Forensic Data Analysts (FDA) & other contracts with SAPS: hearing with Police Minister

Meeting report

Mr T Godi (APC) welcomed the Minister of Police, Bheki Cele, and said that the purpose of the hearing was to ensure the criminal justice system (CJS) was not captured. This was after SAPS released a letter on conclusion of the last meeting that seemed to take a different course from what was discussed at the meeting. It was wrong that the letter arrived in the afternoon yet it was supposed to be in response to questions that had been prepared for the morning meeting, and its contents took a different course which would have changed the engagement at that meeting with SAPS. The Chairperson could not understand how the CJS of the country could be shut down by one company. The fact that the sovereignty of the state lay in the hands of one individual spoke to the kind of leadership at SAPS and SITA which was a concern.

SAPS National Commissioner briefing
Gen Khehla John Sitole, SAPS National Commissioner, began by clearing the air surrounding the letter. He explained that the Committee request for a meeting on contracts was received on 20 February. SAPS acted received feedback from the companies on 27 February. The letter was compiled and signed on the 28 February and sent to the Committee. SAPS was under the impression that the letter was with the Committee by the time SAPS attended the 28 February meeting. SAPS however admitted fault and confirmed that it was not intentional.

Gen Sitole explained that developments between SAPS and FDA had triggered a court process therefore some information would not be provided to protect the investigation. The manner in which contracts were handled could also not be discussed as it was a national security risk. After the 28 February SCOPA hearing, an internal audit process was commissioned, forensic and new investigations had began, and a multidisciplinary committee had been formed with SAPS, SITA, IPID, Treasury and forensic audit investigators from SAPS and Treasury.

Based on the Committee’s recommendations about service delivery and national security threats, the multidisciplinary committee decided to withhold payment on those contracts under investigation. FDA then signed letters of demand which included a letter to the Minister on the implications of withholding payment. Following this, FDA switched off the system on 5 April 2018 which prompted an urgent meeting between SAPS, SITA and an integrated legal team to scrutinise contracts as the switching off of systems had affected the public. Contracts did not 100% confirm the supplier’s behavior and therefore SAPS decided to take the matter to court. SAPS made it clear that if they entered a software contract, the software should be owned by SAPS because of the nature of the information they handled.

The court process was in progress but a contingency plan was in place that ensured services were back to normal and systems were up to date. Moving forward SAPS was looking towards a system that would protect the sovereignty of the state. Matters relating to the last day payment of the financial year were also looked into by forensic auditors and a case had been opened where the matter was under investigation.

The SITA CEO, Dr Setumo Mohapi, confirmed that a notice of termination was issued by FDA on 4 April 2018, systems were switched off on 5 April. On 7 April authorisation was made to switch on the systems and on 9 April 2018 they were switched back on.

Discussion
Mr T Brauteseth (DA) referred to a previous presentation by SAPS and asked about contracts for the three versions of PCEM 1.1 and maintenance contracts, because they were all awarded to a solo supplier. Why was this the case? What process was followed in awarding contracts and who was responsible for awarding contracts to a solo supplier?

Gen Sitole replied that he had instructed his legal team to scrutinise how and why these contracts were awarded, especially those on maintenance.

Mr Brauteseth asked when the legal team was appointed and how long it needed to get to the bottom of why and how the contracts were awarded. Could a timeline also be provided?

Gen Sitole replied that the matter had been given full attention and a report would be provided by 31 May.

Mr Brauteseth asked if the SAPS Commissioner was aware of Project Khulisa. Was he aware of payments made into a bank account linked to Project Khulisa? There was information linking Khulisa to the building of Lt Gen Adeline Shezi’s house. Could the Commissioner confirm that this was the case?

The Commissioner admitted that he was aware and it was part of the investigation and forensic audit.
He had received a report from IPID after which he commissioned an internal investigation.

Mr Brauteseth said that Project Khulisa involved multiple payments to the contractors building the Shezi house, where three payments of over R700 000 were made by a company linked to Unisys’ Jerenique Bayard. Was the Commissioner concerned about the link to Bayard and the contracts awarded?

