Visit the
Southern African Internet Portal on Corruption (IPOC)
www.ipocafrica.org |
Billions plundered – So what?
Outgoing South African Auditor-General Shauket Fakie did not mince his words when he recently reflected on levels of corruption in government. (See National Administration). He described the knock on effect that both public and private sector economic crime has on investment, job losses, poverty and the crime rate. A little more than two weeks later Reserve Bank Governor Tito Mboweni expressed sharp criticism for corrupt politicians and state institutions which he sees as choking economic growth on the continent (See National Administration). The message from two leaders who have crucial oversight and regulatory roles in South Africa is clear – the problem with corruption is more than just perception.
Crucial to tackling graft has been the process of putting in place the laws and institutions that ensure accountability, promote transparency and prosecute corruption. Efforts to keep in check corruption are as new as our democracy. However they, and the constitutional principles that guide them, do not alone set us apart from apartheid. It is our commitment to allowing the media and researchers to name and shame those who steal from the poor majority that signifies the break with the past. Equally it is the willingness of our anti-corruption agencies to investigate and prosecute members of the political and business elite implicated in graft that signals a break with practices of the past.
The Apartheid Grand Corruption Report (See Profile) authored by the ISS on behalf of civil society asks how we deal with aspects of our past that still pervade the present. It sketches reported and alleged instances of corruption within the private and public sector between 1976-1994. The report also points towards tens of billions of rands that were vulnerable to plunder during apartheid and the little we know about the whereabouts of such money. The report stirred debate around the legacy of apartheid and the need for renewed vigour in tackling corruption in South Africa. It was welcomed by voices within civil society, organised business (Business Unity South Africa) and the South African government (through a cabinet statement).
However, it has also triggered the ‘so what’ factor that all too often plagues allegations of corruption involving elites the world over. Once allegations of corruption emerge the general response is one of moral outrage but little evidence of action – leaving ordinary citizens contemplating the question ‘so what if we report corruption – nothing changes?’ This is a phenomenon that fundamentally undermines public trust in institutions that should be serving democracy.
There is no doubt that tackling political corruption is a tricky affair – and it is even more complicated when one deals with a former ruling elite. African countries such as N igeria, Kenya and Zambia continue to struggle with this phenomenon. It is important to ensure that such processes do not deflect from current corruption. Equally they have to be handled with the necessary sensitivity so as to deal with any perception that the motivation is anything but to achieve justice. It is however imperative that something is now seen to be done about apartheid era crime – dealing with the ‘so what’ phenomenon head-on. The illicit wealth of those who plundered under the ruse of a crime against humanity needs to be returned to the public coffers. As years go by the window of opportunity for action grows increasingly smaller only serving to fuel a culture of impunity amongst the corrupt. The South African government and National Prosecuting Authority now needs to show leadership on the issue by indicating if it will invest resources, to investigate allegations of apartheid era corruption. It is in our fearless, but carefully considered, approach to facing difficult issues such as political corruption that will ultimately set the society we imagine for the future apart from the one that continues to shapes the present.
