Anti-Corruption Task Team on disciplinary cases being investigated in Limpopo Province

NCOP Finance

07 October 2013
Chairperson: Mr C De Beer (ANC)
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Meeting Summary

Lieutenant General Anwa Dramat, Head: Directorate for Priority Crime Investigations of the South African Police Service, and chairperson of the Anti-Corruption Task Team (ACTT) said the purpose of the ACTT was to expedite the investigation and prosecution of corruption cases.  The purpose of the ACTT was to provide for better coordination of governmental functions within the Justice, Crime Prevention and Security Cluster (JCPS), with the aim of reducing corruption in South Africa; to expedite the effective investigation and prosecution of priority corruption cases; and to work together with other government departments and initiatives to strengthen government systems, reduce risks, and to prevent the incidence of corruption.

Based on the National Treasury results of risk assessment, with forensic investigations findings of incidents of irregularities, fraud and corruption and conflict of interests, the following departments had been identified as priority areas for ACTT investigations: Education, Transport and Road Agency of Limpopo, Health and Social Development, Public Works and Provincial Treasury

National Treasury had issued 22 investigation reports that had facilitated disciplinary proceedings by the Department of Public Service and Administration (DPSA) and to date, two heads of departments had been suspended and 45 officials across the departments had been charged. 

A summary of disciplinary cases of fraud and corruption that included Health and Social Development, Education, Public Works and COGHSTA showed there were 47 cases, with 46 still in progress and one having been finalised.   National Treasury had further established in the review audit of the Limpopo Provincial Treasury that six out of ten Limpopo PMG accounts were used to process both credit transfers and other electronic bank transfers directly on FNB online system, without authorisation or disbursement through the Basic Accounting System (BAS).  An investigation was still in progress to establish if all identified irregular transactions not processed through BAS had been rectified and recorded in the BAS in the correct financial periods of the affected departments. 

A summary of disciplinary cases involving conflict of interest (government officials doing remunerative work outside the public service) showed 41 cases had been uncovered, with 14 finalised and 26 still in progress.  One case had been withdrawn.

A summary of ACTT criminal cases under Section 100 showed there were 26 cases with 34 accused, with 13 of the cases in court and 13 investigations still in progress.

The Committee felt strongly that the briefing by the ACTT was not detailed enough and the progress of the intervention had been too slow.  The consensus of the Committee was that the ACTT needed to establish clear leadership roles, provide the capacity the team needed to function properly and to engage with the DPSA, as well as the Special Investigating Unit and the chief administrator, before returning next week to give a detailed report so that recommendations could be made to the Executive.
 

Meeting report

The Chairperson declared the meeting open and acknowledged a written apology from Mr D Bloem (COPE).  He said that corruption was an international challenge. In December 1996, the United Nations General Assembly had adopted a Code of Conduct -- the International Public Officials’ Declaration against Corruption -- and in September 1997, the World Bank had approved a comprehensive anti-corruption framework.  The Southern African Forum against Corruption had been launched in June 2001 in Maseru, and in August 2001 the heads of state of the Southern African Development Community (SADC), the Protocol against Corruption had been adopted in Malawi.  The South African government had both the legislative framework and strategies in place to combat corruption.  During engagement with Limpopo and an interaction with the Special Investigating Unit (SIU), it had been said there 303 cases under investigation, and the Department of Public Service and Administration had requested the SIU to engage in these investigations.  The questions that had arisen during the engagement with the SIU were, who was coordinating these investigations, as well as at what speed.

The Chairperson welcomed the delegation, and asked who was leading the delegation and if any apologies had been sent on behalf of those absent.

Lieutenant General Anwa Dramat, Head: Directorate for Priority Crime Investigations of the  South African Police Service and the chairperson of the Anti-Corruption Task Team (ACTT) replied that he was leading the delegation and offered apologies for the two members of the delegation that were absent, saying one was in hospital and the other was attending another meeting.

The Chairperson said it was a parliamentary rule that all apologies tendered should be in written format and should be submitted before the meeting began.  He gave over for the briefing.  (See attached document).

