Hawks current cases

Public Accounts (SCOPA)

13 March 2018
Chairperson: Mr T Godi (APC)
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Meeting Summary

The Hawks gave a briefing on the current status of cases being held in the Department, after bringing attention to matters that were in the public domain in relation to state capture. The Department was quick to note that suspects in the investigation into the Estina dairy project had been arrested and arraigned in court, and would appear again before the courts in August 2018.

On the status of cases being handled by the Department, 30 cases had been reported in government departments at the national level, while 360 had been reported at the provincial level. KwaZulu-Natal featured prominently in the number of cases reported in government departments and municipalities, while the South African Social Security Agency (SASSA) had the highest number of cases under state-owned entities (SOEs), with 32 reported cases.

Some of the challenges cited by the Department, which prevented them from completing their investigations, included the refusal by municipal and departmental managers to be complainants when criminal cases had been identified, the lack of sufficient evidence for criminal investigations from departmental audits, and the non-availability of relevant evidential documentation as exhibits to corroborate evidence.

Members expressed disappointment over the lack of detail in the Department’s presentation, and indicated concern over the delays into the investigation of the Estina dairy project, the issuing of warrants of arrest on Duduzane Zuma, the high number of cases that were still open, the lack of a strong focus on consequence management, the lack of capacity within the Department, and the progress made on the investigation into the Steinhoff International issue.

Meeting report

The Chairperson welcomed officials from the Directorate for Priority Crime Investigation (DPCI) to the meeting. The Committee was interested in knowing how efficient the Department was in taking action against persons who were misusing public funds. He emphasised the importance of the Department’s report in sending a strong message to the public of bringing persons involved in corruption to justice, as the police had the backing of the Committee.

Hawks: Cases currently being handled

Lt Gen Yolisa Matakata, Acting National Head, Directorate for Priority Crime Investigation (DPCI), began the presentation by briefing Members on matters that had been brought to the attention of the public on state capture. Suspects in the investigation of the Estina dairy project had been arrested and arraigned in court, and would appear again before the courts in August 2018. Investigations into the broader aspects of state capture were under way, with the Department hoping to ensure that all suspects appeared before court by the end of the year. The Department was also investigating matters relating to corruption in the North West Province which had been brought to its attention by provincial committees and other whistle blowers.

Maj Gen Alfred Khana, Head: Commercial Crime Unit, DPCI,  presented on the progress made in ‘Operation Clean Audit,’ which had been taking place in the municipalities, government departments, state-owned enterprises (SOEs) and municipal-owned entities (MOEs). At the national level, there were 30 cases involving government departments, with one case sitting with the Senior Public Prosecutor (SPP), while 360 had been reported in government departments at the provincial level. The Department of Health at the provincial level faced the highest number of investigations, with the Eastern Cape, KwaZulu-Natal (KZN), Mpumalanga, Free State, Northern Cape and the Western Cape featuring prominently. KZN also featured prominently in the number of cases under the Departments of Public Works, Transport and Education. Municipalities, on the other hand, had a total number of 315 cases, with the highest number of cases reported in the Eastern Cape and KwaZulu Natal. For SOEs and MOEs, the Department had 78 cases on hand with, 14 in court and 53 under investigation. The South African Social Security Agency (SASA) had the highest number of cases, with 32 cases sitting before the Department.

The challenges faced by the Department included the refusal by managers to be complainants when criminal cases had been identified, the lack of sufficient evidence for criminal investigations from departmental audits, the non-availability of relevant evidential documentation as exhibits to corroborate evidence, the media being aware of information from leaked reports where crimes were never reported to the police for investigation, and the misinterpretation of Section 34 of the Prevention and Combating of Corrupt Activities Act, 12 of 2004 by municipal managers, resulting in malicious compliance.


