Anti-Corruption Task Team (ACTT) on pending cases

Public Accounts (SCOPA)

23 May 2017
Chairperson: Mr T Godi (ANC)
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Meeting Summary

Document handed out: Anti-Corruption Task Team (ACTT) pending cases (not made available to the public)

The heads of the National Prosecuting Authority, the Hawks, the Financial Intelligence Centre, SARS, the Attorney General, the Department of Justice and IPID, who all form part of the Anti-Corruption Task Team, briefed SCOPA on cases referred to them by various government departments. A notable absence was the Acting National Police Commissioner who was said to be at a conference but did not provide an apology.

The Committee had called in the Anti-Corruption Task Team (ACTT) following the Auditor-General report which had shown disturbing levels of non-compliance with financial management processes, some of which was fruitless and wasteful expenditure in which it was clear that Government had not derived benefit. More importantly, there was irregular expenditure, which may contain instances of fraud and corruption, and this required investigation. Irregular expenditure had reached the unprecedented level of R46 billion in state departments and entities in 2015/16, according to the Auditor General. For this reason, SCOPA was going to be working closely with ACTT and the Chairperson was pleased to see that the team appeared far more organised than at the previous meeting in September 2016.

The Hawks reported on cases of interest and on cases in the public eye but this revealed nothing other than, apart from some awaiting information, the cases were under investigation.

Members asked about the status of the State Capture matter, the Tegeta / Eskom matter, the R1.4 billion Gauteng Health case, the Nkandla tax benefit bill, Mr Jonas Makwakwa and the status of NPA employees Adv Nomgcobo Jiba, Adv Larence Mrwebi and Ms Jackie Lepinka.

Members expressed concern about the lenient sentences, including suspended sentences and fines that were a small fraction of the amount stolen, received by the accused in high profile cases, especially in contrast to the harsh sentences handed down for house burglary. The Committee queried the ineffective consequences of prosecuting corruption. The NPA was questioned about cases where the prosecutor had declined to prosecute or had withdrawn the case. Endemic police corruption was hotly debated.

In an attempt to hasten the process of justice, the Department of Justice and Constitutional Development indicated that it would prioritise corruption cases and would consider a special court with additional resources to hear cases presented by the ACTT. The judiciary would be apprised of the concerns about lenient sentences and inadequate consequences in cases involving corruption.

SCOPA said that ACTT needed to up its game and, while working together to fight corruption. The Committee would monitor the work and success of the Anti-Corruption Task Team.

Meeting report

Opening remarks
The Chairperson noted the demands of other parliamentary committees on members due to the budget votes but it was necessary to hold the meeting as it had been delayed from the first quarter. The Anti-Corruption Task Team (ACTT) appeared far more organised than at the previous meeting. The Committee worked through the audit reports of the Auditor-General and the reports had shown disturbing levels of non-compliance with financial management processes, some of which were fruitless and wasteful expenditure in which it was clear that Government had not derived benefit. The bigger concern was the irregular expenditure which may contain instances of fraud and corruption which required investigation. In the Committee’s engagement with departments there had been frequent reference to matters being "sent for investigation", but with no indication of what happened on the other side, i.e. once it was investigated. The Auditor-General showed increasing levels of non-compliance with financial management and administration.

The Committee wanted ACTT to be a partner with Parliament in the fight for good governance and against corruption to ensure that the resources that SARS Commissioner Moyane and his team collect are used in the right way. If not, we’ll soon have a problem as people will query the need to pay tax merely for some crooked fellows to pocket it. As Parliament, the Committee had to ensure that those who did not follow the prescripts of the law were taken to task. The major cry has been the lack of consequences. ACTT seemed to be a vehicle for dealing with this and able to assist parliament in ensuring that there is good governance. The major cry was that there were no consequences for corruption. Parliament was to be the centre of the fight against corruption because of the members’ political obligation but also because of a constitutional obligation as representatives of the people. Parliament had decided that all state organs and institutions had to be brought in to assist parliament with its work. ACTT featured in that broad vision. Did criminals tremble in their pants when one said ACTT or was ACTT not effective? How could the Committee assist ACTT? Could SCOPA assist ACTT? ACTT was there for a discussion about how together solutions could be found. Discussions had to be concise but open and transparent. Present challenges and together we could find solutions to the challenges. Talk to the Committee. If ACTT was to sit on issues, it would not work.

Anti-Corruption Task Team (ACTT) briefing
Adv Shaun Abrahams, National Prosecuting Authority (NPA) head, noted that in response to the invitation from the Committee, they would be briefing the Committee on cases referred to the ACTT by various government departments and entities, including matters at various stages. This was less than two weeks after the launch of the draft document “Towards a National Anti-Corruption Strategy for South Africa” in line with government’s commitment to reduce corruption as in the Medium-Term Expenditure Framework 2014/15-2019/20, the National Development Plan and National Security Strategy and after the revival of the National Anti-Corruption Forum.

ACTT is chaired by the Hawks and included the Justice, Security and Policing Cluster and other government departments and entities, that is, a broad-based organisation. A senior NPA member is offered for attendance at SCOPA meetings to advise the Committee. Efforts to eradicate corruption in government will be replicated in the private sector. ACTT accepted that the inter-agency collaboration could be improved. Adv Abrahams offered to provide info to Committee and to shed light on what they were doing

Lt-Gen Yolisa Matakata, Acting National Head of the Directorate for Priority Crime Investigation (DPCI/Hawks), addressed the five matters specifically referred to in the Committee's correspondence:
• Department of International Relations and Co-operation (DIRCO) matter: They will expedite and will finalise sooner rather than later.
• SANRAL matter: There were just a few things that were outstanding. Dedicated prosecutors were guiding the investigation.
• Military Veterans matter: They were still struggling to get access to the complainant. They will make an effort to get to the complainant.
• SITA matter: They were trying to engage SITA to give the necessary information. They have not had any opportunity to do an investigation on the matter.
• Department of Basic Education matter: They had not yet decided on the way forward but were taking the matter seriously.