Gen Sitole replied that it was a matter of extreme concern and action was taken immediately once the report was received from IPID. Details of the investigation could however not be revealed.

The DA member understood the importance of not disclosing information, but he wanted to ensure that action would be taken. Based on revelations and the information in the public, could the Commissioner confirm the existence of conflict between Unisys, FDA, SAPS and SITA?

Gen Sitole replied that the relationship between departments was indeed a concern and relevant action had been taken by the Commissioner to clean up SAPS. The Committee was right in asking the questions it did.

Mr Brauteseth raised the threat to cut off the IT systems by Mr Keith Keating. Does the fact that the system was turned back on after it was initially switched off confirm that it was a false start?

Gen Sitole replied that nobody could threaten SAPS because it was an organisation of integrity that protected the sovereignty of the State. SAPS had looked into the supplier’s contract together with the CEO of SITA to challenge the matter in court.

The Chairperson asked the Minister of Police, Gen Bheki Cele, to comment before leaving the meeting

Mr V Smith (ANC) asked if the Minister of Police was copied in the letter from SITA to the Committee. He urged him to take a look at the letter if not.

Mr D Ross (DA) raised concern over accusations by the Institute of Risk Management South Africa about the corruption in SAPS being cited as the greatest risk to democracy. Could the Minister address these grave concerns?

Minister of Police, Gen Bheki Cele, confirmed that he did not get the letter from SITA but did not understand why. It could not be denied that the Police was indeed corrupt, given that in April 2018 it arrested 17 of its own in the Eastern Cape, four in Mpumalanga and found one member to be part of the gang involved in the Durban taxi rank shooting. One of the shortfalls had been vacancies in top positions in most divisions, as there were too many acting positions.

Mr M Booi (ANC) asked about the working relationship with IPID.

The Minister replied that the undermining of the authority of the state must be fought. He hoped to clean the system without manipulation. He had received the letter from FDA and had asked for legal advice to be able to respond to it while emphasising the importance of speed. IPID was working well with the Minister.

Mr Brauteseth asked if there was going to be an investigation on the money paid for software maintenance licences.

Gen Sitole confirmed that the forensic audit team was almost halfway in dealing with this. The concern was on the signing of a maintenance contract when there was a warranty and guarantee.

Mr Brauteseth referred to the PFMA stating that payments could only be made once goods were received. In terms of the maintenance contract which was R11 million for 3 563 items, could the Commissioner confirm that they received 3 563 Goods Received Vouchers (GRVs) every month which should be reported on once maintenance was done. Had SAPS looked into the GRVs, and if not could they make it part of the investigation?

Gen Sitole replied that the preliminary report received from the forensic investigation had picked up irregularities on some of the serial numbers on maintenance but a full report would be provided once investigations were complete.

A timeline for the report was requested by Mr Brauteseth, where the Commissioner confirmed that it would be provided by 31 May 2018.

Mr Brauteseth asked the SITA CEO if he was aware of the letter from a company, Forensic Authentication of Commodities Track and Trace (FACTT), which had curtailed licences to FDA. Could he comment on that?

Dr Mohapi replied that he was aware of the letter and had asked FDA to respond to it as part of the investigations. The letter had raised litigation on payments of FPS and PCEM. The letter suggested that there was no authorisation for FDA to license the PCEM system to SITA. Further litigation on various claims of past payment to FDA were also raised.

Mr Brauteseth asked if FDA was not able to license anything to SITA because the foundations of its license had been withdrawn by the original licensor, FACCT.

Dr Mohapi confirmed that this was indeed the case.

Mr Brauteseth asked if SITA CEO was familiar with Barnie Venter, Rachel Venter, Christo de Bruyn and Yolanda Potgieter. Was the SAPS Commissioner familiar with Andre du Toit who was sentenced to 10 years for his activities as leader of the Boeremag, a terrorist association?

Dr Mohapi replied he was familiar with all apart from Yolanda Potgieter.

Gen Sitole replied he was familiar with Andre du Toit.

Mr Brauteseth said that there existed correspondence about financial assistance between Andre du Toit and the SITA employees he had mentioned and FDA. What were his comments on the fact that SITA employees were financially supporting a convicted terrorist?

