Anti-Corruption Task Team & South African Revenue Service: hearing

Meeting report

The Chairperson of the Anti-Corruption Task Team (ACTT) and Directorate for Priority Crime Investigation (Hawks) head, Gen Berning Ntlemeza, delivered the briefing. He complained that some ACTT members were supposed to be present at the meeting but were conspicuously absent.

He began by stating that ACTT derived its initial mandate from the 2010 Justice, Crime Prevention and Security (JCPS) delivery agreement which required ACTT to take steps to eradicate corruption including bribery by officials within the JCPS cluster by convicting 170 JCPS officials by 2014 and to ensure that investor perception, trust and willingness to invest in South Africa is improved by convicting 100 persons who have assets of more than R5 million obtained through illicit means. In 2012 the agreement was revised and the new output referred to “reduced corruption” and the conviction of 100 persons by 2014 for corruption where the amount involved is more than R5 million instead of having assets of more than R5 million. For the 2014-2019 Medium Term Strategic Framework (MTSF), ACTT is mandated to ensure that “Corruption in the public and private sectors is reduced by building a resilient anticorruption system to successfully detect and investigate cases of alleged corruption with a view to prosecution, conviction and incarceration of perpetrators. This will hopefully serve as deterrence and contribute to ensuring a corruption-free society”. This mandate required ACTT to:
• reduce levels of corruption in the public and private sector, thus improving investor perception, trust in, and willingness to invest in South Africa by ensuring that 120 persons are convicted for corruption or related offences where the amount is R5 million and above, by obtaining R1.38 billion in freezing orders and R180 million in recoveries.
• ensure corruption amongst government officials is reduced to serve as a deterrent by convicting 1000 government officials for corruption or related offences involving any amount.

Since ACTT’s inception in October 2010, the total number of cases dealt with is 189 and the number of finalised cases is 68. The number of cases under investigation is 77 and serious corruption cases on the court roll number 44. Total number of persons convicted of corruption involving R5 million and above stands at 128 made up of 63 people for the years 2010 to 2014, 23 people for the year 2014/15, 34 for 2015/16 and 8 persons have been convicted in 2016/17.

The cumulative figure for the MTSF 2014-2019 period to date for persons convicted of corruption involving R5 million and more is 65. To meet the MTSF target of 120 persons convicted by 2019, 55 persons still need to be convicted. The total number of government officials convicted of corruption involving any amount since 2014 to date is 399. To meet the conviction target of 1000 by 2019, 601 government officials would still need to be convicted. A total number of 931 government officials have been convicted since the inception of ACTT in 2010.

Criteria to prioritise cases are: cases that have the effect of improving investor perception and thus willingness to invest in South Africa; matters involving foreign bribery in terms of South Africa’s obligations with the Organisation for Economic Cooperation and Development (OECD); cases that focus on government priorities such as service delivery in the local government sphere, health sector, education sector and construction industry sector and land restitution cases.

The case spread amongst departments is: Agriculture – 1, Education – 14, Health – 11, Social Security Agency – 5, Social Development – 1, Rural Development and Land Affairs – 11, Local Government – 39, Department of Public Works – 28, South African Police Service – 3, Communication – 1, Correctional Services – 2, Tourism – 1, Department of Transport – 3, Mineral and Energy – 1, Human Settlement – 5, Water and Sanitation – 1, Infrastructure and Development – 1. The number of cases involving public and private entities is 37 while foreign bribery cases number 11. A breakdown of the number of officials as well as the amount involved showed the total amount to be R10.6 billion and Gauteng Province topping the list with 125 officials involved, with Free State second (78 people; R873 million) and Eastern Cape third (76 people; R143 million). Mpumalanga had the lowest number (14 people; R154 million). The number of people involved in provincial cases is 462.

