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The promotion and maintenance of a high standard of professional ethics in the public service is the key to ensuring that government remains responsive to the needs of the poor. One way of ensuring that this principle, which is enshrined in the South African Constitution is met, is the occasional review of institutional ethics policies. Revising a country’s ethics infrastructure from time to time ensures an up-to-date ethics framework that is relevant to changing times.

As important as that principle may be, the need for a comprehensive review of the South African Public Service Code of Conduct is more than a matter of adherence to best practice. The Code, among other things, exhorts public servants to report corruption, fraud or nepotism, or any act that is inimical to the public interest. It is indeed not acceptable that almost nine years have lapsed since the introduction of the Code in 1997, without it being reviewed. This should, however, not in itself constitute the main reason for review, as recent Public Service Commission (PSC) recommendations appear to suggest.

The review should rather be effected against the backdrop of disturbing ethical trends emerging from the Public Service over the last few years. The findings presented in recent reports by the Auditor-General and the PSC’s State of the Public Service Report persistently highlight these, including rampant financial misconduct. This continues to flourish despite the existence of a Public Service Code of Conduct. The sheer inability of some departments to submit finalised financial misconduct cases to the PSC in accordance with existing regulations is also an increasing source of frustration for the Commission (see National Administration). Importantly, it also leaves transgressors without much to regret – and thereby fuels a culture of impunity.

This is a perennial problem, particularly when considering the total cost of financial misconduct. The PSC’s latest State of the Public Service Report estimates this at R120,5 million (See Research and Reform for cost of financial misconduct in the 2004/2005 financial year). This is a rather conservative estimate considering the by no means insignificant number of national and provincial departments that fail to submit the cost of financial misconduct to the PSC. The reported recovery of R97,2 million is therefore not particularly consoling.

Given these problems, the role of the Public Service Code of Conduct as a vehicle for upholding the first Constitutional Principle for public administration – namely, the promotion and maintenance of high standards of ethics – clearly needs to be reviewed. Plans to make the Code user-friendly and more accessible, including making it available in all of South Africa’s eleven official languages, have already been outlined. Such a review would therefore complement these initiatives. These are all necessary steps if public servants are to take seriously their individual responsibility to act in a way that puts the needs of citizens first.

The Public Service Commission (PSC) has revealed that eighteen national and provincial departments, including the departments of trade and industry, public works, justice and constitutional development, home affairs and environmental affairs and tourism, have failed to submit required reports on financial misconduct. The PSC’s 2004/05 financial misconduct report revealed that most cases (39%) were reported by national government departments, followed by 10% each for the Eastern Cape and Free State. Fifty-five per cent of cases involved fraud or theft, 29% involved misappropriation or abuse, 14% involved gross negligence and 2% involved bribery. Thirty per cent of those officials found guilty were allowed to keep their jobs. To remedy poor reporting by departments the PSC will begin releasing its reports twice a year rather than annually.

Replying to questions in Parliament, Minister of Home Affairs Nosiviwe Mapisa-Nqakula has said that over the past two years, 106 officials from her department have been arrested for corruption. She said that to date, only 11 of the 106 have been convicted on charges brought against them. An additional 89 officials were charged and dismissed for misconduct between March 2005 and April 2006. Of these officials, 27 were arrested “for aiding and abetting illegal foreigners, 22 for fraud, one for the unauthorised solemnisation of a marriage and 22 others for pocketing bribes”. The Minister emphasized, however, that accurate records could not be provided due to the fact that many cases were still pending in court.

