In a virtual meeting, the Committee met with law enforcement agencies to receive updates on cases that had been referred by the Special Investigating Unit (SIU) to the National Prosecuting Authority (NPA) and the Hawks.
Two items on the agenda were postponed. SIU had been scheduled to provide an update on its investigation into the Digital Vibes contract. The Committee heard that the final report on the investigation had been submitted to the Presidency on 30 June, but that additional information had subsequently been submitted on 2 July, and the report was therefore still being processed. Second, the Presidency had been scheduled to brief the Committee on the reports of all concluded SIU investigations. However, the Presidency had communicated that it was not currently well placed to provide such a briefing, and did not attend the meeting. The Presidency was also unable to provide an update on the status of the suspended Director General in the Department of Public Works and Infrastructure, as the matter was to be heard in court shortly. The Committee was disappointed with the Presidency’s absence – to which it had been alerted at very short notice – and insisted that the briefing would be rescheduled. It emphasised its interest in ensuring that SIU reports led to concrete action by the Presidency.
The Hawks and the NPA provided a joint report on their SIU referrals. The NPA reported that of the cases referred to it by the SIU, 377 were under investigation or awaiting a decision, 23 were in court, 20 had resulted in a conviction, and 51 had been withdrawn. The Hawks reported that it was pursuing 131 active cases emanating from SIU referrals. These comprised a tiny fraction (0.63%) of the Hawks’s total workload of 20 736 cases, but had an estimated total value of R3.4 billion. The Hawks provided a detailed update on the status of the 131 cases: 88 were still under investigation, 20 were on the court rolls, and 23 were awaiting a prosecutorial decision. The Fusion Centre had registered a total of 151 COVID-19 corruption cases, 19 of which were in court.
The Hawks and NPA also reported on the status of the Steinhoff serious commercial crime investigation. PwC had submitted its report on accounting irregularities and was now working on a second report focused on criminality. The investigators had received a draft version of the second report on 30 April. A total of 288 statements had been filed in this case. Outstanding were 23 witness statements – nine from witnesses in South Africa and 14 from witnesses abroad – and 33 foreign bank account statements. The investigators would be requesting mutual legal assistance from abroad, because much of the outstanding evidence had to be sourced from foreign countries (Germany, France, Australia, United Kingdom, Switzerland, Austria, and Poland).
The NPA Investigating Directorate reported on its investigations into Transnet and Eskom, which concerned contracts worth billions of rands. Its Transnet investigations encompassed three matters: consultancy and advisory contracts, locomotives contracts, and the relocation of two original equipment manufacturers to Durban Harbour. Its Eskom investigations, most of which involved Kusile power station, encompassed six matters: the ABB Impulse contract, Impulse gratifications, Tubular gratifications, the Kusile Phola build project, the sale of shares in Optimum Coal Mine, and the unlawful redirection of rehabilitation funds. Most of the investigations were expected to be finalised by March 2022, and some in the next three months.
Members congratulated the agencies on the progress made, and emphasised the importance of collaboration among law enforcement. They asked about progress in the Steinhoff matter, wondering if foreign countries had extended their cooperation and why no arrests had been made yet. The Committee was particularly concerned that the agencies were insufficiently resourced, and that this would have an adverse effect on asset recoveries and on the finalisation and prosecution of cases. It undertook to pursue the budget issue further with parliamentary and executive entities.
Another concern, raised by the Hawks and NPA and taken up by Members, was about how law enforcement should handle reporting to Parliament on sensitive matters. The NPA was concerned that the presentation on the SIU referrals had provided more detail than was prudent to reveal publicly. The Committee agreed that Parliament should not risk compromising ongoing investigations, and that any arrangement had to balance that danger with the need for law enforcement to remain accountable. The Deputy Minister of Police said that his department would elevate the concern to the presiding officers in Parliament, since the problem was a general one and arose outside of this Committee too.
Apology from Presidency
The Chairperson said that the Committee had been scheduled to meet with the Presidency as well as with the National Prosecuting Authority (NPA), the Directorate for Priority Crime Investigation (DPCI), and the Special Investigating Unit (SIU). The Presidency, however, was not present. He had circulated to Members his correspondence with the Presidency. On 24 June, he had written to invite the Presidency to a meeting on the SIU investigations. Yesterday, the Acting Minister in the Presidency had written that the SIU was best placed to brief the Committee – the Presidency was merely the recipient of SIU reports. The Chairperson had responded with the Committee’s rationale that the Presidency had ultimate responsibility for processing and acting on the SIU reports. SIU could not be both player and referee in its investigations.
Nevertheless, that morning, the Acting Minister had sent an apology – she could not attend the Committee meeting, because she had to attend a meeting of the National Coronavirus Command Council (NCCC). She added that, in any case, the Presidency could not report on the two specific issues on which the Committee had requested an update. Firstly, the Presidency could not report on the SIU investigations into personal protective equipment (PPE) procurement corruption, because the SIU had thus far provided only updates, not a final report. The Acting Minister said that the Presidency would be able to engage with the Committee once the SIU final report had been submitted. Secondly, the Presidency could not report on the status of the suspended Director General of the Department of Public Works and Infrastructure (DPWI). The Director General was one of 13 officials implicated in misconduct in the Beitbridge border fence project. However, the Acting Minister said that the Presidency could not provide an update on his case as the matter was now being taken to court.
In his response to the Acting Minister, the Chairperson had pointed out that the Committee’s invitation had been communicated on 24 June, and that receiving the Presidency’s apology on such short notice had put the Committee in a “very difficult” and “unfair” position. The Committee always tried to be flexible and accommodating, but Parliament’s time also had to be respected. All the issues raised by the Acting Minister could have been rised earlier, and he had told the Acting Minister that he held that the meeting should still proceed. He did not believe that any of the issues she had raised should prevent the meeting from taking place.
Mr M Dirks (ANC) said that, in his understanding, the SIU report could inform the Committee and the public about the outcomes of the investigation, but it was the President who would act on those reports. Yesterday, the Presidency had sought to discuss its absence from the meeting with him individually, but he had told the Presidency that it should speak to the Chairperson instead or in addition. The current meeting should proceed with the SIU reports taken as providing information on the current status of the investigations.
Ms N Tolashe (ANC) said that she thought that the Committee agreed fully with the Chairperson and with the approach he had taken. In future, the Committee should not receive such last-minute apologies – it became disorganised if it could not proceed with its programme as scheduled.
Mr B Hadebe (ANC) said that he had read the Chairperson’s correspondence with the Presidency. The Committee had wanted the Presidency to present on the SIU reports submitted to it. Since the Presidency was absent, would the Committee engage with the SIU instead, or would the meeting be adjourned? The Committee had already received about three reports from the SIU, one of which was 133 pages long. He was trying his best to remain calm in responding to the Presidency’s absence.
The Chairperson said that the meeting with law enforcement agencies would proceed.
Mr A Lees (DA) said that the Presidency’s absence created an “unfortunate” situation. Because he had just left another meeting, he had not yet had the chance to read the Chairperson’s correspondence with the Presidency. For now, the DA would reserve its judgement on the matter. In the meantime, the Committee should hear how the Chairperson proposed to proceed.