On the matters in the public spotlight, Lt-Gen Matakata wanted to assure the Committee and the nation that they were not afraid to take on these matters. The PRASA matter was being investigated and was receiving attention. They were working with dedicated public prosecutors. Nkandla was being investigated by ACTT as a collective. It was being led by the Specialised Commercial Crime Unit (SCCU) in the Public Prosecutor’s office. She could not speak further on the matter. The State Capture was being investigated in consultation with NPA. Cases were opened by various persons across the country. The final public interest case was the Water Affairs investigation and Lepelle Water Board where the DCPI was involved in an ongoing investigation with NPA.

Adv Abrahams noted that in April, the prosecutors had received 64 arch lever files as part of the PRASA investigation and were busy with a case plan and were working through the material.

Adv Abrahams explained in respect of the State Capture investigation, there were seven legs but only Tegeta / Eskom was part of ACTT’s work. The other legs were with the Office of Serious Economic Crimes that falls under the Hawks. But DPCI and he would sit down and determine whether the balance of matters should be moved to ACTT. Regarding Nkandla, there were five referrals by SIU. An SSCU prosecutor declined to prosecute in four of the matters. The remaining matter was under investigation by SAPS. Adv Abrahams would review the declines to prosecute. There were a number of investigations. A number of criminal investigations were laid by people across the country so they were being collated.

Lt-Gen Matakata presented the statistics for Serious Corruption Cases, recoveries by the Special Investigating Unit (SIU) and recoveries by the Asset Forfeiture Unit (AFU). For Serious Corruption Cases (involving more than R5-million), there had been 77 inquiries, 85 had been assigned a case number, 37 were currently being heard in court and 55 had been finalised with sentences. Between 2014 and 2017, 91 people had been convicted of cases involving serious corruption. A total of 560 government officials had been convicted of corruption in that period. The value of money and assets “potentially recoverable” by the SIU for 2015/16 totalled R73 million, while the actual value of money and assets recovered was R52 million.  Freezing orders by the AFU totalled R1.124 billion while recoveries over R5 million was R220 million in 2016/17.  Recoveries from government officials totalled R1.170 million. She referred to and proposed remedial actions in response to its challenges of lack of resources, capacity and budgetary constraints. ACTT was looking within each of the departments to find the budget. Court delays included case flow management and systemic delays but ACTT was engaging with presiding officers to prioritise hearings.

Adv Abrahams explained that recoveries by the Asset Forfeiture Unit (AFU) spiked to R1.553 billion as a result of the Gauteng Department of Health matter.

In response to the Chairperson asking about the Gauteng Health matter, Adv Nomvula Makatla, Head of the Asset Forfeiture Unit, explained that the value of the asset forfeiture was R1 billion plus interest.

Discussion
Mr M Booi (ANC) noted that he did not see Acting National Commissioner, Kgomotso Phahlane, present. Where was he?

Adv Abrahams explained that he was attending an international conference for heads of Police Forces Across Africa.

The ACTT Secretariat stated that she had invited all DGs and only Mr Radebe had apologised.

Mr Booi referred to the South African Council of Churches (SACC) statement and said that even the SACC had concerns with State Capture but what did ACTT mean by State Capture and what was corruptible within the State Capture itself? How did they quantify what was included in the R46 billion irregular expenditure? How was it quantified? He asked if it was difficult to arrest politicians. What was the nature of such cases? On the issues of corruption and re-shuffling, where were the Guptas as the broader public and everyone seemed concerned about the Guptas? Was there ever a charge against the Guptas? The Guptas seemed to be a focal point of concern by the broad public  regarding corruption. Could ACTT confirm that that matter was getting appropriate attention? The Eskom money was a huge amount. SACC seemed to believe that the Guptas were corrupt but everyone seemed afraid of touching them.

Adv Abrahams explained that the State Capture report had been submitted by the Public Protector as she was able to refer matters to the NPA for prosecution. The new Public Protector had referred the matter to his office and he had referred it to the SIU. A team studied the report and engaged with relevant authorities. It was difficult to say what the specific amounts were and the specific persons who were under investigation because the matter had to be investigated holistically and he could not speak about the matter in a Committee of this nature and a public forum. Regrettably, he could give no further information than to say that the matter was under investigation and that the National Prosecutor was giving guidance to the investigating structures of the Hawks and they would provide regular feedback to the Committee in due course. Were there difficulties? There would be difficulties in every investigation, none of which was insurmountable. The law was the law and effect must be given to it. Adv Abrahams stated adamantly that he had never had difficulty in causing an arrest to happen where a person had committed a crime and there was a reasonable prospect of prosecution and the interests of justice state that that person/s should be prosecuted.

Ms N Kunou (ANC) wanted to know what was the target - they had spoken of receiving 1 000 cases - to ensure that problems regarding corruption in South Africa are tackled effectively. Last time the Committee had heard of the problems in prolonging an investigation. Could it say that real criminals had been taken to court by ACTT from the time that it was established to date? Were the real criminals in jail? When one looked at tenders obtained from government by the private sector, there was always price fixing. There was no mention of price fixing. Please talk about price fixing. Recoveries by SIU were quite an achievement but the graph was declining. In the year 2013/14, recoveries were R216 million but in the year 2015/16, it was R73 million. Why was there a decline? There were duties on National Treasury and everyone had a particular role to play. At what stage did ACTT come in? Two weeks ago, the Committee heard about a PriceWaterhouseCooper report that was not yet complete. What was the communication with National Treasury? There was a problem of government departments co-ordinating with each other. Much as the Committee appreciated the ACTT coming and committing themselves to these committee meetings, they wanted to see that there were no bottlenecks and that people are put in jail. The value of freezing orders from 2012 to 2016 had declined and needed explanation.