The 23 serving and former parliamentarians and five travel agents accused of defrauding Parliament through the abuse of travel vouchers have been given until 17 October to negotiate settlements with the state or face prosecution. Attempts by the accused to have their trials separated have been opposed. Democratic Alliance (DA) MP Charles Redcliffe has joined the small group who have already entered into plea bargains with the state. Redcliffe was fined R70,000 with a five year suspended prison sentence after pleading guilty to having handed over travel vouchers to the ITC travel agency in exchange for personal benefits.
Full article in Business Day (1 August 2006)

Former ANC chief whip, Tony Yengeni, has failed in his appeal against a four-year prison sentence. The sentence was handed down after he’d entered into a plea bargain with the state in 2003 in which he admitted to having lied about a discount received on a Mercedes Benz. A company seeking a multibillion-rand arms deal with the government had sold the vehicle to Yengeni. Yengeni’s conviction is the first in the ongoing arms corruption scandal. Yengeni is likely to receive preferential treatment while in prison and will be eligible for early release after eight months. Opposition parties have welcomed Yengeni’s imprisonment, pointing out that “it was important for the public to realise that even significant figures in the ANC were not above the law”.

The National Prosecuting Authority (NPA) has questioned South Africa’s ambassador to the US, Barbara Masekela, with regards to an alleged meeting that she organised between President Mbeki and a French arms company implicated in the arms corruption scandal. The DA and South African Communist Party (SACP) were both pleased with the NPA’s move, as were supporters of corruption-accused former Deputy-President Jacob Zuma, whom some believe is being made to take the rap for Mbeki. The SACP said that the ANC should lead a comprehensive review of the entire arms procurement package.

Former head of the Special Investigation Unit (SIU), Judge William Heath, has admitted to having done contractual work for murdered mining magnate Brett Kebble. Heath opened a private consultancy after leaving the SIU. As part of his mandate under Kebble, he received payments of over R18m over a three-year period, half of which was channelled to third parties. Heath has said that recipients included former employees of Durban Roodepoort Deep and Associated Intelligence Network, two companies involved in a dispute that cost Kebble more than R90m. Forensic investigators have not suggested that Heath personally benefited from Kebble’s illicit dealings.

Six employees of the Mpumalanga Department of Finance have been found guilty on more than a hundred counts of fraud, yet they are still employed by the department. The Citizen’s Dalene Robus reports that the six had developed an internal scam through which they pocketed a total of R416,401 claimed for travel fictitious expenses. Magistrate Willie Wilkin said the Department should be investigated further to ascertain whether senior officials were involved or were running other scams. Head of Department, Rabeng Sophitey, testified that he was not aware of the involvement of other officials but that investigations would be conducted.

Five employees of the North West’s Department of Agriculture who were suspended on allegations of corruption, fraud and maladministration last year, are still being paid salaries of up to R656,886 a year, writes the Mail & Guardian’s Yolanda Groenewald. The Department has spent almost R2 million this year on the salaries of these officials who are sitting at home on suspension. A departmental spokesperson has said the length of investigations is beyond the department’s control. A labour law specialist, however, maintains that disciplinary proceedings should have been carried out as soon as possible, calling the situation unacceptable.

The DA is frustrated with the slow pace at which the state has pursued the corruption case of ANC provincial secretary, Mcebisi Skwatsha, reports the Cape Argus’ Mzolisi Witbooi. The DA sees the case as a high-profile matter, which should have been processed as quickly as possible. Yet eight months have passed since investigation began into Skwatsha’s fraudulent signing of tender documents, which allegedly culminated in 15 security companies being awarded a R100-million contract.

Cape Town’s former city manager, Wallace Mgoqi, may face both criminal charges and a bill of almost R9m. The Mail and Guardian reports that Mgoqi, who had authority as manager to approve contracts only up to R350,000, is implicated in the irregular awarding of a R8.5m contract to TOM Consulting for work on a proposed Jewellery City Project at the city’s waterfront. Auditors have estimated the work carried out by TOM to be worth no more than R1,5m.

In a related story speculation is rife around the identity of an unnamed city tender official, nicknamed ‘Mr 10 per cent’, who allegedly received kickbacks for awarding contracts under the ANC’s administration of the city. According to a report by the Cape Argus’ Bulelani Phillip, the nickname was given to an official who apparently got kickbacks for swinging tender awards to companies doing business with the city during the ANC administration. One suspect, Mthuthuzeli Swartz, who would not comment on speculation that he is ‘Mr 10 per cent’, has been linked to Mgoqi’s irregular tender awards and has been suspended from office. He will face disciplinary action in mid-September. The PAC has called the City’s decision to withhold a detailed audit report on the Jewellery City Project scandal “very problematic” and called for a public discussion on the matter.

