ATC170614: Report of the Joint Committee on Ethics’ and Members Interests on alleged maladministration, dated 14 June 2017

Ethics and Members' Interest

REPORT OF THE JOINT COMMITTEE ON ETHICS’ AND MEMBERS INTERESTS ON ALLEGED MALADMINISTRATION, DATED 14 JUNE 2017
 

The Joint Committee on Ethics and Members Interest at its meeting of 16 March 2016 made the following recommendations on the complaints against the following Member:

 

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 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 d, further referred to Hon. Mabe as 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. Sections 4.1.1, 4.1.4 and 4.1.5 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 interest above their own interest.

 

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 directorship in terms of section 9.3.3 of the Code

 

 

1. Investigation Procedure

 

1. In terms of section 10.2.2.4 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 Hambanathi or Kwela Express? ; and
   4. If you have disposed of your interest in KG Media or Hambanathi or Kwela Express, can you please indicate when the interest 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 KG Media on 11 May 2015. His 2014 disclosure reflects his interest in KG Media.

 

1. Hon. Mabe indicated that the shares to KG Media was initially owned by KG Media Project Management and are currently held by 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 Hon 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 thus falls 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 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”.
2. Hon. Mabe disclosed his interest as required in terms of section 9.3 of the Code of Ethical Conduct. In relation to the disclosure of interest, Hon. Mabe had in 2014, Register of Financial Interest disclosed his directorship in KG Media. In 2015 he had resigned and not disclosed the interest 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 occurred in 2008/2009 prior Hon. Mabe’s appointment to Parliament and is thus outside the scope of the Committee.

 

1. The allegation that Hon. Mabe benefited from the award of a contract by PRASA to produce Hambanathi and Kwela Express 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 Interest related to KG Media, Hon. Mabe did disclose his directorship 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 KG Media in 2015, the Registrar notes that the Kedibone Trust holds 100% of the shareholding of KG 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 I fact his minor children who are the beneficiaries of the trust.

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

 

1. Penalty

In terms of 10.7.7.2, the Joint Committee imposed the following penalty on Hon. Mabe:

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

 

NON DISCLOSURE OF INTEREST HON M GANA

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

 

 

Resignation and Replacements as of 25 May 2017

Mr S M Gana (DA National) resigned with effect 14 November 2016. As Mr. Gana resigned his membership of the National Assembly, the Joint Committee does not have jurisdiction over him, as he is no longer a Member of Parliament.

 

 

 

Finding           

In light of the above, the Joint Committee report to the National Assembly that it cannot proceed with the complaint against Mr. Gana, as it lack jurisdiction over him due to Mr Gana’s resignation.

 

A Masondo                                                                                           A Singh

Co-Chairperson                                                                                    Co-Chairperson