National Administration
Travelgate: Thirty facing prosecution
The National Prosecuting Authority (NPA) has decided to prosecute 30 people that defrauded Parliament of R15m in what has been coined the Travelgate scam. According to Business Day’s Wyndham Hartley Director of Public Prosecutions Vusi Pikoli said that after wading through 1200 pages of evidence he was satisfied with their decision to try 23 MPs and seven travel agents. It has been three and a half years since Parliament’s Finance Committee uncovered that MPs were abusing their Parliament travel vouchers. Over 100 MP’s were originally rumoured to be implicated. The trial is due to begin on 31 July 2006. Full article in Business Day (30 May 2006)
Oilgate: Stalling of commission of enquiry sparks new fears
Public hearings of the Donen Commission of Enquiry into the Iraq Oil-for-Food Programme irregularities were abandoned last month causing new fears of a loss of momentum in the process. Stefaans Brümmer of the Mail & Guardian reports that poor drafting of the commission had allowed a challenge of its powers, which President Thabo Mbeki now needs to reconsider. This comes after an initial struggle to get the Commission off the ground because of the potential embarrassment it could cause to senior politicians and officials implicated in the scandal. The Commission was tasked in February this year with probing allegations by the UN that illicit payments were made and kickbacks received from the former Iraqi government. Full article in the Mail & Guardian (12 May 2006)
Transnet sacks 25 corrupt employees a month
Linda Ensor of Business Day reports that public transport provider, Transnet is taking a tough stance on corruption, firing 25 employees a month, this according to Transport CEO Maria Ramos. Talking about Transnets 76000 strong workforce Ramos said she still believes that, “One corrupt person in any organisation is too many.” She concedes that she may be overstating this figure of 25 as these may not be all corruption related but were a culmination of dispute resolution processes. Speculations are that the parastatel may be trying to clean up its “widespread corruption” act before selling off some its assets by the end of December. Full article in Business Day (29 May 2006)
Shaik-ing up the driver’s licence contract
The Department of Transport is reviewing the R650m licencing contract that the convicted fraudster Schabir Schaik’s company Prodiba was awarded in 1998. The plan, according to Director-General of Transport Mpumi Mpofu, is to restructure the deal so that “the system is still operational while a changeover took place, so as not to interrupt the delivery of driving licences,” Michael Hamlyn of Star Business Report writes. Prodiba’s contract in which it receives R40 of every driver’s application fee was renewed in 2004. Businessman Shaik was sentenced to 15 years of imprisonment after being convicted on two counts of corruption and one of fraud in the Durban High Court in 2005.
Full article in Star Business Report (8 June 2006)
The downward corruption spiral?
Both the Auditor-General and Governor of the Reserve Bank recently made strongly worded statements criticising the public and private sectors for their corrupt practices, the Sunday Times and Business Times Report. Fakie, who has been lauded for his fairness and has been instrumental in uncovering government irregularities, stated in a conference that there was, “a lot of corruption in government.” Mboweni buttressed this statement at the a meeting of the World Economic Forum stating that he was more sceptical of those politicians who use the “anti-corruption ticket… because they are the most corrupt of the lot”.
Full article in Business Times (18 May 2006)
Full article in Sunday Times (4 June 2006)
Provincial Administration
Directors suspended for ‘corruption’
Sizwe sama Yende of City Press reports that procurement fraud to the value of R6,6m has led to the suspension of four senior civil servants in Limpopo Province. An independent auditor’s report implicated chief human resources director Simon Makofane, chief finance officer David Mogofe, corporate services director Burton Koma and technical services director Stephen Nkadimeng. The four civil servant directors were involved in “tender rigging, awarding tenders to their own companies, violating the Municipal Finance Management Act (MFMA) and general mismanagement.” Details of the audit report has not been yet been made public.
Full article in City Press (21 May 2006)
MEC living it large at taxpayer’s expense
The Kwa-Zulu Natal (KZN) Member of the Executive Council (MEC) for Public Works Blessed Gwala has to answer to taxpayer’s for his lavish lifestyle, writes Paddy Harper of Sunday Times. Over the past two years, he has been staying in five-star hotels the Edward, The Royal and Elangeni on Durban’s beachfront running up bills totalling more than R1,5m. He also rented a BMW 5-series at a minimum cost of R1050 a day instead of using his state issued and subsidised luxury vehicles. KZN’s Premier S’bu Ndebele refused to comment to probing Sunday Times investigators saying that he would respond when he had all the facts.
Full article in Sunday Times (11 June 2006)
Dismal talk shop mired in procurement irregularities mess
An investigation by SCOPA (Standing Committee on Public Accounts) has revealed procurement irregularities in the multi-million rand international transport convention hosted by the Limpopo’s transport department in May 2005, City Press reports. The Auditor-General Shauket Fakie said that the department overspent by more than R3m, inaccurately budgeted for the event and used funds allocated for other projects. He also claimed that tender rigging and irregular procurement processes were adopted.