Adv Abrahams said there was a massive disjuncture between the R46 million declared by the Auditor-General and the amount being investigated by ACTT. Matters investigated by Auditor-General had to be reported to ACTT. In the absence of that, they would have the position that they are in today. The Auditor-General should be part of ACTT as the role of Auditor-General was critical. Were there real criminals in jail? Of course, there were. If the Committee looked at the statistics before them, they would see that there were people sentenced to serve lengthy terms of imprisonment. ACTT had a number of successes on high profile corruption matters. They continued in pursuit of corrupt individuals. Government officials could not be corrupt on their own. ACTT needed to be equally aggressive in fighting corruption in the private sector. Price fixing was collusion, i.e. corruption. He had been trying to facilitate a meeting with the Competition Commissioner for weeks to discuss the matter. One could not have cartels operating in the way they were but being subject to only a slap on the wrist in fines for such egregious conduct. That concerned him. The NPA would look at prosecution for certain matters as opposed to Competition Commission fines. The construction issue was still unresolved. The banking issue needed to be taken beyond the fines. Where did ACTT come in? They needed to come in as early as possible. The fact that Committee has called the head of the Hawks and National Commissioner of Police to attend meetings helped them to be involved early on.

Lt-Gen Andy Mothibi, Head of the Special Investigating Unit (SIU) addressed recoveries. Recoveries took place through the civil litigation process, even the contracts that had been irregularly awarded. Year on year, the profiles of the cases would differ and the quantum changed. The speed at which civil litigation took place was hampered by the fact that their matters were heard in ordinary courts where they queued with ordinary litigators. However, they were looking at the Special Tribunals Act which had a provision to establish a Special Tribunal which would see to the fast- tracking of civil litigation matters to recover what was due to the state. They were working with the Department of Justice to re-establish a special tribunal and matters that SIU was dealing with would be channelled to that tribunal. That should have an impact and there should be an upward trend in recoveries.

Mr M Hlengwa (IFP) wanted clarification on the Acting National Police Commissioner. He wanted to put it on record that the Acting National Police Commissioner had not attended or apologised. He was impressed by the more organised appearance and preparation of ACTT at the meeting, which far exceeds the disorganisation of the last meeting. There was a shortfall between recoverables and the actual value of money recovered of R185 million in 2013/14. The following year there was a shortfall of R699 million and in 2015/16 the shortfall was R21 million. That was his concern. They went the whole nine yards but the figures were concerning. He wanted better clarification of what was causing the shortfall and what action was being taken. He was interested in the details of the Gauteng Department of Health matter and asked whether the information was ready. He asked the Director General of the Department of Justice where the bottleneck was. Why were cases not proceeding? The Financial Intelligence Centre Amendment Act had been signed into law. How was ACTT going to bring the FICA amendments to life? It was an important instrument in the fight against crime. How far was ACTT with the Nkandla case?

Lt-Gen Mothibi explained the process. The potentially recoverable assets were those in court and in the process of being heard and it was anticipated that those financial matters could be concluded and from that they extrapolated the amounts that could be due and potentially recoverable. The amount was not yet finalised. Litigation was slow, there were interlocutory applications, cases were postponed and so the amounts were not always recovered. They were quantified per year. The second line in the presentation showed money in the bank. It was a two-stage approach. If a contract was irregular, they found out what it was worth. Firstly, they had to have the contract set aside by the court and then they went into the next leg which was a civil matter and the court determined what was due to the state and what services had been rendered. It was at that point that they knew what they would recover. Matters ran over the financial year breaks and so the recovered monies were different from year to year. It was a process indicator.

Mr Vusi Madonsela, Director General: Department of Justice and Constitutional Development (DOJ&CD), responded about the court delays. There are two parts to the process: in the criminal court, the prosecution was in charge of the case; in the civil court, the court roll was determined by the number of litigants appearing before the court and was not a matter that could be placed solely on the shoulders of DOJ&CD. The mechanism - to establish a special tribunal - was the best way of dealing with it as hiring more staff and building more courts was not sustainable. There was also a need to build consciousness amongst judicial officers. Judicial officers within the lower courts fall with the ambit of DOJ&CD so district magistrates and heads of courts would be informed of this matter. To the extent that there was a contribution from the bench in causing delays, they would ensure that the matter was attended to.

Mr Murray Michell, Financial Intelligence Centre (FIC) Director, replied about the FIC Amendment Act. The Amendment Act suffered a long delay and they were trying to implement the roll-out process to give effect to it. There were a number of milestones that they had to meet to ensure that they did not suffer any potential credit rating downgrades in future if they did not meet the timelines. FIC believed that it could meet the timelines. The Minister of Finance should be making an announcement on the details in the near future. There was a drafting process taking place for the regulations and a consultation process taking place with the private sector, particularly the large financial institutions. The Amendment Act had an impact on the Regulations and they needed to ensure that the private sector could perform its role efficiently to assist in the oversight of the financial sector and to assist law enforcement. The Guidelines had to be drafted and issued. The legislation would have a direct impact on ACTT as one of the categories broadened the scope for a relationship between the FIC and categories such as the Auditor-General, the SIU and the Public Protector where they could share information. That had not been historically possible. That would impact on the cooperation of all parties and the flow of information.

Mr Michell said another area is the new risk-based framework for the entire money laundering framework which enabled institutions in the private sector but also in the state to identify risk and then to apply that to targeting of the risk. The FICA burden should be eased but financial institutions should identify risk and had to be doubly cautious about doing business with customers. That would benefit FICA and law enforcement because reports coming from banks would be more focussed and have better profiling and content. On the customer due diligence side, is the attention to important and prominent influential persons and that would mean all persons sitting in the room would be under increased scrutiny. Natural ownership of companies and trusts would have to be revealed and that would create huge value in any investigative process but it would take time to be done.