Mr T Brauteseth (DA) raised concerns over the Department’s presentation, which was not comprehensive. He would have liked to have seen a more detailed report, singling out specifics on exactly what was going on as opposed to a list of the number of cases before the Department. If the Department issued warnings, for example, what were the circumstances that had led the Department to believe that these warnings were sufficient? Had the Department focused on consequence management? What was the timeline for cases under investigation and matters in court, and when would these matters be finalised? He was disappointed at the Department’s lack of preparedness, especially on investigations into SOEs, which was currently a very critical matter to the government in terms of corruption. Why did the report lack details on prominent investigations like the Estina case, and why did this particular investigation take so long? When did the Estina investigation start and how long did it take the Hawks to carry out investigations from the time charges were laid? Was the sudden flurry of activities by the Department in enforcing the law due to a change of leadership? He also made note of the fact that the list of investigations into South African Police Service (SAPS) was quite small in comparison to the presentation from the Independent Police Investigation Directorate (IPID). Was the Department working together with IPID or sharing any information with them?

Lt Gen Matakata confirmed that the Department maintained a working relationship with IPID and had previously allowed investigators to assist IPID in crime intelligence investigations. Information on the investigation of SAPS was not shared, however, and the Department had not been approached by IPID for any assistance. The Estina investigation had started on 9 July 2017 and the docket was submitted in November 2017 to the National Prosecuting Authority (NPA) for a decision on the issuance of warrants of arrest. She wanted to make it known to the Committee that the Hawks had not taken action only after the change of leadership, but had been working on the Estina investigation since August 2017. The warrants of arrest, which were issued only in February, had been delayed because of other processes and decisions that were taken by the NPA.

Maj Gen Khana agreed that the report spoke to numbers only, and lacked detail. The Serious Commercial Crime unit had a large volume of cases and several prominent cases classified under high crime, but providing the Committee with a list of these cases would be problematic because the list was long.

Mr Brauteseth clarified that the idea was not to provide a long list of cases but to get a level of detail which would allow for constant monitoring and evaluation of cases related to public finance. Without monitoring, the cases would drift away, causing the public to lose faith in the Hawks. Was the Department sitting on matters, or were they expediting?

Maj Gen Khana requested that the Committee give his Department time to provide a follow-up report which would include more detailed information on the cases being handled, as requested by Members. On the question of the progress of the Department’s cases, he admitted that their progress had been slow. They had, however, raised concerns within the Department to expedite investigations on old cases. The Department had also pushed for closure of several cases that had been lying with the prosecutor for prolonged periods, as in the case of the Office of the Provincial Prosecutor in Cape Town. Going forward, the Department would amend its reporting to the Committee to reflect concerns from Members.

Mr Brauteseth asked when the Department would provide the report.

Ms T Chiloane (ANC) sought clarification on the rand value of cases being investigated. What was the rand value or average value per case being investigated? What were the cases under the Department of Education specifically related to? Were they related to food nutrition, school transport or infrastructure development programmes? To give a better picture of the cases being investigated at the municipal level, could the Department provide the names of the specific municipalities per province? When the Department referred to cases as ‘serious economic offences’, what did they mean? When cases were classified as being under the Senior Public Prosecutor (SPP), did it mean that the Department was waiting for a decision from the SPP as to whether a case should go to court?

Maj Gen Khana said that his Department would provide details of the rand value per case in the follow-up report, as well as the list of municipalities per province. Was it enough for the report to provide the rand value of cases per department, while highlighting the largest contributor in each department? He clarified that cases under the SPP were those waiting for a decision from the SPP on whether to prosecute or not, while ‘serious economic offences’ referred to a unit within the DPCI, and not to a specific type of crime. The Serious Economic Offences Unit was responsible for handling complex and high profile matters, while the Commercial Crime Unit handled cases of R100 000 and above. This meant that the higher the rand value of cases being investigated, the more likely the cases would be referred to the Serious Economic Offences Unit.

Mr M Hlengwa (IFP) observed that KZN had the highest number of cases across the board, which was an indicator of fundamental problems in management, control and leadership. He welcomed the presentation, however, on the grounds that it provided some form of insight into the work being done, even though it lacked the information that the Committee deemed necessary. In addition to Mr Brauteseth’s question on the sudden ‘flurry of activity’ within the Department after the change of leadership, could the Committee get a commitment that none of the Department’s decisions were going to be affected by the politics of the day? The perception out there was that the change of leadership had necessitated the Department to take action, because there had been no ‘flurry of activity’ before the change of leadership. Could the Department provide insight into this matter, so that the confidence the Hawks enjoyed was not a seasonal affair?

