Anti-Corruption Task Team (ACTT): pending cases and Criminal Asset Recovery Account (CARA)

Public Accounts (SCOPA)

14 June 2017
Chairperson: Mr T Godi (ANC)
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Meeting Summary

Documents handed out:
Anti-Corruption Task Team (ACTT) presentation [wasn’t able to obtain]

The SCOPA meeting with the Anti-Corruption Task Team (ACTT) was a follow up to the previous meeting where Committee members had raised concerns about the sentences meted out to those found guilty of crime and corruption. The Hawks Commercial Crime Unit presented its cases within local, provincial and national government as well as state-owned entities and municipal-owned entities. A list of challenges was presented to the Committee.

The presentation left highly dissatisfied Committee members who were shocked by the slow pace of case finalisation and the largely inappropriate sentences handed out as a result of plea bargaining and negotiated settlements. Cases had been initiated as far back as 2009 and no cases had gone to open court. At the time 67% of the cases were awaiting decision by public prosecutors. The Chairperson expressed his shock and disappointment as he had had high hopes for ACTT. Discussions focussed on possible ways to make ACTT more effective and efficient.

The Director General for the Department of Justice and Constitutional Development made a presentation on the Criminal Asset Recovery Committee (CARC) and how it disbursed funds. The Director of the Financial Intelligence Centre spoke to the recently gazetted Financial Intelligence Centre Amendment Act.

The Chairperson reiterated the determination of the Committee to fight corruption, urging ACTT to be more proactive in identifying challenges and delays and to come up with creative solutions for improving its work.

Meeting report

Opening remarks
The Chairperson welcomed everyone and noted that everyone in the room, as representatives of different government entities, would be able to assist the Standing Committee on Public Accounts (SCOPA). They were entering the last phase of questioning the Anti-Corruption Task Team (ACTT) before the ACTT moved to the Committee side of the room and joined SCOPA in the fight against corruption. SCOPA wanted the ACTT to become its enabler just as the Auditor-General and National Treasury were enablers. Before the Committee did that, it wanted to ensure that the Committee and ACTT were on the same page and that the work that they did actually contributed to achieving the objectives of SCOPA.

The Anti-Corruption Task Team was meeting with SCOPA for the second time in a number of weeks. The Commercial Crimes Unit dealt with crimes below R5 million and that report was required by SCOPA. Maj Gen Khana would present that report. Mr Vusi Madonsela, Director General of the Department of Justice and Constitutional Development, would present on the Criminal Recovery Asset Account (CARA) and then the Head of Hawks, Lt General Matakata, would respond to questions arising from the last engagement SCOPA had with ACTT.

Hawks Commercial Crimes Unit briefing
Major General Alfred Khana took the Committee through commercial crimes under investigation. Those were known as Clean Audit investigations because the objective was to root out and address corruption. It had started with local government in 2009 but had expanded to include government departments, State-owned Entities (SOEs) and Municipal-owned Entities (MOEs). Head Office undertook the coordination of the investigations. It was to ensure clean audits and to ensure that by 2019, it achieved targets of 120 persons, as well as 1 000 government officials, convicted for fraud and/or corruption.

The presentation covered Government Departments, SOEs and MOEs and Municipalities. Certain documents were for members only and not available to the public.

The situation in government showed 350 cases under investigation, including court cases. As far as SOEs and MOEs were concerned, 77 cases were on hand, i.e. 13 court cases, 43 under investigation and 21 had been referred to the public prosecutors for their decision. One of the most widespread investigations was into the South African Social Services Agency (SASSA) with 24 cases in the Eastern Cape, six in the Free State and three in KwaZulu-Natal. Challenges experienced included managers who were reluctant to be the complainant, the non-availability of relevant evidential documentation and the fact that some crimes were not reported, but leaked to the media.

For municipalities, Maj Gen Khana reported that there were 248 cases on hand, of which 88 were in court, 101 were under investigation and 59 were awaiting decisions by the public prosecutors. The Eastern Cape had the most with 50 cases. Challenges were similar to those experienced with SOEs and MOEs but it was also found that municipal audits did not provide sufficient evidence for criminal investigations and the re-shuffling of municipal officials or their political positions caused them to be uncooperative.

Maj Gen Khana stated that he was not happy with the pace of investigation. They were looking at the performance of members of the Commercial Crimes Unit.

