ATC160316: Report of Joint Committee on Ethics and Members Interests 16 March 2016

Ethics and Members' Interest

JOINT COMMITTEE ON ETHICS AND MEMBERS INTERESTS

 

 

The Committee at its meeting of 16 March 2016 makes the following recommendations on the complaints against the following Members:

 

 

HON MABE

 

  1. Background

 

  1. On 13 October 2015, the Office of the Registrar received a complaint against Hon. Mabe emanating from the Public Protector’s report into allegations of maladministration against the Passenger Rail Agency of South Africa (PRASA). The report is published as report 3 of 2015/16 and is available for viewing at the following website address: http://www.publicprotector.org/library/investigation_report/investigation_report.

 

  1. In terms of the complaint it is alleged that that a company on which Hon. Mabe serves as a director, KG Media, was improperly awarded a tender by Prasa to produce the Hambanathi magazine and that this contract was unlawfully extended. The Prasa Report, at page 28 paragraph b, further referred to Hon. Mabeas the “then owner” of the Kwela Express newspaper.  It was further alleged that Hon. Mabe, who was the former Executive Corporate Affairs Manager at PRASA, was improperly paid a salary after his resignation from PRASA in 2008/2009.

 

  1. Consideration of the Code in respect of the allegation

 

  1. Sections4.1.1, 4.1.4 and 4.15 of the Code of Conduct requires Members to, inter alia, :
    1. uphold the law, and
    2. discharge their obligations in terms of the Constitution, to Parliament and the Public at large, by placing the public interests above their own interests.

 

  1. Section 6.1 of the Code prohibits Members from “receiving any benefit including but not limited to a tender or a contract with an organ of state”.

 

  1.  Members are also required to declare their directorships in terms of section 9.3.3 of the Code.

 

  1. Investigation Procedure
    1. In terms of section10.2.2.4 of the Code, correspondence was sent to Hon. Mabe on 13 October 2015, , informing him of the complaint and requesting that he responds to the following questions:
      1. Does your resignation as a director at KG Media still stand?;
      2. Do you have any financial interest in any form in KG Media and if so what are the particulars of such interest?;
      3. Are you, or any company that you associated with, own the copyright for Hambanani or Kwela Express?; and
      4. If you have disposed of your interests in KG Media or Hambanani or Kwela Express can you please indicate when the interests were disposed of and to whom?

 

  1. On 20 October 2015, Hon Mabe requested additional time to respond to the allegations against him. This was agreed to.

 

  1. In his response Hon. Mabe confirmed his resignation as a director of KGP Media on 11 may 2015. His 2014 disclosure reflects his interests in KGP Media.              

 

  1. Hon. Mabe indicated that the shares to KGP Media was initially owned byas KGP Project Management and are currently held by the Kedibone Mabe Trust of which it is established that Hon Mabe is a trustee and his minor children are the beneficiaries.

 

  1. In his correspondence Mr Mabe explained that Hambanathi and Kwela Express are Newspapers for which he owns the trademark. He has submitted documents confirming this.

 

  1. The Registrar further requested clarity on whether the extension of the contract constituted business with the state. 

 

  1. Hon Mabe in his response explained that KG Media does not produce a newsletter for PRASA but produces a newspaper in which PRASA buys advertising space. He included in his response a copy of the Audit Bureau of Circulation document for Kwela Express, and copies of the newspaper which also reflect other advertisers. He alleges that the agreement with PRASA is not a tender but a contract as it is merely for advertising space.

 

  1. Consideration of complaint

 

  1. The alleged additional salary payments took place in 2008/2009 which was prior to Hon. Mabe’s appointment to Parliament and is thus outside the scope of the Committee.

 

  1. On the allegation on the appointment of KG Media to produce the Hambanathi Magazine in 2012, this matter is also outside the scope of the Committee as the contract was entered into prior to Hon. Mabe’s appointment as Member of Parliament.