Full article in City Press (4 June 2006)
Local Government
Whistle-blower sues council to get job back
A former director in Mafikeng Municipality Mpiyesizwe Guduza is taking his former employer to court for dismissing him last year after he allegedly exposed his boss’s involvement in awarding an irregular tender worth R79m. Dan Dhlaminii of City Press reports that Guduza believes that the internal tribunal’s decision to fire him is a cover-up for Municipal Manager Sello Mogodiri’s corrupt activities. The tribunal found that Guduza brought the municipality into disrepute because he expressed his dissatisfaction with municipal Project Consolidate to staff and public without exhausting internal procedures first.
Full article in City Press (28 May 2006)
‘Untouchable’ manager suspended
Only after pressure from the regional ANC executive committee was a Mpumalanga municipal manager suspended on corruption and s exual harassment charges, Sizwe sama Yende of City Press writes. Former mayor of DR JS Moroka municipality Alfred Malefo repeatedly refused to launch an investigation into the conduct of George Mthimunye stating that he did not want to “use his executive powers to take decisions that will backfire and ruin my reputation and that of government.”
Full article in City Press (11 June 2006)
Public complaint: Metro Police asks for bribes
Inga Strydom of Cape Times reports that an investigation into corruption by Metro Police was launched in Cape Town after the public made several allegations of bribe solicitation by police officers. These were mainly drunken driving related incidents where complainants stated that policemen asked them to pay spot fines to prevent being arrested. Full article in the Cape Times (10 May 2006)
City’s tender underbelly exposed
City of Cape Town tender awards were in the spotlight recently when the Treasury found that some were unconstitutional and in breach of national legislation, writes Anél Powell of the Cape Times. Hundreds of millions of Rands of tenders were called into question in the process. Former mayor Nomaindia Mfeketo made a decision in 2004 to award 30% of all tenders to Black Empowerment Equities (BEE), which is outside of the requirements of the Preferential Procurement Act (PPA). Many companies who were excluded from the tenders have been fighting the issue but to no avail under Mfeketo’s reign. The flawed contracts are now under review and the policy is being amended. Full article in the Cape Times (31 May 2006)
Industry
Kebble update: The father, the son and their un-holy ghosts
Business Day’s Rob Rose reports that, the first high profile individual connected with late mining magnate Brett Kebble was brought to the courts to answer on corruption charges. Top ANC Youth league official Songezo Mjongile is facing six charges of tax fraud. Nedbank has also been drawn into the fray denying allegations that it knowingly traded in stolen shares connected with Kebble’s investment vehicles, Investage, Mzwandile Jacks of Star Business Report writes. Meanwhile, Rob Rose writes again that in a bid to defend itself against a liquidation bid one of Kebble’s company’s JCI claimed it didn’t owe investment house Trinity any money by pinning fraudulent deals on Kebble. They claimed that Kebble agreed to buy back shares from disgruntled shareholders to absolve his guilt in missing assets. Finally, Kebble’s father mining boss Roger Kebble has employed private auditors to clear him of five charges of tax fraud. As Brett Kebble’s corrupt activities unfolded after his death, the South African Revenue Service (SARS) hit Roger Kebble with unpaid back taxes amounting to R62m.
Full article in Star Business Report 15 June 2006 Full article in Business Day (22 June 2006)
Also see the Business Day (23 June 2006)
Also see Business Day (29 June 2006)
Crooked doctors cost industry R12bn a year
Medical aid schemes complain that they lose billions every year because of health care professional fraud, Penny Sukhraj of Cape Times writes. More than 2000 cases involving doctors, dentists, pharmacists and optometrists are currently being investigated by the forensics management unit (FMU), a division of the Board of Healthcare Funders. The FMU stated that they relied heavily on tip-offs and admitted to using hidden surveillance equipment to catch the culprits. Full article in the Cape Times (25 May 2006)
Firm disputes army’s ration-pack tender
Dewina Food Consortium claims it lost a tender contract because of procurement irregularities and is now asking the court to make the South African National Defence Force (SANDF) to compensate it in the amount of R13m, Ilse de Lange of the Citizen reports. Dewina states that the supply of ration packs to the SANDF was awarded to an “unknown, inexperienced newly formed company” this decision seemingly influenced by Defence Minister Mosiouoa Lekota. The Minister of Defence Minister has challenged the claims made.