Dr Mohapi replied that SITA had included the charges about the use of SITA laptops and networks as part of its investigations. The correspondence referred to was received and stored on SITA networks.

Mr Brauteseth asked him to confirm that it was correct that a convicted terrorist in prison was able to send emails to SITA systems along with malware and viruses?

The SITA CEO agreed that these claims were true but its systems were protected from viruses and malware.

Mr Brauteseth asked SITA to comment on Barnie Venter’s role in the awarding of the FPS and PCEM contracts to FDA and Unisys.

Dr Mohapi replied that Barnie Venter was a SITA Business Case Originator whose role was to motivate for certain contracts to be given to the Supply Chain Unit. He was involved in contracting and negotiating contracts as well.

Mr Brauteseth asked if there was justification for having sole supplier contracts for the FPS and PCEM?

SITA responded that, based on what it currently knew, it should have sorted the matter earlier.

In response to Mr Brauteseth asking if he was in charge in 2004/05 when all this began, Dr Mohapi said that he was not.

When asked who was the CEO then and if SITA was investigating that CEO, Dr Mohapi replied that the CEO at that time was Mr Mavuso Msimang, in 2010 it was Mr Blake Mosley-Lefatola and in 2014 Mr Sithembiso Freeman Nomvalo. No action had been taken against them.

Mr Brauteseth asked if the SITA CEO or SAP Commissioner could provide the letters to National Treasury requesting deviations for the FDA and Unisys sole supplier contracts.

Dr Mohapi replied that SITA only had a letter for FPS but was not aware of any other letters.

Mr Brauteseth asked about the three versions of software. From the perspective of an ignorant customer, could SITA confirm the concern that the project sold to SITA were repackages of another company’s systems?

Dr Mohapi confirmed that he was aware of this and part of the litigation concerned the original licences of the systems. Indications showed that it could have been repackaged but the investigations were not yet at the point where they could fully reveal that PCEM was simply repackaged.

Mr Brauteseth asked why did SITA not pick this up and stop SAPS from entering into this contract.

The SITA CEO admitted that it was a weakness in the controls of their system and technical advisors that had their own interests.

Mr Smith said it was clear that SAPS and SITA were not working as a team. SAPS had a multidisciplinary committee dealing with these matters but it did not include SITA. Why was this the case? SAPS and SITA were not assisting themselves to assist the Committee. Why was Rachel Venter suspended? Was she suspended with pay and how much was she being paid? How long had she been suspended and at what staff level was she?

The SITA CEO confirmed that Rachel Venter had been suspended with pay but did not know how much she was being paid. She was an administrator and she had been suspended for conflict of interest because she owned companies that she had not disclosed.

Mr Smith asked how she was able to do all these things at the level of an administrator. How was she able to influence procurement?

Dr Mohapi replied that she was able to handle and see correspondence going through to managers and that was how she was able to influence procurement.

Mr Brauteseth asked if there was there a problem in SITA with a cabal that had taken over SITA? Was this cabal still in place and assisting the Boeremag terrorist group?

Dr Mohapi replied that SITA was actively working towards breaking up the cabal through current investigations.

Mr Smith asked about the five employees who resigned, five who were suspended and three who were dismissed. What were the names of these employees? Could they be named and shamed in the report? If they had resigned because they were implicated, were they still alive and what was SITA’s legal recourse? Of the five suspended on pay, could SITA give a commitment that they would fast track the process because they should not be funded. Those who were dismissed, were they dismissed with their pension? Could timelines be provided on this?

Dr Mohapi replied that a report with names would be provided in the next business day. Those who resigned had been reported to the relevant authorities as part of recourse. The suspensions would not take more than a year and people were dismissed according to the norm.

Mr M Hlengwa (IFP) was worried that the leadership of SITA was not in charge. He was convinced that the tentacles of the cabal extended beyond SITA to SAPS. Based on the 11 April email, after SITA had switched the system back on, it appeared that the section head responsible did not know about SITA switching the systems back on. Was there a problem with communication? Could the leadership of SITA firmly confirm that they were in charge? Was SAPS happy with SITA and vice versa?