Regarding the briefing on Estina by the Hawks on 23 February, what was the status of Duduzane Zuma insofar as warrants of arrest were concerned? The fact that people had either left the country, or had unknown whereabouts, confirmed to him that the country was lacking healthy co-operation among law enforcement agencies. Did the Hawks feel that they were receiving the necessary co-operation from other law enforcement agencies to fulfill their mandate as far as all cases were concerned, and if not, what were the challenges and limitations? What was the status of the Department’s financial health? Had they budgeted adequately to perform their duties, and to what extent did budgetary constraints prevent the Department from completing its tasks? Such an evaluation was necessary to gauge whether the shortcomings were on the part of those appropriating funds or on the part of the Hawks, because the number of cases not concluded was too high and unacceptable.

Lt Gen Matakata confirmed that there had been lots of cooperation with other law enforcement agencies on the Estina matter and other state capture investigations. The NPA had, in particular, been working with the Department from August 2017, but their decision to issue warrants of arrests in February could be answered only by the NPA. She reiterated that the Hawks had been working on the Estina investigation from July 2017, and that the recent ‘flurry of activity’ was unrelated to a change of leadership. 

On the status of Duduzane Zuma, the Department did not have a warrant of arrest for him at the time the warrants of arrest were issued, and did not want this to be part of the public confusion, because the Estina investigation and other cases on state capture had not been concluded.

The Department did not have budgetary constraints, but were instead struggling with the loss of members with specialised skills, which ultimately affected the timelines of its investigations.

Mr Hlengwa asked what reasons were cited by members for leaving the Department. Where were they going to, and where were these specialised skills lying in the country?

Lt Gen Matakata explained that the Department was losing the bulk of its members to greener pastures in the private sector, specifically for commercial transfers and anti-corruption investigations, while other members were moving to local governments or retiring.

Maj Gen Khana responded to Mr Hlengwa’s concerns over the high number of cases in KZN, and said that he understood him correctly on the controls and measures that were needed, but he had also left the matter to the House because his brief to the provinces had urged municipal managers to take action on areas highlighted as concerns.

Mr C Ross (DA) asked that those implicated in the Estina matter should once again appear before SCOPA, because the Committee still wanted to ascertain the status of these investigations. He was pleased to note from the press that the Asset Forfeiture Unit (AFU) had obtained a preservation order on the Estina dairy project, which was a sign of progress, but he was also quite concerned about the R10 million returned to a person implicated, who had recently left the country. It was only fitting that the Committee assessed the progress of the Department on the Estina issue, to find clarity on this matter. Could the Chairperson consider scheduling an engagement with both the Hawks and the Special Investigation Unit (SIU) to obtain the status of Estina, and for purposes of creating synergy between Departments? In support of the concerns raised by his colleagues on delays in the investigation of cases related to Estina, it was clear that the Chief Procurement Officer of Estina had requested Specialised Audit Services to investigate allegations of procurement irregularities committed by the Free State Department of Agriculture in 2013, but to date no consequences had been witnessed. The implications of Minister Zwane and Estina director, Kamal Vasram, on suspected money laundering from the state should also be explained.

In regard to the national and provincial picture of government cases, what consequences were in place for transgressors who had misspent state resources? Were the Hawks aware of the allegations involving some Members of the Executive Council (MECs) of the Department of Co-operative Governance, Human Settlement and Traditional Affairs (CoGTA) in the Free State, for illegal payments in procurement for the low-cost housing project in 2014? He requested that the Department be provided with the documents related to this investigation, and be given time to look into the matter and get back to the Committee.

Maj Gen Khana said that consequence management relating to government departments and municipalities was an internal process which the Department was not privy to. There existed a professional relationship between the Department and the SIU, but it was not a direct relationship because the SIU did not supply reports directly to the Department. Going forward, the Department would update its database on the outcomes of cases under review for reference to the House.

Mr Ross asked if the Hawks had received any cases on the administration of the Department of Water and Sanitation, or on the management of the South African Broadcasting Corporation (SABC).

Maj Gen Khana confirmed that the Department had received cases from both departments and would provide details at a later date, but would not respond to whom the cases related.

