ATC231024: Report of the Joint Committee on Ethics and Members’ Interests on the Complaint against Honourable Dipuo Peters, MP in her former Portfolio as Minister of Transport

Ethics and Members' Interest

Report of the Joint Committee on Ethics and Members’ Interests on the Complaint against Honourable Dipuo Peters, MP in her former Portfolio as Minister of Transport

The Joint Committee on Ethics and Members’ interests (“the Committee”) having considered the complaint against Honourable Dipuo Peters, MP, the Deputy Minister of Small Business Development, reports its finding on breach and recommendation on penalty, in terms of item 10.7.8.1 of the Code of Ethical Conduct and Disclosure of Members’ Interests (“the Code”).

INTRODUCTION

Mr Abdurrazack Achmat on behalf of, himself, Zukiswa Fokazi and #Unite Behind, non- profit organisation, (“the Complainants”) submitted a complaint to the Committee concerning Honourable Dipuo Peters, MP in her former portfolio as the Minister of Transport (“the Member”). The Office of the Registrar of Members’ Interests received the complaint on 12 September 2022 for an alleged breach of the Code.

SUMMARY OF THE COMPLAINT

The Complainants states as follows:

The Member, at the time when the complaint was lodged, served as a member of the Standing Committee on Appropriations. She was neglectful in her previous portfolio as Minister of Transport by failing to appoint a Group CEO of PRASA.

Failure to appoint a Group CEO

The Complainant states that the Member during her testimony before the State Capture Commission indicated that she did no appoint a permanent Group CEO because PRASA was not ready for a new Group CEO. Her failure to act on the recommendation by the Board resulted in a loss of R1 767 000.00 that was paid to the recruitment company.

Dismissing the Molefe Board

That the Member dismissed the Molefe Board, seemingly because it had uncovered 14BN of irregular expenditure and it instituted investigations into corruption at PRASA. The High Court in Molefe and Others v Minister of Transport and Others (17748/17)[2017]ZAGPPHC found that the conduct by the Member was irrational, unreasonable and unlawful.

The Member also attempted to stop the investigations into corruption at PRASA that was initiated by the Molefe Board. That the Member failed to investigate the allegation of the R79 Million of PRASA money paid by Swifambo to other people for alleged distribution to the African National Congress (ANC). The Member was under a duty to ensure that corruption as rooted out from public entities.

Misuse of PRASA assets- Busses

The Member also utilised PRASA busses for ANC events during 2014 and 2015 without ensuring payment from the ANC.

The Member is alleged to have influenced procurement proceedings through pressurising the PRASA CEO and Board of Control (BOC) because of the nationality of tender applicants. The Member allegedly demanded a change of the procurement prescript despite a legal opinion that indicated that changes to the procurement prescripts would be in breach of the procurement laws of the country.

The Complainants state that the Member must be called to account for these serious cases in failing in her Parliamentary duties, maladministration and inhibiting the work that tried to ensure that corruption and maladministration is stopped at PRASA.

The Complainants argues that the Member breached items has not abided by Items 4.1.1, 4.1.2. 4.1.3, 4.1.4 and 4.1.5 of the Code of Ethical Conduct and Disclosure of Members’ Interests.

Item 4.1 of the Code provides as follows:

“4.1 Members must:

4.1.1 abide the principles, rules and obligations of this Code;

4.1.2 by virtue of the oath or affirmation of allegiance taken by all elected Members, uphold the law;

4.1.3 act of all occasions in accordance with the public trust placed in them;

4.1.4 discharge their obligations, in terms of the Constitution, to Parliament and the public at large, by placing the public interest above their own interests;

4.1.5 maintain public confidence and trust in the integrity of Parliament and thereby engender the respect and confidence that society needs to have in Parliament as a representative institution; and … .”

SUMMARY OF RESPONSE BY THE MEMBER

The Member was given an opportunity to respond and responded via Majavu Incorporated Attorneys as follows:

The Member indicates that the Complainants regurgitate the findings and recommendations of the State Capture Report and in the result demands “accountability”.

The Member is taking legal advice on the possible remedies that are open to her. The Member intends taking the State Capture Report on judicial review, to the extent that it relates to her. The Member is awaiting the President of the RSA to put in place an implementation plan on how these matters are to be dealt with by Parliament. She will deal with the matter in a holistic manner and not in a piecemeal fashion and therefore will await the action plan by the President of the RSA.

The Member requested that any further process by the Committee be held in abeyance until the President of the RSA’s implementation plan is put in place. The Member elects not to engage with the conclusions in the Sate Capture Report at this stage. The Member remains available and willing to engage with the Office of the Registrar and the Committee.

The Member reserves all her rights.

THE REPORT OF THE STATE CAPTURE COMMISSION: PART V, VOLUME 2: PRASA

Failure to appoint a Group CEO

Mr Molefe testified that after Mr Montana left PRASA, the Board commenced a recruitment process to appoint a new Group CEO. In terms of clause 15.8 of the Board of Charter, the Group CEO is appointed by the Minister, on the recommendation by the Board. A candidate well versed in rail matters was recommended. But the Minister wanted Mr Collins Letsoala, the then CFO of the Department of Transport to act as CEO.

