Department of Housing and Local Government requested the Special Investigations Unit (SIU) and the Directorate of Special Operations (Scorpions) to investigate the projects after complaints by beneficiaries. The housing projects have been ‘ring fenced’ and subsidies halted. Subsidies will be reinstated once the findings of the SIU are known. Western Cape MEC for Local Government and housing Richard Dyantyi said the complaints ranged from unauthorised payments of state subsidies to failure by the service provider to comply with contractual obligations. He added that investigations are at an advanced stage.
Full article in the Cape Times (13 April 2006)

Buanews reports that five employees of the Chris Hani Baragwanath Hospital are facing criminal charges. The employees were suspended after a preliminary investigation into the hospital found irregularities in the procurement department. This follows moves by the Gauteng health department to clamp down on corruption. Gauteng Health MEC Brian Hlongwa stated, “It is not enough simply to lay criminal charges and take disciplinary action against people involved in acts of wanton crime in our facilities. We will also be taking action to recover the lost money from the guilty individuals”. He added that financial irregularities would not be tolerated as it compromises the quality of health care received by patients.

The City Press reports that a social worker was jailed for two years for operating a scam to defraud the child-care grant system. The Nelspruit Magistrate’s Court also ordered her to pay back R9 690 that she stole. The scam was uncovered as part of an ongoing national investigation into social grant fraud. About 2 500 government employees in Mpumalanga are being investigated for such fraud. These officials had ignored the amnesty period during which they could come forward and avoid prosecution. To date more than 50 civil servants in the province have been charged with social grant fraud. The amnesty period that ended in March last year saw the provincial department saving approximately R12 million as a result of fraudsters who voluntarily came forward.
Full article in the City Press (23 April 2006)

The Cape Times reports that more than 43 000 civil servants claim social grants to which they are not entitled. Of these, 4 262 have been removed from the government’s grant system since the Special Investigation Unit (SIU) began investigations in 2005. About 571 civil servants have been prosecuted since last year of which 333 have been convicted. According to the SIU a high number of civil servants being investigated for corruption are claiming child grants. The annual amount is estimated at about R50m. Prosecutions have saved government about R7.3m over the last nine months and the SIU expects it will save the government about R23m by the end of the year. Apart from the civil servants another 115 000 people have also been removed from the social grant system. These people either voluntarily stopped collecting grants (79 000 cases) or requested to be taken off the system (36 000 cases). This information was revealed in the SIU’s annual report to the Parliamentary Portfolio Committee on Justice and Constitutional Development. The SIU has been mandated to probe and prevent corruption in the public service.
Full article in the Cape Times (10 March 2006)

Parliament’s Standing Committee on Public Accounts (Scopa) launched a public hearing into housing-subsidy irregularities. According to the Business Day the auditor-general’s report on the approval and allocation of housing subsidies reports a total of 53 426 irregular or fraudulently granted housing subsidies, which cost the taxpayer an estimated R323m.
Full article in Business Day (16 March 2006)

A report on RDP housing in Limpopo has revealed irregularities at several levels, from the department of local government and housing, to municipalities, contractors and building material suppliers. The City Press reports that a former head of the department is also implicated for allegedly soliciting a R165 000 bribe. The investigations leading to the report, by a task team appointed by the previous MEC and led by Advocate Lazarus Mahlangu, followed a range of complaints, including alleged irregularities in the allocation of RDP houses in certain municipal areas. The report cites “rampant malpractices caused by a desire of self-enrichment” by “the private-sector individuals and entities that work hand-in-hand with the two tiers of government”. A provincial police spokesperson said that most cases mentioned in the report have not yet been referred to the police for investigation.
Full article in the City Press (12 March 2006)

The City Press reports that the chief executive of the National Prosecuting Authority (NPA) Marion Sparg and her executive management team face charges of tender-rigging and corruption. The entire tender committee of the NPA were also to face a disciplinary inquiry towards the end of April for tender misconduct. Sparg and her team face nine allegations ranging from financial misconduct and misappropriation of funds to contravening the Public Finance Management Act. Paradoxically, the head of the NPA’s Integrity Management Unit, the Statutory body set up to investigate the conduct of the Scorpions and NPA employees, is also implicated. The alleged misconduct took place under the previous national director Bulelani Ngcuka. An audit by the Auditor-General in 2005 also found that “tender processes were not always followed for the acquisition of certain assets” in the NPA. The NPA management has been under investigation by the Public Service Commission since 2004.

The Sunday Times reports that Correctional Services Commissioner Linda Mti is director of a company with links to three others that benefited from tenders worth R800 million issued by his department. Mti is sole director of accompany that shares the same physical and postal address as the companies that were granted large tenders by Mti’s department. Mti’s relationship with the companies is a potential conflict of interest as he is, as an accounting officer and in terms of the Public Finance Management Act, ultimately responsible for the expenditure of the Department of Correctional Service’s (DCS) budget. Mti denied influencing the procurement process of the DCS in favour of the companies. He also denied that his company was active and linked to tender beneficiaries.