The SITA CEO replied that he was not copied in the letter but he had already discussed with the SAPS National Commissioner on Monday 9 April where he informed him that he had switched the systems on. It was clear that there was a court process for the systems to be on. He was aware of the letter but he had discussed the views with the Commissioner on 9 April so the systems were still on.

Gen Sitole replied that SITA was not part of the investigation family but part of the management family. There was a strategic engagement that was formalised between SITA CEO and the SAPS Commissioner. On the switch off, the discussion by the Commissioner and CEO were at a level that could not be disclosed due to national security threats. He had however appointed Lt. Gen Magadlela to be in charge of correspondence with SITA.

Mr Hlengwa asked who the brigadier was that sent the 11 April email and what fundamental interest did the brigadier have if the SAPS National Commissioner was already aware of the systems being switched on. As far as he was concerned it was insubordination by the brigadier.

Gen Sitole replied that the brigadier’s actions were part of the investigation on matters of conduct.

Mr Hlengwa asked if it was it Brigadier Beauty Phahlane?

The National Commissioner confirmed that it was her.

Mr Hlengwa said the bigger problem was that an ex SITA employee, Mr Keith Keating, was the director of FDA. Had SAPS and SITA taken the time to investigate the people they were doing business with especially after the Boeremag incident? What were the outcomes and if not, why not? It was also important for the multidisciplinary committee to conduct vetting and lifestyle audits.

The National Commissioner confirmed that a vetting plan had been initiated and specific areas and individuals had been identified. Lifestyle audit projects were also in place for SAPS members and those considered as suspects.

Mr Hlengwa asked about time frames for vetting.

Gen Sitole replied that the newly appointed Head of Crime Intelligence had been given special instruction to make vetting a priority. A progress report on vetting would be provided with other reports due by end of May.

Mr Booi said he agreed with IPID’s suspicion of a counterrevolutionary structure in SITA and Parliament had to take over. The safety of the country was not in capable hands and Parliament could not be an observer because information disclosed in the parliamentary committee meeting gave an indication of a national threat. Could the Commissioner convince the Committee that he was aware of the matters being disclosed in this meeting? Had SITA also reported to any security structures on the involvement of the Boeremag?

The SAPS National Commissioner confirmed that he was aware of 80% of communication but the Boeremag matter was a bigger security investigation issue. Own investigations had already been initiated that were deeply orientated and he could not share information with the public. The multidisciplinary committee was also monitoring the process of the takedown of the Boeremag.

The SITA CEO also confirmed that SITA had reported to the Hawks about the Boeremag

Mr Booi asked that Parliament be provided with the correspondence with Hawks. It was evident that Boeremag was active in government structures and was undermining security. The Committee was willing to cooperate but had to get to the bottom of the matter. Did the police have the capacity to act? Had IPID come across this kind of information and how had they handled it so far?

Gen Sitole confirmed that SAPS had the capacity to act and had engaged with the Department of Defence on national security threats. It therefore had a focus from a multi operational discipline.

Mr Robert McBride, IPID Executive Director, appealed to the SAPS National Commissioner stating that IPID was a friend to good policy and not an enemy, so resistance to investigations must be ended as soon as possible. IPID had uncovered devastating collaboration between criminal elements, the police and SITA and none of the assertions of the National Commissioner were new because IPID had made the assertions before. In response to the numerous letters to the National Commissioner, IPID faced resistance to its recommendations to suspend people. Brigadier Phahlane was still at work after IPID had requested her suspension. The IPID team had faced death threats and fabricated charges where evidence was not found after lengthy court proceedings. The collusion of interest between the police and subversive elements was linked to the subversive elements of the prosecuting authority. Direct approaches had been made by senior police officers to bribe IPID investigators in return for positions within SAPS, and IPID’s bank accounts and phones had been intercepted officially and unofficially. IPID had also been put under surveillance and numerous attempts had been made to destabilise the organisation. The Executive Director added, “There are people sitting in this room that can talk about it and attest to what I am saying.”