Lt. Gen Dramat said on 22 July 2010, the President had announced the establishment of an Anti-Corruption Task Team to expedite the investigation and prosecution of corruption cases.  The purpose of the ACTT was to provide for better coordination of governmental functions within the Justice, Crime Prevention and Security Cluster (JCPS), with the aim of reducing corruption in South Africa; to expedite the effective investigation and prosecution of priority corruption cases; and to work together with other government departments and initiatives to strengthen government systems, reduce risks, and to prevent the incidence of corruption.

He listed the principal and secondary member institutions, and said the Ministry of Finance had played a leading role in implementing the national intervention in Limpopo.  All the ACTT member institutions had been requested on 14 December 2011 by the chairperson of the JCPS to support the intervention, and the ACTT institutions had effectively implemented their investigation plans in January 2012.  It had been emphasised that it was also to look at criminal matters emerging from the Section 100 (1) (b) investigation.

Based on the National Treasury results of risk assessment, with forensic investigation findings of incidents of irregularities, fraud and corruption, and conflict of interests, the following departments were identified as priority areas for ACTT investigations:
Department of Education
Department of Transport and Road Agency of Limpopo
Department of Health and Social Development
Department of Public Works
Provincial Treasury

The National Treasury had issued 22 investigation reports that facilitated disciplinary proceedings by the DPSA and to date, two heads of departments had been suspended and 45 officials across the departments had been charged.  (See list of National Treasury forensic reports on pages 3-4 of attached document).

A summary of disciplinary cases of fraud and corruption that included the Departments of Health and Social Development, Education, Public Works and COGHSTA showed 47 cases, with 46 still in progress and one having been finalised.

Mr B Mashile (ANC, Mpumalanga) asked for an explanation of the cases mentioned.

Ms Zanele Mxunyelwa, Head of Specialised Audit Services in the Office of Auditor-General, explained that 47 people had been charged and 1 person had been dismissed, while the DPSA was still busy conducting disciplinary hearings with the other 46 individuals.

National Treasury had further established in the review audit of the Limpopo Provincial Treasury that six out of ten Limpopo PMG accounts had been used to process both credit transfers and other electronic bank transfers directly on the FNB online system, without authorisation or disbursement through the Basic Accounting System (BAS).  The investigation was still in progress to establish if all identified irregular transactions not processed through BAS had been rectified, and recorded in the BAS in the correct financial periods of the affected departments.  (See list of affected departments on page 4 of attached document.)

A summary of disciplinary cases involving conflict of interest (government officials doing remunerative work outside the public service) showed 41 cases had been uncovered, with 14 finalised and 26 still in progress.  One case had been withdrawn.

A summary of ACTT criminal cases under Section 100 showed 26 cases, with 34 accused.  13 of the cases  were in court, while 13 were still in being investigated.

The report was concluded and the Chairperson gave over to the Committee.

Discussion
Mr R Lees (DA, KwaZulu-Natal) said that Mr Mashile had given an opening earlier for more details in the report to be provided, and it had not been taken.  He felt it was waste of time and contempt of the process to give a numerical report on things that were still in progress, and not to actually report on the progress on each matter.  That was a serious deficiency.  Nothing had been done really, if it was to be compared with the 303 cases mentioned by the Chairperson, and it spoke of a serious lack of progress.  In the previous meeting there had been a lack of surety as to who was driving the process, and when it was confirmed that it was the ATCC, they had been asked to give a detailed report.  He referred to the comment on page five of the briefing document -- that the Accountant-General was still checking the irregular transactions made -- and asked whether those who had benefited from the irregular accounting should not be looked at and prosecuted, or at the very least should have been dismissed.  He asked when this process would be finished, and when would there be results.   He understood Cabinet was thinking of withdrawing the intervention, while this process had barely left the starting blocks.

Ms T Memela (ANC, KwaZulu-Natal) echoed Mr Lees, and said the Limpopo legislature was doing as they pleased and the investigators were pussyfooting.  Wrong was being done to the people who deserved the service, and there needed to be an explanation for the lack of progress and results.  The delegation had been entrusted to do the work and they had the skills, but what was blocking progress?

Mr M Makhubela (COPE, Limpopo) referred to the purpose of the ACTT, and said the President had appointed the team to expedite the investigations, and the team had been paraded on television.  However, this report showed a ‘chameleon movement’, which was very slow.  He referred specifically to witnesses, and said witnesses could die or be influenced if the process took too long.   He was very disappointed in the report.

