"The moment when something which has been kept hidden, becomes exposed"

Issue No 006
23 July 2003

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Top SADC Story

Threat to cut R1.3 billion Aids cash over graft
Kenya risks losing sh12.7 billion (R1.3 billion) aid for the fight against Aids unless the council spearheading the campaign is investigated for corruption. Donors want the National Aids Control Council probed or the country would lose a $170 million from the United States, through Global Fund Against Aids, TB and malaria. The aid withdrawal threats come at a time when Aids is killing an estimated 700 Kenyans a day and costing the economy upwards of sh500 million a month in diversion of resources to care for the sick. The Kenyan government was warned that the offer of sh12.7 billion which the Global Fund agreed to give Kenya, but which is being withheld “pending clarifications”, would be withdrawn unless it starts to take serious the issues relating to financial impropriety at the Aids council. The issues to be investigated were queries on how money for the World Aids Day activities for 2001 was spent which allegedly led to the loss of about sh19 million; and the way money was being disbursed to NGOs and Community Based Organisations. Auditors, after looking at the National Aids Council’s 2002 accounts have raised the Sh19 million matter and it has been referred to the Anti-Corruption Police Unit. But in a surprising dilemma, the World Bank has threatened to cut funding for the Kenyan Aids fight, if its health ministry does not stop raising questions about corruption at the council as it would damage the credibility of the institution.

Full article at Allafrica: allafrica.com


In this issue we look at the Southern Africa Online Corruption Information Centre


All back issues of Umqol'Uphandle will in future be posted on the ISS website.

Visit us: www.issafrica.org



(Another) Three steps forward...

The East African saying goes that you can’t expect a Cassava crop within a year of planting. Equally a Southern African may retort – if you would like to sit in the shade of a baobab you need to start by planting a seed. Despite the plethora of graft stories in the news the past few weeks have signalled a number of new initiatives to tackle corruption both in South Africa and in terms of continental initiatives. Although the Libyan ‘brother leaders’ stupendous remarks regarding Africa’s ills such as the tsetse fly and HIV-Aids may have made the headlines – real work - guided by more sober minded hands, was taking place behind the scenes. Through the adoption of the AU Convention on Preventing and Combating corruption we have, for the first time, a continental basis for developing a standard approach to tackling graft (See Reform Section). Although South Africa is making some headway with the Prevention of Corruption Bill which is being finalised in Parliament (Also see reform), the AU Convention includes a stipulation to regulate the private funding of political parties. This will place the heat on lawmakers and party hacks who have been slow to act on this despite allegations of corruption in party funding (see Umqol’ 005 regarding alleged NNP kickbacks in return for donations).

Similarly the ISS has launched its Southern African Online Corruption Information Centre (See profile) which should assist those wishing to tackle graft with an essential tool required to do so – access to information including knowledge of good practice from the region. The past week also saw the creation of the SA Civil Society Network Against Corruption (CSNAC) (See reform) which should hopefully strengthen South African civil societies capacity to engage in combating graft in future.

… and a couple of side-steps
The dust has not settled over the arms deal and although the Scorpions questioning of Shabir Shaik may spread some light on the arms deal (see National Administration), the National Prosecuting Authority’s lack of willingness to prosecute Michael Woerfel the German arms peddler who handed out gifts to senior SA officials is worrying (See National Administration). Some might claim Woerfel was the ‘tango-meister’ in the arms deal. Equally concerning is the fact that German prosecutors who are still investigating Woerfel on charges of bribery – are also investigating the chief of the SA National Defence Force for corruption. These matters need to be resolved in order both to deal with perceptions of corruption (See Research) and allow government to administer public monies without the unnecessary spectre of scandal looming in the shadows, a disservice to the many positive attempts being made at combating corruption.

Aid and (HIV)Aids

Pls. Note: The top SADC story has been replaced with one from Kenya this week on development co-operation and HIV-Aids. The subject matter is nowhere as pertinent as in SADC where corruption in health care can directly be counted in human lives lost when drugs don’t reach people who need them. With more aid money heading this way to tackle the scourge of HIV-Aids SA would do well to pay careful attention to the Kenyan experience.



National Administration: Scorpions can quiz Shaik on Maharaj, Zuma
Tim Cohen reports in Business Day that Shabir Shaik is likely to face enforced cross-questioning by the Scorpions in connection with unexplained transactions involving both former transport minister Mac Maharaj and Deputy President Jacob Zuma. Shaik is a key party in two separate Scorpions investigations involving allegations that Zuma solicited a bribe in connection with government’s R50bn arms procurement exercise and in the case of Maharaj who received a series of payments before and after the former minister stood down from office. On Friday the Durban High Court handed down a crucial decision in a trial within a trial dealing with Section 28 of the National Prosecuting Authority Act. The decision by the Durban High Court is a huge boost for the Scorpions’ investigations and could further complicate the positions of Maharaj and Zuma.
Full article in Business Day: www.businessday.co.za...