The Chairperson said that like Mr Hadebe, he was trying to maintain “composure” in dealing with the Presidency’s absence. As he had told the Acting Minister, he still firmly believed that the meeting with the Presidency should have gone ahead as planned. The Committee had been briefed by the SIU, but the SIU could only speak to its findings and recommendations – it was not the “implementing agent.” The Committee had long discussed this: what happened to the SIU reports? Did they merely gather dust, or did they lead to action? The Presidency’s absence was “regrettable.” He accepted the Acting Minister’s explanation on the DPWI Director General – that matter would indeed be in court later that week. At the same time, however, the Committee had to deal with the “perennial headache” of PPE maladministration and corruption. The SIU had investigated and the Committee needed to confirm that there was progress in implementing its reports. For the Presidency, this was a “missed opportunity” to submit itself to parliamentary oversight. Nevertheless, the Acting Minister had said that the Presidency would be able to brief the Committee once it had received the SIU final reports. The Committee would continue to communicate with the Presidency in the expectation that a meeting would certainly take place – it had a duty to pursue the matter. However, these reservations notwithstanding, the Committee should proceed with the briefing from the law enforcement agencies.
Opening remarks by Deputy Minister of Police
Mr Cassel Mathale, Deputy Minister of Police, said that the law enforcement agencies always appreciated the opportunity to account to Parliament through this Committee. The briefing would illustrate the role played by the SIU, as well as its relationship with the other agencies. Under the legislation which established the SIU, the SIU work was closely related to that of the NPA and of the South African Police Service (SAPS), especially DPCI. The presentation would contribute to the Committee’s understanding of the matters with which it was concerned. DPCI got its original mandate from the National Assembly (NA), so it was very appropriate that DPCI should occasionally appear before Parliament in this way. The presentation would be given jointly by DPCI and the NPA, because it concerned work they did together – specifically, it concerned cases which the SIU had referred for DPCI and the NPA to pursue.
The Chairperson said that the agencies should note that this was the last time that the Committee would accept joint reports. It had communicated this previously, ahead of the current meeting.
The Chairperson said that the SIU Head had written to him on the Digital Vibes investigation. The Committee had requested a briefing on that investigation and report, since Members had had questions about the matter after the Committee’s last meeting with the SIU. The report on the Digital Vibes investigation had been submitted to the Presidency on 30 June. Subsequently, on 2 July, additional information had been provided to the Presidency. At this point, the matter was still “alive,” and the information was still being processed. The SIU was therefore not yet able to brief the Committee on Digital Vibes. He would forward the SIU correspondence to Members.
The Chairperson welcomed the delegation from the agencies. He encouraged them to focus on the substance of their presentations. He alerted Members that the presentation displayed in the meeting would be redacted – Members had received presentations which included suspects' names, even in ongoing investigations, and those names could not be revealed publicly.
Opening remarks by DPCI Head
Lt Gen Godfrey Lebeya, DPCI National Head, introduced his delegation. His deputy was not present because she was recovering from COVID-19 and preparing for the funeral of her husband, who had died of COVID-19-related illness. The Acting Divisional Commissioner was currently hospitalised with COVID-19, and the wife of one of the generals present was in the intensive care unit (ICU). COVID-19 was presenting an ongoing challenge. 25% of DPCI members had been affected, and ten members had died.
The Chairperson conveyed condolences from the Committee and Parliament to DPCI and its members. He wished a speedy recovery to those currently ill. The Committee was aware of the challenges presented by the pandemic.
Opening remarks by National Director of Public Prosecutions (NDPP)
Adv Shamila Batohi, NPA NDPP, introduced the NPA delegation. She said that the NPA had been similarly affected by COVID-19 – almost the same proportion of its staff had been affected. The NPA had been engaging with the Department of Health about its staff, as essential workers, being prioritised in the vaccination queue, and she hoped NPA staff would be vaccinated soon. COVID-19 was having a serious impact on capacity and delivery. After the joint DPCI and NPA presentation, which Lt Gen Lebeya would lead, the NPA Investigating Directorate (ID) would make a separate presentation, but she also had some introductory remarks she hoped to make to provide context for the presentations.
The Chairperson conveyed condolences to the NPA and its staff, and wished them strength. He asked that the SIU be introduced first and Adv Andy Mothibi, SIU Head, introduced its delegation.
Adv Batohi asked the Committee to provide guidance as the agencies had been invited to report on the cases referred by SIU. However, firstly, the invitation mentioned monthly reports on the Steinhoff investigation. The NPA had not been aware of a requirement to report monthly, and had not been able to find a reference to such a requirement in the Committee minutes. Monthly reporting would be onerous. Although the NPA was happy to report to Parliament, law enforcement agencies had to be given space to do their work. She and Lt Gen Lebeya did understand the urgency of the Steinhoff matter, and a lot of work was going into preparing to take it to court. Secondly, the invitation referred to the agencies’ “straightforward” cases. The NPA was not sure to which cases this referred and would appreciate clarity on that.
Adv Batohi said that the current briefing and parliamentary oversight more generally, were extremely important. The SIU investigated several cases that were extremely important for the country, and it was critical that other law enforcement agencies pursue such cases to their conclusion. The NPA had had a workshop in March on delivery for impact, and unsurprisingly, corruption – and expediency in prosecuting corruption – had emerged as the top priority. However, the capacitation of the NPA remained a challenge. There were some “green shoots” – recently, there had been promising progress in certain cases. There was a lot of collaboration among agencies, sometimes of a high quality and sometimes in need of improvement. A lot of good work was happening. However, the progress was still “incremental.” For exponential progress, capacitation was crucial, particularly in the Asset Forfeiture Unit (AFU) and the ID, which faced similar challenges. One central challenge was investigative capacity. The NPA did not hire investigators, except on contract.
A potential “game changer” for asset recovery was the co-location of DPCI investigators with Asset Forfeiture experts. This had been agreed to with Lt Gen Lebeya at the high level, but, regrettably, implementation had been slow. She said to Lt Gen Lebeya that she thought they urgently needed to make progress in that area. Forensic capacity also remained a huge challenge in law enforcement. Creating forensic capabilities within government would not happen overnight, and the skills that the NPA needed were extremely difficult to obtain. The NPA had developed a scarce skills framework that would help in that. It was also looking at engaging with the private sector abroad, in line with Treasury regulations, to build partnerships to assist in asset recovery. The AFU was central because “bringing back the money,” particularly from foreign jurisdictions, was crucial.
Adv Batohi said that outside of the ID, most of the SIU referrals were managed through the Anti-Corruption Task Team (ACTT). There were challenges in the ACTT on collaboration between stakeholders. Law enforcement needed to collaborate better and find “common goals.” An ACTT retreat would be held soon and would be discussed at the ACTT meeting next week. Collaboration among law enforcement was good, but could be much better. SIU referrals formed only one small slice of the “massive pie of corruption.” NPA would also appreciate getting clarity and guidance from its political principals on the 'single entity' issue, if the Committee could assist on that.