Mr C Ross (DA) asked about the potential savings that could save the fiscus billions of Rand as it was a step in right direction. On the R46 billion irregular expenditure, he was pleased to hear that setting aside contracts was a first step. It was very important and encouraging. That the capacity constraints were not weighed up against the potential savings did not make sense. How and when could it be addressed and was it possible in the Medium-Term Expenditure Framework? The presentation indicated that their benchmark was R5 million for contracts, so what was the status of all the Eskom contracts which were below R5 million? In the same vein could the Committee be informed about the massive SABC losses and the SABC contracts that were under investigation?

Lt-Gen Mothibi replied to the query about capacity constraints when it came to the litigation process. It was not currently regarded as critical but they were embarking on an internal review which would inform them on the kind of capacity they would need to improve on, especially their legal capacity. What was hampering recoveries was the litigation processes. The re-establishment of the special tribunal should have an impact on the speed of processing. On the process to investigate matters at SABC, SIU had been in engagement with the SABC Interim Board.

The Chairperson informed him that the Committee would be calling him together with the SABC Interim Board to hear some of the things that they were engaging on.

Lt-Gen Mothibi welcomed that meeting as they were finalising the proclamation process.

Maj-Gen Zinhle Mnonopi, DPCI Head of Serious Corruption Investigation, confirmed that there was a Tegeta investigation emanating from the State Capture reports. There was information relating to the awarding of the tenders and they were investigating and hoped to get it right through because they had assistance with the analysis of the reports.

Mr V Smith (ANC) noted that ACTT had said that they would like to get involved in corruption cases earlier. He assumed that the Auditor-General and the Public Protector would be amongst their sources for picking up information. To understand why they waited to get involved, he asked ACTT whom they expected would refer matters to them so that they could get involved. Accounting officers of departments had said that they were awaiting investigating or law enforcement agents. Who should ideally refer matters to ACTT? One would have thought that ACTT had identified stakeholders but how could they not have identified the Auditor-General as a source? If R46 billion corruption were happening, and ACTT was not being proactive, corruption would never be defeated. Did the Auditor-General have to present the case or could Accounting Officers lay cases? The main concern of the Committee was consequence management. If there was no consequences for the R46 billion, it was going to be R98 billion in five years’ time. ACTT had to be part of the team informing people that if they were corrupt, certain actions would occur. They were not going to win unless something changed. Rape had a special court. Corruption was the backbreaker of the country if they did not deal with it.

Mr Smith referred to the statistics for the whole period from 2013/14 and only 55 had been finalised but if he compared the 85 cases registered to the total of 37 in court and 55 finalised, the figures did not balance. He then compared the number of private individuals prosecuted with the number of government officials prosecuted. There was a huge variance whereas the numbers should be similar. How come there were 91 non-government individuals and 560 government individuals prosecuted? There could never be only 91 corrupt South Africans. He asked ACTT whom they expected would refer matters to them so that they could get involved. Just in Eldorado Park, the police were regularly looking for the Top 100 hijackers, so how come only 91 private individuals were involved? He wanted to understand the difference between what was presented in Parliament and what was happening on the ground.

Adv Abrahams replied that they were on same page when it came to the disjuncture around the R46 billion. The Auditor General, departments, other relevant stakeholders had to bring it to their attention. They did espouse the whole societal approach and the entire government in the fight against the scourge of corruption. The Auditor-General would be engaged about this.

The Chairperson asked the presenters to talk to the slides and then the Auditor-General would be asked for input as they could talk to the Rands and cents. How did they find a bridge between the Auditor-General findings and what the Justice cluster did?

Lt-Gen Mothibi made the point that the referral system to ACTT had to be firmed up. In their respective agencies, there were also referral systems. SIU replicated stakeholder mapping as it related to ACTT. He was informed by the Auditor-General that they were to look at the amendment of legislation to enable referrals but before that they needed a mechanism on a working basis. That figure is an indicator that there was a whole lot of work that the agencies needed to discuss with Auditor-General as not all irregular expenditure translated into corruption.

Adv Malini Govender, Acting Special Director of Prosecutions in the NPA Specialised Commercial Crimes Unit (SCCU), presented the background to the statistics. The targets were based on the number of persons to be convicted of serious corruption where the value is R5 million or more and the other target is the number of government officials convicted of corruption. The targets come from the MTEF 2014-2019 where they were looking at a target of 120 persons convicted of crimes exceeding R5 million over that period and a target of 1000 government officials convicted. Cases in court referred to cases, not individuals. Cases in court were not over the entire period, they were the number of cases in court at that time.

Mr Smith interjected as he felt that they were talking at cross-purposes. Was he correct that there were 85 cases? After investigations, 37 were in court. They could not bring those figures to Parliament as the statistics were inadequately presented.

Adv Govender replied that was what was currently on hand. One slide referred to both private sector and government officials. The other slide related to all corruption by government officials such as traffic officials accepting R50 fine etc. In the Post Office matter, the convicted officials were sentenced to between 54 and 58 years’ imprisonment so they were serious about the fight against corruption and had a zero-tolerance approach.

Adv Makatla, AFU Head, provided details of the Gauteng Health case. It was referred by ACTT to the AFU on 1 June 2011. 3P Consultancy colluded with government officials to leak a tender so that they could get a positive result when the tender evaluation committee sat. The total amount frozen by AFU amounted to R1,4 billion. The order was granted on 21 July 2014. In the presentation, the fluctuation in recoveries in 2014/15 was largely related to that one case. Freezing orders could result in forfeiture of interest or the benefit that the accused was to derive. The Chairperson was given confirmation that that case had involved the Gauteng MEC for Health. Interest had accrued to the consultancy but the loss was stopped before it was incurred. Recovery fluctuations occurred because after the freezing order, there were several stages to completion. The Trifecta matter started long ago and was only finalised in December 2016 and currently there was an appeal but they hoped to finalise in the current financial year. However, recoveries took longer to get.