Full article in the Citizen (14 June 2006)
Total’s SA coal unit faces corruption charges
Europe’s third largest oil company, Total is facing local corruption charges involving the removal of secret documents from their offices, Stewart Bailey of Star Business Report writes. The two janitors who were asked to dispose off the documents blew the whistle on the company directly implicating its managing directors and two consultants hired by Total Coal in SA. Ironically, the consultants were hired to make the office safe from outside influence by debugging it.
Full article in Star Business Report (10 May 2006)
Crime & Justice
Prisons: Union says sacked officials got off too lightly
Prison officials who used inmates to do work for a private company that was paid R750 000 by the state were dismissed but not charged criminally, Dan Dhlamini of City Press writes. The two North West prison officials were found guilty of failing to implement the policies and internal controls of the department of correctional services but the South African Prisoner’s Organisation for Human Rights (Sapohr) believed they got off too lightly. The R750 000 tender fraud and use of government labour was exposed last year by an inmate who blew the whistle on the warders and the company that was awarded the tender.
Full article in City Press (21 May 2006)
Police: Zero-tolerance drive in police force lands two in court
Karen Breytenbach of Cape Times reports that the Western Cape Police Commissioners determination to root out corruption and fraud in his units has led to the prosecution of two corrupt cops in the Maitland Detective Unit. The two former Branch commanders appeared in the Cape Town Magistrate’s court on charges of bribery and purgery. They were suspended without pay or benefits until the trial was finalised.
Full article in Cape Times (21 May 2006)
Police: Focus shifts to ‘crooked cops’ in airport heist
Collusion of police in the deaths and disappearance of informants and robbery suspects has become the new focus in investigations in the aftermath of the March 25 heist at Johannesburg International Airport, Sunday Independent’s Jeremy Gordin reports. Three policemen also claimed they were tortured, while only R340 000 of the R96 million stolen has been recovered (after it was stolen again at the police station it was housed in after recovery). At the outset of the investigation, police were satisfied with a breakthrough, which saw the speedy arrest of the ten men charged and the recovery of some of the stolen money.
Full article in Sunday Independent (18 June 2006)
Social Justice
Housing: No direct evidence of corruption in N2 project
Marianne Thamm writes for the Mail & Guardian that the N2 Gateway Housing Project in Cape Town has been given a clean bill of health by a local law firm following its preliminary investigation into allegations of corruption. At worst, the report questioned the competency of project managers on the pilot project but it did not fault the procurement process. Mayor Helen Zille still plans to conduct a forensic audit of all contracts.
Full article in Mail & Guardian online (16 June 2006)
Housing: Civil servants in housing fraud
A staggering 92% of 314 housing subsidies randomly selected for an audit by the Auditor-General’s made fraudulent claims to get houses in KZN, Edward West of Business Day reports. Lionel Mtshali of the Inkatha Freedom Party (IFP) said that false testimonies of earnings and employment status were “traced to municipalities where connivance with fraudulent beneficiaries had occurred.” The Auditor-General was asked to intervene by the KZN Housing MEC to assist with cleaning out the department of corruption. Full article in the Business Day (7 June 2006)
Education: Gauteng probes school bus service corruption
Whilst announcing her massive R2bn increase in budget from last year, Gauteng Education MEC Angie Motsekga revealed an investigation into suspicions of corruption in the provision of school bus services. Vusimuzi Ka Nzapheza of the Citizen reports that, “Bus contractors stopped operating and accused the department of not paying them in full earlier this year.” This is peculiar considering that the budget has gone up by R2bn from last year.
Full article in the Citizen (21 June 2006)
Education: Vice-chancellor faces 166 counts of misconduct
Formal charges of misconduct, nine years in the making, were finally made against former rector and vice-chancellor of the Vaal University of Technology (VUT) Professor Aubrey Mokadi. City Press’s Jackie Mapiloko reports that Mokadi is being charged with “fraud and corruption, theft, plagiarism, nepotism, abuse of a VUT credit card and abuse of VUT assets to name a few.” The trial began in May.