The Chairperson noted the delays in prosecution and that 67% of the cases had been referred to public prosecutors for decision on whether to prosecute. He asked if that process was a challenge and, if it was a challenge, could he illustrate the challenges.

In response, Maj Gen Khana informed the Committee that they had some delays and in some provinces prosecutors took longer than in others. His Unit dealt with the Specialised Crime Unit, a specialised team of prosecutors who reported directly to the Special Director under the National Prosecuting Authority. The smaller provinces did not have such courts and they relied on the bigger provinces and that was where the delays lay. There were cases that were delayed by the NPA. He did not know why some cases were delayed for a long time.

The Chairperson suggested that the Hawks should have had an interest in why there was a delay after they had put so much effort into the cases. He had understood that the investigations were guided by the prosecutors, so why did prosecutors take so long to take action? Or was it that the investigators did not provide sufficient evidence for prosecutors?

Maj Gen Khana agreed that from inception, cases were dealt with by the investigating officer in conjunction with the relevant prosecutors.

The Chairperson said that if the Committee went to the public, they would want to know why there were so many delays. That was why the Committee was having the interaction with ACTT. The Committee wanted to ensure that if they worked together, ACTT would not shoot the Committee in the back and cause the Committee to fail. That was a question mark in the Chairperson’s head. To what extent did the prosecution delay the cases? If the Committee were to rely on the ACTT, they would need to resolve issues that may cause bottlenecks. He said discussion would deal with municipalities first.

Ms N Kunou (ANC) asked how the Hawks quantified serious economic offences. Maj Gen Khana had spoken of 2009. She felt that Hawks were dealing with their cases as a unit and not as an ACTT Task Team. How strong was the prosecution if they were working in silos? If they were working together, the Committee would not find the same problems as had been experienced previously. Before ACTT began in 2010, there was a multi-agency working group formed by National Treasury. How did ACTT link to the cases that they had been dealing with? What had happened to the working group and how far did they help each other?

Maj Gen Khana explained that the Serious Economic Offences Unit did not deal with the normal cases. They only dealt with the ultra-serious cases within the Commercial Crimes Unit. His office sent cases above R500,000 to the Serious Economic Offences Unit. If the case involved amounts above R300,000 and required intense investigation, he could apply his mind and refer the case to the Serious Economic Offences Unit. That tied in with the mandate of the Hawks which was that the case had to deal with the public interest. Maj Gen Khana sat on ACTT as a member. He was also a member of the operational committee of ACTT and cases were referred to ACTT but the Hawks’ cases were purely fraudulent in nature. There was a strong working environment within the ACTT. Certain of his cases would be taken up in the ACTT for coordination and monitoring. ACTT cases were more related to corruption. ACTT took up high priority crime. He sat with the NPA and discussed cases where he highlighted his dissatisfaction if there were unacceptable plea bargains or inappropriate sentences.

Ms Kunou had been wondering how the Hawks had got involved in cases from 2009 when the Hawks were only constituted in 2010.

Ms N Mente (EFF) asked about the 67% of cases that were with prosecutors and the challenges that had been cited. She referred to the non-availability of relevant documentation, especially where that documentation was the only evidence on which the case could be pursued. Were cases sent to prosecutors with no evidence or was hard core evidence available? What did the Unit do if the municipality would not release the documents? How did they force the municipality to give them the documents? She could not understand how a municipal manager could refuse to be a complainant because the CFOs and the municipal managers were custodians of the fiscus of the municipality. She could not believe that they had to have a council resolution for a complainant to be determined. The lack of evidence would contribute to the decision of the prosecutor who would strike a case off the roll if there was no evidence.

Maj Gen Khana said that he had mentioned challenges in general but when a matter was referred to the prosecutor, it was only at the end of the investigative cycle when the investigating officer and the prosecutor were comfortable that the investigation had been completed and they were ready to make a decision on it based on the information that they had in the file. The non-accessibility of documents was the exception, not the rule. If they could not access documents, they could get a search warrant and they went in by force and took the information that they needed. Alternatively, they could take a person to court via Section 205 where a person was compelled to go to court and provide the evidence that the Hawks needed. Occasionally a case went to court without documents but then it was usually declined.

Mr D Ross (DA) stated that in his mind the Municipal Finance Management Act and the Public Finance Management Act (PFMA) set out the responsibilities of the Accounting Officer. Sections 36 and 38 of the PFMA clearly set out the obligations of the Accounting Officer to report fruitless and wasteful expenditure. Chapter 10 gave impetus to the Criminal Procedure Act. Would it not be useful to include the Auditor-General’s report and the Auditor-General Management Report in their interaction? They would have to go to Court to get the Management Report but they would get all the findings of the Auditor-General and that might assist in a successful prosecution. Would they consider that avenue or were they having engagements with the Auditor-General about that?