Overview of DPCI and NPA joint briefing
Lt Gen Lebeya omitted the background information, in line with the Chairperson’s request for conciseness. He would have to find a way to move quickly through the details of the specific cases, or the presentation would take more than two hours. It also provided a summary of the matters managed in the Fusion Centre – some of those matters were referred by the SIU, but others were referred directly by departments or complainants, or were picked up from the media. Thereafter the prosecutorial outcomes of SIU cases and various highlights were noted. There was also a separate presentation dealing solely with the Steinhoff matter.
Lt Gen Lebeya said that subsequent to the initial invitation, the Committee had sent a request specifying that the presentation had to answer certain questions about each case. The necessary information had been added to a separate presentation, which had not been finalised in time. However, DPCI was worried about how it could provide the requested details on certain matters. It was slightly dicey given that the presentation was public. Suspects might be alerted that DPCI was close to charging them, and the presentation might inadvertently reveal its investigation methods, thus alerting criminals to ways of evading those methods in the future.
The Chairperson said the Committee fully appreciated the details were “sensitive" and it did not want to compromise investigations. It would be undesirable for a presentation to Parliament to “botch” an investigation. Members had been provided with the unredacted presentation and the agencies could exercise discretion in the meeting and focus on the high-level aspects. The NPA had called that morning to indicate that parts of the public presentation would be redacted. Lt Gen Lebeya could indicate a sensitive issue and need not discuss it extensively. They would work out how to accommodate responses to Members' questions. The Committee was less interested in details than in “outcomes and impact” in successful prosecutions and recovery of state losses.
DPCI and NPA briefing on SIU referrals
Lt Gen Lebeya said that as of 31 March 2021, DPCI’s workload comprised 20 736 cases and approximately 76 000 charges. DPCI’s current head count was 2 521, only 47% of its fixed establishment of 5 332 and only 1.39% of the total SAPS workforce. DPCI was currently being capacitated with human resources, including through the appointment of contract workers to assist with priority areas such as the Truth and Reconciliation Commission (TRC) matters and municipal matters. DPCI had selected a new head of the forensic accounting investigations component, a chartered accountant, and he would be appointed once he had been vetted for security clearance. However, DPCI faced the risk of losses by attrition for various reasons. For example, DPCI assisted other agencies such as the NPA. Nine DPCI members had joined the ID permanently, and another 15 DPCI members were currently working at the ID.
Lt Gen Lebeya highlighted the following as challenges for DPCI:
- COVID-19 isolation, quarantine, office decontamination, and staff rotation procedures all contributed to delays, especially in attaining evidence;
- Reliance on external forensic auditors;
- The proceeds of crime were quickly dissipated, due to sophisticated concealment methods.
Lt Gen Lebeya discussed mitigating actions that DPCI was taking (see slides). He emphasised that as Adv Batohi had said, steps were being taken to improve collaboration between agencies, particularly through the co-location of DPCI investigators at the AFU.
Of all cases referred to DPCI by the SIU, through the NPA, since 2010, 131 were active. This meant that SIU referrals constituted only 0.63% of DPCI total workload. Their estimated total value was R3.4 billion. Most of the cases involved fraud, corruption, money laundering, contravention of the Public Finance Management Act (PFMA) or Municipal Finance Management Act (MFMA). 88 were still under investigation, 20 were on the court roll, and 23 were awaiting a prosecutorial decision.
The 131 active cases referred by the SIU were each outlined – its background, the offences and monetary losses involved, and its current status (see slides). The cases involved companies, non-profit organisations, government departments, and state-owned entities (SOEs), including Transnet, Eskom and SABC, as well as individuals, both private individuals and public servants. The cases included matters recently referred by the SIU about PPE procurement by the South African National Defence Force (SANDF) and by the Free State, Gauteng, and Johannesburg governments. The update included the COVID-19 cases handled by the Fusion Centre, including the number of bank accounts frozen and the value of asset recoveries (see slides). The Fusion Centre had registered a total of 151 cases, 19 of which were currently at court.
Of the total cases referred to the NPA by the SIU, 377 were still under investigation (or awaiting a decision) and 23 were in court. A further 20 had resulted in a conviction, 51 had been withdrawn by the NPA, and four had resulted in outstanding warrants of arrest. Lt Gen Lebeya also highlighted examples of SIU-referred cases involving municipalities which had had successful outcomes (see slides).
DPCI and NPA briefing on Steinhoff matter
Lt Gen Lebeya said that, as Adv Batohi had mentioned, DPCI had not been aware that the Committee expected monthly reports on the Steinhoff matter. It had also not found any reference to this expectation in the Parliamentary Monitoring Group reports on previous Committee meetings. In the past, DPCI had reported to the Committee of the previous Parliament on a monthly basis until that Committee had told them it was no longer necessary. DPCI would respect the Committee’s directive, whatever it was.
Lt Gen Lebeya provided background on the serious commercial crime investigation of Steinhoff International Holdings NV. Four complaints had been received, together with a report from Steinhoff in terms of Section 34 of PRECCA, and DCPI had combined those into a single criminal investigation. The offences under investigation were fraud and contravention of the Prevention and Combating of Corrupt Activities Act (PRECCA), Prevention of Organised Crime Act (POCA), Companies Act and Financial Markets Act.
The allegations were that Steinhoff Investment Holdings Ltd had been submitting false, misleading, and deceptive financial statements to attract investors, in contravention of the Financial Markets Act. When these allegations had become known in December 2017, the value of the shares had dropped significantly, resulting in substantial prejudice (€6.5 billion) to investors. Steinhoff had appointed PwC to investigate the financial irregularities. PwC had concluded that a group of former Steinhoff executives and others, led by a senior management executive, had over several years pursued transactions which had substantially inflated the profit and asset value of Steinhoff. DPCI had subsequently appointed PwC forensic accountants to investigate further and prepare a second report, this time focused on criminality instead of accounting irregularities. DPCI had received the draft report – which comprised 31 lever arch files – on 30 April 2021.
A total of 288 statements had been filed in the case, including witness affidavits, affidavits serving as proof of facts, subpoenas served to banks and cell phone service providers, and statements obtained from bank officials with bank records (see slides). However, some outstanding investigation was required for the final forensic report. The final report would incorporate evidence collected from other countries through mutual legal assistance. In the main investigation, the audit process had identified the need for a further 23 witness statements – nine from witnesses in South Africa, and 14 from witnesses elsewhere (in Germany, France, Australia, and the United Kingdom). Also to be obtained were a further 33 foreign bank account statements (from Germany, France, Australia, the United Kingdom, Switzerland, Austria, and Poland). In the insider trading investigation, only three statements were outstanding.
NPA Investigating Directorate on SOE investigations
Adv Hermione Cronje, NPA Head: Investigating Directorate, noted the Committee was interested in SIU cases referred the NPA. It would therefore be helpful to outline how the Investigating Directorate (ID) worked. DPCI cases typically arose when a complainant went to a police station and opened a docket. On the other hand, although many ID dockets had been opened by such complainants, its focus was on building a hypothesis on the capture of state institutions. In line with its mandate, the ID focused on serious, complex and high-profile corruption. The scale of corruption in South Africa was common knowledge, and the ID had to select its cases from a wide range of candidates. The Zondo Commission had informed much of ID work. ID cases had also been worked on by DPCI, SIU, South African Revenue Service (SARS), South African Reserve Bank (SARB), and Financial Intelligence Centre (FIC). The ID tried to bring together the work of all these agencies and develop a holistic understanding of what had happened at particular state institutions.
