Corruption in local government: NPA, SIU, DPCI progress reports

Meeting report

The Chairperson noted that in a previous session with law enforcement agencies, the Committee had resolved that the agencies provide the Committee with quarterly progress reports on corruption cases in local government.

Special Investigating Unit (SIU) briefing
SIU Head, Adv Andy Mothibi, SIU Chief National Investigations Officer, Mr Leonard Lekgetho and Adv Gerhard Visagie from the SIU, gave the briefing. The SIU has made several investigations into allegations of corruption in local government and where wrongdoing has been found, it has either made referrals to the NPA for criminal prosecution or to the political authorities to implement disciplinary charges against municipal officials; setting aside contracts and recouping of funds. The SIU also made recommendations to the municipality on how to improve systemic problems that allow corruption and maladministration to occur (see document for details).

Directorate for Priority Crime Investigation (DPCI) briefing
DPCI Head, Dr Godfrey Lebeya, said that 121 local government investigations are currently underway, 27 cases are pending decisions from the NPA, and 69 court cases are enrolled. Many of the cases being investigated are in municipalities based in the Eastern Cape, KwaZulu-Natal, Western Cape and the North West.

National Prosecuting Authority (NPA) briefing
National Director of Public Prosecutions, Adv Shamila Batohi, Deputy NDPP: National Prosecutions Services, Adv Rodney de Kock, and Deputy NDPP: Asset Forfeiture Unit, briefed the Committee. (see document for details).

Discussion
Ms H Mkhaliphi (EFF) said that the Committee is interested in how law enforcement agencies (agencies) are dealing with corruption in municipalities, as this impacts the quality of services delivered to residents. Both the NPA and DPCI reports lacked the details the Committee requires to communicate the status of the fight against corruption in municipalities. She requested that both DPCI and NPA provide the Committee with further details on corruption cases.

The majority of SIU cases involved administration officials in municipalities. Rarely were politicians implicated in the misconduct. Were no politicians implicated in the current set of cases? The corruption case against the former Mayor of Ethekwini had still not begun after much time had passed. How long does the NPA take for a case to be ready for prosecution in a court of law?

She asked if the Committee should look at amending the SIU and Special Tribunals Act 74 of 1996, to provide the agency with greater powers. This is particularly as it is unable to take further action after concluding its investigation and retrieving state funds. The Mphaphuli Consultants matter had not been included in the report presented to the Committee or the one submitted to the President. The company had been issued a summons in 2017 by SIU. She asked if the Mayor who reported this irregularity had since stepped down and if his and the Municipal Manager findings were noted by SIU.

Ms P Xaba-Ntshaba (ANC) said that the agencies have been selective (and political) in the corruption matters they choose to investigate. For instance, in Buffalo City, Ethekwini and Limpopo's Mokgalakwena Local Municipality, officials were arrested for alleged involvement in corrupt activities whereas no officials had been arrested and charged for involvement in the Gauteng Department of Education’s R431 million irregular expenditure on school sanitising tenders. She asked if setting aside the contracts was enough or if there would be further investigation. The agencies do not execute adequate oversight in Gauteng and requested that they be neutral and transparent when investigating and arresting individuals accused of wrongdoing.

She asked NPA if it planned to pursue all the cases recommended in the State Capture Report. If it did, she requested that it be transparent when doing so.

She indicated that several roads and bridges in the Msukaligwa Local Municipality in Mpumalanga have not been completed. Had the agencies investigated the contractor appointed to do the work? She asked how the SIU planned to improve on executing its duties and mandate.

Ms E Spies (DA) appreciated the work done by NPA; however, it has not done well with prosecutions. She recommended that both the NPA and Department of Cooperative Governance and Traditional Affairs (CoGTA) should consult the new Chief Justice, to develop a plan to deal with the case backlog. In addition, she suggested that Parliament look into changing the legislation that would make private prosecution easier and allow for more cases to be prosecuted.  

She suggested that CoGTA assist SIU in ensuring the political leadership in the municipalities implement the SIU reports.

She was pleased that some officials are being arrested and prosecuted although some of those cases were successfully prosecuted by the previous NPA leadership. She asked for more information on the status and progress of the current cases.

Mr K Ceza (EFF) said that the corruption that took place in Msukaligwa has not been included in the reports. Serious corruption has occurred, while municipal officials have been subject to threats and intimidation. He asked if SIU has investigated the corruption in the municipality and if it has, what plans does it have to address this.