The Chairperson said that Auditor-General South Africa (AGSA) would make an input on the amounts found to be irregular on an annual basis and the amount recovered by law enforcement.

Ms Kunou asked that Auditor-General’s input come at the end.

Mr M Waters (DA) agreed with the necessity to combat corruption. He asked for a comment about the credibility gap that law enforcement institutions faced because the perception out there was that law enforcement institutions had been captured. They were used in a political chess game. Two issues highlighting this were the charges against President Zuma which were dropped and never re-instated. Certain people and their surrogates were protected and on the other side there was a vendetta against certain individuals such as the charges laid against the former Finance Minister and then dropped. How were they addressing that credibility gap? He asked for an update on the Nkandla tax bill and Mr Jonas Makwakwa. Why were the Hawks not involved?

Adv Abrahams stated categorically that he was not captured and spoke equally for members of ACTT. He was optimistic about the commitment of ACTT to fight corruption. Some politicians had labelled people as captured and so those politicians should answer to that question. It was irresponsible of anyone to say someone was captured without evidence to back it up. He was not aware of anyone in ACTT being captured. The citizenry should judge them by the work that they did. The matter against the President had been subject to litigation in the Supreme Court of Appeal which had set dates for filing heads of arguments, where after there would be a date for the hearing. He could not comment but had to wait for a ruling. He did not understand the statement about the President’s surrogates being protected. No one was being protected. Everyone would be treated equally. He vehemently asserted that there was not, nor had been, a vendetta against the former Minister of Finance. The evidence was submitted to the Pretoria High Court by the Helen Suzman Foundation and Freedom under Law who brought an application against himself and two NPA senior members. Everyone was invited to look at the evidence. They had to look at the evidence before saying that the former Minister of Finance had been victimised. A decision was made to prosecute the former Minister of Finance.  Adv Abrahams was requested to review the matter in terms of Section 179(5) of the Constitution and Section 22(c) of the National Prosecuting Authority Act. After reviewing the matter, he declined to prosecute the former Minister.

Mr Tom Moyane, South African Revenue Service (SARS) Commissioner, replied that Adv Neo Tsholanku who was in the SARS investigating unit would respond to the Nkandla tax matter. The Jonas Makwakwa case had two legs: firstly, the internal disciplinary process and secondly, the Hawks criminal investigation. The lawyers responsible for the disciplinary process would finalise the matter by mid-June. As to the second matter, only the Hawks could speak to it. It needed closure as it had a reputational impact on the organisation and the integrity of the organisation, including the official in question. It was important that the South African people should be able to appreciate that SARS had officials who could account for their actions. An investigation of such a nature could not be fast tracked, but had to follow due process. His concern was that they seemed to be pressurised to close the matter but with haste, they could end up with egg on their face. It was an urgent matter but they could not take the short route.

Lt-Gen Matakata, Hawks acting head, replied that they were proceeding with the Makwakwa case and it would be finalised in the current year.

Adv Neo Tsholanku, SARS acting chief officer of legal counsel, stated that tax matters pertain to taxpayers and SARS so it was problematic to give details. Suffice to say that processes were painstakingly slow because they involved audits and other investigations. When they were ready to engage with the taxpayer, they would do so but he could not give further details.

In response to the Chairperson wanting assurances that it would not take five years, Adv Tsholanku explained that by its very nature audits were complicated but the auditors were working as fast as they could.

Mr Booi said what that implied was that when it came to transparency, Parliament had to accept what he was saying. That approach should not encroach on Parliament and Adv Tsholanku should apply his mind as he was dealing with MPs in Parliament in a way that tells them nothing. They should walk in the fog while he tells them nothing. He was turning the Committee into a laughing stock. He must not transgress and undermine Parliament. What about the State Capture report?

The Chairperson injected trying to determine whether it was “State Capture” or “State of Capture” report. How long did the Committee have to wait? He had heard about nothing that was happening. They heard only what the public heard. There was a need to go deeper and to take the Committee into their confidence. It was undermining confidence and demoralising people.

He asked Mr McBride to explain the information on the finalisation of serious corrupt cases from 1 April to 31 March. It dealt with the R1.3 billion case of Hamilton Hlela and David Scholtz. He asked if they were two separate cases. Was it creating tension in SAPS and was it pushing the Acting National Police Commissioner not to come to ACTT meeting? What was the war within the police service? ACTT had spoken of the levels of corruption amongst officials. Did that refer to the levels of corruption within the police service as indicated by the AG? Was the level of corruption in the police so high that SAPS could not do its work? Corruption happened at police station level but did it also happen at the highest level? What could the Independent Police Investigative Directorate (IPID) tell the Committee about this?

Adv Abrahams explained that the matter against David Scholtz and Hamilton Hlela was one matter which had been finalised and people had been convicted and sentenced. The matter did highlight the level of corruption that existed in the Police. The Acting National Commissioner had indicated that he was attending a meeting in Tanzania. Adv Abrahams had not tendered an apology on his behalf.

Mr Booi stated that the Police had never attended SCOPA meetings and now the Commissioner was running away. He said repeatedly that he would send people but did not. Mr Booi realised that there were corruption cases affecting him.

Adv Abrahams was aware of complaints against General Phahlane but they were being investigated. NPA would prosecute against the Police if there were a case to be answered.

The Chairperson noted that he had recently spoken to the Auditor-General who had informed the Committee that the police who were supposed to arrest criminals had the highest levels of corruption.