In reporting on cases involving SOEs – specifically, Transnet and Eskom – the ID’s focus was to identify who, at the highest level, was responsible for the corruption. The ID seldom dealt with direct referrals, but such referrals often informed its hypotheses and strategies. It worked very closely with the SIU, even borrowing SIU capabilities. In the Eskom and Transnet cases on which the SIU and ID were working jointly, the SIU processes had led to recoveries being made.
Adv Cronje said that it was difficult, in such a briefing, to convey the ID’s full hypothesis and all the strategies that it used in investigating and prosecuting the cases. She would be happy to answer questions about the ID approach, but with the same proviso made by Lt Gen Lebeya – she had to be cautious not to reveal too much about its strategy and would try to focus on the high-level aspects. Also, in some cases but not in others, she would mention the names of suspects. Many of the matters had been dealt with at the Zondo Commission or in court, and it would be artificial to refrain from naming individuals and entities against whom the ID had already made allegations in court papers.
Transnet: Consultancy and advisory contracts
Adv Cronje said that the first Transnet case concerned fraud, theft, racketeering, corruption, and contraventions of PRECCA, POCA, and PFMA, in 13 contracts with a total value of R1.9 billion and with related bribes and gratification estimated at R635 million. Transnet had appointed McKinsey, Regiments Capital, and Trillian allegedly without following the procedures stipulated by the PFMA and by its own procurement regulations. The firms were paid at inflated rates to enable them to pay up to 75% of their fee to alleged service delivery partners, which never provided any service and which laundered the money to other entities, alleged to be front companies for Salim Essa and for the Gupta family. The ID aimed to finalise the charge sheet in July and to finalise the investigation in August, although the investigation might be adversely affected by the COVID-19 resurgence in Gauteng.
The ID had already taken Regiments to court in an asset forfeiture case, seeking to freeze R1.6 billion in corrupt proceeds. The case had been overturned on a technicality and the ID had taken it on appeal, to be heard shortly. The ID had successfully restrained the assets of Albatime, one of the entities that received benefits from Trillian. Through collaboration with ID and the Zondo Commission, McKinsey had paid back R800 million to Transnet in a contemplated civil case. However, the ID’s current focus was prosecutions. It was working on how to structure the matter for court – it was not practical to enrol such a large matter in its entirety. It was better to break down the matter into smaller, more manageable prosecutions that could be expedited. The ID hoped to enrol the matter in September.
Transnet: Relocation of two original equipment manufacturers (OEMs) to Durban Harbour
Adv Cronje said that a second case was a “spin-off” on the Transnet locomotives contract, though it involved a separate contract worth R1.2 billion, with related bribes and gratification estimated at R635 million. Three companies were involved, alongside Transnet officials and board members, in alleged fraud, theft, and contraventions of PRECCA and POCA. The ID aimed to finalise its investigation in October, and was pursuing this matter alongside the locomotives contracts.
Transnet: Locomotives contracts
The Transnet locomotives contracts had a total value of R40.2 billion, with an estimated R8.161 billion in bribes and gratification. The ID was investigating corruption, fraud, theft, and contraventions of PRECCA, POCA, and PFMA, in the awarding of the contracts. It was alleged that China South Rail, which had received the first tender for 95 locomotives, had agreed to pay a 20% “commission” to Century General Trading in Dubai. Similarly, in a later contract for 1 064 locomotives, China South Rail had agreed to pay Tequesta 21% of the contract value in return for advisory services. The ID aimed to finalise its investigation in March 2022, with the charge sheet expected to be finalised in November.
Adv Cronje said that it would be imprudent to provide too much detail about the ID’s strategy. As in the advisory and consultancy matter, the ID was sequencing smaller prosecutions – including tax prosecutions – that could be used to test its central hypothesis about the larger locomotive matters. Prosecution was somewhat hampered by the need for international cooperation, since the entities involved were foreign SOEs. However, prosecution was only one component, alongside asset recoveries and civil processes. Transnet had instituted civil proceedings, now underway, against the companies.
Eskom: ABB Impulse contract, referred by SIU
Adv Cronje said that most of the Eskom cases dealt with the award of contracts at Kusile power station to ABB. The first matter was the unfair award of variation orders to ABB and the corrupt relationship between ABB employees and the employees of Impulse International, an ABB subcontractor. ABB had received an estimated R1.58 billion in overpayment and in unfairly awarded variation orders. Eskom executives and ABB and Impulse employees were implicated in corruption, fraud, and PRECCA contraventions. The ID intended to finalise its investigation in March 2022.
ABB had already paid a R1.5 billion settlement to Eskom. It was again difficult to provide details of the ID’s prosecution strategy without giving too much away. The relevant prosecutions were being coordinated with NPA’s foreign counterparts, as some of the implicated executives were in countries that did not extradite to South Africa.
Eskom: Impulse gratification, referred by SIU
Adv Cronje said that Impulse and Indiwize Construction had allegedly transferred money to ABB employees, to ensure that ABB subcontracts were awarded to Impulse. The ID aimed to finalise its investigation at the end of July. However, one of the suspects in this matter – whom the ID had been planning to arrest and prosecute – had died of COVID-19 the week before. Two weeks earlier, two ID investigators had themselves been hospitalised with COVID-19. So the ID was adversely affected by the pandemic, just as Lt Gen Lebeya had said DPCI was.
Eskom: Bedfordview Kusile – Tubular, referred by SIU
Adv Cronje said that in 2007, Eskom had concluded a contract with Alstom S&E Africa, worth approximately R13.1 billion, at Kusile power station. Eskom had subsequently reported possible misconduct. An investigation had found that the agreement between Alston and Eskom had been manipulated in several ways. The central allegation was that Michael Harry Lomas and entities related to Tubular Construction Projects had paid bribes to Eskom employees to induce Eskom to de-scope the contract and contract directly with Tubular instead. Over R1.5 billion in bribes or gratification was alleged.
Related cases were being heard in court in South Africa and in the United Kingdom. The NPA was considering making agreements with some of the accused, in order to strengthen its case against those ultimately responsible at the highest level. The matter also appeared on DPCI’s list of cases, because it had originally been reported at Bedfordview and overlapped with another criminal case docket. The dockets had subsequently been pooled.
Eskom: Kusile Phola build project, referred by SIU
Adv Cronje said that Eskom employees had allegedly received gratifications, valuing over R1.5 billion, from contractors. Investigations had revealed that Babinatlou Business Services had received R74 billion from various Kusile build project contractors, namely Tubular Holdings, Esor Construction, Stefanutti Stocks, and Tenova Mining & Minerals SA. The Eskom cases showed a pattern of corrupt procurement processes. The ID expected to finalise its investigation at the end of November. Currently, it was focusing on the implicated third-party entities, in order to ensure that those cases were solid before it moved onto the next level of prosecutions.