A lot of tender fraud and irregularities are prevalent within the local government sphere as well as the following departments: Department of Public Works, Health, Education, Rural Development and Land Affairs. There were few charges with regard to the Public Finance Management Act (PFMA), Municipal Finance Management Act (MFMA) and money laundering. Most of the cases from the Department of Public Works deal with fraudulent grading by the Construction Industry Development Board (CIDB). Fraudulent activities involving land claims are prevalent in cases involving the Department of Rural Development and Land Affairs. Most corruption cases committed within the departments are reported by whistleblowers. Several recommendations have been made in the fight against corruption. Awareness campaigns amongst employees attached to departments and municipalities are being planned. The creation of special courts for serious corruption cases was recommended as was training sessions about the protection of whistleblowers against victimisation by their supervisors who are involved in the commission of corrupt activities. Conducting workshops on the PFMA, MFMA, and the Prevention and Combating of Corrupt Activities Act (PRECCA) is of crucial importance as is funding for forensic auditors.

Discussion
Mr D Ross (DA) asked why there was no information on corruption cases in the state owned entities (SOEs). He wanted to know why there was no focus by ACTT on SOEs as these SOEs were breeding grounds for a lot of corruption cases.

Mr T Brauteseth (DA) talked about the targets set by ACTT on the number of cases it wants to investigate and prosecute. He was of the opinion ACTT had set the bar too low, making it easy for them to achieve the set targets. He demanded an explanation on that.

Mr M Hlengwa (IFP) referring to slide 21 of the presentation asked why there was no mention of the Auditor-General report and the Public Protector. These two Offices, especially the Auditor-General, was very important in the fight against corruption. How were these two institutions being utilised so as to avoid a conflict of interest in the fight against corruption.

Ms N Mente (EFF) asked Gen Ntlemeza how accessible he is to ordinary citizens who want to open cases of corruption because sometimes it is difficult to open corruption cases at the police station. Some policemen deliberately frustrate such attempts and in some cases bribes are given to strike down such cases. She gave an example of six councillors who had to spend six hours at a police station trying to open a corruption case.

Mr V Smith (ANC) referred to the number of convictions achieved and was very disappointed at this figure. He told the ACTT chairperson the conviction rate of 28% was very unimpressive. He pointed out that “a student can’t even pass matric if they get below 30%”. He told Gen Ntlemeza he feels ACTT has failed in its role as an anti-corruption agency. He questioned the figures for convictions in the presentation stating that they were conflicting. He demanded an explanation for that. He reminded the delegation they were bound to speak only the truth or remain quiet when they appear before Parliament.

Ms T Chiloane (ANC) asked for a breakdown of foreign bribery cases and in what currencies. She specifically mentioned the Department of Home Affairs and Customs and asked if there were reported cases in these departments because many complaints were made against these two departments by the public.

Deputy National Director of Public Prosecution, Adv Nomgcobo Jiba, asked for a five minute adjournment so that ACTT members to decide among themselves how to respond to the matters raised by the MPs.

The Chairperson agreed to her request and gave a 10 minute adjournment.

On resumption, the Chairperson asked the ACTT chairperson about the attendance rate of ACTT members.

Gen Ntlemeza replied that some attend while some do not due to their commitments.

Mr M Booi (ANC) commented on the attendance saying it was not proper. He stated that the behaviour of the ACTT members was a reflection of the laziness of and casual way of doing things by government employees. He stressed there was no excuse good enough.

The Chairperson asked for the list of those who are usually absent.

Gen Ntlemeza replied he had no evidence on this and also insisted that the absence of members usually came with tangible excuses. He stated he could not tell who were usually present or absent at the meetings.

The Chairperson was not impressed by this and asked why there was no representation from the Performance Monitoring and Evaluation team. The impression he had from the requested adjournment was that there are not any proper coordinated meetings of ACTT and even if they met, they were not organized.

Mr Hlengwa asked for the attendance register to know those who attend and those who do not attend the meetings because he was not impressed by the submissions of Gen Ntlemeza.