Maj Gen Khana took note of that and said that he did go to the relevant municipal offices to get information. Sometimes the Accounting Officer reported, but the documentation was still a problem. If the Accounting Officer had not reported a case, the Accounting Officer was also charged. The relationship between the Hawks and the Auditor-General was not good in the beginning but they had developed a much better relationship and the Auditor-General was helping them when they needed information and were not able to get it.

Mr M Booi (ANC) thanked Maj Gen Khana for the engagement. He wanted to see a detailed discussion that talked about those types of challenges so that they could determine how to work together to improve this for the sake of the public. As Parliament, they wanted to find a working relationship. They were working hard to fight corruption and ACTT were the operators who were supposed to make it happen. The public was tired and wanted to see officials and Parliament working together and fighting crime. The process was very long. The Committee understood that local government challenges were very difficult and where there was no service, there were allegations of corruption. The public did not understand the processes. The Committee wanted to identify where the challenges lay. Was it policy matters or administrative issues? Those involved in crime enjoyed this environment that was not able to counter it. The ACTT was supposed to manage the situation. The Committee and ACTT had to find each other and they would have to bring the Executive in to account properly as it could not just be an administrative problem. The security agencies were not addressing the bigger crimes but the Committee had taken responsibility to work with the crime units to resolve matters. He would also encourage a broader engagement amongst themselves.

Mr E Kekana (ANC) referred to the non-cooperation of the complainants. What did the Hawks do, how did they deal with complainants who were not prepared to come forward? He remembered, for example, when cable thieves were caught and Eskom would not come forward as a complainant.

Maj Gen Khana explained that he went to municipal offices and made the officials aware of their obligations in terms of Section 34 of the Prevention and Combating of Corrupt Activities Act to report crime and if they did not report the crime, then they would charge the Accounting Officer. However, the officials then sent only junior people to court and the junior could not always speak to issues relating to higher level officials. The Hawks did try to get more senior people in court but sometimes they had to threaten them.

Mr T Brauteseth (DA) was not happy with the documents that had been received only during the meeting from ACTT. It took time to go through it and he could not do it in a couple of hours in the meeting. ACTT had also sent an email only the previous evening and he was concerned that this was mere “malicious compliance”. There was a three to four year drag or delay on the matters. The point of the engagement was about consequence management but he had the feeling that it was taking too long to happen. What mechanisms were put in place to speed up priority cases? Did they have guidelines or perhaps financial guidelines to identify priority cases, deal with the cases and show the South African public that there were swift and serious consequences for corruption? The lag in cases suggested that they were not meeting frequently or cooperating. The sentences were too frequently suspended sentences. Had the ACTT improved at all in terms of frequency of meetings and engagements because there was no evidence of it? He had not yet seen a high ranking official or a politician put in handcuffs and taken to jail.

Ms Kunou spoke of the challenges experienced, especially of getting information. Occasionally the Hawks would invoke Section 34. Why were they not invoking Section 34 more frequently? The Committee did not get a sense of how the ACTT interaction worked. They needed to see the backlog of cases. As legislators, they needed to know whether laws needed to be amended. She asked when they would start dealing with cases before 1994 and noted that they also needed to deal with private companies. The Committee was committed to seeing anyone involved in corruption go to jail and pay for the crimes committed, but they were not seeing that.

Maj Gen Khana responded to the question on priority crime. The Directorate for Priority Crime Investigation (DPCI) dealt with criminal conduct irrespective of who was involved. They dealt with the facts on the table. The name was irrelevant. They were mindful of the delays and the public were suffering as a result of the delays. They were trying through consequence management to remove delays. His team looked at document age analysis and most cases older than five years are either court bound or sitting with the prosecutor for consideration. Those that were still under investigation were dealt with under consequence management. A commercial crime investigator took five years to train as a forensic investigator and as soon as the person was fully trained, the person moved to the private sector. He had set a target of two years for completion of an investigation. The bigger cases such as PRASA were dealt with by an ad hoc team drawn from all provinces to run with the investigation. The delay in document provision was not as easy to manage. They had ad hoc teams for all large cases to conclude those matters more quickly.