Full article in City Press (14 May 2006)
Social Development: Forensic unit probes grant to wife of councillor
The wife of a Democratic Alliance (DA) councillor has been receiving a child grant since 1992 even though she earns more than the threshold amount required to access such a grant, Anél Powell of Cape Times reports. A report is to be released soon by the internal forensic unit investigating the case in which the department has promised to act on if corruption is proved. Full article in the Cape Times (13 June 2006)
Civil Society & Sport
Sport: Disgraced ref offers bribes to fix match
Sowetan’s Canaan Mdletsche writes that details of match fixing of local soccer games emerged in a court case two years after former PSL referee Enoch Mandla Hadebe was implicated in the scandal. A former colleague of Hadebe’s testified that he offered him and another assistant referee R4000 each to manipulate the result of a match. Other PSL officials were also fingered in the match-fixing scandal that rocked local soccer.
Full article in the Sowetan (8 June 2006)
Research: Study finds lack of will to act against bribery, corruption
Sanchia Temkin of Business Day reports that an Ernest & Young survey report found that the will of SA companies to address the problem of fraud is lacking. This is despite indications that 24% of companies experienced fraud in the past year. Sixty eight percent of companies did not implement fraud procedures and 79% of employees lacked training on anti-fraud policies, Stuart Waymark of Ernest & Young commented. Full article in Business Day (20 June 2006)
Research: Axe all corrupt government officials, say majority in SA
A countrywide survey of 2500 participants revealed that the majority felt that government officials who were found guilty of corruption should not be allowed to hold office again, the Citizen reports. In particular, 66% of interviewees believed that the decision to fire Jacob Zuma as Deputy President last year was the right decision.
Full article in the Citizen online (12 May 2006)
Reform: Corruption-riddled Home Affairs department on the mend
The department of Home Affairs is to use technology and enforcement in its drive to root out corruption in the beleagured department, the Star and Citizen report. Minister Nosiviwe Mapisa-Nqakula stated that, “We are indeed making inroads with technologies such as the HANIS, Automated Fingerprint Identification System, Back Record Conversion, the new smart card ID and refugee card to build a temper-proof system.” The Treasury is also to assist the department repair its shoddy financial management.
Full article in the Star (29 May 2006)
Full article in the Citizen (31 May 2006)
Civil Society Report: Apartheid Grand Corruption
After a dozen years of silence on the subject civil society has rekindled interest in economic crimes under apartheid. When it called for investigation into the issue at the National Anti-Corruption Summit in March 2006 it met with stiff criticism from quarters within government and business. The compromise was that civil society would prepare a report, released this week, for discussion at the tri-partite National Anti-Corruption Forum (NACF). This was only one of a broad range of priorities that civil society organisations (including faith groups, labour and NGO’s) has placed on the national anti-corruption agenda, however the sensitivity towards tackling this thorny issue head on underscores the difficulty we have with forthrightly addressing issues of our past.
Corruption is a good lens through which to understand how the interests of some groups and individuals continue to outweigh efforts to call for justice and exposure of crimes that took place during apartheid. While the TRC attempted to promote reconciliation through truth, it focussed on apartheids ‘middle managers’ while society as a whole may be accused of pussy footing around those individuals – with a real handle on political and economic power – who committed a variety of crimes under apartheid. Grand Corruption in its pure sense has nothing to do with group benefit – it’s a crime of personal accumulation of capital at the expense of group interests. Therefore the corrupt in societies in transition often seek refuge in the ruse of ‘investor confidence’, ‘minority interests’ and ‘stable hand-over of power’. Furthermore a hands off approach may have set a bad precedent for dealing with the corrupt rogues who equally steal billions from the poor since 1994 in order to finance their Tuscan Villa’s in Florence or Four Ways in Johannesburg.