Mr Booi expressed dissatisfaction about the ineffectual attendance. Corruption is a serious matter and should be taken seriously but the attendance today had clearly shown that the agencies do not take corruption seriously. He stated that the attitude was one of total disregard for Parliament and its functions.

Ms N Khunou (ANC) asked about the composition of ACTT and the departments represented on it.

Gen Ntlemeza explained that the task team comprised of various institutions, but not everyone showed up to scheduled meetings. The ACTT members are:
• National Treasury
• Development Bank of South Africa
• State Security
• Special Investigating Unit
• South African Revenue Service
• Financial Intelligence Centre
• National Prosecuting Authority
• Hawks
• South African Police Service
• Justice Department
• Government Communication and Information System
• National Intelligence Co-ordinating Committee
• Department of Performance Monitoring and Evaluation
Only six entities within ACTT appeared before SCOPA, while the rest were absent with no known reason.

Ms Khunou told Gen Ntlemeza that defending his colleagues will not help anyone because the Committee would get to know the truth. She asked for the frequency of the meetings and asked which of the members attend the meetings.

Gen Ntlemeza told the Committee the key to ACTT was the lead agent, Department of Performance Monitoring and Evaluation, who was absent from the SCOPA meeting.

Mr Smith referred to the mandate of ACTT with respect to its meetings. He asked how often ACTT met and the content of such meetings. The impression he got is that the major source of information for ACTT was from whistleblowers which should not be. The major source of information for ACTT is supposed to be the chief financial officers but obviously they do not attend these meetings. He proposed that there should be a way to have a direct report from the departments.

Mr T Brauteseth asked about the ACTT budget and from where the budget comes.

Gen Ntlemeza replied that there is no special budget for ACTT as each member operates within their individual budgets.

The ACTT secretary, Ms S Lebakeng, told the Committee ACTT usually has a standing agenda for its meetings. Operational and legal matters are usually discussed as well as each of the component departments communicates about corruption and trends that have been picked up.

Ms Mente asked about the designation of the people representing the various units of ACTT. She spoke to slide 8 where it reported on the potential recovery of funds and asked why there was no report on the monies recovered and from whom.

Gen Ntlemeza responded about the attendance of ACTT and the designation of the representatives. He stated that the directors general and deputy directors general were the ones who are designated to attend such meetings but because of the busy schedules of these people they are usually not present and always send in representatives. However he has no power to decide who attends and when they attend. He specifically told the Committee that only a few DGs and DDGs attend.

Ms Chiloane asked Gen Ntlemeza who ACTT reports to and the frequency of the meetings.

Gen Ntlemeza replied that ACTT meets monthly on the first Tuesday of every month and they report to the JCPS which in turn reports to the inter-ministerial committee.

Mr Hlengwa requested the agendas and attendance registers of ACTT meetings. There seems to be a lack of continuity of persons and thus effectiveness of these meetings because it seems different people attend the monthly meetings. He asked about the possibility of having a face from each department. He asked if the non attendance of meetings by certain departments has been reported to the inter-ministerial committee. If not, then ACTT is aiding the non-attending departments.

Mr Booi commented about the poor attendance stating that corruption could bring down a country. It was shocking that people who were supposed to be at the forefront of the fight against corruption were so negligent and unserious. He spoke disapprovingly of the accounting officers, saying they were the ones undermining the fight against corruption and they were only interested in flying around.

Ms Khunou spoke about the clarity of the ACTT mandate but she felt the problem with ACTT is the miscommunication between the various departments. If the accounting officers are not present at the ACTT meetings then the meetings are just a complete waste of time. She was not impressed by the lack of budget as this could be the reason why out of the R1.3 billion being investigated, only R3 million had been recovered so far.

The Chairperson referred to the SOEs and asked why the presentation was all about departments and no mention made of the SOEs. The figures given us are only about government departments. And yet, generally, you hear SOEs are in chaos and in the news for all the wrong reasons. They are like milking cows, but all you have given us pertains to departments.