Mr Robert McBride, Director of IPID, spoke to the investigation of the Former Deputy National Commissioner and SAPS and Head of Police Procurement, Hamilton Hlela. IPID had not been involved in it. ACTT had agreed to coordinate matters so that IPID would be involved only where it was relevant. As regards sentencing, the suspended sentence appeared wholly inappropriate and did not bode well for the fight against corruption.

The Chairperson wanted to raise the question of sentencing. He asked if they were not wasting public resources when investigations into serious corruption resulted in such light sentences. Were the suspended sentences going hand-in-hand with any asset forfeiture? What message was it sending?

Ms Kunou was very pained as the report simply confirmed what they had always heard. Members of the Committee had visited prisons where people were sentenced 10 to 20 years for housebreaking. How did DoJ&CD sentence someone to ten years for stealing a loaf bread – she was just dramatizing for effect - but the real, real criminals in that report who stole R1.3 billion, received only 10 years’ imprisonment. Scholtz did receive 19 years in prison but Hlela was at home fighting the cases as he had money. In a R24 million corruption case, this person was fined R9 000 or three years in prison suspended. How did one weigh cases of corruption against housebreaking? An imbalance between rich and poor was the oldest and most fatal element of all republics. They were shading rich people. These were real criminals. Sheila Mabaso faced a fraud charge of R15 million but was fined R8 000. When would they transform the country? The DoJ need to talk to the core, which was the white monopoly, which would not feature in the report as ACTT did not have the teeth. The Committee wanted to see the people who were stealing the real amounts. How did they sleep when people got such light sentences? People took cases to the public because government would not take cases seriously. It was important that ACTT communicate. They wanted to see real cases. It involved SARS as well as some SARS people were colluding with people on tax clearance certificates and thus getting large contracts. How did ACTT ensure that people complied with National Treasury regulations?

Mr Hlengwa said that when people stole from the public purse, they denied development. A lot of the tenders found in the hands of criminals were geared towards economic growth and creating jobs. The ripple effect was that the people in prisons were those who were robbed of jobs by corrupt people sitting at home with suspended sentences. They had done the country a huge disservice. Where did the problem lie? Was it necessary to amend laws? Then Parliament had to do so. Even high level politicians such as John Block were involved in corruption. What recourse to action did they have because the sentences made no sense? People stole millions, received a lenient sentence and were sorted for life. Where were the bottle necks in law that were inhibiting consequence management and time in jail? Otherwise justice becomes a commercial commodity. It was not just politicians but society was complaining about the situation. He wanted a sense of the proactive pursuit of the cases. There seemed to be an outsourcing of duties instead of proactive pursuit.

The Chairperson wanted someone to respond about sentencing. The Post Office guys stole R9 million and they received harsh sentences but others stole higher amounts and sat at home. It did not make sense.

Director General Madonsela explained that DoJ&CD was responsible for the administration of courts but was not responsible for adjudication. The magistrates and judges were part of the judiciary and the decisions that they made were not dictated to by the DG or the Minister of Justice. They were guided by the law, looked at the evidence but took into account mitigating factors. They then arrived at what they believed was a just conclusion. He had heard many people raise the issue of sentencing. Attempts had been made to prescribe minimum sentences but even then, judges could depart from that sentence based on evidence placed before them. If the prosecution was not happy with the sentence, there was nothing stopping a prosecutor from appealing the sentence.

Mr Booi stated that he did not want to take the ideological position that the working class was being attacked. He asked the DG whether white judges gave preferential treat to people in front of the courts even if evidence was presented by the police. He referred to the R1.3 billion case where the sentence was not the same. It was the responsibility of the transformation programme because evidence was provided by the police in all cases. Black faces got higher sentences and white faces got lower sentences. DoJ should take responsibility for that. Where did they put the blame? They dealt with that matter when dealing with the Scorpion and Hawks Acts. It was a legacy of apartheid. The DG had to take responsibility and explain how to solve the problem; unless the problem lay with police corruption and the lack of capacity of the Hawks. Where did he put the blame?

The Chairperson stated that he wanted ACTT as a collective to talk about the sentences. Were they satisfied with the sentences? Did they act as deterrents, especially suspended sentences? Perhaps there was something that the Committee did not understand.

Mr Madonsela, DOJ&CD Director General, said he was personally not satisfied with the sentences but it was not the responsibility of the Director General to take it up with the judges and tell them how to arrive at a conclusion. The NPA could take up the issue. An appeal of the sentence could take place. The transformation of the judiciary was another matter. The judges appointed were those recommended by the Judicial Services Commission which included Members of Parliament.

Adv Abrahams stated that sentences were at the discretion of the court and there was a wide range of issues that they had to consider.

The Chairperson did not want him to talk for the judiciary. He wanted to hear from people who chased criminals. Did they feel that the sentences were satisfactory? If they found something amiss with the sentencing, they were to please indicate. Was the lack of deterrence a challenge?

Adv Abrahams explained that he was giving background. When NPA believed that a sentence was not equitable, they appealed against it. In the J Arthur Brown matter, he was initially sentenced to pay a fine by the High Court but, on appeal, the Supreme Court sentenced him to 15 years in jail. Sentences in the Report on Corruption Cases saddened him. Things could be done differently. When it came to plea agreements, they should look at how such agreements are decided upon. Perhaps there should be restrictions on plea agreements that related to ACTT cases according to Section 105(a) of the Criminal Procedure Act. They needed to look more closely at sentences and appeal where appropriate. They could improve things going forward.

In response to the Chairperson ­asking if the suspended sentences involved the Asset Forfeiture Unit, Adv Abrahams conceded that in some cases there may have been freezing of assets or final orders.

The Chairperson pointed out that those consequences were not stated in the Report on Corruption Cases provided to the Committee. ­Could the NPA explain how such lenient sentences happened as the Committee could not understand the logic of the sentences?

Adv Abrahams assured the Committee that they attempted to get back every last cent owed to the state.