In 1997 Inspector Hermias Hendrik “Blackie” Zwarts died, apparently from a heart attack. Now, nine years later, The Star reports that a former colleague and one-time friend of Zwarts appeared in court to face a charge of poisoning him. Initially it appeared that the police successfully covered up the case, but a private investigation by Zwarts’ widow unearthed a confession. Before his death Zwarts reopened two cases in which his colleagues were suspects, including a vehicle fraud case allegedly involving two policemen. Commenting on Zwarts’ death, the private investigator and former policeman Danie Nielson commented, “It’s a huge organised crime syndicate operating within the police force from Polokwane to Musina”.
Full article in The Star (8 April 2006)

Western Cape Judge President John Hlophe allegedly received a monthly retainer from the private asset management firm Oasis while serving as a judge. The law forbids judges to hold positions of profit without the justice minister’s consent. Tumi Makgetla of the Mail & Guardian argues that the judiciary currently has no code of ethical conduct with legal standing and neither can the Judicial Service Commission (JSC) discipline judges for non-impeachable conduct. Makgetla goes on to say that a Mail & Guardian investigation revealed that there are more judges who are registered as company directors. The Civil Society Network Against Corruption (CSNAC) has called for legislation on a code of conduct for judges and a register of their assets. Business Day reports that the call could impact on two bills before Parliament, the Superior Courts Bill and the 14th Constitution Amendment Bill.
Full articles in the Mail & Guardian (7 April 2006)

One of the biggest organised crime investigations undertaken in South Africa - dubbed Project Yield – has exposed how criminal syndicates are smuggling vast amounts of precious metals stolen from mines. These syndicates are allegedly paying millions to buy off mine employees and members of the South African Police Service. The joint continuing police and Scorpions investigation dates back to 1999 and involves more than 45 investigators as well as international police. The Sunday Independent reports that it is particularly difficult to successfully investigate as law enforcement agencies at all levels are influenced.

Two N igerian men are facing bribery charges after they offered Port Elizabeth’s only Igbo court interpreter R100 000 to resign from his job. The Sunday Independent reports that the two brothers were arrested in one of the magistrate’s courts while allegedly harassing the interpreter for refusing the bribe. They reportedly hoped the resignation would lead to cases against N igerian friends of theirs being dropped. The brothers are now facing intimidation, bribery and defamation charges.
Full article in the Sunday Independent (9 March 2006)

A former deputy director of public prosecutions, Advocate Cornwell Tshavhungwa, successfully applied for discharge on five charges of fraud and corruption. News24 reports that he still has to face six other charges ranging from fraud, corruption and perjury to driving under the influence of alcohol. The state earlier decided not to pursue three cases in which the former chief executive of the Mpumalanga Economic Empowerment Corporation (MEEC), Ernst Khoza, was expected to testify against Tshavhungwa. Tshavhungwa will appear in court on 3 May to defend himself against the remaining charges.
Full article on News24 (15 March 2006)

The former Serious and Violent Crimes Act inspector Sagie Govender will stand trial on 21 charges ranging from extortion and corruption to defeating the ends of justice. According to Sunday Independent, the well-known Durban detective allegedly took, or attempted to take, more than R2 million in bribes from people accused of kidnapping, armed robbery, murder and drug dealing. Before Govender was arrested in May 2005 he had an unblemished 23-year service history with the police where he had been involved in investigating many high-profile cases. A trial date is expected to be set when Govender appears in court again on 31 July.
Full article in Sunday Independent (6 March 2006)

Police are investigating claims of corruption and irregularities at the Paarl East police firearm and liquor application office. The Cape Argus reports how police allegedly target shebeens that do not give in to police demands, for raids. In the words of Marthinus Gouws, they “victimise shebeen owners through liquor and money bribes”. Gouws, legal consultant and also chairman of the Paarl police sector, urged a “higher independent authority” to convene the investigation, as well as the suspension of the officers involved.

The same secret, independent report that led to SA Rugby giving its president Brian van Rooyen the boot has also raised questions about the reasons behind the selection of South Africa’s new Super 14 franchise. The Herald reports that, according to the report, the man who headed the panel that selected the Super 14 rugby franchise allegedly enjoyed an overseas trip funded by SA Rugby with his wife a few months before the franchise decision last year. Advocate Norman Arendse, who convened the controversial Super 14 franchise adjudication panel, is one of several people who allegedly enjoyed trips funded by SA Rugby. The report describes the funding for Arendse’s trip as “unauthorised”. Sports Minister Makhenkesi Stofile’s office said that the minister would only respond to the content of the report after SA Rugby presented it to him.

