South Africa

AMABHUNGANE

New Joburg mayor could dig up dirt on Mashaba Afrirent fleet deal

Herman Mashaba (pictured) launched Action SA in 2020 after resigning as mayor of Johannesburg and from the DA in 2019. (Photo: Gallo Images / Sunday Times / Simphiwe Nkwali)

When we reported 15 months ago that fleet company Afrirent scored a big contract with the City of Johannesburg after paying an EFF slush fund, then-mayor Herman Mashaba announced an investigation. It let the city off the hook. But Mashaba is now gone and his defence of the deal is looking increasingly tenuous.

After Herman Mashaba stepped down as Johannesburg mayor late in 2019, the new ANC-led administration may want to dust off and re-examine some forensic reports he commissioned.

Among those reports is one into allegations of corruption relating to the city’s main fleet contract, which cleared Mashaba’s administration of wrongdoing.

In February 2020, new Joburg mayor Geoff Makhubo claimed at a press conference that Mashaba’s DA-led administration had brought the city to the brink of financial collapse and “created an environment where maladministration bordering on fraud and corruption has thrived”.

Makhubo pointed specifically to fleet contracts, saying: “Preliminary investigations have brought to light violations of the MFMA [Municipal Finance Management Act], SCM [supply chain management] processes and, as a result, the fleet contracts account for the high irregular expenditure in the city over the last two years.”

When we first reported on the city’s main fleet contract in late 2018 – and on payments the successful bidder, Afrirent, made to a Julius Malema/EFF slush fund – the acting head of the city’s fleet directorate, Sanjay Dubru, was alleged to have interfered improperly in the procurement process.

Earlier in 2020, the new administration suspended Dubru and a colleague for alleged acts of serious misconduct. The nature of their alleged offences were not specified, but it followed social media exposure of photographs purporting to show Dubru handling large amounts of cash.

Dubru did not respond to amaBhungane’s attempts to contact him for comment.

Afrirent, at the time of our story, denied having any relationship with Malema. It admitted paying Mahuna Investments, which we showed to be a Malema/EFF slush fund, but claimed that those payments had nothing to do with the fleet contract.

Rather, it maintained that it had paid Mahuna for logistical and translation services on another contract that it, Afrirent, had with the department of land reform and rural development in Limpopo.

In support of its claim, Afrirent cited the forensic report Mashaba had commissioned into the fleet contract. Afrirent claimed the report found that “there was no wrongdoing by Afrirent in relation to how the fleet management contract was awarded to us”.

The problem for Afrirent, however, is that the forensic report was not all that forensic.

amaBhungane’s investigation has cast serious doubt on the credibility of the report – and turned up more of Afrirent’s dodgy past.

A flimsy report

The forensic report, compiled by the city’s Group Forensic and Investigation Services (GFIS), itself noted: “The allegation of corruption between Afrirent and the EFF is outside the scope of this investigation.”

Nevertheless, the GFIS investigators made a stab in that direction, only to be met with a striking lack of cooperation from Afrirent and Mahuna.

The report discloses: “GFIS requested [but] were not provided with the contracts between Mahuna and Afrirent and therefore we could not ascertain that there was a business relationship between the companies although this was confirmed by the CEO of Afrirent.”

And further: “GFIS requested [but] were not provided with the scope of work, the invoices and the sites for which Mahuna was contracted to perform services, by Afrirent; as such we could not confirm the assertion that payments made to Mahuna were for services rendered. Mr Mashoabane from Mahuna Investments was contacted telephonically and he refused to speak to GFIS referring all questions to Afrirent.”

Afrirent’s alibi, that it paid Mahuna for work it did in connection with its Limpopo contract and not in connection with the Johannesburg fleet deal, could therefore not be tested by the city’s investigators.

AmaBhungane subsequently published additional evidence linking Afrirent to Malema and showing that Mahuna played no real role in Limpopo.

Where the forensics team did have a mandate to probe – namely, the city’s conduct during the procurement process – it appears still to have failed to interrogate the evidence properly.