An unprecedented raid in Pietermaritzberg by the Scorpions has seen 34 premises and almost every municipal department in the city raided. Quoting National Prosecuting Authority spokesperson, Makhosini Nkosi, the Sunday Tribune’s Fred Kockott reports that the raid was part of a criminal investigation that centred on allegations of fraud, theft, corruption, contravention of the Prevention of Organised Crime Act, the Municipal Finance Management Act and the Income Tax Act. It is further reported that documents seized from municipal offices largely related to the awarding of contracts to at least 60 firms from 1 July 2003 to 1 June 2006, as well as as recent municipal appointments and promotions.

A Johannesburg metro traffic officer was assaulted by eight of his colleagues after he reported two of them to internal affairs for having accepted bribes from taxi drivers, writes The Star’s Solly Maphumulo. Following an internal tribunal five of the officers were dismissed after being found guilty of corruption, fraud and assault, while three were given suspended sentences and ten days unpaid leave. According to a Johannesburg metro police spokesperson, several metro police officers were arrested this year after the department received tip-offs from motorists who had to pay bribes.

Former chief executive of defunct Rod Mitchell group, Peter Gardner, has sworn in court that money deposited in an offshore account was part of a joint property investment, not an extortion payment as architect Dawid Rabbie has claimed. Gardner has also claimed that it did not cross his mind to declare to his board his interests in a company with which LeisureNet entered into a deal, from which Mitchell earned R6m. Gardener is being tried on charges of fraud, money laundering and contraventions of the Companies Act.

Trinity Holdings, led by Quinton George, has dropped an application for the liquidation of Johannesburg Consolidated Investments (JCI) and Randgold & Exploration (R&E) the day before proceedings in the multibillion-rand case were due to begin. Writing in The Citizen, Barry Sergeant notes that forensic audits have shown that JCI owes R&E at least R1 billion following the theft of shares by slain former CEO of JCI and R&E, Brett Kebble. Trinity's involvement with Kebble dates to 2003 when he bought R40 million of shares from Kabusha, an ostensible BEE entity of which George was a director, through a crooked transaction scheme. In addition to this case, Kebble stole hundreds of millions of rands, little of which has been recovered.
Full article in The Citizen (3 August 2006)

OSR Human Capital (OSR), a black empowerment company run by Dr Isaac Amuah and the head of the ANC's chaplaincy, Rev Vukile Mehana, has not paid tax or Unemployment Fund contributions in its two years of running the Hatfield Business College, writes Barry Bateman of Pretoria News. The cheating has come to light following the company's filing for voluntary liquidation. It has also emerged that the Development Bank of Southern Africa issued an R8,5million loan to OSR, despite Mehana acting as a senior advisor to the CEO of the bank at the time.

When the DA accepted donations from murdered mining magnate, Brett Kebble, he was already embroiled in well-publicised allegations of fraud, writes the Mail & Guardian’s Yolanda Groenewald. The DA, which previously attacked the ANC for having accepted money from Kebble, claims it was unaware of alleged shady dealings by Kebble at the time. The party has called for the ANC to return its own Kebble donations, claiming that if in the future DA donations are shown to be linked to corrupt money, they too will be repaid.

Sunday Independent’s Chiara Carter reports that forensic auditors have uncovered records of over R25 million listed as having been paid to the ANC and its structures by slain mining boss Brett Kebble. Much of the money, paid in the form of consultants' fees, loans and bonuses, was channelled through the account of ANC Youth League leader, Lunga Ncwana. Ncwana also shared business interests with Kebble. The ANC said it had not been formally informed of the allegations but that if it were, the party’s secretary-general, Kgalema Motlanthe, would handle the matter.