Eskom: Optimum Coal Mine sale of shares
Adv Cronje said this Eskom case involved the sale of Optimum Coal Mine to Tegeta Exploration and Resources, as well as several Eskom contracts awarded to Tegeta and prepayments received by Tegeta. The case implicated several Gupta-related individuals and entities. The ID expected to enrol the matter in March 2022, although it faced the problem that the main suspects in the case were not in South Africa. The NPA was making efforts to extradite those suspects, and was simultaneously pursuing other alternatives.
Eskom: Rehabilitation of funds
Adv Cronje said that, as established at the Zondo Commission, Eskom had unlawfully redirected the rehabilitation funds – over R1.7 billion – of Optimum Coal Mine and Koornfontein Mine. The investigation was complete and had found fraud, theft, money laundering, perjury, and forgery and uttering. ID had intended to enrol the case before the end of June, but had been “hamstrung” by difficulties related to COVID-19, which it hoped to overcome before the end of July.
Adv Cronje said that the presentation outlined the challenges faced by the ID, and that these had largely already been raised by Lt Gen Lebeya and Adv Batohi (see slides). Skills challenges, in particular, were huge. The problem was not just about numbers – it was about building capabilities over time through experience. The NPA had not undertaken major corruption prosecution over the last decade, so there was very little experience in fast-tracking such cases while also pursuing a broader strategy. However, the ID was building such capabilities. It was learning an enormous amount during each step of the processes. Those processes were challenging and complex, but she thought genuine progress was becoming apparent.
Parliamentary reporting on sensitive information
Adv Batohi said that she wanted to raise a concern before Members discussed the briefings. As Lt Gen Lebeya had said, the original version of the first presentation – jointly prepared by the NPA and DPCI – had been less detailed. The Committee had later sent a request that certain details should be provided, and DPCI had added that information to the presentation without the NPA seeing the final result. She was seriously concerned about the extent of the detail provided in Lt Gen Lebeya’s presentation. For example, the presentation mentioned the outstanding elements of investigations and the names of prosecutors and witnesses. The suspects in these cases were not just “sitting around” – they were actively planning to evade prosecution. Even the information that an investigation was being conducted, or that it was progressing in a certain way, could alert such suspects. Such a presentation gave suspects a lot of information. Suspects were everywhere – they were even in Parliament.
Adv Batohi said that an understanding had to be sought between law enforcement and the Committee. What did accountability to the Committee entail? How could such accountability be provided effectively but without, as the Chairperson had said earlier, compromising investigations? They needed to have a constructive engagement about how to strike a balance between the potential damage to investigations, on the one hand, and, on the other hand, the agencies’ accountability obligations to Parliament and thereby to the people – obligations which they respected and took very seriously. They needed to find “a middle ground.” Perhaps after the meeting, the agencies could meet with the Chairperson to find an understanding. They had to achieve accountability without compromising these very complex and sensitive investigations.
The Chairperson replied that firstly, Lt Gen Lebeya’s presentation was supposed to be a joint presentation. If the NPA had not been aware of its content until the meeting, that raised questions about the quality of the communication between the NPA and DPCI.
Secondly, he had already mentioned that the NPA had phoned him that morning. The NPA had requested permission to redact sensitive information in the public version of the presentation, and he had readily conceded to that request. He had even asked for the redacted version to be sent to Members, so that Members would be aware of which specifics were not in the public domain. He had not had time to consult with the Committee about the NPA’s request, but he had thought it reasonable. He had made this concession, and explained it to Members, precisely because he understood Adv Batohi’s concern. He reiterated that the Committee had no intent to derail or compromise investigations, and instead wholly intended to protect their integrity. He noted Adv Batohi’s concern and the Committee would take it forward.
Police Deputy Minister Mathale thanked the agencies for their presentations. Adv Batohi was raising a concern that the Ministry shared. The issue had come up during a meeting with Lt Gen Lebeya and they had agreed with the Minister of Police that it was a concern. They had decided that the Ministry should formally communicate with the Speaker of the National Assembly about how law enforcement agencies could facilitate the flow of information to Parliament without compromising the cases. The discussion should probably involve the Minister of Justice, perhaps also the House Chairperson of Committees and the relevant NA Committee chairpersons. A formal engagement of this kind was appropriate as the matter was not unique to this Committee. The work done by SAPS, NPA, and SIU affected all government departments so many Committees were interested in receiving updates from them on ongoing investigations. The agencies needed to develop a common approach to their parliamentary engagements to ensure they provided accountability without compromising their work.
Deputy Minister Mathale said that he appreciated the Chairperson’s response, which acknowledged the sensitivity of the matter. He hoped that the Chairperson’s parliamentary colleagues would share his attitude. Parliament and law enforcement agencies had a common objective: everyone wanted the agencies’ work to succeed. It was just a matter of working to achieve a common understanding of the approach taken, so Parliament and the agencies could enhance each other’s work through their interactions.
Mr Hadebe said that he agreed with Adv Batohi, the Chairperson, and Deputy Minister Mathale. However, one would have assumed that it was already standard procedure to refrain from distributing sensitive information to the Committee. There should not be a perception that the Committee was insisting on receiving sensitive information about ongoing investigations, or that it was forcing law enforcement agencies to share that information. The Committee understood the constraints. Its intent was not to compromise criminal cases, so it did not want to hear sensitive information that was sub judice or under investigation. Instead, the Committee intended to follow up on concluded cases, to ensure action had been taken and consequence management had been effected. It was only interested in information pertinent to such a follow-up. The delegates should ensure they do not put themselves in a compromising situation. For example, Adv Batohi had just said that some suspects were in Parliament – that information had openly been offered without the Committee asking for it.
The Chairperson said that he thought everyone was in agreement. He thanked Adv Batohi for her concern and Deputy Minister Mathale for his constructive response.
Mr Lees said that he thought the subject was “fraught with difficulty.” He thanked the Chairperson for making a last-minute determination in response to the NPA request that morning, but the issue should not be oversimplified. The Committee could not simply give delegates carte blanche to decide, at their discretion, what information was or was not sensitive, and what information they did or did not present to the Committee. Moreover, it was not merely a matter of requiring agencies to brief the Committee on concluded cases, while allowing them to remain reticent on ongoing investigations. For example, the Steinhoff matter had been going on for years, and no charges had been laid. Markus Jooste, whose involvement was public knowledge, lived “a life of luxury.” Naturally, the Committee wanted to receive a report on the Steinhoff matter. Even though the case had not been concluded or even prosecuted, it was a matter of public interest and in the public domain. So there was more to the issue raised by Adv Batohi, and he thought it needed further discussion.
The Chairperson said that the Committee would wait for the Ministry to contact the Speaker, the House Chairperson, and the affected Committees, as Deputy Minister Mathale had indicated it intended to. The Committee would park the issue until it was called on to participate in that wider discussion with Parliament. He encouraged law enforcement agencies to improve communication, so that all stakeholders could find a common understanding and “sing from the same hymn sheet” moving forward. He thought everyone agreed with what had been said on the issue.