Not specific”

AmaBhungane’s late 2018 article contained specific allegations that Dubru, then acting head of the directorate, played a central role.

The subsequent GFIS report noted that a key witness, the former group head of fleet compliance management, accused Dubru of having been appointed to manipulate the tender process.

However, the report declared that the group head “was not specific on how this happened or which political party or politician was responsible” and GFIS effectively dismissed his allegations as too vague to follow up.

But he was quite specific.

His statement to investigators contained detailed allegations of Dubru taking an active interest in the fleet procurement and subverting internal processes.

The group head wrote that Dubru “started requesting information regarding contracts” and “went to the extent of requesting confidential tender files from my staff”.

“He also requested the specifications for the non-specialised fleet contract … from my staff. They complained to me about these requests.”

The group head claimed that he confronted Dubru, accusing him of interfering in the details of contracts that someone at his level should not be involved in.

According to the group head, Dubru responded by saying, “this is bigger than you and me and that I [the group head] should not resist”, and claiming that the MMC responsible for the department was “behind him [Dubru] in these matters (contracts)”.

The group head also accused Dubru of going behind his back and pressuring staff who reported to him: “The Director Fleet and Fleet Specialist complained to me about these meetings that they were being called to.

“Eventually the Director Fleet and myself were excluded from all discussions pertaining to the non-specialised fleet.”

He added: “My conclusion regarding the string of events, is that Dubru was brought in to remove me … so that he can manipulate the contracts … From where Dubru was getting his instructions must be investigated.”

None of this made its way into the forensic report.

In mid-October 2019, we put the allegations in the group head’s written statement to the city for comment. Then came an angry response at the end of the month, days after Mashaba had announced that he would step down, but still more than a month before Makhubo was to succeed him.

“You are placing reliance on a disgruntled former employee of the city who resigned before he could face his disciplinary hearing,” city spokesperson Nthatisi Modingoane told us, dismissing the group head’s claims as “purely speculative” and stating: “There has been no evidence found whatsoever to corroborate the allegation.”

Modingoane added: “There is little surprise that an individual suspended by Mr Dubru would go to such lengths to discredit him. Please substantiate the allegation made by [the group head]? Please note that should you publish such allegations without such substantiation, Mr Dubru reserves all legal rights.”

On whether these allegations had been probed during the GFIS investigation, Modingoane replied: “The investigation could not corroborate the allegations made by [the group head]. All relevant officials who played a role in the process were interviewed.”

Then, on 24 November 2019, the anonymous Twitter account @AdvBarryRoux published a string of tweets about Dubru’s alleged interference in tenders. The Twitter thread contained photographs purporting to show Dubru and an unidentified individual handling a stack of cash at a luxury estate in Centurion, and a stash of money in Dubru’s office.

Later that same month, Modingoane told amaBhungane that Dubru and another official alleged by the @AdvBarryRoux account to have been involved in corruption were called to give their own version of events. He said GFIS was looking into the allegations, but that the two officials had not been placed on suspension.

That changed when new mayor Makhubo said during his 19 February 2020 press conference that two senior officials had been placed on suspension pending disciplinary processes.

More dodgy tenders

If the city’s forensic services had been paying closer attention at the beginning, under Mashaba, the embarrassing about-turn regarding Dubru and the fleet contract, in general, might have been different.

The GFIS investigators would have noticed that, in February 2019, the Sunday Times reported on a leaked recording in which a man boasts about giving an MEC R1-million for a 2015 ANC Women’s League event so he could score more contracts with the MEC’s department.

“The comment is believed to have been made by Senzo Tsabedze, whose fleet management company has won big government tenders,” read the article.

Tsabedze is the chief executive of Afrirent. He did not deny or confirm to the Sunday Times it was his voice in the recording, but told the paper, “As a business, we make contributions towards political parties and never to an individual. In relation to the voice clip, I have nothing to add. I have never paid or assisted any MEC with funding.”