The reports also did not include the Section 106 investigations (of the Municipal Systems Act) currently in place in the Emalahleni and Dr JS Moroka Local Municipalities in Mpumalanga. He asked for the investigation status into allegations of the Emalahleni Mayor increasing the salary upper limits for the municipal manager and certain section 56 managers, without a council resolution. The Dr JS Moroka Mayor was accused of using R223 000 of municipal funds to pay for fuel, toll gates and Council vehicle. How far was the investigation into the municipality’s decision to invest in VBS Bank? He asked if the Mpumalanga provincial government had submitted these cases to the agencies. If not, he asked what action will be taken against it and other provincial governments that are not doing so. He called for greater implementation of consequence management.

He asked for the causes for delays in prosecuting cases, as the turnaround time was too slow.

The Municipal Manager in Knysna Local Municipality had resigned twice, yet he has recently been appointed at the Cederberg Local Municipality. He asked what measures the agencies have implemented to ensure they are proactive and not reactive.

He asked the agencies for progress on the section 106 investigations instituted in the Central Karoo District, Matzikama and Bitou Local Municipalities. Who were the liable persons and what consequence management had been instituted?

Mr A Matumba (EFF) said that each municipality needs to be investigated, as the mechanisms should have been able to pick up the irregularities. In the Makhado Local Municipality, a contractor was paid R1.1 million to refurbish a pool; however the work was not completed. No investigation has taken place into this. The matter was brought before the Council and it did not act on the allegations.

The Municipal Financial Management Act (MFMA) outlines a separation between the roles of the political authorities and management. It is unacceptable that only officials in management are arrested. He called for the political leadership to account for the wrongdoing taking place.

Mr G Mpumza (ANC) said that the SIU report had not mentioned what it did to uncover the allegations that a Mokgalakwena Local Municipality junior official had promoted himself to a senior position and then issued tenders to service providers to clear vegetation.

He believed that SIU has a responsibility to monitor if municipalities are complying with its recommendations. He asked what action SIU can take where municipalities are found not to be implementing its recommendations.

He commended SIU for referring officials who have left the municipalities for civil action.

His belief is that the poor record-keeping of municipalities and departments is deliberate. He asked if the municipalities implemented SIU recommendations to improve systemic deficiencies. If not, he asked SIU jointly with CoGTA to take steps to ensure recommendations are implemented.

In the Alfred Nzo Local Municipality, it was alleged that R38 million was stolen from the municipality in 2008. However, this case was remanded and has disappeared from the roll. He asked about progress with another criminal case in the municipality where R25 million was lost.

He requested in future the agencies provide reports with up to date details on the cases.

Referring to the NPA presentation which stated that fake companies have been created to loot municipalities, he asked the specific recommendation made to address such loopholes used by municipal officials to commit crime.

Mr X Msimango (ANC) said that it was important to note the trends in crimes committed across municipalities. He suggested that all politicians, outside of municipalities, come together to find ways to prevent these wrongful and irregular acts. This should be a joint effort across party lines, as corruption affects all South Africans.

Suspended sentences did not correlate with government’s message to prosecute and punish all wrongdoers. Rather, it gives the impression that wrongful acts will be penalised only with suspended sentences. He did not believe that this measure was enough.

He asked when the cases related to Covid-19 will be concluded as two years have since passed.

After commending SIU for freezing the pension funds of municipal officials under investigation, he asked if SIU believed that this an efficient deterrent.

Public opinion suggests that the NPA is not moving fast enough to prosecute corruption cases involving politicians. He asked what has been causing the delay in prosecutions so Members are able to communicate the reasons to their constituents.

Ms D Direko (ANC) asked the reasons for the delay in finalising cases as there is a backlog. What are the criteria for instituting investigations? Do the agency reports include current cases being investigated? Were there cases which implicated politicians and, if so, what action had been taken?

SIU response
Adv Mothibi replied that in cases where SIU has investigated politicians involved in wrongdoing, it has made findings with evidence that points to that. For instance, in the JB Marks Local Municipality, it made a finding against the Mayor and action has since been taken. The SIU made findings against a former Eastern Cape MEC for her role in the fraud and corruption related to Former President Nelson Mandela’s funeral.

The investigations are based on allegations and the findings require the gathering of credible evidence. In certain cases, politicians have been fingered, and the courts have ruled in the SIU’s favour. He assured the Committee that the SIU will continue to conduct its work without fear, favour or prejudice.