Of importance was determining whether SAPS was the vehicle used to fund a white supremacist non-constitutional organisation whose aim was to destroy and to cause violence to the constitutional order. It was a conspiracy in collaboration with the collusion of interests and needed to be looked into with the seriousness it deserved. Gen Sitole was aware of former acting police commissioner Khomotso Phahlane's “activities” when Phahlane was his supervisor because matters were brought to his notice. However, requests for information by IPID during its investigation of the matters had been met with resistance from the police who gave "a long song and dance about declassification". SAPS must become accustomed to operating within the confines of a constitutional democracy. He pleaded to the National Commissioner and senior police commissioners to collaborate with IPID because none of the assertions previously made had been wrong.

Mr Booi could not understand the resistance against IPID and asked for guidance on the way forward because the story about confidentiality was not convincing. It was a national threat that had to be dealt with.

Mr Ross said that national security issues should inevitably be dealt with by National Security. The ownership of IT software was important and he wanted to know where the ownership of the software currently lay. What was the risk of a possible SAPS systems shutdown to the public? It was clear that a gross violation had been made by SITA upon admittance of oversight on contracts. How would SITA prevent future risks and what would be the recommendations of SITA in terms of accountability?

Gen Sitole asked that it be left to the court’s pronouncement, but he maintained that the software of the police could not be owned elsewhere and that was the direction they were following.

SITA made a proposal to re-write the entire software base itself that intellectual property rights resided with the State.

Mr Ross asked for clarity on preventing the situation from happening in the future and an explanation how a service provider had the capability of switching off the system in terms of the ownership model. Could a clear answer be given on the recommendations going forward? What was SITA’s view on the legal position of ownership? Did SITA confirm with the SAPS Commissioner that system was currently under adjudication but still in the hands of the service provider?

The SITA CEO confirmed that ownership was under adjudication and could not confirm that ownership did not reside with the State. Moving forward, as a short term strategy, SITA had secured the entire environment such that the system was only operated by SITA staff, while medium term strategies were to re-write the entire software base.

Ms T Chiloane (ANC) raised concerns over the client relationship that existed between SAPS, SITA and the FDA. There had been an extension of contracts but there was no value for money on maintenance despite money being paid. What was the validity of contracts with FDA? What plans did SITA have towards terminating contracts with FDA?

Dr Mohapi explained that the contract had been terminated at the end of March 2018 but had been challenged in court. On value for money, people signed off on work that had not been done and further controls had been put in place with a checklist in place for verification purposes. This was because most of the paperwork on payment that previously came in was prepared by FDA and not verified by anyone. The legal team had been instructed to start the process of litigation on overpayments. On FPS, FDA had been locked out because there were no maintenance costs. SITA’s litigation was based on the fact that they maintained the right to use FPS because payment was made in 2006 – but of course it was subject to the court process.

Ms Chiloane asked SITA to talk about the proposed extension of the FPS contract from 2017 to 2020.

The response was that a letter of award had been issued in November 2017 but the contract had not yet been signed.

Ms Chiloane asked why SITA had to wait for whistleblowers to show that processes had not been followed. Why could they not take their own responsibility? What was the role of the SITA Board? Was there any SITA board member present?

The SITA CEO replied that it was not always right to be reactive to whistleblowers. SITA had taken its own initiative before whistleblowers had made the information known but was working to ensure that its own internal control systems were working.

A member of the SITA Board told the Committee that it had considered the matter to be very serious and the regular updates on investigations were led by the Board and management. The challenges facing SITA were being looked at as lessons learnt and an opportunity to identify weaknesses within the organisation. Lifestyle audits and vetting of some employees were also initiatives of the Board and management.

Ms Chiloane still did not understand the validity of the contracts with FDA. How could there be a relationship with FDA after switching off of systems and putting the public at risk?

The Chairperson expected that the report submitted at the end of May would be able to reveal the validity of contracts and payments made so far.

Mr Brauteseth was concerned about the promises made by the SAPS National Commissioner on targets and timelines because he had previously broken the promise to release files within 14 days to IPID as agreed. Could he explain why this was not done?