He told Ms Kunou that in terms of section 205 they were able to summons a person to bring the required information or documents to court. Section 34 spoke to a person in a position of authority who was obligated to report fraud, corruption and forgery and only when they were struggling to get a complainant to report a crime, they threatened to invoke Section 34. Sometimes it was malicious compliance as they merely sent a junior person. He apologised for the late sending of documents to the Committee.

Mr Brauteseth asked whether the ad hoc teams worked directly with a special prosecutor and did they have, or did they need, a special court. Was that the issue and did he need the Committee to push for additional resources? Were they not paying commercial investigators enough?

In response, Maj Gen Khana explained that the investigators spent a month preparing the case then they met with the prosecutor for case planning and even draw up a provisional charge sheet. If they saw that they needed more staff to complete the task expediently, an ad hoc team was put together to assist the assigned investigator. There could be litigation that delayed matters. The Commercial Crime Court had been established some years earlier and dealt only with commercial crimes but Mr Brauteseth had asked whether they needed a new structure. He did not know whether another court would help as it depended on the prosecution.

Mr Booi advised him not to speculate and they would ask those who were responsible for prosecution.

The Chairperson said he was interested in the question about a separate court.

Mr Tom Moyane, SARS Commissioner, spoke about the skills challenge and stated that it was a problem across the State. It takes five years to train a public prosecutor or other specialised person. There was an issue about the State remuneration budget so it was necessary to create a situation where the State was seen as the preferred employer. The ability of the State to discharge its responsibility was based on the quality of work that would come from those that one had employed and entrusted to deal with the matters raised. Did the State have the wherewithal for paying how much they paid in the private sector? Then one would find oneself in the vortex of problems where someone would say that they had been given a higher offer and could they match it. His colleagues around the table experienced similar problems about skilled personnel. They needed to review how they could ensure that civil servants could feel that they were cared for. Corruption also crept in because people felt that they were not paid sufficiently. A tax practitioner or expert took a long time to train and they were poached endlessly but the State had a huge wage bill so there was a conundrum. They had a responsibility to address those issues and he would ask Parliament and the Committee to assist with the solution. He did not have a solution but he spoke to the problem.

Mr M Hlengwa (IFP) responded about capacity. The previous day, the Minister of Finance had signed into law the guidelines for FICA. He wanted to know, within the broader understanding of the State having the capability and the capacity to implement FICA, the cost factors involved so that the Committee could assist FICA to grow. There was a need to strengthen FICA but how would they deal with it? What could they expect in respect of FICA?

Mr Vusi Madonsela, DoJ&CD Director General, explained that he had spoken previously to the question of prosecution. In the midst of the overwhelming number of cases, it was tempting to talk about specialist courts but the view of his Department and of Cabinet was that they should set up dedicated courts anywhere, by means of a specialist court. Even the Labour Court currently was dealing with other matters in addition to labour matters and was broadening its scope. There was an increasing awareness by the courts that they could not have a narrow focus on issues that were considered special.

Mr Kekana asked whether the cases that the departments told SCOPA had been reported to the Hawks were the same cases that Maj Gen Khana was talking about.

The Chairperson informed him that they would use the list of cases provided by the Hawks as a reference when departments declared that their cases were with the police.

Maj Gen Khana reminded the Committee that his cases dealt only with commercial crimes. The Committee should also refer to the list of cases being handled by the serious corruption unit to obtain a complete picture.

The Chairperson said that they could check case numbers to confirm the reports of departments.

Criminal Asset Recovery Account (CARA) briefing
Mr Vusi Madonsela, DoJ&CD Director General, spoke about the Criminal Asset Recovery Committee (CARC) constituted and how it functioned.

Section 65 of the Prevention of Organised Crime Act 121 of 2008 gave rise to CARA. The Committee that administered the account comprised the Minister of Justice and Constitutional Development as the Chairperson, the Minister of Police, the Minister of Finance and the National Director of Public Prosecutions. Two others could be designated by the Minister of Justice. The Committee met when there were applications for CARA funds from law enforcement agencies and organisations, institutions or funds that dealt with victim support. The Committee did not receive applications but received recommendations that had been evaluated by the Integrated Justice System Development Committee which would have called for applications and made provisional recommendations to the CARA Committee and assessed them against the available funds and which organisations and law enforcement agencies were eligible to receive funding. If an allocation was warranted, a recommendation was made to Cabinet.