Mphaphuli Consulting did feature in the presentation on slide 16 in the matter covered by Proclamation 52 in 2014. The investigation has been completed and six recommendations for disciplinary action against implicated officials have been issued. Currently, civil proceedings are ongoing. SIU is seeking to set aside a contract valued at R326 million. This was stalled by the application by Mr Mphaphuli, the company owner, to review and set aside SIU report in the Limpopo High Court. However, his application was recently dismissed by the court and the court case to set aside his contract and recover the monies is ongoing.

Adv Visagie added that the value of repayment SIU is looking to retrieve amounts to R73 million. He expressed hope that the matter will be concluded in court soon.

Adv Mothibi replied that SIU attempts to investigate all allegations levelled by institutions or whistleblowers and it does not selectively investigate matters. It investigates without fear, favour or prejudice.

On the Gauteng school sanitising tenders, the investigation has concluded and the Special Tribunal outcome was that the contracts be set aside. As this was not municipal-related, it was not included in the report. If requested, SIU would return with details on that investigation.

Adv Mothibi replied that SIU is willing to work with the Committee to ensure that all accounting officers who failed to implement its recommendations are held responsible. SIU thinks that disciplinary action is not implemented fast enough. This can be improved on.

SIU has not received allegations of misconduct by officials in Msukaligwa Local Municipality. However, it did have information on alleged wrongdoing in the Matzikama Local Municipality. He confirmed that there was pushback from officials who did not cooperate with SIU. Following this, SIU laid criminal charges against the officials and the municipal manager was subsequently arrested. This was done to indicate that no one is above the law and no one should interfere with ongoing investigations. He confirmed that SIU does verify if cases are being investigated by DPCI so as to avoid duplication of cases.

Adv Mothibi assured the Committee that SIU does monitor if disciplinary cases are implemented. There is a unit in SIU which monitors if referrals are implemented. Where the accounting officer is not cooperative, SIU defers to the political authority. He was pleased that the Committee is looking to assist SIU on implementation of recommendations.

He appreciated the Committee’s advice for SIU to work with CoGTA, to ensure that systemic recommendations are implemented. Presently, it is working with the Department to establish a local government anti-corruption forum.

On the poor record keeping, SIU is aware that this is done by officials to interfere with investigations. To prevent this from occurring, SIU establishes who was responsible for supervising the documents to ensure they are available. Failing which, it recommends that action should be taken against those individuals as they are not fulfilling the legislated requirements.

Adv Mothibi agreed that there are similarities in how the crimes in municipalities are committed. SIU will await feedback from government on what can be done to ensure that it is preemptive and not only reactive which will also assist in preventing a backlog in cases.

DPCI response
Dr Lebeya replied that DPCI cannot share much information on the cases, as they are ongoing. There needs to be caution when sharing information. DPCI needs to protect the lives of the whistleblowers and witnesses who have come forward, especially as such individuals have lost their lives during investigations.

As the evidence usually lies with the implicated individuals, DPCI cannot publicly disclose its investigations until it has made arrests. The information could be disclosed to the Committee during a closed session. DPCI will look into how it can enhance its information in the report so that it does not only provide statistical information.

On the allegation about selective investigations, all DPCI members take an oath of office before a judge and conduct investigations without fear, favour or justice. DPCI takes a zero-tolerance approach towards crime and is apolitical.

There are various factors that cause delays such as the complexity of the matter or the number of counts in an individual case. However, DPCI has done its best to conclude matters as soon as possible.

He agreed that there are perceptions of the Hawks conducting Hollywood-esque arrests but certain cases have more publicity than others. He has cautioned officials from conducting arrests in this way. However, the successes of the investigations have drawn public attention.

He replied that it is often difficult to detect if politicians have been involved in wrongdoing, as the administrative decisions are taken by municipal officials. Nevertheless, where there is evidence that politicians did influence the officials, the Hawks does institute investigations.

Most of the Covid-19-related crime was committed in March 2020. Since then, 17 accused persons have been jailed while another 100 accused persons have been processed in court. The agency is working with other agencies in the Fusion Centre to conclude these cases.

On the criteria used for investigations, some allegations are obtained from media reports and investigations. DPCI then verifies the correctness of the allegations and if confirmed, it may institute an inquiry or open a docket. Other matters are referred to the Hawks by SIU, through informers or reported through Section 34 of the Prevention and Combating of Corrupt Activities Act (placing a duty on persons in authority to report offences over R100 000).

NPA response
Adv Batohi asked that in future the Committee specifies what details to include in its presentation. Certain information cannot be shared on a public platform, as it may lead to compromising cases and putting the lives of witnesses at risk.