Lt Gen Matakata, in response to the concerns raised by Mr Ross, said that some of the matters he was referring to may not be lying with the Commercial Crime Unit, and requested a closed meeting when reporting on the progress of the Estina dairy farm investigation, which was taken into consideration by the Chairperson.

Mr E Kekana (ANC) requested the Department to provide more information on their presentation for better engagement, and was worried that the Department lacked the capacity to handle the cases under investigation. On the challenge of municipal managers not wanting to be the complainants in criminal cases, who was expected to stand in their place, because municipal Managers served as the the accounting officers of the municipalities? Had the Department engaged municipal managers on the misinterpretation of Section 34 of the Prevention and Combating of Corrupt Activities Act, to prevent malicious compliance and the providing of vague reports? Was the failure of municipalities to provide evidence for criminal investigations related to their misinterpretation of the Act and, if that was the case, had the Department clarified this issue with the municipalities? With the provincial and national government, who was laying the charges, because his understanding was that the Director General (DG) was the accounting officer? Was the lack of progress because of the lack of a complainant, and was the Department receiving cooperation from the DG’s? He also emphasised the importance of consequence management for persons found to be corrupt.

Lt Gen Matakata clarified that the Department faced challenges with its capacity, but not its budget. Other departments and stakeholders, however, provided support where necessary.

Maj Gen Khana, in response to Mr Kekana, said that reports from municipalities and government departments on corruption cases were opinionated, not factual, lacked a record of statements and could therefore not be used to start an investigation. Of greater concern was the unavailability of municipal managers, who could not be found for engagements, leaving the Department to seek information from lower level staff. DG’s also did not report cases of corruption to the Department, as most cases were reported by lower level staff and whistle blowers. To avoid misinterpretation of the law, municipalities had been engaged on Section 34 of the Prevention and Combating of Corrupt Activities Act.

Mr Brauteseth sought clarification on whether the Department worked only on matters reported to it, or if it took note of other investigations, such as those lying with the Public Protector. If the Department was indeed aware of such cases, why was the complaint made to the Public Protector on Estina dairy farm in 2013 never acted on until July 2017? Had the Public Protector shared information with the Department on the Estina case, and had it taken any action on it?

Lt Gen Matakata confirmed that the Department took note of investigations lying with the Public Protector, but did not know of any investigations that took place in 2013. The Department had received information only when the Public Protector’s report came out, and no investigations had been conducted by the Department before then.

Mr Brauteseth referred to an earlier statement made by Lt Gen Matakata to the Joint Portfolio Committee on Justice and Police, where she had raised concerns on the lengthy time taken by NPA to make decisions, and asked if the NPA was slowing down the Department’s criminal justice process.

Lt Gen Matakata responded that she was going to take all national cases that had been with the NPA for decision-making for over a year.

Mr Brauteseth interjected, saying that he had asked a simple yes or no question. Was there a problem with the NPA or not?

Lt Gen Matakata remained adamant on her inability to confirm that there was a problem with the NPA because such a conclusion required more information and could not be answered by a yes or no question.

Mr Brauteseth asked the Department to provide statistics on high profile cases being handled by the NPA which the Committee could use for their upcoming meeting with the NPA. Was it possible for the Hawks to be present at the same meeting? On the issue of capacity, what was the Department doing about members who had left the force but had later returned to work with the Department? How far had the Department reached with its 2019 target to convict 120 persons in government departments and 1 000 public officials on allegations of corruption?

Lt Gen Matakata clarified that the targets had been set by the Anti-Corruption Task Team (ACTT), and she was not aware of how many of the targeted officials had been convicted. She asked for time to consult.

Mr Brauteseth suspected that the Department was nowhere close to their target, adding that the Department was part of the ACTT which had set a target that was expiring in eight and a half months.

To further understand the capacity challenges facing the Department, Mr Hlengwa asked if the Department was using consultants to deal with the high staff turnover rate. If the Department was outsourcing their work, to what extent was this happening? 

Maj Gen Khana said that the 2019 conviction targets were an ACTT mandate, and his Department was contributing to the total only through clean audits. The Department had only hired the consulting services of accountants who were appointed under certain circumstances and as far as Hawks was concerned, there were no incidences of members leaving the force and coming back to work for the Department.