State nets small-fry Yengeni while big fish slip away
Michael Woerfel, the former local head of the European Aeronautic Defence and Space (EADS) company, was one of a number of weapons’ peddlers keen to supply the SA National Defence Force with equipment for its strategic procurement package in the late 1990s. DaimlerChrysler Aerospace, incorporated into EADS in July 2001 made numerous overtures to high-ranking SANDF officers and parliamentarians, which included flights to exotic destinations and discounts on luxury vehicles. One of the recipients of these vehicles was former chair of the Parliamentary portfolio committee on defence – Toni Yengeni. The startling revelations in the British House of Commons recently have shown that British Aerospace, another key weapons supplier in the SA arms deal, admitted to paying ‘agency fees’ in the SA deal. According to information received from a German non-governmental organisation, the Munich state prosecutor is continuing its bribery investigation into Woerfel, which it launched in 2001, despite the South African National Prosecuting Authority’s decision to drop charges against him. It has had contact with South Africa’s national prosecuting authority as recently as this year and is investigating South African officials who may have benefited from corrupt transactions. Under German law, the bribery of foreign public officials attracts a penalty of up to five years imprisonment – part of a move to punish large corporations for exporting bribery to developing countries. If Woerfel were to be proven guilty of corruption, on behalf of EADS, it might be important to scrutinise other public-procurement deals that the company has been awarded. South African Airways, for example, announced its acquisition of a new fleet of 41 Airbus airlines of about $3.5-billion of which two names in the arms deal, EADS owns 80% of Airbus stock and BAE Systems a 20% stake.
Full article in the Sunday Times: www.suntimes.co.za...

At least 20 MP’s linked to R1m travel scam
A prominent Cape Town travel agent, Estelle Aggujaro of ITC Travel, disclosed that at least 20 MPs had been implicated in making irregular travel and accommodation arrangements, which included free flights, hired cars and hotel stays. A private investigator Estelle had hired said some MPs’ signature may, unbeknown to them, have been falsified by corrupt consultants. Two MPs’ blank travel voucher books were found in her consultant’s desk. Old voucher books with counterfoils dating back to 1999 were also discovered. Parliament has laid criminal charges against several travel agencies.
Full article at Independent News Online: www.iol.co.za...

Provincial Administration: Interim Management Team tables report on Eastern Cape to Cabinet
The Interim Management Team (IMT) tasked to probe the administration systems and also look into service delivery in the Eastern Cape presented its turn-around strategies report to Cabinet with recommendations to improve services as well as governance in the province. The IMT focussed on the departments of health, education, social development, roads and public works and the provincial treasury. The intervention focussed on strengthening back-office support to departments, improving internal controls and accountability, improving human resource management, strengthening the leadership and management, fighting corruption and promoting ethics and turn-around strategies to address challenges faced by the departments. Out of the 244 managers, 224 have been ‘profiled’ for the purposes of doing competency assessment and then dealing with incapable and ill-disciplined managers, looking at ‘exiting’ them from the province. On the issue of fighting corruption and promoting ethics, significant progress had been made in dealing with backlogs in disciplinary and criminal cases. Forensic audits are ongoing, detecting problems in the system as well as specific people to guide and inform appropriate administrative action and systems remedies.
Full article at Allafrica: allafrica.com...

Local Government: Ex-Civil Co-operation Bureau (CCB) man in court over fraud
Joe Vester, the former head of the apartheid government’s killer hit-squad organisation, the Civil Co-operation Bureau, was arrested by the Scorpions unit in connection with alleged fraud, corruption and theft involving R27 million that was supposed to be invested overseas on behalf of three Kwa-Zulu Natal municipalities. According the Scorpions, municipal employees in Dundee and Richards Bay were approached with alleged promises of “excessively high returns” on investments. In one case, a municipal official was apparently paid a “fee” of R3 million after R10 million was invested. The Scorpions allege that the millions that were apparently invested were paid into the trust fund of a Pretoria attorney, from where the money disappeared. Vester is accused together with brokers Hannes Uys and Willie Vermeulen; Kobus Coetzee, the financial director of the Richards Bay municipality, and Thokozane Madlala, the former financial director of the Dundee municipality.
Full article in the Witness: www.witness.co.za...