The disbursement model was governed by the Grant Management Policy which focused on law enforcement agencies and victim support organisations, institutions or funds. Organisations and agencies would make an application if there was a need. No applications had been received in the last three years. The last allocations were made in 2011/12 in an amount of R250 million and before that, allocations were made in 2006/07 amounting to R3.8 million. CARC had met the previous week. There was R592 million in the kitty but applications of R1.1 billion had been received in 2017. Allocations were not done annually. Allocations were made according to funds available.

Mr Booi enquired whether disbursement was decided by the Criminal Asset Recovery Committee and Cabinet. They decided how to allocate the money but there was no accountability and it did not go to any parliamentary committee.

Mr Madonsela stated that the Inter-Departmental Grants Committee brought together a number of Ministers who made recommendations to Cabinet and Cabinet, which was government, made the decision and allocated the money.

Mr Booi asked whether there was any duplication as, for example, SASSA had the largest budget but they had received extra money through the fund.

Mr Madonsela said that once the funds had been allocated, they had to be accounted for separately and the Auditor-General checked the use of the money. The DoJ&CD Director General remained accountable for the use of the funds. Oversight was by the Auditor-General.

Mr Booi asked how the system bypassed parliamentary processes. He asked whether the DG accounted to his Portfolio Committee. Did SCOPA have to request the Auditor-General to provide information?

Mr Madonsela replied that they could be called to account. He suggested that if parliamentary committee did not believe that the Auditor-General was sufficient accountability, other parliamentary procedures could be put in place. He added that he accounted for the funds in the Annual Report of his Department.

A request could not exceed 35% of the budget of the Department making the request. The money was not from the Revenue Fund. They were funds that had been recovered from the proceeds of crime. When there were funds available, they called for applications. Allocations were not made every year.

Adv Jacob Skosana, DoJ&CD Deputy Director General: Court Services, explained that CARC could only allocate amounts that were in the account and that those amounts were dependent on forfeiture of assets. CARC reviewed reports from the institutions that had received funds before an institution could receive further funding.

Mr Booi asked if the model was designed for Cabinet members to share out the funds. Why was there no accountability for the funds? How transparent was it? The ordinary person did not know about the funds so it was open to corruption.

Mr Madonsela replied that the view was an unfortunate one and the principals would respond to that if necessary. He pointed out that the Integrated Justice System Committee brought together several departments, as did the Inter-Ministerial Committee. Cabinet made the final decisions and Cabinet was government. There had to be a demonstrable need for the funds to be allocated.

Mr Booi interjected that he was asking about accountability. How come SASSA received money when it had the biggest budget of all departments?

The DG agreed that the issue of the money was important. Once the funds had been allocated they were accounted for separately from money ordinarily received and the Auditor-General audited those accounts. There were requirements of transparency. The departments that received the money became responsible for the money, but he remained accountable as the Accounting Officer of DoJ&CD.

Mr Booi remained concerned about the parliamentary oversight of the money. He asked if he should solicit information about the money from the Director General or the Auditor-General.

The DG explained that they accounted to the Portfolio Committee on Justice but the Committee could make a proposal for further oversight. The funds were set out in the Department’s Annual Report.

Mr Booi remained concerned that the funds could remain unutilised for up to six years.

The DG explained that it was not revenue and came from the proceeds of crime and was utilised whenever sufficient funds were in the account.

Mr Ross appreciated the clarification on the source of the funds. He enquired whether the grants were reflected in the Annual Reports of the receiving departments.

Mr Madonsela agreed that that was the case.

National Prosecuting Authority (NPA) briefing
Lt General Yolisa Matakata, Acting Head of DPCI, apologised for the absence of Mr Shaun Abrahams, the Head of NPA, and informed the Committee that the Deputy Head of the National Prosecuting Authority would take them through the report.

Ms Nomvula Mokhatla, Deputy National Director of Public Prosecutions, informed the Committee that 42 cases had been received and 41 cases had been finalised through plea bargains. One matter had been withdrawn as the main accused had mental health issues. There had been 12 cases of asset forfeiture. There had been no appeals as all the cases had been resolved via plea bargaining.

Lt General Matakata stated that ACTT had not discussed sentencing at a strategic level but it might have been discussed in bilaterals at operational levels. ACTT would put it on the agenda of the principals.