SIU update on Digital Vibes investigation
The Chairperson returned to the point he had raised earlier about the SIU briefing which had been scheduled for this meeting. He did not want the situation to be misunderstood, and therefore read into the record a letter he had received from Adv Mothibi on 5 July. The letter concerned the invitation for the SIU to update the Committee on the Digital Vibes investigation in the 6 July meeting. Adv Mothibi had explained that the SIU had submitted its report to the President on 30 June, and subsequently had submitted additional related documentation on 2 July. The Presidency had been able to begin considering the report only once the additional information had reached it on 2 July. Since the Presidency was still considering the report, the SIU, through Adv Mothibi, had asked the Committee to reschedule the update on the investigation.
The Chairperson said that Members had indicated that they were agreeable to the SIU request. At the last meeting with the SIU, Adv Mothibi had committed to finishing the report by the end of June, and that deadline had been met. Moreover, in light of the developments discussed at the start of the current meeting, the Committee would be meeting with the Presidency as soon as possible.
Mr Lees said that it was good to see that “long overdue” action was being taken by law enforcement. Despite his comments a moment ago, he thought that the agencies should be congratulated for their work. However, he was concerned that the volume of work was so great and the agencies’ resources so small. The human resources shortfall, both in skills and in headcount, was very concerning. He thought that the Committee’s report should include a recommendation about the agencies’ budgets. They were vital entities, and they had to be properly resourced – both financially and with human resources – if they were going to clean up the corruption that had taken place. He asked the delegates to provide further comments on the resourcing of their agencies, so that the Committee could make an informed recommendation.
Lt Gen Lebeya replied that, apart from human resources, DPCI needed other resources that worked in tandem with human resources. It was working on that. DPCI expected to receive assistance, but some funds had already been made available, and it wanted to ensure that it exhausted those funds it already had before it asked for further funding. The biggest problem currently was accommodation. It also needed assistance in dealing with other departments.
Adv Batohi said that the NPA was very concerned about its budget moving forward, and introduced her colleagues to provide details.
Adv Anton Du Plessis, Deputy NDPP: Strategy, Operations and Compliance, NPA, said that, as Adv Cronje had mentioned earlier, resourcing was not just about numbers and the size of the budget – it was about the types of capacity that were needed to deal with these types of crime. There was a budget component but it also required a “holistic,” multi-faceted strategy, and a holistic set of non-traditional engagements, including with the private sector. In addition, as the NPA had reported to the Portfolio Committee on Justice and Correctional Services in May, the NPA also needed its partners, especially DPCI, to be properly resourced and capacitated. The NPA was working on complex and unfamiliar matters, and it needed to develop “sustainable” capacity for dealing with them. This was not going to happen overnight, and it also would not happen through internal processes alone – it would sometimes require partnership with other entities, both nationally and internationally, and including the private sector. The NPA would also have to expand its approach to skills development, to the recruitment of prosecutors through the aspirant prosecutor programme, and to the appointment of specialist prosecutors and external counsel. Crucially, it had to work out a sustainable budget for doing all of this in a very fiscally constrained environment.
Adv Du Plessis said that, as Members knew, there was not a lot of money to go around at present. But it was “unfortunate” that the NPA faced such a difficult budget situation over the next three years. Over the next three years, the NPA’s budget increase amounted to around 2% – lower than inflation, and therefore actually a decrease in real terms. The NPA would engage with the relevant committees, in consultation with DPCI, to try to secure the budget it needed. During the COVID-19 pandemic, budgets were being shifted around more than usual, since agencies were underspending on some expenditure line items and overspending on others. As Lt Gen Lebeya had said, this required ongoing engagement with budgetary processes – the NPA had to see how it could use the funds it did have, and then find innovative ways of getting additional funds. And, as he had said, it was not just about the funds, but also about the human resources and specialised technical resources the NPA needed in order to do its work.
Mr Tebogo Sethabela, NPA Acting Chief Financial Officer, said that there were two “red flags” to raise about the budget. Firstly, the NPA recruitment drive, which had begun about a year ago, was still underway and the NPA was filling its vacant posts. Its biggest problem, however, was the low budget increase over the next few financial years – at around 2%, below inflation. The NPA could cover the compensation of its employees for the current financial year, but it would face a serious challenge in the outer years – it would not be able to compensate the employees that it was now recruiting.
Secondly, the budget for goods and services was critical, and it was insufficient. In the current financial year, the NPA was already, going into the second quarter, “in the red” for goods and services. There would naturally be a “knock-on effect” in the ID and all other units. For example, the ID’s work required highly skilled services that had to be sourced from the market. The NPA budget allocation was R4.4 billion in 2021/22, R4.487 billion in 2022/3, and R4.5 billion in 2023/24. The fiscal constraints obviously were not unique to NPA, but they were critical for the NPA – the biggest problem the NPA faced was always resourcing the organisation. When the budget increase was below inflation, this posed a very serious challenge, including in 2021/22.
Adv Batohi added that the NPA knew that it was working in a time of severe fiscal constraints, and that it had to be more efficient with fewer resources. However, an investment in the NPA was an investment in the country. This held particularly for the AFU – there would be returns on any investment in asset recovery. AFU hoped to and should recover more money than it spent. The AFU and the ID were two key areas. Asset recoveries often depended on prosecutions and convictions, so effecting asset recoveries required ensuring that prosecutions moved quickly. It would take “big money” to achieve what the NPA, and law enforcement more generally, were trying to achieve. Forensic capabilities did not come cheap.
Adv Batohi said that one challenge was that the NPA had difficulty recruiting expensive forensic skills under the public service remuneration framework. It was in the process of adopting a scarce skills framework, which would provide some leeway, but not enough. As noted earlier, the NPA needed investigative capacities – but there were legal and institutional obstacles to the NPA hiring permanent investigators. Some of these challenges required legislative amendments. In trying to capacitate the AFU and the ID, in particular, the NPA was working within a very constrained legislative framework. The NPA was trying to be innovative, but more resources were needed for that. She should also mention witness protection – it was extremely expensive to protect witnesses. The Witness Protection Act placed the programme within the Department of Justice and Constitutional Development. Due to an arrangement between previous NDPPs and ministers, the witness protection programme currently fell within the NPA. The NPA was engaging with the Minister of Justice and his Director General about the ultimate location of the programme. However, whichever entity ultimately housed the programme, that entity would require a lot of money moving forward. It was already becoming clear that the programme was “under strain.”
Mr Lees said that the Committee had raised resourcing at previous meetings, and it seemed that the situation had not improved. The problem was not that government did not have the money. It had been able to allocate R14.6 billion to SAA. Surely, in prioritising resources, there could be no comparison between these strategically important law enforcement agencies and a “defunct, bankrupt airline.” He agreed that state entities should “do more with less.” However, there were clearly funds available, and those funds were being used for purposes far less important than this. Through state capture, South Africa had been systematically destroyed, economically and otherwise, over the last decade. South Africa faced a dire future if it did not get on top of the lingering fraud and corruption. Yet Parliament still had to debate allocation of funds to key law enforcement agencies. It was mind-boggling. He firmly held that the Committee’s report should contain strong recommendations on funding and other forms of resourcing for these agencies.