Mr Smith suggested that what was being done was wrong, or could be done differently. Parliament was not happy with it. Parliament made the law. The NPA was expected to tell them what was going to happen. Referring to the presentation, he noted that ACTT had targeted 91 people over five years. They should up the target as it was inadequate for five years.

Adv Govender explained that the target of 120 for five years was set in the MTEF. They had convicted 91 persons and ACTT had two more years to exceed the target.

Mr Smith reiterated that the Executive had to up the game since even if they doubled the targets, they would not make a dent. How could the Justice Portfolio Committee have accepted that target? In the real world, people split tenders so that the tenders remained under R5 million, the threshold for attracting ACTT. Please explain why they had targeted R5 million as a threshold. Remand detentions are filled with people who stole bread and those convictions were achieved by normal constables. What were the specialists in ACTT doing? The R5 million threshold had to be changed. The presentation noted 37 cases in court above R5 million. The document with the corruption case details showed charges were deferred against people in cases involving R4 million and R2.8 million. The information was glaringly not reconciled and such shoddy documentation and presentations were unacceptable. They should not return to SCOPA with such poor documentation. A R5 million threshold obviously did not work and would obfuscate the real situation. The National Treasury team had to attend these meetings as the Committee needed accurate information. There was no point in having oversight simply for the sake of doing it, for the sake of all South Africans. Mr Smith indicated that he had to answer to the voters about what he was doing about corruption. They could work as a team but ACTT had to do a good job if they were to take South Africa forward.

Mr Ross spoke to the Special Tribunal process that had been mentioned and asked for a quantified cost in the next meeting. He asked Adv Abrahams about the latest news that former Minister of Finance had suggested that the books of Eskom should be opened. Would Adv Abrahams investigate that as a proactive initiative? Were Adv Jiba and Adv Mrwebi still attending the meetings of the National Prosecuting Agency? Could the Committee be provided with details on the employment of Jackie Lepinka by the NPA?

Mr Booi referred to the acquitted and declined to prosecute cases in the Report on Corruption Cases. He noted Case 6 Eskom, on fraud and corruption of R121.7 million, the prosecutor declined to prosecute as there was no chance of a successful prosecution. He noted a R126 million case was declined and acquitted. The Department of KwaZulu-Natal Department of Public Works case involving R169million had been determined to have no prospect of a successful prosecution. How can one trust government after these huge corruption cases have been declined by the prosecutor? Commit a crime and the state will assist you to go and enjoy your money. Those cases did not relate to judges but to public prosecutors. What was ACTT reaction to such huge amounts that had not been the subject of prosecution? It was in the NPA report. He still awaited an answer from Adv Abrahams as to how long the State Capture report was going to continue. Was it a lack of capacity on the side of prosecutors?

Ms Kunou referred her question on litigation to the Director General. State departments were spending a lot of money on litigation. Appealing cases was very expensive and that money could be used elsewhere. When on an oversight visit, she had seen a woman in prison with her baby, who had received a 10-year sentence for house breaking. Light sentences for corruption cases remained a problem. Criminals were laughing. What was the DoJ&CD doing and how far could they go? If it meant calling in the Judicial Services Commission, they should be called. The NPA could not be proud of the report. What were the challenges? DoJ&CD was not to shift blame to the judiciary. Appeals were costly so please tell the Committee what they were not telling. They needed interaction with ACTT every six months to check on cases. They should tell the Committee what they were not telling the Committee.

Mr Hlengwa stated that week in and week out, they were dealing with Directors General, their books and their work. For example, there was the R5.1 billion irregular expenditure in the SABC with zero accountability. The list was endless. On the side of the Committee, there was a frustration with the lack of deterrence. Everyone was doing what they want with zero consequences. He had hoped that more concrete reports would be coming to the Committee so that it could fulfil its duty of holding people to account. He wanted ACTT and the Committee to rise above “us and them” and for ACTT to present reports even when not called. It was painful to see no consequences for stealing money. His view was that if one stole the money, one went to court. If the bottle necks were in law, they would change the law. If the NPA was so unhappy, as demonstration for harsher sentences, how many appeals had there been? He would like the Hawks to provide a report on Nongoma Municipality as service delivery may come to a halt if the matter remained unresolved following extensive corruption. Secondly, Endumeni municipality had problems with corruption but things were put on the back burner and people had been killed the previous day.

The Chairperson indicated that the next time ACTT was called in, the Committee would provide them with details of specifics they wanted beforehand. He had been telling departments that the Committee had the Hawks working with them but now he saw the consequences of the criminal investigations. The issue was to transform society for the better and they could not do that unless their own state of mind was transformative. They could not get into a system that commodifies justice. If the fight against corruption was central to their being, what were the impediments? Sentencing was not highlighted by ACTT as a concern. The sentences handed out seemed meaningless. How many people had gone to jail? Except for the Post Office guys, government officials did not end up in prison. How could it be a deterrent? He asked the Director General what the law said. Could minimum sentence be a solution, even if it was not an absolute? He looked at the list of serious crime cases and was shocked. Prison was the ultimate deterrent. What about the cases under R5 million? MPs Booi and Kunou had raised the matter. The Committee needed a complete picture of everything involved in corruption. How did the Auditor-General feature?