In his reply, Gen Alfred Khana, Head: Commercial Crime in the Directorate for Priority Crime Investigation (DPCI), apologised for omitting this. “The fact is we are dealing with cases involving SOEs, but for this purpose we were of the assumption, and the wrong assumption, that we must focus on government departments. There are matters that we are dealing with on Prasa, Eskom, Denel … the list is endless”.

The Chairperson quickly reprimanded him by telling him the Committee had clearly stated in the letter it sent to ACTT that it required a report on the public entities and government departments which have been investigated. The Committee wants a complete picture and not the quarter or half picture being presented to it. He demanded to know when the report on the SOEs would be ready.

Gen Ntlemeza promised it would be ready by Wednesday 21 September 2016.

Mr Brauteseth asked if the report on the SOEs would be a detailed report and asked who was carrying out the investigation, the Special Investigating Unit (SIU) or the Hawks.

The Chairperson asked ACTT to include details on what is being investigated, how much money is involved and what the current status of the investigation is. The identities of people involved in the cases may be protected but where there is a conviction, full details must be made available.

Gen Khana promised to give a breakdown of the cases and who was investigating what.

Ms Khunou stated that the cases concluded must include the name of the convicted persons.

Gen Khana replied about the targets saying R10 billion was not listed as a target but their caseload had a cumulative figure of R10 billion and involved 460 officials, but it might not be achievable to recover all the funds lost to graft.

Adv Jiba, on the coordination of the meetings, stated there were strategic meetings which consisted of all ACTT members and operational meetings were there was a case by case analysis and these operational meetings can be weekly and are usually done to help the operational teams.

Mr Hlengwa replied that the answer by Ms Jiba added to the confusion. He asked her who the strategic people are and insisted there must be a face to these meetings. He wanted the meeting criteria to be sorted out.

Ms Khunou asked how they merge the day to day jobs of the members and their responsibility within ACTT.

Mr Brauteseth asked about the case involving Jonas Makwakwa, the second in command at SARS. He asked if that case was being investigated and he asked about the meeting between the SARS Commissioner, Tom Moyane, and Gen Ntlemeza.

Adv Jiba replied that strategic meetings consisted of all the ACTT members while operational meetings only look at specific cases and it involves the specific departments within ACTT. ACTT does not screen the cases but the National Prosecuting Authority (NPA) does that. The Hawks are responsible for deciding which cases the task team will deal with and the NPA prosecutes. There is consultation between the departments but none of them takes on the mandate of the other.

Gen Khana spoke to the issue of fewer charges and why the Public Finance Management Act (PFMA) was not being used. He said that the task team tends to focus mainly on fraud and corruption, and less on transgressions of the PFMA because the PFMA charges were less serious.

Mr Smith replied that ACTT was watering down the most important law governing public finances. It was a serious problem for ACTT to come to Parliament and say it does not consider the PFMA. There is a need to hold managers accountable and the only weapon available is the PFMA.

Mr Hlengwa stated that the prosecuting authority has a limited understanding of the PFMA and this was a serious indictment which must be addressed.

Ms Khunou asked for the role of the National Treasury in ACTT and asked how ACTT got its cases since the accounting officers were usually absent from the meetings.

Mr Booi said there was a conflict between this report and the presentation given earlier by National Treasury. He asked for an explanation and stated it was either National Treasury was taking Parliament for a ride or it was deliberating misleading the Parliament.

Mr Kenneth Brown, Chief Procurement Officer: National Treasury, responded that in 2010, 2011 and 2012, ACTT did a detailed diagnostic of corruption in the entire governance of supply chain and procurement and a report was prepared which recommended that a central office for supply chain management and procurement be opened to make it easier for business and to intervene where necessary. He stated the system relied on the ethical behaviour of the public officers and it is difficult to keep an eye on everything.