 

  1.  On the extension of the contract in March 2015, the Public Protector found that PRASA’s SCM policy and treasury regulations were contravened. She also found that there was maladministration and contravention of section 217 of the Constitution, which requires that state institutions create transparent, fair, competitive and equitable system of procurement.  Regardless of the fact that a fair tender process was not followed by PRASA, it still remains that Hon. Mabe benefitted from a contract between PRASA and KG Media. Hon. Mabe’s contention that the purchase of advertising space does not constitute a tender is refuted as section 6.1 of the Code in any event applies not only to tenders but to, “any contract with an organ of state”

 

  1. Hon Mabe disclosed his interests as required in terms of section 9.3 of the Code of Ethical Conduct. In relation to the disclosure of interests, Hon Mabe had in the 2014 Register of Financial Interests disclosed his directorship in KGP Media. In 2015 he had resigned and not disclosed the interests as he was no longer a director. He had disclosed details of the Kedibone Mabe Trust.

 

  1. Finding

 

  1. The allegations of improper payment to Hon. Mabe, refers to events that purportedly occuredin 2008/1009 prior Hon. Mabe’s appointment to Parliament and is thus outside the scope of the Committee.

 

  1.  The allegation that Hon. Mabe benefitted from the award of a contract by PRASA to produce Hambanathi and Kwela Magazine in 2012 occurred prior to Hon. Mabe’s appointment as Member of Parliament and is thus also outside the scope of the Committee.

 

  1. On the disclosure of financial interests related to KGP Media, Hon. Mabe did disclose his directorships in 2014, before his resignation as a director of the company. The Kedibone Mabe Trust which holds the copyright to Hambanathi and Kwela Express is disclosed in the 2015 disclosure of Interests.

 

  1.  On the matter of a benefit being received from the renewal of the contract by PRASA with KGP Media in 2015, the Registrar notes that the Kedibone Trust holds 100% of the shareholding of KGP Media. Hon. Mabe is a trustee of the trust and beneficiary and accordingly benefited from the proceeds of the contract

 

 

  1. Appeal

Hon Mabe submitted a letter of appeal in which he indicated that he had erroneously disclosed that he is a beneficiary of the Kedibone Mabe Trust and that it is in fact his minor children who are the beneficiaries of the trust.

 

It is the view of this office that as legal custodian of the minor children, Hon. Mabe benefitted from the contract. Alternatively Hon. Mabe’s children benefitted from same in contravention of section 6.2 of the Code.

 

 

  1. Penalty

In terms of 10.7.7.2 It is recommended that Hon. Mabe be given

  1. a reprimand and  
  2. a fine of 15 days salary.

 

 

 

 

 

 

 

 

 

 

 

REPORT ON THE NON-DISCLOSURE BY HON. MAIMANE

 

  1. Background

 

  1.  Following media reports alleging that Hon. Maimane failed to disclose certain sponsorship received by him in support of his nomination for party leader at the elective conference of the Democratic Alliance in 2015, Hon Maimane addressed correspondence to the Office of the Registrar on 29 October 2015.  

 

  1. In terms of the correspondence, Hon. Maimane rectified his disclosure by submitting details of the sponsors and the value of the sponsorships.

 

  1. The Registrar addressed a letter of response to Hon. Maimane informing him that the matter would be tabled for consideration at the next meeting of the Committee scheduled for 24 November 2015.

 

  1. Consideration of the Code

 

  1. It was widely reported in the media that Hon. Maimane failed to disclose sponsorships received in support of his campaign for leadership at the 2015 electoral conference of the Democratic Alliance.

 

  1. In response to these allegations, DA chief whip John Steenhuisen, told IOL news that "We acknowledge these declarations (on contributions to the party position election contest) should have also been included in the parliamentary register of members’ interests, and we regret this report."

 

  1. Shortly thereafter, Hon. Maimane disclosed the details of the sponsorship and the register was updated accordingly. In his correspondence Hon. Maimane admitted that “it was a complete oversight on the part of my office to not have submitted this as part of my submission to Parlaiment.”