Adv Abrahams appreciated robust debates and welcomed the guidance, leadership and constructive criticism. They did not pass the buck regarding sentences but explained the process. Prosecutors placed all facts before the court. They did appeal where they were unhappy that a sentence was unjust and unfair and a different court could come to a different decision. Regarding the matter of declining to prosecute and withdrawing cases, he would follow up on those matters. There were various reasons for declining but no one had asked him to review the matters but he will review the sentences as the Committee had called on him to invoke his powers as envisaged in the Constitution to review cases. He did not have the power to make decisions but did review them when asked to do so. In cases where the accused were acquitted, it was a lack of evidence and they relied on key stakeholders to provide the evidence. It may be in some of the cases there were suspicions and insufficient evidence. They would look and see if there was anything to learn from the cases as they were always prepared to learn from mistakes

On the State Capture or State of Capture matter, Adv Abrahams said the new Public Protector had submitted the case to his office for the matter to be criminally investigated. He was uncomfortable to provide a timeline but he would come back next quarter and report on progress. He did not want the public to be peeping over the shoulders of officers, nor structures. The circumstances where there was a lack of transparency was to protect justice. The NPA did not outsource work. The NPA did not have the power to investigate. It relied on other agencies to find intelligence and to carry out investigations but it guided investigations. He could say that everyone sitting in ACTT was not involved in state capture. In a sharply rising voice, he stated that he could not comment on members of the public speaking on corruption but if criminal charges are laid and if there was evidence for prosecution, those persons would feel the wrath of the law. No one was going to be protected.

He referred to the call for Eskom to open its books. In certain circumstances, they could investigate books and compel people to hand over evidence required for investigation.

Ms Jiba and Mr Mrwebi were on special leave. As per arrangements with himself, the only time that they came to the office was on his request. They attend no meetings unless they need to assist with historical matters but they remain on special leave. Ms Lepinka worked in administration at the NPA head office. He was not sure that he could take the matter further.

Lt-Gen Mothibi spoke about quantifying matters for the special tribunal. Once it was established he could quantify matters but of importance was the need to monitor the speed of litigation.

Director General Madonsela hoped that they were not being discouraged from appeals as they utilised paid prosecutors to do the work. They would utilise the system where they felt a need. The DoJ&CD could engage with the Head of Courts and the Chief Justice to bring the message home that they were invited to be party to the fight against corruption and they needed to look carefully at the sentences that they impose. He will raise this with the Minister of Justice, the Chief Justice and Head of Courts. Mr Smith had asked about having special courts for corruption. The call had an agreeable ring to it but it started fragmenting the justice system if they had stand alone courts. Specialist courts are stand alone courts. Dedicated courts are in the ordinary courts with special capacity for personnel and case handling was improved and they believed that it was doable. The case had been made in the meeting that matters of corruption required such action. It was a philosophy that they believed in. The case for corruption would be placed before their Ministers.

Acting Co-ordinator of the National Intelligence Coordinating Committee (NICOC), Mr Mike Masiapato spoke on the partnership between SCOPA and ACTT. Two weeks before, the Minister had led the launch of the discussion document on an overarching approach to corruption. This would marshal all forces, including government, civil society and business. The discussion document had been launched and the unit wanted SCOPA input into the discussion document. Over the years, they had used a one-sided approach that relied on the law enforcement side. It was a fact that a collective effort was necessary to address corruption and to devalue the corrupter in the value chain. He took the opportunity to invite SCOPA to engage with the document.

The Chairperson welcomed the invitation. He asked Auditor-General about the figures that they engaged with annually and figures given to ACTT. Where was the gap and how did they deal with it?

Mr Eugene Zungu, National Leader: Audit at Auditor-General South Africa, referred to the 2015/16 Consolidated General Report tabled by the Auditor-General in Parliament the previous year. The report showed R46 billion of irregular expenditure in relation to all national and provincial departments and associated entities. In 2014/15, irregular expenditure was R26 billion so that was a R20 billion increase. In 2015/16, the irregular expenditure had come from 60% of the auditees. The major contributor was supply chain management failure in 68% of these matters so there was high correlation between supply chain and irregular expenditure. There were instances where they could not audit supply chain management as documents simply were not available. R2.5 billion relating to 30 auditees could not be audited.

In terms of consequence management, the General Report states that the PFMA and regulations stipulate that the management had to investigate the irregular expenditure, wasteful and fruitless and unauthorised expenditure to stop the abuse of the systems and fraud. The Auditor-General realised that mechanisms were in place to report transgression e g. policies, reporting structures, record keeping. On paper, all was in place for responses to fraud in 90% of the environment. In 2015/16, 2147 possible cases of fraud were to be investigated. Of these, 84% of the cases were investigated but an analysis of the outcomes of disciplinary actions, recoveries etc. revealed that only 25% of the cases investigated resulted in disciplinary action and 16% were referred to law enforcement agencies. If there was this level of activity, then how did it impact on irregular (and unauthorised and wasteful) expenditure? In the past few years, irregular expenditure had grown. Insufficient steps had been taken to recoup, write off or condone the irregular expenditure. Over R100 million of irregular expenditure had accumulated because it was not addressed. A figure of R3 billion fruitless and wasteful expenditure had not been addressed. Mechanisms were in place, activities occurred that seem to be investigating but the impact was not being felt as the figures were growing year by year. Either the consequences were not serious enough, not being communicated internally or not being applied consistently. He felt privileged to be part of discussion as it had given insights into what might be lying behind the consequences.

On the Auditor General’s involvement and working with ACTT, quite a number of MOUs are in place and they worked closely with some members of ACTT, that is, National Treasury and SIU. This meant that where the Auditor-General could share information or enhance work they were doing and they would do so. He would be in touch with the secretariat so that they could participate and he would share his findings.

The Auditor-General was reviewing how it could increase its powers. On 9 June, they would be sharing insights with their oversight structure how they could increase their effectiveness and ensure decisive action arising from their work. They had been examining other Auditor-General offices across the world and would present options on 9 June.

The Chairperson thanked ACTT for better engagement and greater cohesiveness but told ACTT not to send just any report and expect it to be fine. When they want information, they were expected to provide details. They were not accused but comrades in arms who would come behind. The DG of DoJ&CD would be required to report on the Criminal Asset Recovery Account at the next meeting, as well as the complaint about lack of resources. How was the account structured, how did it function; how did it assist in their work and were they able to get resources? That was for the next engagement.

Meeting adjourned.

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