Gen Sitole explained that he had a meeting with the IPID Executive Director, brought the matter to the attention of the Minister, and requested them to both meet as these files had to be declassified within the ambit of the law. He requested that the IPID Executive Director and himself be given an opportunity to have a meeting with the Minister because the Minister had said he was going to call them.

Mr Brauteseth sensitised the Commissioner on the need to move forward. How long was it going to take to declassify information?

Gen Sitole replied that by the end of May 2018 he should have met with the Minister because IPID had also written to the Minister.

Mr Brauteseth informed the Commissioner to report matters to the Committee and not directly to the Committee Chairperson because it was irregular. He said that revisiting software systems and setting them up again was not different from what was done in the past. Expenses paid to investigate systems and to take matters to court was all fruitless and wasteful expenditure because if it had been done right, there would not have been problems. If the expenditure was fruitless and wasteful, who should be responsible for this?

Dr Mohapi replied that SITA, at the end of the day, was responsible for everything that had happened to the systems.

Mr Brauteseth asked if all the systems would be redone. Was there any value in re-doing the systems again?

SITA’s response was that the systems were being re-written because the underlying source code of critical applications was currently owned by a third party. It was not abnormal to have critical applications owned by the state because the state would be able to gain complete freedom of functionality.

Based on the information disclosed at the meeting, Mr Brauteseth asked if SITA agreed that everything was a mess. Going forward could SITA walk SCOPA through the whole process of acquiring systems and provide updates on cost. SCOPA should get credit for bringing this matter to a hearing. All the whistleblowers and the media involved in ensuring the matter was brought to the public’s attention should also be given credit. If SCOPA could not put people in jail, it could at least ensure some form of justice was served.

Mr Hlengwa said that the National Commissioner was in the middle of a syndicate that was operating within and outside SAPS, which was its biggest shortcoming. The very people inside SAPS were working outside SAPS and understood the shortfalls. It was therefore necessary for the Commissioner to flush out all corrupt elements. Why was Brigadier Beauty Phahlane still overseeing a very strategic role in SAPS if IPID had called for her suspension? The fact that she was still at work spoke to a high level of a lack of cooperation. If consequence management was selective, then anyone was free to do as they pleased.

Gen Sitole explained that when a report was received on a SAPS member’s involvement in a prima facie case, SAPS was faced with two options: either to follow an expeditious process or to follow a normal internal investigation process where a report was released at the end of the investigation and action was taken on whether to suspend. By the time he took over as Commissioner, the internal investigation option had already been started and not the expeditious process. Investigation was still ongoing but it was one of the matters that had been given high priority.

Mr Hlengwa asked how long the process was going to take. How soon would the report be available?

Gen Sitole replied that the report would be part of submissions to be provided by end of May 2018.

Mr Booi asked about the cost involved in the whole process surrounding the IT system. Was the SAPS Commissioner still confident about SITA which was corrupt and a security risk?

Gen Sitole replied that SAPS had formalised the process about the system but SITA was in charge of costing. It had started looking into certifications and the contracting process, and he had engaged with the Treasury Director General where one of the discussions had been the reconfiguration of SITA.

Mr Booi asked how much money had been spent regardless of whether a meeting had been held with the DG. What was the financial cost?

Gen Sitole assured the Committee that the SAPS CFO was at the centre of the multidisciplinary team and a forensic audit team was looking into the amount of money spent, which would also be provided as part of the progress report on the 31 May 2018.

Mr Ross emphasised the importance of political responsibility and asked that the Minister engage with the SITA CEO to solve the matter once and for all.

In conclusion, the Chairperson said steps had been taken in the right direction and the Committee was confident that corrupt elements within SAPS and SITA were going to be weeded out. If Parliament was going to be at the centre of the fight against corruption, they needed the help of the police but if the police themselves were corrupt who was going to assist? He was pleased with movements made by the SITA CEO in trying to clear up the organisation and stressed the importance of IPID in the fight against corruption. Police commissioners were also encouraged to continue with investigations and he asked that timelines be adhered to so that reports would be received by the end of May as agreed. SITA should also conclude its investigations and have reports ready by end of June 2018 as promised.

The meeting was adjourned.