A “cosy club of comrades”, Blue IQ board members were paid R4.168 million for wasting taxpayers’ money, paying executives already drawing salaries from other government departments, breaching government and corporate governance codes, giving jobs to relatives of high profile politicians and, worst of all, not doing their jobs.
Little more than three weeks ago, Paul Mashatile was riding high and sipping champagne. After a brutal leadership struggle that pitted him against Gauteng Premier Nomvula Mokonyane, Mashatile was chosen as leader of the ANC in Gauteng. With damning news of Blue IQ’s board’s failure and remuneration mess now breaking, it’s clear there was another struggle going down within the ANC at the same time.
It now emerges this was an almost epic struggle between good and evil as breaking news reveals Mashatile approved the board’s extravagant salaries, overpaid two members some R700,000 and allowed directors to pocket between R20,000 and R25,000 a meeting. Mokonyane was trying to clean up the mess at Blue IQ and this may in part have cost her the ANC provincial leadership.
After questioning by the DA it emerged in Parliament yesterday that Blue IQ paid R4.168 million for the 2009/10 financial year to its 12 board members who attended 13 meetings. Prime position on the gravy train went to Noedine Isaacs-Mpulo who earned R901,000 as chairwoman while also serving as CEO of Lefatshe Technologies. Industry sources say Isaacs-Mpulo was recently dumped by Lefatshe, although the reason behind this is not yet clear.
Other members riding high include Younaid Wada, who took home R724,000 last year, and Johnny Sexwale who was paid R493 000. Two board members were paid despite being employed in other government entities – in direct contravention of a directive of the National Treasury.
The DA today called for these “double dipping” funds to be returned. “Jacob Modise, the CEO of the Road Accident Fund, should pay back the R693 000 he has been paid for serving on the board of the Blue IQ agency that falls under the Gauteng department of economic development,” said DA Gauteng corruption spokesman, Jack Bloom.
The National Treasury forbids employees who work at one government job being paid for work done with another state entity. “Modise is morally, if not legally, obliged to pay back this money,” said Bloom. “Another reason he should pay it back is that he failed as chairman of the Blue IQ audit committee to get unqualified audits from the auditor general who identified numerous infringements of the Public Finance Management Act, Treasury regulations and supply chain management policy.”
On Tuesday, while answering DA questions in Parliament Gauteng economic development MEC Firoz Cachalia said they would seek to recover the funds paid as it was “completely improper” for board members to double dip.
According to the companies and intellectual property registration office (Cipro), Modise has 48 active directorships in addition to his full-time job at the helm of the RAF. Bloom added that the RAF “has enormous problems that have not been solved, perhaps because he is too busy elsewhere”.
The Blue IQ crony club received five times more than officials at similar government agencies, and some board members were paid much more than Eskom’s directors. Despite earning what has been termed by Cachalia as “excessive” remuneration, investigations show that the board members failed miserably at doing their jobs.
A provincial government agency, Blue IQ was ostensibly created to “deliver strategic economic infrastructure to catalyse sustainable economic growth and to indirectly contribute to job creation, to influence the composition of exports and influence the diversification of Gauteng’s GGP”. In reality they were responsible for a litany of failures including the disastrous motorsport contracts which cost R115 million to cancel, amid news from The Star that Gauteng Motorsport and Blue IQ directors were wanted for fraud in Burundi.
Cachalia said: “Indeed, our consultants have concluded that the agencies in general have demonstrated a significant lack of good corporate governance, which points to systemic failure of the executive teams and boards of directors.”
Bloom said the remuneration was an outrage. “The huge fees paid to the Blue IQ board members are outrageous, especially since it is admitted that they did not perform well and wasted huge amounts of taxpayers’ money on fruitless projects. It’s a cosy club of comrades who set their own remuneration while not performing their duties. They enriched themselves at public expense.”
Who’ve we got to thank for this fine mess? The DA says former MEC Mashatile who was recently re-elected the ANC’s provincial boss must squarely shoulder the blame.
“I believe this is only part of the terrible rot in all the agencies set up by Mashatile. It’s good news that they are being re-organised into three big agencies, but Cachalia needs to dig deeper with forensic audits that could lead to criminal prosecutions and recovery of wasted money,” says Bloom.
What happens next will clearly show whether the good guys or the bad guys are winning in provincial government as the epic struggle of good against greed continues. Insiders say a provincial government reshuffle is on the cards and that this, together with the merging of Gauteng’s economic agencies, may see Cachalia get the boot as ANC cronyism digs in its heels.
By Mandy de Waal
Read more: Sam Sole and Stefaans Brümmer’s Mail&Guardian story “How Blue IQ got into bed with Mashatile’s ‘mafia’”