BAE ‘paid millions’ to win Hawk jets contract
Britain’s biggest weapons manufacturer, BAE Systems, paid millions of pounds in secret commissions to obtain a huge UK taxpayer-backed contract to sell Hawk jets to South Africa. The British government has confirmed the payment, which will fuel the ongoing row about corruption allegations faced by BAE all over the world. The arms firm refuses to disclose the identity of its confidential agent in South Africa, and the Department of Trade and Industry admits it does not know who is to receive the money, despite providing loan guarantees for the £1.5bn deal. The commission could be more than £160m, if it is in line with similar payments in the past. Last month, the Guardian revealed allegations that Joe Modise, then South African defence minister, received a £500,000 bribe, and that cash also went to the 1999 election fund of the ANC. South African government documents show Modise intervened to prevent a rival Italian firm, Aermacchi, winning the contract. Although the deal was signed in 1999, payments are likely to extend for several years over the delivery period of the aircraft. The South African government and the ruling African National Congress joined British arms maker BAE Systems (BA.L) in rejecting allegations of corruption in the 1.5 billion pounds ($2.49 billion) large contract to supply military jets.
Full article in the Guardian: politics.guardian.co.uk...


Health: Payback time
The Health Professions Council (HPC) found four Johannesburg surgeons, Julies Preddy, Percy Miller, Leonard Nainkin and Ian Weinberg, guilty of unprofessional and scandalous behaviour resulting in more than R1.3m in kickbacks. Prosecutor Mike Maritz recommended that the four be scrapped from the roll, but that the disbarment be suspended for five years on condition of community service that could order Miller to work in state hospitals two days per week and the others one day per week. Maritz argued that kickbacks often resulted in over-service, which in turn increased medical aid premiums, making medical cover unaffordable for the poor. By working in the state hospitals, the surgeons would be helping this sector of society. The surgeons received financial kickbacks for referring patients to Dr Illes and Partners, a former radiology practice at the Linksfield Park centre in Johannesburg, between 1993 and 2001.
Full article in News 24.com: www.news24.com...

Housing: R400m housing swindle
The Gauteng government has lost R400-million – enough to build 22 000 low-cost houses – to an unscrupulous housing developer who manipulated the subsidy system. Work done by private forensic detectives show that the developer, a former university law professor, won tenders to build houses in 17 townships and was allegedly overpaid. In some cases, the developer allegedly used fictitious beneficiaries to claim subsidies from the government on their behalf and without their knowledge. Some of the allegations include: that the developer was overpaid R41, 8m for houses in Soweto’s Protea Glen; overpayment on 893 subsidies amounting to R4-million; the developer claimed 40 subsidies worth R9 500 each (R380 000) for houses to be built for poor families whereas, according to the report, the stand was designated for business premises. The forensic report also shows that there were also people who benefited from houses that were meant for other people. An amount of R9, 5-million was paid to the developer for subsidies that should have benefited 1006 families. Other people now occupy those houses.
Full article at Independent Online: www.iol.co.za...

Education: Technikon officials face fraud inquiry
Two Technikon South Africa (TSA) officials are facing a disciplinary inquiry after a forensic report compiled by auditing firm PricewaterhouseCooper alleged that they fraudulently authorised staff retrenchment and irregularly made payments to creditors. TSA management has confirmed that Joshua Litabe and Bavesh Desai, both senior officials in the human resource department, will soon be hauled before a disciplinary hearing on allegations of irregularities and gross misconduct. The forensic report accuses Litabe and Desai of cronyism and of failure to follow proper procedures in the appointment of consultants. According to the report they used the signature stamp of the institution’s Registrar Tony Links to authorise staff retrenchments and to make payments to creditors. Of the 188 affected staff, only 34 accepted the packages. An additional 41 non-affected staff applied for packages. Professor Neo Mathabe, TSA’s vice-chancellor, said the institution has launched a probe into the matter to establish how many employees received fraudulent retrenchment letters. The report, dated March 2003, also accuses Desai and Litabe of failing to comply with provisions of the Labour Relations Act and disregard for appropriate channels in the appointment and transfer of staff. Litabe is accused of hiring former colleagues from South African Airways where he was employed before he joined TSA without following proper procedures. He is also alleged to have awarded a contract worth more than R800 000 without following proper procedures.
Full article in the Mail & Guardian: www.mg.co.za...