Mr Mashile said a lot of resources had gone into the Province to ensure that those that were corrupt were removed.  He referred to the 303 cases, including the two heads of departments, and said there was no clear indication if they had been, or would be, dismissed.  If at the end of the disciplinary processes all, or the majority, of the 303 people were dismissed, this would result in a new administration and new leaders at the same time.

Mr S D Montsitsi (ANC, Gauteng) asked what the rate of convictions of criminal cases being investigated was?   At what levels of the organisation was corruption taking place?  What amounts had been recovered as a result of the investigations taking place?  In which sections of provincial government departments were corruption rife?  Was the war against corruption being won?

Mr Lees said an example of the expected feedback would be the airport lounge in Polokwane, which was being run as a very exclusive nightclub without any contract or rental, and without water, electricity or any service payments.  The Minister of the relevant department was aware of this, and yet the illegal occupation continued. The ACTT should have given feedback on monies that had been recovered, people arrested, and so on.

Mr T Chaane (ANC, North West) said the expectation was that while the SIU and others concluded their investigations and handed over to the Department of Public Service and Administration (DPSA) for disciplinary hearings, the investigation of the cases under investigation by the ACTT would be focused on simultaneously.  Detailed reports would be given on the status of each case being investigated, without undermining or compromising the case, by simply giving details of who was arrested and for what, and the date of the court appearance.  The term “in progress” throughout the report needed to be clarified, as it related to each case, but no effort had been put into the report and the purpose of the ACTT was to expedite the investigations and prosecutions in corruption cases.  He realised that court proceedings could be long affairs, but it also depended on the readiness of the investigators, prosecutors and the defence.  There were no results that the Committee could see, and the processes were taking too long.  He asked for the meeting to be closed and for the delegation to go back and prepare a proper report.

Mr Mashile agreed and said the meeting should be closed.   He asked who was in charge of the team in Limpopo -- the person who was in charge of the practical leadership of the team -- so that it could be communicated to that person what needed to be done.

The Chairperson said the intervention in Limpopo was being reviewed in terms of Section 100 (2) (c) of the Constitution by National Council of Provinces (NCOP).  The Committee had to make recommendations to the Executive and based on the report, there was no recommendations to be made. The DPSA had previously said that they had requested the ACTT to make capacity available to fast track investigations and prosecutions.  The SIU had said 38 matters in respect of irregularities were being invested by private forensic firms that had been appointed by National Treasury, and these matters were to be handed to SIU for the preparation of relevant disciplinary proceedings.  However, these matters had not been handed over to SIU in spite of numerous requests, and these matters were currently being handled by the ACTT. 

The Chairperson asked if the ACTT had the capacity to do the work, and who the private forensic firms were.  He asked Lt. Gen Dramat to answer the questions put before them, but to also go back and engage with the DPSA and SIU about the presentations and his role, and to return next week when the Committee would be dealing with Limpopo for three days.
 
Lt. Gen Dramat said the ACTT had been formed in July 2010 to fast track corruption investigations, and the Limpopo intervention had come a bit later to the ACTT brief.  The brief was that 100 individuals that were involved or benefited from corruption of R5 million or more had to be convicted by 2014.  The Limpopo intervention was an additional task, with much broader criteria.  The ACTT, with its initial efforts, had achieved significant results, with 42 convictions involving 32 individuals and it had led to freezing orders of R1.3 billion to date.  With the Limpopo intervention, the results had not been what were expected.  There were capacity issues, as well as disciplinary issues where cases could not be handed over until it had been ensured that this would not compromise the criminal proceedings.  There was also reluctance on the part of heads of departments (HODs) to conduct disciplinary hearings.  He asked for the lead investigator to be given an opportunity to present a status report on the criminal cases.

Ms Mxunyelwa said the forensic firms were initially Gobodo Forensic Investigative Accounting and Price Waterhouse Coopers.  These two firms had produced 27 forensic reports from which 38 criminal cases had been formed, and 22 of those reports had been given to the DPSA for disciplinary proceedings and five were being withheld until the court and criminal proceedings were finalised.  National Treasury had the list of names and details of fraud or irregularity cases, which had been referred to the DPSA.  The general delay had come when the MECs and HODs refused to take the disciplinary process forward, and the Minister of DPSA had since taken charge of the disciplinary proceedings.