Former managing director of PSC Guaranteed Growth (PSCGG), Jack Milne, says he will not oppose an application by his now liquidated company to hold him personally liable for its collapse since he has no assets to seize. Milne is responsible for the loss of R200 million of investors' money, much of it from pensioners, for his part in a scam for which he served 11 months of a five-year sentence. Milne entered a plea bargain with the state that will see Gary Porritt, whose company bought PSCGG in 2000, tried in what is set to be South Africa's biggest white-collar trial. While three others have been convicted and sentenced in relation to the scam, victims have expressed dismay at the justice system’s failure to seize Porritt's assets in an attempt to reclaim losses. Sunday Independent’s Wiseman Khuzwayo reports that Milne still owns three luxury cottages while his pensioner victims live in poverty.
Full article in the Sunday Independent Business Review (30 July 2006)

An affidavit submitted to the Pietermaritzburg High Court by the managing director of Thint, the arms manufacturer, contains startling allegations. These include the claim that despite former Minister of Justice Penuel Maduna’s submission of an affidavit critical of the French company’s records, he accepted a job there in 2005. It also states that Thint and its mother company, Thales, did not approach the National Prosecuting Authority (NPA) to negotiate a deal, as had previously been suggested, but that the NPA approached Thales through a middleman. This information was not included in affidavits previously submitted by Ngcuka and Maduna for the state.

Arms manufacturer and co-accused in the Jacob Zuma corruption trial, Thint, is to subpoena NPA director Vusi Pikoli. Thint has been angered by the state’s decision to re-charge the company, having dropped its initial charges against Thint in 2004. Employees, including director Pierre Moynot, are unwilling to testify in South Africa for fear of arrest. Moynot said Pikoli would be asked to testify as to why he had called for charges to be reopened.

Essop Pahad, a minister in the Presidency, has confirmed that he met with members of arms manufacturer, Thomson CSF (now Thint) on 23 February 1999 at a time when South Africa was finalising its arms deal. The Sunday Times had previously alleged that both Pahad and President Mbeki met with Thomson CSF, a meeting Mbeki apparently cannot recall. During the corruption trial of Jacob Zuma’s financial advisor, Shabir Shaik, it was found that Thomson CSF had agreed to pay Zuma R500,000 a year “to secure benefits” in the arms deal.

A report released by the Special Investigation Unit (SIU) has revealed numerous instances of irregular procurement and fraud in the Department of Correctional Services (DCS). Among the SIU’s findings are that inmates are supplied with repackaged expired medicines, that state medicines are repackaged and sold to private pharmacies and that inmates are supplied with medicines illegally manufactured or smuggled into the country by criminal syndicates. As of September 2005 two criminal cases were pending against DCS officials while 145 others had been referred for disciplinary hearings.

Nine men accused of stealing R213 million from pension funds have been brought before the Specialised Commercial Crimes Court. It is alleged that one of the accused, Peter Ghavalas, used his position at a company that administered pension funds to develop the scam that saw funds surpluses extracted for the benefit of himself, his company, his family and other collaborators. The Star’s Phomello Molwedi reports that the nine face a string of charges including money laundering, theft, fraud and conspiracy to commit fraud.
Full article in The Star (2 August 2006)

The Bloemfontein District Court has convicted the husband of Free State Education MEC, Sandile Tsopo, his sister and a friend of fraud amounting to R30 million. The fraud over three years involved 37 tenders for support materials for schools. The three were also found guilty of owing R100,000 in tax having not registered their company, Abelusi Enterprises, for VAT.

An internal audit conducted at the Cape Peninsula University of Technology (CPUT) has revealed that the institution paid more than R3.5 million to companies linked to two of its top executives, writes Cape Argus’ Mzolisi Witbooi, Candice Bailey and Henri du Plessis. While it is the university's policy that council members disclose financial interests to the institution, it is believed that this did not occur in this instance. The audit and a related meeting came in the wake of media reports that the appointment of the university's vice-chancellor was not proper and that some councillors had direct interests with CPUT.