In 2015, Afrirent was awarded a R52-million tender with the Eastern Cape transport department to fit vehicle tracking systems in over 3,000 government vehicles. Like with its City of Johannesburg contract, Afrirent was appointed on a “piggyback” tender with the Tshwane metro, forgoing a competitive bid.

The Sunday Times tentatively linked this contract to the funding discussed on the recording.

Separately, diligent enquiries might also have led city investigators to make a call at their neighbouring Ekurhuleni metro, where another fleet manager found himself on suspension, like the former group head of the Johannesburg department, allegedly because he stood in the way of an Afrirent contract.

Following a tip-off, amaBhungane spoke to the former head of department (HOD) for the Ekurhuleni fleet, who told us of attempts to pressure him into giving Afrirent the tender, which culminated in his suspension from the department.

The former HOD, who asked not to be named, told amaBhungane that a tender to supply, fit and operate tracking systems to monitor the municipality’s roughly 4,500 vehicles was up for renewal in 2016.

He said that no sooner had the new tender process started than the MMC for transport at the time, the ANC’s Petrus Mabunda, began enquiring about the status of the tender.

Mabunda is now a member of the Gauteng Provincial Legislature.

As political appointees, MMCs are not allowed to be involved in the awarding of tenders – a job that is for administrative staff.

An Ekurhuleni spokesperson told amaBhungane in 2018 that “no councillor sits in any bid evaluation committee, and the MMC for Transport Planning Cllr Petrus Mabunda has never got involved in the awarding of the fleet tender concerned.”

The former HOD said that a team of managers was supposed to begin evaluating 16 bids for the contract, but that Mabunda warned him not to involve anyone other than one particular project manager.

“I said I’d rather have everyone involved, and Mabunda said okay then if that is your view, you and I are going to have a fight.”

He said the project manager went ahead and whittled the 16 bidders down to four, among them Afrirent.

The former HOD said he was informed that Afrirent was to be appointed. All that was needed was his signature on an accountability statement, but he was not willing to sign off without knowing more about the bidders and pricing, since costs had risen far higher than budgeted.

“I said I’m not prepared to sign this accountability statement unless I get an audit of the whole process and can understand things.”

The Ekurhuleni spokesperson countered that the “evaluation process always includes other city departments, such as the officials in the supply chain management. Therefore, it would have been impossible to just have one employee doing evaluation of bids, as it is alleged. We therefore state that the MMC has never instructed that the Project Manager… be the only person to do the evaluation process.”

Afrirent earlier denied any involvement in trying to manipulate tender processes and told us it does not have information about Ekurhuleni’s internal processes.

The company said: “As you are aware, we have, on several occasions raised our concerns not only with the false information you have been given but also the inaccurate conclusions that you draw.

“From the two articles written so far [at the time amaB posed these questions] and the manner in which you frame your questions, it is clear amaBhungane’s stance is that Afrirent engaged in illegal conduct despite forensic and legal reports vindicating us …

“In view of the above, and after consulting with our lawyers, we are of the view that amaBhungane has no intention of reporting fairly and accurately on these matters. This negates any further engagement with yourselves.”

In January 2017, the former HOD detailed his concerns in two separate memos addressed to the Ekurhuleni city manager, which amaBhungane has seen. Afrirent’s contract was ultimately withdrawn, but the former HOD was nevertheless suspended in April 2017.

He was accused of irregularly extending the term of the incumbent on the contract and says he was also blamed for leaking allegations to the press.

His disciplinary case dragged on for months, until January 2019, when he was told to return to work while his disciplinary hearing continued.

The enquiry flagged an irregularity – that the former HOD allowed the incumbent company to render services for a period without a contract. But it found that he should not be dismissed as he “did not personally [benefit] and the breach was intended to benefit the employer”.

The former HOD said that officials are put in awkward positions because companies “use politicians” to pressure civil servants.

“Verbal instructions are given, but we’re the ones who put our signatures down.” DM

 

The amaBhungane Centre for Investigative Journalism, an independent non-profit, produced this story. Like it? Be an amaB Supporter to help us do more. Sign up for our newsletter to get more.

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