Tthat the Member gave the following reason for failing to appoint a Group CEO- “Minister Peters thought that PRASA was not ready for a new CEO. This went on for about a year and new Group CEO was never appointed.

The Member never acted on the Board’s recommendation and PRASA paid R1 767 000,00 to the company that was contracted to conduct the recruitment process.

Dismissing the Molefe Board

The Report states that the Member herself attempted to stop the investigations but the Board refused to stop the investigations that it had commissioned Werksmans attorney’s to conduct. The Board applied to the High Court to review and set aside the awarding of the contract between PRASA and Swifambo. In 2016 the Board applied to have the contract between PRASA and Siyangena reviewed and set aside on the basis of irregularities and corruption. Mr Molefe and the Board sought protection from the then Speaker of the National Assembly, Ms Mbete as the Minister was frustrating the work of the Board.

The Report indicates that after the letter was sent to Parliament, Mr Molefe made a similar request to the Portfolio Committee on Transport. Instead of getting protection, it was announce in the Portfolio Committee meeting on the same day that the Minister had dismissed the Board. The High Court set aside the decision to dismiss the Board.

The Report states that when it became public knowledge that Mr Mashaba said that after his firm was awarded the Swifamnbo contract, he paid money to persons who would pay it to the ANC, one would have expected the Minister to whom PRASA was accountable, to insist that the allegation be expeditiously pursued. The Minister did not do this and stood by.

Misuse of PRASA assets- Busses

Through the testimony of Mr Montana he indicated that the ANC through instructions from the Minister of Transport had over the years used PRASA transport services without paying. And PRASA also provided dozens of trains and more than 200 buses for the ANC Centenary Celebrations. In 2014 he was approached by the Minister to provide buses for a large gathering of traditional leaders in the Northwest Province. He did not approve the use of the buses because Autopax would have lost R40 million. In 2015 he was asked by the Minster to provide transport for the January 8th celebrations of the ANC, and he indicated that he would put together a plan.

In the Ministers testimony she states that the buses were never meant to be without charge and that she asked Mr. Montana for a quotation from Autopax. The Report indicates that on her own version, the Minster asked Mr Montana for transport to assist the ANC in 2014 and in 2015 succeeded in securing the transport. The Minister failed to follow up with Mr Montana on the issue of payment considering that she said that she expected an invoice. The Minister, had a duty to do ensure that payment was made for the busses.

COMMITTEE DELIBERATIONS

Failure to appoint a Group CEO

The Committee noted that the Member gave testimony before the State Capture Inquiry. Her testimony is reflected in the Report. She is on record stating that the reason she did not appoint a Group CEO is because she thought that PRASA was not ready for a new CEO. Later her testimony changed for the reason for not appointing a Group CEO.

The Commission found this reason to “shock everyone because I do not think anybody has ever heard it in relation to any business entity”. The Report indicates that the PRASA Board gave the Member names to be recommended as Group CEO, but she did nothing. Mr Molefe denied that he agreed with the Member that PRASA was not ready for a GROUP CEO.

The Report states that the Member conceded that her reason for not appointing a Group CEO was not sound and that she could have been wrong at the time. In essence the Member conceded that she was wrong in not appointing a Group CEO. Her failure to appoint a Group CEO amounted in a loss of R1 767 000.00 for PRASA.

Dismissing the Molefe Board

The Committee noted that the Report clearly states that the Member dismissed the Board on the same day when the Mr. Molefe wrote a letter to the Portfolio Committee on Transport. The testimony of the Member before the Commission also indicates that she was irrational in that decision. Her testimony before the Commission indicates the following: “It was my decision to dismiss the board, I was irrational. The Board stretched my patience for a long time, the timing was wrong”. https://www.iol.co.za

Misuse of PRASA assets- Busses

The Committee noted that the Commission found that the Minister was under a duty to secure payment for the buses that were provided in 2015 by PRASA for the ANC celebrations.

FINDING

The Committee found as follows:

Failure to appoint a Group CEO

In terms of item 10.1.1.3 of the Code, the Committee found that the Member breached items 4.1.3 and 4.1.4 of the Code, i.e. that the Member failed to –

4.1.3 act of all occasions in accordance with the public trust placed in her; and

4.1.4 discharge her obligations, in terms of the Constitution, to Parliament and the public at large, by placing the public interest above her own interests;

when she failed to appoint a Group CEO after the PRASA Board had commissioned a recruitment process which resulted in a financial loss of R 1 767 000. 00

Dismissing the Molefe Board

In terms of item 10.1.1.3 of the Code, the Committee found that the Member breached items 4.1.3, 4.1.4 and 4.1.5 of the Code, i.e. that the Member failed to –

4.1.3 act of all occasions in accordance with the public trust placed in her;

4.1.4 discharge her obligations, in terms of the Constitution, to Parliament and the public at large, by placing the public interest above herr own interests;

4.1.5 maintain public confidence and trust in the integrity of Parliament and thereby engender the respect and confidence that society needs to have in Parliament as a representative institution;

when she dismissed the PRASA Board on the same day when Mr. Molefe wrote to the Portfolio Committee on Transport. This dismissal was ruled by the High Court in Molefe and Others v Minister of Transport and Others (17748/17)[2017]ZAGPPHC to be irrational, unreasonable and unlawful.