Mr Lees said that Lt Gen Lebeya would recall that, in 2017 or 2018, he had been “a little bit rude” about the pace of investigation. A huge amount of work seemed to have been done on the Steinhoff investigation since then, for which he congratulated Lt Gen Lebeya. However, there were still no charges laid against the persons involved in the biggest corporate fraud in South Africa’s history. When would the suspects be charged? When would Markus Jooste have to face the courts, account for his actions, and, hopefully, if found guilty, be sent to prison for a long time?
Mr S Somyo (ANC) said that some matters had received a lot of public attention. Also, when suspects were pursued and prosecuted abroad in the cases that seemed to be moving slowly domestically, that encouraged interest in the progress of those domestic cases. He was particularly interested in progress in the Steinhoff matter. How far were the agencies in that matter? It was a huge matter in monetary terms and it impacted negatively on investments, so it had to be vigorously pursued by domestic agencies. Even if monthly or quarterly reporting was too onerous, some kind of report had to be made. If no report was made, it created the perception that no action was being taken. Yet Lt Gen Lebeya’s report in the current meeting had shown that, in fact, extensive work had been done, and there were only a few outstanding issues.
Lt Gen Lebeya replied that DPCI would have loved for the Steinhoff matter to have progressed more quickly. One concern was that there was a multitude of charges that individuals could face. Should law enforcement prosecute one offence at a time, or should it prosecute them jointly? The various agencies involved in the case were discussing this, and their views differed in certain areas. But DPCI would continue to work towards charging the suspects. No formal charges had been laid yet, which is why DPCI did not mention the suspects’ names, even if others had identified them in the public domain – they were only suspects, not accused persons.
Mr S Somyo expressed his condolences to Lt Gen Lebeya’s Deputy. The Committee had to appreciate that, given COVID-19, the agencies were working under very difficult conditions.
Mr Somyo said that Lt Gen Lebeya’s presentation on the SIU referrals had been unusually detailed, and that the detail showed that DPCI had been doing a lot of work. However, he was concerned that it covered only the 131 active cases referred by SIU – a miniscule portion of the 20 736 total active cases for DPCI. The Committee should encourage DPCI to survey and categorise all its cases, and perhaps conduct an age analysis too. That information should be provided to the Committee so that all cases could be kept on the radar.
Lt Gen Lebeya agreed the 131 cases in his briefing were only 0.63% of the DPCI total caseload. However, DPCI could categorise the other cases, and had done so for other purposes. Most of its cases involved serious organised crime, serious commercial crime, or serious corruption, though there were also some crimes against the state and some TRC matters. DPCI dealt with national priority offences – but it had to set priorities even among those national priority offences. It had done an age analysis of its cases, which it had shared with the ACTT. 6 000 of its cases, involving over 11 000 accused, were at court. DPCI also had to ensure that those enrolled cases were properly finalised. Sometimes, due to capacity problems, matters were not finalised as quickly as DPCI hoped.
Mr Somyo said it would be naïve for the Committee to expect comprehensive reports from law enforcement agencies given the sensitive information. What the Committee wanted was assurance that once wrongdoing was identified, consequence management followed. Investigation had to be matched by prosecution. SIU investigations resulted in findings and referrals, including to DPCI and NPA. The Committee wanted to ensure that the SIU excellent performance was matched by the performance of the agencies which finalised the referred cases. The Committee needed to know the current state of the referrals to ensure that they were being pursued.
Mr Somyo said that the Auditor-General was conducting special audits into COVID-19 expenditure. Ideally, those audit findings would be energetically pursued by law enforcement while still fresh. However, he understood that DPCI and the NPA were constrained by their capacity and resources, both financial and otherwise. In the past, he had proposed for consideration that the law enforcement agencies would benefit financially from asset recoveries. If a successful investigation and prosecution yielded asset recoveries or other revenues, then a percentage of that amount could be given to the agencies that had contributed to the success of the case. The country was in a deep fiscal crisis, but it made sense that the agencies who chased the money should receive some portion of the gains.
Lt Lebeya said that DPCI interacted with the Auditor-General. Last week, for example, he had met with the AG, who had suggested that DPCI look at certain cases. Some of the AG’s cases were referred to the Fusion Centre and others were referred directly to DPCI, but, either way, those cases were being dealt with. DPCI had also established a specific section, located within its Specialised Commercial Crimes Unit, to deal with matters emerging from the municipalities. A lot of corruption and fraud took place at municipal level, especially in municipal tender processes. So DPCI had established the relevant capacity to ensure that more of the responsible parties were brought to court. He thought Members would be aware that DPCI had already brought to court certain individuals involved in such municipal cases – they were charged not only with fraud and corruption but also, in some cases, with other offences like racketeering.
Adv Batohi said that the money recovered from asset forfeiture went into the Criminal Assets Recovery Account (CARA). In fact, CARA did allow for a certain percentage to go back into law enforcement budgets. So the more money law enforcement recovered, the more funding law enforcement could get.
Ms V Mente (EFF) said that Lt Gen Lebeya’s presentation on SIU referrals seemed incomplete in its coverage of some cases, especially the Brixton cases. For most cases, the slides clearly indicated that the case had been referred to the NPA on a certain date and that the prosecutor’s decision was outstanding – but in the Brixton cases, the timeline and the actions outstanding. This made it difficult to analyse the age of the cases and potential delays on the part of the agencies.
Lt Gen Lebeya replied that Ms Mente might be looking at an older version of the presentation. The additional information about timelines had been incorporated, in red text, in a newer version. If she wanted information about a specific docket, he could read those dates to her.
Ms Mente said that the Committee should follow up on the briefings in the future, cross-referencing between past and future presentations. According to the briefings, many of the corruption cases were almost finalised. For example, Adv Cronje said that the Impulse gratification case at Eskom was almost finalised. But had any arrests taken place in these cases? If the cases were almost finalised, it was surprising that the very same officials and companies were still operating. For example, ABB, though implicated, was still involved in Eskom tenders.
Mr Hadebe said that he was hesitant to ask questions, for fear of “skating on thin ice” in probing sensitive information. However, if the agencies could safely answer, he wanted to know about the Steinhoff investigation. It was quite concerning, since the case had first become prominent in 2017, that it was only as of April 2021 – four years later – that a draft forensic report had been received and was being studied by investigators. Lt Gen Lebeya had also mentioned that mutual legal assistance requests were being made for evidence needed for the final report. There were 33 foreign bank statements and 14 foreign witness statements outstanding. Had progress been made on that? Was DPCI receiving cooperation from other countries?
Mr Hadebe said that the Committee appreciated that the wheels of justice were turning, though perhaps slowly. However, it wanted to see the wheels of justice crush the beneficiaries and proponents of state capture and corruption. The culprits had to be prosecuted and imprisoned. People were sick and tired of inaction. His question was therefore motivated by an interest in ensuring that suspects had to face the music and that justice was served – currently, such people did not want to go down without a fight and without attempting to destroy the country in the process.