The Chairperson noted that the report provided at the previous Committee meeting had referred to many withdrawn cases and he required information on that matter. He required an answer to the question about the cases that had been withdrawn. He also noted that the problem was not the sentencing by judges. The outrage expressed by the Committee at the last Committee meeting was misdirected as it was the plea bargaining that had determined the lenient sentences. Ms Makhatla would have to respond to Question 5 in writing.

Ms Mente believed that they had reached the stage where they could not rely on the ACTT to get officials to account or to recover the money from officials. The NPA presentation sent shivers down her spine. A hardcore criminal installed software into a municipal computer system to channel money out of the municipality and when he eventually got caught, there was a plea bargain and he was sentenced to 15 years in jail. A Chinese national in Brooklyn defrauded the state of R28 million and he got only 8 years in prison. This was not sending any message to officials who were stealing from government. They could not rely on ACTT. The Hlela case was an example where this official stole a great deal of money but only a fraction was confiscated.

Mr Ross noted that the 20 worst municipalities did not pay electricity accounts for six consecutive months, putting the citizens at risk but there were no significant consequences for the officials. In terms of the state owned entities there were massive levels of corruption. PRASA had R14 to 24 billion irregular expenditure and 142 cases under investigation and they did not see consequences from NPA or ACTT. There was no positive conviction and sentencing and consequence management. How could the ACTT be more functional? There was no political will or capacity to deal with the massive corruption and serious cases were settled by plea bargaining. There were also allegations that the previous PRASA board chairperson [Sfiso Buthelezi] had destroyed documents. That was an offence in terms of the Public Finance Management Act. What was going to be done about it?

Mr Brauteseth asked why there was plea bargaining. Was it to save time or because cases were weak? Were courts overloaded? Could she give insight into the situation? Slam dunk cases were always taken to court. If the cases were not good enough, where did the challenge lie? Were the weaknesses in detective services or a broken witness protection programme?

Mr Booi reiterated that the Committee and ACTT had to find each other or it would keep coming back as a bigger challenge. People said Parliament did not have teeth and the Committee had thought that the institutions had teeth but it seemed not. For more than 20 years he had heard about how officials were abusing the system. What were the challenges? Why were they plea bargaining? The scenario showed no consequence management so why not and what challenges were confronting the institutions? The Committee needed to understand why the system was not working.

Ms Makhatla replied that the NPA intended to do a review of all plea bargaining and to review all cases. Plea bargains allowed the criminal to plead guilty and present evidence. She pointed out that a plea bargain was not running away from a case as an accused would accept their guilt and plead guilty. She understood that the Committee was looking at the total amount of corruption but if one looked at the benefit that the accused had derived, then the sentences were appropriate for what the evidence showed. The Humewood case was a plea bargain but with a 15-year imprisonment. The Brooklyn case dealt with R28 million and the forfeiture of assets was pending and most of the money would be recovered. The NPA had highlighted its challenges to the Portfolio Committee on Justice. Challenges included a lack of capacity in detectives, lack of courts and lack of capacity in prosecutors as they left the NPA as soon as they had been trained and matured in the environment and the NPA had to start training people again.

On the question of specialised courts, Ms Makhatla said the DG had responded to this. DoJ&CD had ensured that they had sufficient presiding officers following a recruitment drive and that problem should be resolved. There were specialised commercial crime courts and there had been a court backlog but they would be capacitated and there would be no lack of courts. That explained some of the plea bargains but there should be an accolade given to the investigators as the accused realised that they stood to lose everything. The plea bargains were a concern and were being reviewed. ACTT had debated whether they needed another structure but through discussions it had emerged that they just needed to strengthen the structures that they currently had. There was a lack of gel between the institutions. Even though they had the ACTT team, the NPA had other responsibilities and they had challenges around the right personnel and the budget. They also needed to rely on other institutions as the enabling legislation could only take them to a certain point. Budget issues related to personnel but it was also about the appetite to take on the situations. She promised to go back and review the situation.

The Chairperson was disappointed. It was an anti-climax as it seemed that the courts were like the Catholic Church where one confessed one’s sins and was then one could go to heaven. They were back to square one. It could not be that all cases had been resolved via plea bargaining and there were no real consequences. He was stumped as he did not know how to take the discussion forward.

Mr Booi was not stumped. He had asked the ACTT to reflect on their challenges and they needed to debate how to take it forward. He recommended that they requested the Executive to tell the Committee how they were going to solve the problem. It was their responsibility to do it. They had all adopted the vision of the capable state. Leadership was important in resolving the problem. The Committee had to find a way forward to fight corruption. It could not give up. The Committee, the ACTT and the Executive were the hope for South Africans and they needed to take the fight forward. He wanted the Minister in the President’s Office to come and account as he must have seen the problems. They needed a written response on all the challenges from ACTT.