The referees department of the South African Football Association (Safa) has vowed to clamp down on corrupt match officials. The City Press reports that the chairperson of the appointment committee, Ari Soldatos, said the department relies on match commissioners’ assessment reports on referees as a guide in appointing officials. Soldatos added that “referees would be wise not to be tempted by money”.
Full article in the City Press (12 March 2006)

The South African Council of Churches (SACC) in Limpopo is no longer interested in serving on the province’s anti-corruption forum. The Sowetan reports that the SACC commented that it was “in the dark” about the province’s different programmes and that it did not have the needed figures on the levels of corruption. The SACC added that they lack confidence in the effectiveness of a forum that has held only two meetings since its inception a year ago. The forum was established to come up with a provincial strategy to deal with corruption.
Full article in the Sowetan (27 February 2006)

Corruption, which South Africans mostly experience in relation to seeking employment and the provision of utilities such as water, electricity and housing, was a key issue raised in workshops for South Africa’s self-assessment for the African Peer Review Mechanism (APRM) held in Johannesburg. Corruption, according to the City Press, was mentioned in one of the presentations as “one of the areas in which the focus was more on process than on product”. The existence of good rules, and insufficiently enforced penalties is a commonly observed phenomenon. Corruption not only came up as a concern of government but also of business and ordinary citizens. In another submission, police were identified as the public servants most associated with corruption.
Full article in the City Press (9 April 2006)

The Western Cape Department of Local Government and Housing MEC Richard Dyantyi said his department would step up its anti-corruption campaign. He added that the arrest of those guilty of pocketing money intended for housing projects was imminent. The department already has in place monthly monitoring sessions where departmental officials put housing projects under the spotlight. These sessions has helped to dictate early warning signs of fraudulent activities and other tendencies that negatively impact on the delivery of housing in the province. Dyantyi announced that the department was also rolling out a programme aimed at educating beneficiaries about housing projects and how to protect their rights. The move follows an investigation that revealed the theft of funds by building suppliers and other role players as the main reason behind the collapse of several housing projects in the province.

The Limpopo provincial government executive council (Exco) instructed all departments to resolve all impending cases arising from Operation Headcount 2005 by the end of March 2006. The Citizen explains that Operation Headcount took place in September 2005 and involved the personal collection of salary cheques with positive identification. The operation saved the government at least R1 786 204 per month after more than 200 cheques of ghost workers were not collected. The exercise was intended not only to uncover fraud, but also to close the administrative gaps that opened the system to abuse.
Full article in The Citizen (16 March 2006)

A meeting by the Civil Society Network Against Corruption (CSNAC) / Transparency SA noted with concern that the Kebble saga is only the latest in a trail of corporate scandals that include Masterbond, LeisureNet and MacMed. They committed themselves to opening up a dialogue with SARS and JSE to understand this repetition of failures in corporate governance. They also registered concern at the payment of judges by private companies. They welcomed the process of creating a register of judges interests, while calling for even-handedness in its implementation. Lastly, they wished to refer the issue of private sector interests of civil servants that could conflict with their public interest to the National Anti-Corruption Forum for discussion.

The Cape Argus reports that the investigation into social grant fraud is to be expanded from public servants employed in the national and provincial departments, to cover also government agencies and parastatals. This follows the successful “bringing to book” of thousands of public servants linked to such fraud. Willie Hofmeyr, head of the Special Investigations Unit (SIU), also commented that it would soon be time to go after private-sector employees claiming grants. In related news, the Minister of Social Development Zola Skweyiya’s budget speech of 28 March discussed the integrity of the Social Security System. The national budget allocation for system integrity is being increased from R24m in the current financial year to R60m in the next. Reform of this system includes the establishment of the national Social Security Agency as well as key oversight institutions such as the Social Security Inspectorate. The Agency initially takes over social assistance payments in Gauteng, the Western Cape and the Northern Cape from the end of March 2006, and will be expanded to the other provinces by March 2007.
Full articles in the Cape Argus (28 March 2006) and City Press (12 March 2006)

The National Prosecuting Authority’s (NPA) Asset Forfeiture Unit has confiscated assets worth about R275m from suspected criminals in the past ten months. Citing Willie Hofmeyr, head of the forfeiture unit, M&G’s Waghied Misbach reports that this is an increase from the R222m of the previous financial year.
Full article in the M&G (10 March 2006)

Parliament was to discuss a report of the court services unit of the Department of Justice and Constitutional Development. Attached to this report are the results of a UNODC survey that is part of the UN’s global programme against corruption. The UN programme aims to assist government and the judiciary to enhance the rule of law by strengthening the integrity and capacity of courts. The survey indicates that at least 44 percent of people who interacted with the South African criminal justice system believe that it is corrupt while 23 percent completely disagreed. Perceptions, however, appear not to reflect reality, as only 0,3 percent of respondents had actually received an indication that a gift, payment, money or a favour was expected from magistrates. Thus, as the City Press reports, the survey found that actual experience of bribe seeking might not be the main driving factor of users’ negative perceptions.
Full article in the City Press (12 March 2006).

Despite an overall improvement in governance in the 27 African countries surveyed, the UN Economic Commission for Africa’s (ECA) Governance Report 2005, the first of two to be issued after a three-year survey, still found pervading corruption. Corruption ranked third amongst the most urgent problems in many African countries after poverty and unemployment. The report also said that corruption is often reflected in a judiciary lacking operational independence as “the executive determines the appointment, promotion and remunerations of judicial officers”. The Second report is due in 2007.

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

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)

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"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".