Gen Ntlemeza, speaking about public access to his office, stated that there is a website for the Hawks, and in terms of reporting, anonymous letters can be sent and some letters are specific. He stated there are police officers at the police stations, usually the station commander, who immediately interacts with the Hawks once a case has been registered. The Hawks can be easily located in the provinces.

The Chairperson asked how ACTT interacts with institutions such as the Auditor-General and Public Protector

Gen Ntlemeza replied that there are usually no interactions between ACTT and these institutions.

Ms Mente asked for the requirements needed to open a case of corruption at the police station and again gave the example of the councillors who spent six hours trying to open a case at the police station and the police tried to refuse.

Gen Ntlemeza replied that no policeman had the power to refuse any case of any kind. He promised to personally look into her claims.

Mr Hlengwa commented on the synergy between ACTT and the Auditor-General. He noted that the Committee responds heavily to the Auditor-General’s reports and he is worried that that ACTT does not interact with the Office of the Auditor-General. He advised that ACTT reviews its modus operandi and use the Office of the Auditor-General because the reports from that office are widely accepted by South Africans.

Ms Khonou asked about the length of time it takes from opening a case to prosecution and conviction.

Adv Jiba responded about the vacancies at the National Prosecuting Authority, saying a report was sent to National Treasury but the response was that there was no money. There was a resolution to move resources from general prosecutions such as house breaking and malicious theft to specialised cases and lower level prosecutors be moved to the lower courts.

Adv Malini Govender, Western Cape Deputy Director of Public Prosecutions, replied about the time frame for investigating cases. Cases involving corruption are more complex cases that require more time. These cases can go as long as two to five years because the suspects put up all sort of tactics to delay the trial.

Adv Jiba responded to Mr Smith’s comments about the percentage of cases successfully completed. She pointed out that the figures on the two slides dealt with two different types of cases. One slide referred to people convicted who were involved in cases involving R5 million or more while the other slide dealt with cases which spoke generally of corrupt government officials.

Mr Smith was not impressed by this and said that it means people were successfully stealing and asked why the conviction rate was so low.

Adv Jiba again responded to this by saying some of these cases were heavily litigated and some of them go on as long as 10 years. The complexities of some of these cases contributed to the low rate for successful convictions. She again made a call for the establishment of more special courts to deal with corruption-related cases because the ordinary courts do not have space to entertain such cases therefore creating backlogs.

Mr Tom Moyane, SARS Commissioner, responded to allegations in the media about his meeting with Gen Ntlemeza about the case of the second in command at SARS, Mr Jonas Makwakwa. He said that he had not met the general to present this matter. He stated that the investigations being carried out will be done within a process that follows the laws of the land. If one uses the media as a distributor of information to the public, one could allow dangerous information to spread to the Committee, which is not true.

The Chairperson asked how cases are being prioritised.

Gen Ntlemeza replied that there is an ACTT operational committee where these cases are being discussed and it all depends on which of the cases comes up first.

Adv Jiba added that there were some cases which were really difficult and others easy and straightforward. The performance of the NPA is measured based on the number of cases concluded per year creating a tendency for prosecutors to address more of the simple cases first. She therefore appealed for a change of this performance criteria because it adds to the creation of backlogs.

Ms Khonou was not impressed about that, saying that was unacceptable. She asked what could be done to address that.

Mr Lawrence Mrwebi, NPA Special Director : Specialised Commercial Crimes Unit, spoke on foreign bribery and explained that this referred to bribery of government officials to secure international transactions. It could refer to monies accepted by government officials from foreign countries allowing them do business with South Africa. He gave the example of the arms deal scandal and stated that foreign bribery had nothing to do with intergovernmental agencies.

Mr Smith suggested that when ACTT next appears, it has to prepare a simple table which details the cases reported, those in progress and those already completed so that the Committee would know where necessary action is to be taken. He stated it was necessary for everyone to be more proactive in the fight against corruption.

The meeting was adjourned.