 

  1. There was accordingly no dispute as to the facts.

 

  1. In considering the matter the Committee took note of precedents dealing with similar incidents.

 

  1. Findings

 

  1. Hon Maimane has breached section 10.1.1 .1 of the Code in so far as he failed to disclose the receipt of a sponsorship received by him in support of his campaign for leadership at the Federal Conference of the DA.

 

 

  1. Letter of objection by Hon Maimane

 

On 14 March 2016, Hon. Maimane submitted a letter of complaint alleging, inter alia, that the findings and procedure followed by the Committee was procedurally unlawful and requesting that the process be started de novo.

 

The Committee, acting on its own, considered the alleged breach by Hon Maimane in terms of paragraph 10.2.2.3. Hon Maimane had conceded that he had not disclosed all sponsorships received. He updated his disclosure after media reports indicated that he did not fully disclose his sponsorships. Hon Maimane was informed on the 11 November 2015 that the updated disclosure would be referred to the Committee for consideration.

 

The Registrar based on the information at her disposal made a recommendation to the Committee in terms of 10.4 of the Code. The information was based on Hon Maimane’s admission that the failure to disclose fully was an oversight. There was no dispute of fact. Once the finding was made Hon Maimane was invited to make representations to the Committee on its finding and proposed sanction and to present any relevant information before the Committee refers its recommendation to the National Assembly.

 

  1. Recommendation

 

  1. The Committee recommends that the following penalties be imposed on Hon. Maimane-
  1. a fine of 7 days salary; and
  2. a reprimand in the House.

 

 

 

 

NON DISCLOSURE OF INTERESTS HON M GANA

  1. Background

.

  1. The complaint was based on media reports that Hon. Gana failed to disclose sponsorships received in support of his campaign for Federal Chairperson at the 2015 electoral conference of the Democratic Alliance (“the DA”). 
  1. Requirements in terms of the Code

 

1.1    Section 9.9 of the Code of Ethical Conduct and Disclosure of Members’ Interests sets out the disclosure requirements in respect of sponsorships as follows:

 

Sponsorships

  1. The source and description of direct financial sponsorships from non-party sources; and
  2. The value of the sponsorship or assistance

 

  1. Consideration of the Complaint

 

  1. Following the media reports of the alleged non-disclosure, DA chief whip John Steenhuisen, told IOL news that "We acknowledge these declarations (on contributions to the party position election contest) should have also been included in the parliamentary register of members’ interests, and we regret this report."

 

  1. Hon. Gana thereafter rectified his submission following the media reports and the correspondence from the Registrar requesting him to respond to the complaint., However, Hon Gana only submitted partial information.

 

  1. In considering the matter the Committee took note of precedents dealing with similar incidents.

 

  1. Findings

The sub-committee found that Hon Gana has breached section 10.1.1 .1 of the Code in so far as he failed to disclose the receipt of a sponsorship received by him in support of his campaign for Federal Chairperson at the Federal Conference of the DA.

 

 

  1. Letter of objection by Hon Gana

 

The Committee on its own considered the alleged breach by Hon Gana in terms of paragraph 10.2.2.3. Hon Gana had conceded that he had not disclosed. He updated his disclosure after media reports indicated that he did not fully disclose his sponsorships. Hon Gana was informed on the 11 November 2015 that the updated disclosure would be referred to the Committee for consideration.

 

The Registrar based on the information at her disposal made a recommendation to the Committee in terms of 10.4 of the Code. The information was based on the facts provided by Hon Gana. There was no dispute of these facts. Once the finding was made Hon Gana was allowed an opportunity to submit any reason to the Committee to review its decision to ensure he was afforded full opportunity to put forward any relevant information before the finalisation of the findings.

 

  1. Recommendations

 

The Committee, recommends in terms of section 10.7.7.1 of the Code, that the following penalties be imposed on Hon. Gana-

  1. a fine of 7 days salary; and
  2. a reprimand in the House.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  •  

 

 

 

Co Chairperson                                                   Co Chairperson

 

A Masondo                                                            A Singh

            16 March 2016                                                 16 March 2016

 

 

 

 

 

 

 

 

 

 

 

 

Documents

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