Cop corruption whistle-blower on the run

A policeman who alleged there was corruption at Hammanskraal Police Training College has been whisked off to a secret location after a fellow police officer told him a gang had been hired to assassinate him. The alleged corruption includes nepotism, bribery, extortion, exploitation and other “backhanded deals” to secure senior positions at the Detectives and Crime Intelligence Academy in Hammanskraal. Independent Newspapers investigated the staff situation at the academy and learnt that more than 50 percent of those occupying senior positions were related. The policeman’s family said they had been told that he had been taken to a secret safehouse by members of the Crime Intelligence Unit.
Full article in the Daily News: www.itechnology.co.za...

Dramatic new twist in Keeble arrest saga
The Kebble mining family took its fight with business rival Durban Roodepoort Deep to a new level by going public with startling claims that police were bribed to arrest father, Roger Kebble, on trumped-up allegations last year. The claim is the latest in what has shaped up as one of SA’s most bitter corporate feuds, with allegations of dirty tricks surrounding Kebble’s arrest on charges of fraud and contravening the Companies Act last November. Now after an investigation by top forensic accounting firm Gobodo and retired judge Willem Heath, who were recruited to clear the Kebbles name, the father-and-son team believes it has “conclusive and irrefutable evidence of bribery and corruption by certain SA Police Service (SAPS) officials in order to influence the arrest of Roger Kebble. The criminal case against Kebble relates to R6, 3m received by Skilled Labour Brokers from Durban Deep, of which Kebble was deputy chairperson until March last year. Kebble allegedly failed to disclose his connection to the firm. After almost eight months, a detailed charge sheet had yet to be produced, despite the Gobodo/Heath probe having taken just three months to complete. National police spokesman Sen Supt Selby Bokaba confirmed that the findings of the Kebble sponsored investigation had been handed to the police and an investigation had been launched.
Full article in Business Day: www.bday.co.za...

House arrest for cops who helped kleptomaniac
A former policeman sergeant Brenton Klopper, 28, and a former reservist, constable Wolfgang Wiese, 26, were sentenced for corruption to house arrest and community service after they helped a woman escape into a department store ceiling when she was caught shoplifting. The two were convicted and sentenced for an incident on September 9 2000, when businesswoman Susan Ellis was caught shoplifting at a Stuttafords outlet in Sandton. Klopper and Wiese responded to the complaint and Ellis was handed to them by security staff. Ellis, who had been arrested on eight occasions and convicted six times for shoplifting, testified that she was receiving treatment for kleptomania. She told the court she asked if there was any way she could avoid arrest. She was asked if she had any money and replied that she had a few hundred rands. Klopper and Wiese let her escape into the ceiling through an open trapdoor, after handing over R500. The woman said because she was short, the two men had to help her up to the trapdoor. She crawled around for hours, but was unable to find a way out and was eventually rearrested. The two former policemen were also ordered by the Johannesburg Regional Court magistrate T Carsten to attend programmes on crime prevention.
Full article in Allafrica: iafrica.com...


Reform: African leaders adopt continental anti-corruption treaty
African governments have adopted “ The AU Convention on Prevention and Combating Corruption” at the Second ordinary session of the Assembly of the African Union in Maputo, Mozambique earlier this month. The convention aims to guarantee the public access to information, with the media helping monitor that access; and sets-up checks and balances to combat corruption in political parties and government.

The draft decision on the Convention on the prevention and combating of corruption reads that:

The Assembly:
  1. TAKES NOTE of the recommendations of the Executive Council;

  2. ADOPTS the Draft Convention on the Prevention and Combating of Corruption;

  3. APPEALS to all Member States to sign and ratify this important instrument in order to ensure its speedy entry into force.
Full details at the official Maputo AU Summit website: www.au2003.gov.mz...

Research: South African citizens fear rise in corruption
In a global survey by Transparency International the majority of South Africans polled expect corruption in the country to increase. The public perception survey polled 47 countries. The survey showed that 36% of SA people polled expected corruption to decrease, and a further 15% expected it to increase marginally. This contrasted to the 11% of South Africans who expected corruption to ease slightly. South Africa differentiated itself from other countries where nearly 24% of SA citizens polled said that they would most like to rid the country’s police force of corruption. 33 out of 44 countries polled isolated corruption in political parties as the biggest scourge. Two other areas of weakness included SA’s medical services sector and education systems, in which SA citizens had less faith than the world average. Corruption in SA’s courts and in the business licensing departments was seen as far less of a problem than in most of the other countries polled.
Full article in Business day: www.businessday.co.za...