Suspicions have been raised over eight low-cost housing developments in Cape Town. The developers have failed to meet their contractual obligations, leaving houses incomplete or poorly finished while would-be owners pay monthly instalments and await transfer of ownership. According to the Cape Argus’ Ntomboxolo Makoba and Steve Kretzmann, this emerged in a hard-hitting report by a University of Cape Town researcher on the Cape Town Community Housing Company (CTCHC), which lifts the lid on a tale of malpractice and inefficiency. The DA's spokesperson on corruption is conducting an investigation into the matter while a forensic audit of the developer, the CTCHC, is also being conducted. The provincial Housing Development Board, which failed to set subsidy conditions after paying the company R92 million in 2002, is also fingered in the report.

The head of Fifa in South Africa, Michael Palmer, has warned of a 2010 scam in the wake of the 2006 World Cup in Germany, writes The Star’s Phomello Molwedi. According to Palmer, the scam involves the making of anonymous phone calls or the distribution of emails claiming individuals have won a 2010 World Cup lottery and requesting banking details. Palmer insists the phone calls and emails have nothing to do with Fifa, nor do they necessarily originate from South Africa.

The Public Service Commission has recommended that the Code of Conduct for Public Servants be reviewed. This comes in light of revelations that financial misconduct in provincial administrations amounted to R19.2 million in the 2004/5 financial year, of which only R1.12 million was recovered. The current code had not been reviewed since 1999 and appears inadequate in curbing corruption and malpractice in the public sector. Opposition parties have welcomed this as they believe that a review of the code will contribute to stamping out corruption in the public sector.
Full article in The Citizen (11 August 2006)

As part of implementing the National Anti-Corruption Programme (NAP), the National Anti-Corruption Forum (NACF) has developed and launched a Guide to the Prevention and Combating of Corrupt Activities Act (12 of 2004) The Act has been developed as part of an overall anti-corruption strategy and as a remedy to its largely ineffectual predecessor, the Corruption Act of 1992. Fundamental to the Act is the codification of corruption-related offences and the extension of the criminal activity of corruption beyond the public service to the private sector as a whole.

The NAP was adopted in June 2005 in the wake of the Second National Anti-Corruption Summit held in March 2005. It provides for government, civil society and the private sector – the three sectors represented on the NACF – to undertake joint projects, which encourages all the sectors to work together in the fight against corruption. The Guide is one of three products recently emanating from the NAP, the other two being a website and an Integrity Pledge by leaders of the sectors. The initiative is a response to the tendency to write legislation in complex legal jargon, which may be challenging for some to understand.

The South African Prevention and Combating of Corrupt Activities Act, which follows the trend of international legislation in terms of ‘unbundling’ corruption, is seen as a case in point. Various commentators have noted the Act’s cumbersome drafting. This makes the Act’s logic difficult to follow in some places, raising serious problems of interpretation. Simplifying the Act in terms of language and through the use of pictorial illustrations and making it easily accessible to lay persons is the crux of the NACF Guide. Accessibility is further ensured through the Guide’s brief overview of the Act in all of South Africa’s official languages.

The Guide will soon be available for download at http://www.nacf.org.za

Subscribers are reminded to visit the Southern African Portal on Corruption (IPOC) for a daily corruption news feed. This web log presents daily news items relating to anti-corruption in Africa.

Bookmark the ISS daily corruption news feed at: http://www.ipocafrica.org

The New York based Open Society Justice Initiative and its partners have released a new publication, Transparency and Silence – A survey of Access to Information Laws and Practices in Fourteen Countries. The study is a comparative overview of the state of access to information in 14 countries: Argentina, Armenia, Bulgaria, Chile, France, Ghana, Kenya, Macedonia, Mexico, N igeria, Peru, Romania, South Africa and Spain. While these country comparisons are not absolute measures of compliance with access to information principles, they are meant to be indicative of broad trends.

"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 to ask 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: http://www.12iacc.org

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:
Andile Sokomani (Researcher: Corruption & Governance Programme)
asokomani@issafrica.org
Hennie van Vuuren (Head: Corruption & Governance Programme)
hvanvuuren@issafrica.org - Tel: 021 4617211
Trusha Reddy (Researcher: Corruption and Governance)
pgaushe@issafrica.org
Andrew Faull (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". Former 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".