On the allegations of selective prosecution, the NPA does not target certain individuals; rather, it follows the evidence. Once a matter is fully investigated and NPA is able to take a decision, it will prosecute the matter, irrespective of who the individual is, and in line with its constitutional mandate. Not all cases can be prosecuted and neither can the Hawks investigate all matters before it. Instead, both should prioritise certain cases. The Anti-Corruption Task Team has set criteria which guide NPA on the cases it should prioritise.

Touching on private prosecutions, Adv Batohi replied that the NPA is constitutionally mandated to enact prosecutions and the NDPP makes certain that the prosecutions are done without fear, favour or prejudice. Presently, NPA officials are working at ensuring that it is properly capacitated to fulfill its prosecutorial mandate.

She assured Members that the law enforcement agencies are apolitical and only investigate and prosecute matters based on the evidence. They cannot get entangled in the affairs of political parties and must follow only their constitutional objectives.

Adv Batohi replied that it was difficult to answer how long it takes to prosecute a matter as it depends on several factors such as the complexity of the matter. Presently, the NPA is looking for ways to prevent the delays in courts but it is aware that the decision to adjourn proceedings ultimately rests with the magistrate.

She agreed that more steps can be taken to fight corruption although she admitted that the level of corruption, particularly in local government, is overwhelming for NPA officials. Prior to 2019, there was no will at many levels, including the law enforcement agencies, to deal with these cases, mainly because they involved politically-aligned individuals. However, she was pleased that the NPA has since made progress in these cases. She assured Members that the NPA will continue working to end corruption, and show the public that the wheels of justice are turning.

Closing remarks by the Chairperson
The Chairperson said that it is Parliament’s responsibility to conduct oversight over the actions and non-actions of the Executive. He admitted that Parliament should do more to prevent corruption and extended the Committee’s support to the agencies in the fight against corruption and maladministration. All agencies should be allowed to conduct their work without fear, favour or prejudice.

The Committee plans to place greater focus on conducting oversight on the implementation of SIU reports and consequence management. More discussion is needed on the tendency for officials to resign from their positions before they have been charged.

The 2021 Local Government Elections demonstrated that the public is fed up with the current rate of corruption in the country and are looking for action to be taken. The Committee appreciates the work being done and wants it to be consolidated, to ensure that corruption is done away with.

Ms Xaba-Ntshaba requested that the NPA put more effort into ensuring more cases are prosecuted.

She requested the agencies investigate the contractor who did not complete his work at the Msukaligwa Local Municipality.

Mr Matumba said that the Hawks should focus on ensuring it builds concrete cases against those accused of wrongdoing. He requested that it not invite the media when high-profile individuals are being arrested.

He asked for the agencies to investigate the allegation that a contractor was paid R1.1 million to build a swimming pool in Makhado Local Municipality but failed to do so. He requested that they also investigate wrongdoing done by Members of the Mayoral Committee and the Speaker. An omission by political office bearers must translate into criminal conduct and not only the actions of the administration.

Mr Mpumza asked for progress on the investigations into the irregularly awarded ventilated improved pit (VIP) toilet tender. He asked how far the agencies were in concluding two cases of alleged corruption in Nelson Mandela Bay Municipality.

Mr Ceza asked when the agencies planned to act on the Section 106 investigation reports of the Emalahleni and Dr JS Moroka Local Municipalities. He asked for a clear turnaround time for this and when they will take action in the Central Karoo District Municipality and the Matzikama and Bitou Local Municipalities.

Mr I Groenewald (FF+) thanked the agencies for their efforts but said that more can be done.

The Chairperson asked that Members focus on cases not yet investigated by agencies.

Adv Batohi replied that the NPA looks at the range of cases and tries to adopt a zero-tolerance approach to corruption. There is a need to deal with lower-level officials to send a message that there are serious consequences for any wrongful conduct by officials. In some instances, the NPA must build a case through a small one. However, she agreed that law enforcement agencies must focus on the bigger cases to ensure those who benefited most from corruption are held to account.

Dr Lebeya replied that DPCI has informed its communications department not to invite media during the arrests of high-profile individuals.

He clarified that crimes are identified both when an individual takes deliberate wrongful action, or through omission when there was an obligation to do something to prevent the wrongful act from occurring.

Adv Mothibi requested that he preferred Members to report the matters raised to SIU directly, then it will assess each one, in line with its legislative mandate and report accordingly.

The Chairperson thanked the agencies. The Committee wants to assist in providing public education on the efforts taken by the agencies. Additionally, it will mobilise society in supporting the agencies' efforts in fighting corruption and deterring those who seek to destroy the country.

The meeting was adjourned.