Research: South Africa’s Crime Culprits
A global survey of corporate crime by PricewaterhouseCoopers has shown that South African companies have been the subject of more crime than most other countries in the world. According to the survey, 71% of the 91 companies surveyed in South Africa uncovered fraud over the last two years, compared to 37% of the business surveyed worldwide. The African continent also boasts the dubious title of having the highest level of economic crime worldwide at 51%, followed by North America with 41%. The most common crime in South Africa, according to the survey was asset misappropriation (theft), followed by product piracy and counterfeiting and then bribery and corruption. Around the world corruption and bribery is the most widely perceived form of economic crime, followed by theft. Financial misrepresentation comes in at third place on the ‘considered crimes’ list, while money laundering feature at the bottom end of the spectrum. Actual crimes reported show that industrial espionage and information brokerage as well as cybercrime feature more prominently than the more financially focussed crimes. Overall the survey shows that the larger companies with more than 1000 employees in a country are most vulnerable to fraud, and says that the financial services companies reported more incidence of fraud than any other industry.
Full article at Moneyweb: m1.mny.co.za...

Reform: Keeping enforcers free from temptation
The Integrity Management Unit established in the National Prosecuting Authority is tasked to review its organisational system. The unit was recently placed in the limelight after the Scorpions embarrassingly suspended its human resource department for alleged corruption. According to the unit’s head, Dipuo Mvelase, the unit takes a three-fold approach to corruption – prevention, public education and enforcement. The main purpose of prevention being to protect the organisation from outside corrupt influences. She elaborates… “ It would therefore be important to look critically at systems within the organisation and determine where there are vulnerabilities, especially considering the sensitive nature of its work. If there are weaknesses, someone will find a way to exploit it”.
Full article at Allafrica: allafrica.com...


Southern Africa Online Corruption Information Centre
Knowledge is key to an effective anti-corruption strategy. The Southern African Corruption Information Centre – Online is the first portal of its kind on the African continent. It aims to provide policy-makers, researchers, activists, academics, the media as well as public and private sector officials with access to material on corruption as well as strategies to combat graft and corruption. The centre, which is a free to use service, provides information with a specific Southern African focus.

Over 500 abstracted documents which include legal documents, government/civil society reports, journal articles and conference paper appear on this online resource centre which will be constantly updated. Although there is a current bias towards information from South Africa we are working at closing the gaps and have as a start ensured that all corruption legislation from every country in the region is included in the database.

We are in the process of making all documents available on the website in PDF format. If you need a copy of any document please mail us and we will forward you an electronic copy of the document. Users in the Cape Town area can also visit the physical Information Centre in Cape Town by prior arrangement.

New material will constantly be added to the site. If you have any material you would think we should include please contact us (see website for details). The web site does not include abstracted news articles on corruption – we will however be adding indexed case-studies at a later stage, drawing on a wide variety of media sources.

The Southern African Corruption Information Centre – Online is located within the ISS organised crime and corruption programme in Cape Town, South Africa. The Centre is an initiative of the South African Anti-Corruption Diagnostics project, which is funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark.

To use the Southern Africa Online Corruption Information Centre go to: www.issafrica.org...


Civil Society Network Against Corruption (CSNAC)
Representatives of 11 South African civil society organisations met in Cape Town last week to discuss existing civil society anti-corruption initiatives in SA. The meeting, hosted by the ISS, was an opportunity for information sharing amongst organisations that are active in the area of ‘anti-corruption’. Participants agreed to the establishment of a Civil Society Network Against Corruption (CSNAC), a loose civil society network which will provide a basis for increased sharing of ideas and possible future co-operation. Participants were drawn from the following organisation: Black Sash, COSATU, Centre for the Study of Violence and Reconcilliation (CSVR), ISS, Idasa (Pims), National Religious Leaders Forum (NRLF), Open Democracy Advice Centre (ODAC), Public Service Accountability Monitor (PSAM), SA Democratic Teachers Unions (SADTU), SA Catholic Bishops Conference (SACBC) and Transparency-South Africa (T-SA). Other interested Civil Society organisations are welcome to join the CSNAC electronic mailing list.


The Institute for Security Studies (ISS) is an applied policy non-profit research organisation with a focus on human security issues on the African continent.

This e-briefing is produced by the SA Anti-Corruption Strategies component which is located within the ISS Organised Crime and Corruption programme in Cape Town and funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark.

Editorial Team:

Hennie van Vuuren (Senior Researcher: Anti-Corruption Strategies)
Paul Arendse (Research Intern)
Pilisa Gaushe (Manager: ISS Corruption Resource Centre)

For more about ISS please visit our website at: www.issafrica.org...
To contact us, or if you should have any comments, please email: umqoled@iss.org.za or Tel: 021 4617211