Mr Kekana was struggling to understand. The Committee’s request was for NPA to give its plea bargain cases from 2014 to 2016. Perhaps they should have asked for all completed cases. Were those all the cases that the ACTT had completed in that time or were there other cases that had not been resolved via plea bargaining?

Ms Makhatla explained that she had presented all cases that had been completed in the period from 2014 to 2016, as presented in the previous meeting. Of the 41 finalised cases, 29 cases were guilty pleas, 12 cases were negotiated and the court decided whether to accept the negotiated settlement or not. She would go back and go through those cases where the NPA had declined to prosecute with a fine toothcomb.

Mr Booi mentioned that even the Head of NPA had been shocked at the previous meeting when he heard about the cases that had been withdrawn and the amounts that had been recovered. The shock was that there was something wrong about the system. He wanted to challenge the Executive because they could not trust the institutions that were entrusted with the job of fighting corruption. He could not go to the voters and say that the government could not deal with corruption because the individuals were not able to deliver. People were also looking to the Constitutional Court to resolve the situation rather than trusting the institutions. The Committee was going to find a solution. That was why he was querying CARA as it could not be part of the solution as it was. CARA should be giving ACTT funds to assist with fighting corruption.

Mr Madonsela, DoJ&CD Director General, was concerned that the Chairperson felt disappointed and that it was an anti-climax. There was a place for a guilty plea and a place for plea bargains but he suggested that minimum levels could be placed on plea bargains to strengthen confidence in the process. Anything below the minimum, the prosecutor would have to go to court. He also pointed out that the proceeds of crime were recovered and that the guilty persons could not go out and enjoy that money. At the previous meeting, they had thought that the fault lay with the courts and so minimum sentences had been suggested, although courts could depart from those minimum sentences. That was one instance where, outside of the judiciary, the parties could agree on a minimum sentence. That was the route that he saw as the way forward.

The Chairperson suggested that the ACTT had not examined gaps and decided on solutions. They were not thinking about ways of doing things differently. It seemed as if it was SCOPA’s role to prod ACTT to get action. They had the ideas when pushed but why did they not come up with proactive solutions. Why did they not have those interactions at the ACTT meetings? Those who were employed to deal with these matters on a daily basis should be finding the problems and resolving them.

Mr Kekana said that ACTT had to respond to the crime and the criminals out there. SCOPA was saying that there were no consequences to corruption and crime. The Committee was asking ACTT to change the narrative. They would be happy to hear how things were successful, they would be happy to talk about them. He wanted ACCT to assist the Committee in providing clout as everyone was saying that South Africa was soft on corruption and that image of the country had to be changed. The Committee was pleased to find out that ACTT was doing something about corruption but they had been disappointed.

Ms Mente said that it was necessary to look at preventative measures. Putting a cap on the amount of money was problematic as the value of money depended on how much money the person robbed had had. She could understand that they could put a cap on the sentence as the people had stolen money and deprived people. It was not the process of plea bargaining but it was the person with whom the prosecutors were plea bargaining. Those corrupt people were stealing from the poor. Those people planned their theft and corruption. They planned for themselves and their families to be wealthy when they left government. The Committee’s trust had to be based on ACTT’s ability to punish and recoup the money but asset recovery did not recoup all the money. Those criminals were educated and knew exactly what they were doing. They had not been coerced into corruption.

Mr Booi agreed that plea bargains were part of the system. Plea bargaining was not new to the country. The Committee wanted to know what was new about ACTT and how they were going to fight crime differently. Maybe everyone was too blind to understand the level of corruption in the country. The government would find itself out of power if the government was unable to stop the corruption. The police were corrupt and they too got plea bargains and walked away from their crimes. Rating agencies were making judgements against South Africa precisely because the country was not dealing with the crime and corruption. SCOPA would not give up so the law enforcement agencies could not retreat to their offices. The Committee understood the environment and would tackle the problem head on. He complained that SAPS had corruption and they did not have systems to identify corruption and deal with it effectively. Rating agencies such as Moody’s were downgrading South Africa and what could one say to them? The Committee was not going to accept the lack of information and activity and the Committee would bring ACTT back with their Minister and they would have to account for their actions.