Lt. Gen Dramat said that during the criminal investigations, eight officials had resigned and had not been subjected to disciplinary proceedings.

Colonel Johan du Plooy, Group Leader: South African Police Services (SAPS) gave an overview of Limpopo cases that were deemed priority criminal investigations, and the status of these cases.  He said that the forensic reports had “red flagged” certain allegations, and these allegations still had to be investigated. 
The criminal cases he had presented were in court already, but when the defence came up with their version, or the accused changed their version, that also needed to be investigated.  To speed up investigations, a decision was made to go forward with the fraud charge as the principle charge, because irregularities in the supply chain process could be dealt with faster than the corruption route.  There were currently three teams, with five to ten members in a team consisting of a group leader, three team leaders and investigators.

Mr Makhubela said that if the accused or the defence changed their version and it still had to be investigated, this meant that the investigators had not been properly prepared.  The presentation was an embarrassment, and the team should go back to prepare a proper briefing.

Mr Chaane said that the intention of the intervention was to clean up the administration of Limpopo.  Those who were found to have violated rules and procedures internally would go to a disciplinary hearing and based on the severity of the transgression, would be sanctioned accordingly.  Those who broke the laws of the country needed to be criminally pursued, but the processes employed by the investigators were taking too long.  Cleaning up the administration of Limpopo was the focus of the briefing, not the general mandate of the ACTT.  Compared to the private sector in dealing with disciplinary and criminal matters, government took too long and when people were not held accountable for their actions, others might also start to transgress.

Ms Memela said people who faced charges and resigned, as well as the HOD’s that refused to undertake disciplinary proceedings, were accomplices and should be charged. There were huge amounts of money at stake.

Mr D Joseph (DA, Western Cape) said that those who had resigned should be held accountable and should still be charged.  National Treasury should have a list of names of the people found guilty in disciplinary hearings, because people could simply move on to another province or department.

The Chairperson said that a copy of the presentation should be left with the Committee, but the ACTT should go back and engage with the DPSA and SIU, as well as the chief administrator, because the Committee understood that people were being moved from one department to another, possibly to bypass disciplinary proceedings.  He asked that ACTT provide more detail on the capacity it needed, and should schedule to brief the Committee the following week.   Corruption needed to be rooted out.

Lt. Gen Dramat confirmed that those individuals who had resigned were still being pursued criminally.

Ms Mxunyelwa said that everybody implicated in the forensic report had been flagged by National Treasury, and they had a detailed report on all the individuals and the irregularities -- even those that had resigned and would not be able to return to the public service.  The only way a person on the list could work for government would be if they were employed as a consultant to a department, or an MEC, because then they would not be technically employed by the government.

Ms Memela asked what would be done with the HODs that were blocking the disciplinary processes, as well as the defrauded money that needed to be returned to government.

Ms Mxunyelwa said the disciplinary actions created a political problem, because National Treasury could not, as an outside department, initiate and conduct disciplinary hearings against an official.  A major challenge and delay was created when MECs refused to undertake disciplinary actions against an HOD and the HOD refused to take disciplinary action against officials.  There was also a Labour Act that dictated who should initiate and conduct disciplinary proceedings.  In collaboration with Ministers of the department and the Minister of the DPSA, a team of directors-general of the DPSA had been elected to initiate and conduct disciplinary hearings.  The hearings had been done, with outcomes still pending.  National Treasury had done a lot to make sure the issues in the reports were addressed by the intervention team, and that policy issues and procurement processes were properly followed.  She identified the Department of Health in Limpopo as being the most problematic, followed by the Department of Roads and Transport, with its road agency, and the Department of Education.

Ms Mxunyelwa assured the Committee that all the information the Committee required was ready and available, but added that some of the information was very sensitive. 

The Chairperson asked Mr Du Plooy to make his overview of the criminal cases available to the Committee, as well as additional information from National Treasury, so that an informed recommendation could be made to the Executive.

The Chairperson thanked the delegation and closed the meeting.
 

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