The Apartheid Grand Corruption report goes some ways to debunking the myth that corruption is a crime perpetrated by Black (South) Africans - rather it is a general disposition of power. White (South) Africans stood master over a system that during its terminal phase was characterised by state and private sector secrecy and poor governance. It was an environment in which the elite within white society (and co-opted black elites) had more to gain than loose by participating in plunder as the apartheid state gave its last gasps of breath. The opportunities were vast and stretched from the over R300 billion (in 2006 Rand value) in the Secretive Special Defence Account over which there was little oversight to the billions of Rands that were use to shore up political support by puppet regimes in the Homelands. The oil and arms embargo also created an environment where brown paper bags and secret deals became the rule – permeating corporate governance in South Africa. Organised crime personalities were attracted to the countries shores at the same time as the very wealthy were whisking away cash (illegally) in the form of gold, containers and other complicated forex frauds that may have seen over a R100 billion leave the country during the 1980’s. While the vultures were circling, the economy was in terminal decline and the Reserve Bank stood accused of propping up banks that were technically insolvent. Members of the SADF are alleged to have been involved smuggling ivory from Angola while diamond giants were accused of tax avoidance in Namibia. Allegations of overseas slush funds were linked to mysterious murders. As the old South African Latin maxim read- in Unity is Strength – a motto fitting for those at the top of the pile who chose to benefit from the plunder.
Piecing together this picture should underscore the need to tackle graft with renewed vigour in SA and ensure that politics and capital do not become intertwined to such an extent that we are unable to differentiate the one from the other. It also stresses the inter-generational nature of corruption – the link between the new and the old – and the flawless ability of old elites to reinvent themselves in the new South Africa and how elements of the new elite have appropriated the habits of the old. A tricky question remains around the issue of tracking alleged stolen funds and further investigations and prosecution of those allegedly involved in apartheid era corruption. The report also suggests options for tackling apartheid era corruption. Visit the ISS website to download the report
12th International Anti-Corruption Conference –
"Towards a Fairer World: Why is corruption still blocking the way?"
With billions of people still mired in poverty and delivery on the promises of many new governments and anti-corruption campaigns yet to materialise, it is time for the movement to ask itself some serious and probing questions. After nearly two decades of research, advocacy and reform, why is corruption still such a huge problem? There is an urgent need to reflect and regroup, to look beyond our traditional coalitions, to find new voices and new faces, to energise this vital fight, upon which justice and the welfare of the global community depends. The IACC provides an excellent context for an honest and rigorous examination of these questions, so that together we can move towards a fairer world.
Date: 15-18 November 2006
Place: Guatemala City and Antigua, Guatemala
Organisers: IACC Council, Transparency International, The Government of the Republic of Guatemala, Acción Ciudadana, TI National Chapter in formation Further information visit the website
The Institute for Security Studies (ISS) is an applied policy non-profit research organisation with a focus on human security issues on the African continent.
This e-briefing is produced by the Cape Town based ISS Corruption and Governance Programme, and funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark as well as the Norwegian Development Agency (NORAD) through the Embassy of Norway.
Editorial Team:
Hennie van Vuuren (Head: Corruption & Governance Programme)
hvanvuuren@issafrica.org - Tel: 021 4617211
Andile Sokomani (Researcher: Anti-Corruption Strategies)
asokomani@issafrica.org
Pilisa Gaushe (Manager: ISS Cape Town Corruption Resource Centre)
pgaushe@issafrica.org
Mari-Lise du Preez (ISS Research Intern)
Visit the Southern African Internet Portal on Corruption
http://www.ipocafrica.org
please email: umqoled@issafrica.org
"Corruption and misadministration are inconsistent with the rule of law and the fundamental values of our Constitution. They undermine the constitutional commitment to human dignity, the achievement of equality and the advancement of human rights and freedoms. They are the antithesis of the open, accountable, democratic government required by the Constitution. If allowed to go unchecked and unpunished they will pose a serious threat to our democratic state". President of the SA Constitutional Court (Judge Arthur Chaskalson), 2000
Umqol uphandle - SA Corruption Briefing, a monthly free e-briefing, aims to document and inform on instances of corruption in South Africa and the SADC region and assist in raising the debate around effective anti-corruption strategies - with a South African perspective. Published by the ISS - Organised Crime and Corruption Programme, Umqol uphandle highlights the results of relevant research, initiatives to combat corruption as well as a snapshot of recent corruption related stories, which have appeared in the media. Each edition features the top corruption related story from the SADC region as well as a short profile on a key anti-corruption agency, organisation or instrument.
Umqol uphandle is inspired by a Xhosa proverb meaning "the moment when something which has been hidden is revealed".
| 