Lt Gen Lebeya replied that the audit process had identified the further evidence needed. However, that had been relatively recent, so it might be too early to judge how much cooperation DPCI would receive. When notices were served and mutual legal assistance was requested, there was a certain timeframe provided for the foreign parties to respond. If his colleagues had specific information about the requests, they could add to his response.
Mr Hadebe noted the outstanding statements from witnesses and banks abroad. Did this mean that DPCI had sent the request for those statements but had not received a response within the usual timeframe? Or did it merely mean that DPCI still had to get the information?
Ms V Mente (EFF) asked about the dates provided for the finalisation of the ID investigations. Sometimes the date was a long time away – for example, the ID aimed to finalise the ABB Impulse case in March 2022. How did the ID determine those dates? Moreover, was it fairly certain that it would be able to finalise the cases by the dates given – or would the resourcing problems have an impact on the timeline?
Adv Cronje replied that the reliability of the ID’s targets did relate to resourcing. For example, the ABB team comprised two prosecutors and four investigators. Yet the ABB investigation was “enormous,” since it consisted of several smaller prosecutions. As she had noted one of the planned prosecutions had not been able to go ahead – initially, the arrest had been delayed due to COVID-19, and last week the suspect had himself died. Importantly, the ID relied on staff seconded from other agencies. Lt Gen Lebeya had allocated 15 DPCI members to the ID full-time. Two were working on the ABB investigation, but not full-time, since they were also working on other dockets. The ID had also appointed 21 financial investigators from 1 January. They would be managed by four chief financial investigators, who had only come aboard formally on 1 July – so, in fact, it was only this week that the ID would be meeting with its full component of financial investigators for the first time. The ID also did not have a building to house the financial investigators’ offices. For the tools of trade the investigators needed for their work, the ID was negotiating time and space with the Zondo Commission. The NPA had hoped that, by now, the Zondo Commission’s capacity would have migrated full-time to the ID – but, of course, the Commission’s work had been extended.
Adv Cronje said that the ID set the predicted deadlines based on the resources it had available. However, admittedly, the ID had shifted its deadlines on several occasions. When it did not receive the resources or capacity that it had expected to have, it had to re-group and develop a new strategy for doing what it could with the available resources. She had “gone begging” to the SIU, asking the SIU to second to the ID some of its investigators who were familiar with the investigation, so as to augment the ID’s full-time capacity. The bottom line was that the more resources the ID had, the more it could do. Without the resources, it took longer. She hoped the ID would be able to work to the dates in the presentation. Those dates were based on the ID’s current resources, and there were financial investigators on board for the first time – but the ID now had to work on acquiring other necessary capacities and getting the investigators fully functional.
On resourcing, the Chairperson noted in a prior NPA presentation, it had indicated it needed to hire an additional 700 prosecutors. Subsequently, after a meeting with the inter-ministerial committee, the Committee and NPA had heard that funds would be made available to fill the vacant prosecutor positions. What was the NPA’s current vacancy rate for prosecutors, and how many more prosecutors did it now need? Had the NPA received funds from Treasury for filling the vacancies? If necessary, the Committee could engage with the Department and Treasury about that. Mr Lees was right that if the NPA was under-resourced, prosecutions would take ten years, and other complications would emerge, including obstacles to asset recoveries. The Committee understood that it took money to recover money. But timing and urgency were also critical. He did not want to see merely “cosmetic prosecutions,” resulting in imprisonments but not in asset recoveries.
Adv Batohi replied that the NPA had been given an injection of funds about 18 months ago. The NPA had also revived its Aspirant Prosecutor Programme. With that initial injection, it had gone on an intensive recruitment drive, hiring almost 900 prosecutors, including about 400 aspirant prosecutors. However, as Mr Sethabela had said, the NPA was concerned about future years. With the budget increasing at such a slow rate – around 2% per annum – the NPA would not have sufficient funds to compensate the staff it was now recruiting. This was a huge concern, and the NPA was engaging with Treasury about it. The goods and services budget was also shameful and under serious strain. The NPA did not just need staff – it also needed to provide staff with the tools of trade they needed to do their work. The NPA needed to invest in technology, support services, and tools of trade. It was pointless to recruit additional staff if they would not have the requisite tools of trade. In the context of the national budget in its entirety, the NPA annual budget – R4.4 billion – was miniscule. The NPA did not need much money to make a large impact. The NPA would also submit a written response clarifying the recruitment figures.
Closing remarks by the Chairperson
The Chairperson noted the points raised by Adv Batohi in her opening remarks, and the Committee would discuss those. The other issue about reporting on sensitive matters to Parliament was more general. As the Police Ministry had said, it would engage with the NA presiding officers. The Committee would participate when it was called upon to do so. Ultimately, the Committee wanted to see cases moving to ensure consequence management was not confined to internal disciplinary processes in departments or entities. Law enforcement and the judiciary were crucial in “turning the tide against corruption.” This would require effectiveness and efficiency, but also the pooling and sharing of resources, skills, knowledge, and expertise. Collaboration was critical.
The budgetary problems of these agencies should not “fall on deaf ears.” The Committee would have to discuss this with the Portfolio Committee on Justice and Correctional Services, the Department and Treasury, so that it could be dealt with “once and for all.” Otherwise, Parliament would have to manage its expectations in accordance with these budgetary constraints. Parliament could not expect the NPA to deal with 50 cases if it only had the resources to deal with 20. If it were forced to, the quality of its work would suffer. Unfortunately, to recover money and to prosecute cases required money – though, at the same time, there were non-financial problems that could not be addressed with financial solutions. So a healthy balance was needed. There were competing priorities. Yet corruption continued to “destabilise” the state at every point, and the loss of each rand negatively affected a South African. The government had to “put our money where our mouth is.” The commitment to fight corruption came with financial obligations, and the Committee should take this seriously.
The Chairperson thanked the delegations which assured the Committee that work was being done. There should be no further disagreements between DPCI and NPA over the appropriateness of the content of their joint presentations. The Committee encouraged the agencies to collaborate and communicate better about the submissions they made to the Committee. Although the Committee’s reputation proceeded it, Members were not especially demanding – they were nice, smart people, and they were aware of the sensitivity of law enforcement work. It took teamwork across the state machinery to sort things out and accommodate each other.
The Chairperson thought that the Committee remained unequivocal in its expectation that the Presidency would report to it about the concluded SIU reports. This should, had to, and would be done. It was “not negotiable.” Otherwise, the SIU reports – both about PPE corruption and other matters – would only “gather dust.” If there was not already a framework for implementing the SIU reports, such a framework had to be established. The SIU, and therefore government, spent millions of rands on the investigations, and that expenditure could not be rendered wasteful and fruitless. The investigations had to have an impact and lead to concrete action. Currently, the Committee’s focus was on “fixing systems” – restoring functionality to parts of the state machinery.
The Chairperson noted Ms Mente’s point about the need to follow up and cross-reference progress in the cases reported, especially to monitor delays. The secretariat would look into that and would send written questions from the Committee to the agencies, so that the Committee could get a better perspective on these matters.
The meeting was adjourned.
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