Misuse of PRASA assets- Busses

In terms of item 10.1.1.3 of the Code, the Committee found that the Member breached item 4.1.4 of the Code, i.e. that the Member failed to –

4.1.4 discharge her obligations, in terms of the Constitution, to Parliament and the public at large, by placing the public interest above her own interests;

when she requested buses from PRASA to be used for the ANC 2015, January 8th celebrations that was not paid for.

SANCTION

The Member was requested to provide written representations on the sanction to be recommended to the House. The Member provided representations dated 18 May 2023. The Member also requested to address the Committee in person. The Member addressed the Committee on 28 September 2023.

The representations state the following:

The Member states that she is acutely aware of the seriousness of the matter.
The Member asks that her political journey to date, be taken into account.
She did not benefit personally from anything where there were found to be shortcomings on her part.
She was not found guilty of any corruption or aiding such acts.
She asks for leniency.
After the court ruled that her dismissal of the PRASA Board was unlawful, she was removed within days from the position of Minister of Transport.
She intended to appeal the court ruling just as she was recalled from her position. Had she not been recalled, her appeal she says, would have been successful.
Other than the findings of the Commission (State Capture) and the Committee, her track record is clean.
She was never the sole decision maker. She relied on advice and acted in good faith.
Things at PRASA became accentuated after the report by the Public Protector “Derailed”.
She instituted a forensic audit and Mr Molefe enlisted a law firm called Werksmans. The costs escalated to about R200 million, and she queried the expenditure.
She held the view that the public spat between Mr Molefe and Mr Montana was bout their egos and that it was detrimental to PRASA.
The situation at PRASA could have been saved had the two men behaved professionally.
On the issue of not appointing a CEO, she acted on her discretion on the material conditions that were prevalent at the time. Had she appointed a CEO the person would have failed because of the internal strife at PRASA.
Her failure to appoint a CEO was not done through negligence or maliciousness but because she did not want a new CEO walking into factional and egotistical battles.
She denies having any knowledge of the procurement as PRASA.
She was approached by the organizer of the rally about the procurement process to be used if they wanted to use trains from PRASA. She indicated that she would ask Mr Montana, the then CEO.
She did not discuss the use of, or procurement of busses.
She rejects, with contempt, the finding that she abused her authority as Minister of Transport in relation to the issue of the use of busses.
She has never abused her authority and this finding brings her immense pain.
The issue of the use of busses is simply unfounded and unsubstantiated.

During the meeting of 28 September 2023, The Member amplified certain matters further. The Members of the Committee interacted with the Member by posing questions after her address to the Committee.

The Member indicated that she cannot be held liable for the issues at PRASA as she always discharged her duties with diligence and care. She indicated that she never acted maliciously or in her own personal interests. That the delay in appointing a Group CEO at PRASA was a short delay of a few months. That she had the intention of appointing a Group CEO but before she could do so, she was removed as the Minister of Transport. The Member indicated that she does not know anything about busses that were used by the Africa National Congress. She only remembers receiving a call to obtain a contact number of Mr Montana to authorise the release of trains during the holiday season as the trains were not “running” during the holiday time.

The Committee noted that the court judgment in respect of the irrational finding for dismissing the PRASA Board, still stands. That the Member should never have forwarded the details of Mr Montana to secure PRASA assets for the use during the ANC 2015, January 8th celebrations. The Committee further noted that the time in the delay of appointing a Group CEO at PRASA resulted in a financial loss at PRASA.

RECOMMENDATION ON PENALTY

The Code determines what penalty must be applied.

Item 10.7.7.2 of the Code states:

“in the event of the Committee finding that that a Member is guilty of contravening clauses 10.1.13 … of this Code, the Committee shall not impose any of the above mentioned sanction, but shall recommend any greater sanction it deems appropriate to the House, and the House shall decide the appropriate sanction to be imposed after consideration of the recommendation of the Committee.

The Committee recommends to the House to impose the following penalty-

Breach 1

That the Member be suspended from her seat in all parliamentary debates and sittings, and from committee meetings and committee related functions and operations for one term of the Parliamentary program.

Breach 2

Breach 3

That the suspension in respect of all three breaches as set out above, run concurrently during a term of the Parliamentary program as determined by the House.

REPORT TO BE CONSIDERED

BEKIZWE SIMON NKOSI MOJI LYDIA MOSHODI

CO-CHAIRPERSONS OF THE JOINT COMMITTEE ON ETHICS AND MEMBERS’ INTERESTS

Documents