Mr Hlengwa asked if the Department could provide the names of the accounting firms it was using.

Maj Gen Khana responded that these names would be provided, but sought clarification on the time period which the Committee was interested in.

The Chairperson asked the Department to provide information on the list of accounting firms used for the last three years.

Mr Kekana asked whether the Department had a specific unit that dealt with the sophisticated issue of ‘operation clean audit,’ or if it was being dealt with on a day to day operational basis. What was the relationship between DGs and the Department? Were the DGs co-operative?

Maj Gen Khana explained that all matters relating to ‘operation clean audit’ were reported to his office from the provinces and the Serious Economic Offences unit on a monthly basis, which allowed for the monitoring and evaluation of the progress of cases. In the two entities that the Department had recently dealt with, the DGs had been co-operative, but at the provincial level there was no relationship between DGs and investigators because the DGs were not the complainants at this level.

In conclusion, the Chairperson asked Mr Ross to hand over the documents relating to the Free State MECs for the Department to look into and provide reports on from time to time. He wanted to know what value the Committee meetings had added for the Department, and what more the Committee could do to assist in the fight against corruption?

In reference to a file that had got lost at the Crime Intelligence Unit, and which later found its way to the Hawks, how could IPID access the file which they needed for investigation? Clarification was also sought on whether the file was used for purposes of investigation, or if it had been taken unlawfully. In the Department’s presentation, where it reported a case involving the Passenger Rail Agency of South Africa (PRASA), was it related to the threat by PRASA to take the Department to court for failing to prosecute after it had provided the necessary information? Was there anything the Hawks was doing on the scandal at Steinhoff International, where the Public Investment Corporation (PIC) had invested workers’ money?

Lt Gen Matakata said that the file from the Crime Intelligence Unit had not been stolen, but had been given upon request, but had required that the information be declassified. IPID had never approached the Department directly for the information in the file, and she was trying to understand why IPID had been requesting information for an investigation that was under a DPCI docket.

Maj Gen Khana wanted to make it clear that PRASA had never taken the Department to court to force it to investigate, as though the Department had refused to investigate. There was, however, a matter in court from PRASA on the failure of the Department to investigate, which the Department was currently contesting. PRASA had indeed reported cases of corruption to the Department, but their reports lacked supporting documents, which were not useful in launching investigations. With regard to Steinhoff, the Department had since learnt that Steinhoff International had a class action case against them in the Netherlands, and was facing a private prosecuting matter in Germany. The day prior to Steinhoff International appearing before Parliament, a report had been sent to the Department which he termed as ‘malicious,’ on the basis of it having nothing that was useful to the Department. He was waiting for information on the investigations in the Netherlands and Germany to understand the nature of these cases.

On the question of the value added from the Committee meetings, Lt Gen Matakata said that since attending SCOPA, the Department had been able to get a better understanding of what was expected of them in terms of consequence management and corrective measures. The Committee had also strengthened the role of accountability within the Department, which was in the best interests of the public, and it would continue to seek assistance on challenges that were beyond its scope.

Mr Brauteseth reminded the Department that he was still waiting for the conviction statistics and a list of matters pending from the NPA. 

Lt Gen Matakata confirmed that out of the targeted 120 persons in government departments, 106 had been convicted from 2014 to date, but she still had no information on the 1 000 public officials.

Mr Brauteseth found those statistics hard to believe, and requested a list providing details.

The Chairperson proposed that in its future reports, the Department should include:

  • The number of cases concluded with outcomes in the medium term;
  • Timelines on cases waiting for a decision from the Public Prosecutor;
  • Timelines on the Department’s investigations, to have a sense of the challenges facing the Department and to allow for comparison with NPA reports;
  • The substance of cases investigated, to have a sense of exactly what was being investigated;
  • The rand value of the corruption cases involved; and
  • A list of targeted convictions, to have a sense of where the Department was.

The report should be sent in two weeks, which would set the agenda for the Department’s next meeting. The list of matters sitting with NPA should also be provided, for questioning with NPA.

The Chairperson informed Members of changes for the meeting that was to be held with the NPA on 14 March.

The meeting was adjourned.

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