Mr Brauteseth raised questions about the ACTT structure. When and where did they meet and what did they discuss? Who attended the meetings? Did Advocates Jiba and Mrwebi attend the meetings? He wanted it on the record as to whether they attended or not. He wanted to know whether Jackie Lepinka, who had stolen documents, was employed by ACTT.

Ms Makhatla noted that the NPA had responded to the questions in the last meeting. ACTT met as principals and the meeting was called by the Head of DCPI as convenor and held once a month. The attendees were the Heads of Departments. Directors General should attend or a representative not below the rank of Chief Director. Minutes were kept and the secretariat resided in the Office of DCPI. Operational level meetings took place and cases were given PC numbers as soon as they met the criteria, such as three cases above R5 million, and then case plans were developed. Minutes were kept but they did not report to the principals unless they required guidance or direction. Ms Lepinka was employed in administration support in the NPA but was not associated with ACTT. One of the suspended employees came to one meeting when the meeting related to work she had been involved in. The executive meeting was supposed to be every first Monday of the month.

Mr Murray Michell, Director: Financial Intelligence Centre (FIC), spoke about the Financial Intelligence Centre Amendment Act, which had been gazetted the day before. The gazetting meant that certain sections of the Act would come into force immediately, that is, those sections that did not have requirements for regulations and guidelines. In other words, definitions etc. would be applicable immediately. In October, the regulatory requirements would start kicking in.

The essence of the legislation was that it introduced a risk-based approach to terror financing and money laundering which depended on two key components. Firstly, all of the business and institutions that fell under the Act had to adopt a risk-based approach and apply it within their institutions and compliance would be tested on a continual basis. The question was how they would identify the risks and apply relevant measures. That approach also applied to the State departments, including the ACTT. They had to adopt a risk-based approach to terror financing and money laundering and they had to create a government-wide risk assessment. Specific issues would be sanitised out as the Act looked at the broad principles rather than specifics. That would meet the international standard for management of financial sectors. New categories include who were the natural owners behind all the entities and persons, which had consequences for the work done by SARS, SCOPA, ACTT and enables SARS to kick in other international agreements that were already in place and deal with illicit financial flows etc. Beneficial ownership was a critical component.

The second component was around prominent individuals who held positions of authority and power as a category. That group was an added risk to the system and people in senior positions had to be screened as those who posed a risk for corruption or moving illicit money through a bank account. The other issue was around knowing your customer which meant that financial institutions could go to a central hub to find all the information that they wanted, making it more customer friendly but more rigorous. The Customer Hub had to be constructed and was a confidential database of key individuals. CIPC would play a role in relation to the ownership of companies and the Master’s Office in respect of trusts. The Accountant General and the Chief Procurement Officer would have to identify who was working with contracts for the state beyond a certain threshold. The key work for the October date was extensive consultation with the private sector so that regulations could be developed. The key elements were the introduction of greater transparency while making it more robust to withstand pressures locally and in the global system.

Mr Ross asked about FICA and whether it was a uniform Act.

Mr Mitchell replied that each sector would have a special set of risks and conditions according to their sector and according to which they had to manage and be judged. What pertained in a bank would not pertain to an estate agent. The idea was to make it less onerous and less burdensome.

Maj Gen Khana spoke to the 31 commercial cases that related to government departments. There were 28 cases on hand and two with the prosecutors, awaiting a decision. He presented a breakdown according to departments. There were 284 cases from provincial departments. 55 had been referred to the prosecutors for decision. The challenges were similar to those experienced with local government. A number of officials had been charged for non-compliance with the PFMA.

Mr Brauteseth asked for timeframes. How long did it take from inception to completion? Which was the longest standing case? How long had the 31 cases been on hand?

Maj Gen Khana explained that the CAS number showed the date when the case was first registered. He referred to one case that had been first registered in November 2009, although it would have started somewhere other than with the Hawks.

The Chairperson stated that the information would assist SCOPA when they engaged with departments and entities and they informed the Committee that cases had been referred to the law enforcement authorities. He believed that in this meeting they had gone further to the core issues that inform the work of the Committee. Issues that had been left hanging at the previous meeting had been addressed. SCOPA would meet with ACTT on a quarterly basis. ACTT needed to tie down all issues that had been left hanging. He urged ACTT to tighten up and show that government was doing something and was winning the war against corruption and serious crime. The worst thing was not to be doing anything or not winning against the criminals. He believed that there had to be a continuous forward movement.

Meeting adjourned.


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