COVID-19 CORRUPTION

The looting starts deep in the bowels of government, that’s where it must be stopped

By Marianne Merten 21 August 2020
Caption
National Director of Public Prosecutions Shamila Batohi. (Illustrative image | Sources: Felix Dlangamandla / Foto24 / Gallo Images / Getty Images)

The committee compiling lists of personal protective equipment tenders is also looking at measures such as dedicated courts to fast-track Covid-19 tender corruption cases. But top law enforcement bosses have warned MPs that the malfeasance must be stopped at its origin.

“If the proper risks were identified, if the proper mitigating measures were put in place… we would not be sitting with this massive challenge,” National Director of Public Prosecution Shamila Batohi told Parliament’s public spending watchdog, the Standing Committee on Public Accounts (Scopa), on Friday.

“There really has to be a strong focus on what went wrong with these departments, and measures put in place.”

Or as Auditor-General Kimi Makwetu put it: “This idea that we will chase afterwards is very expensive, it is very wrong…

“In order to win this battle sustainably, the point has to be made: the only way to fortify the systems in government … is to build up on the preventative measures.”

Tax boss Edward Kieswetter agreed, but took a slightly different turn, telling Scopa how companies that were registered for IT services, or as car washes or bakeries, had won personal protective equipment (PPE) tenders.

The South African Revenue Service (SARS) is already looking at 307 cases with revenue losses totalling R300-million – three big contracts are with the SA Police Service (SAPS) – while also being requested by the Free State Special Investigating Union (SIU) to assist with 300 cases involving PPE contracts.

“Unless we significantly boost resources of SARS we are fighting a losing battle,” explained Kieswetter.

Friday’s Scopa meeting was called for an update from the ministerial committee established by the Cabinet on 5 August 2020 to compile lists of Covid-19 PPE tenders.

It followed Thursday’s SIU briefing to Scopa at which it emerged that the unit was looking at 658 dodgy Covid-19 PPE tenders valued at R5.08-billion.

SIU probes R5.08-bn in questionable Covid-19 tenders, while lists of PPE contracts emerge

Overnight, the first action was taken: the Special Tribunal granted the SIU’s request to freeze R38.7-million in bank accounts of 40 Gauteng-based companies involved in the Covid-19 PPE looting.

These include politically connected companies Ledla Structural Development, Royal Bhaca Projects and Mediwaste.

Special Tribunal spokesperson Selby Makgotho said in a statement on Friday that Ledla Structural Development had, according to the SIU, obtained “unlawfully, irregularly and corruptly awarded” contracts at “grossly inflated” prices.

“Ledla Structural Development (Pty) Ltd subsequently transferred a large portion of the proceeds it received into various banking accounts belonging to entities and individuals, which funds, the SIU contends in court papers, are liable to be forfeited to the State.”

This is the first concrete achievement in the matter by law enforcement agencies. On the political front, Cabinet’s ministerial committee’s move from compiling lists of Covid-19 PPE tenders to actively supporting steps to halt the corruption is seen, according to Batohi, as “strong political will to give support to the entities that must address Covid-19 related corruption”.

At Friday’s Scopa meeting, the ministerial committee still looked like a work in progress.

Justice Minister Ronald Lamola, who heads the committee of six ministers, said not only was the Covid-19 tender information being released on the National Treasury website, the ministers also are looking at dedicating some of the country’s special commercial crime courts to speed up Covid-19 tender corruption cases.

“Information is being made available so (people) can be held accountable by the committee, by Parliament, but also others and ordinary South Africans,” said Lamola. “Information, when it’s available in the public domain, any member of the public can access it.”

He acknowledged there was no time frame yet for the committee, nor a budget. These matters were still being considered. A report would go to Cabinet finalising the details, including how long the minister’s committee would remain in place, be it three or six months, to drive urgent action to stop Covid-19 tender looting.

Measures to stop the potential for corruption, fraud, misadministration and malfeasance at the heart of the public administration across all three spheres of state were left hanging. At least for now.

As officially promised, much of the Covid-19 PPE tender contract information is already available on the National Treasury website.

However, because departments, entities and provinces provided details in different formats, and to different levels, comparisons are impossible to make.

The Presidency procured seven wheelchairs at a cost of R18,900, but it is not clear if that’s per wheelchair or in total as unit costs are not provided.

The Department of Correctional Services Covid-19 PPE tenders amount to R127,103,552.98. The SIU on Wednesday told MPs it was probing Correctional Services contracts worth R53.9-million, effectively almost half the total PPE tender amount.

The detailed breakdown list does not give unit costs. Barberton prison in Eastern Cape in late March procured “coverall bodysuits” at a cost of R4.48-million. It would make a vast difference if that money was spent on, say, 1,000 such coveralls, or whether the money was spent – at National Treasury’s cost limit of R286.20 per item – on 15,650 coveralls.

The Department of Co-operative Governance and Traditional Affairs (Cogta), in a report headed “confidential” even though it was always known the information would be made public, shows R11,707,800.98 went to Black Dot SA (Pty) Ltd for “cleaning, hygiene and pest control services in all five buildings for a period of 36 months”. The same company also supplied PPEs.

The Department of Health’s list details all suppliers – giving not only names but director and company registration dates – quantity, delivery dates, total units, unit prices and delivery dates.

It emerges that 2,400,000 gloves were ordered in boxes of 100, but the order was cancelled after 900,000 gloves were delivered at a cost of R419,000, or a unit price of R46.60 per box of 100.

What isn’t clear is the reason the contract changed. Some items may have been overpaid.

For example, 3,400 cloth masks with the departmental logo cost R195,500, or R57.50 per mask. The National Treasury PPE emergency procurement instruction stipulates a mask price of R20 for two layers and R25 for three layers.

In Friday’s Scopa meeting, MPs were told that the Departments of Communications and Water and Sanitation were among the national departments yet to deliver reports on Covid-19 PPE tenders. Among the provinces, North West and Limpopo had not delivered.

At Friday lunchtime, the National Treasury website showed the SAPS Covid-19 PPE tender list still missing.

The Scopa meeting was uncharacteristically uncontroversial and non-confrontational as MPs agreed, across the political divide, on the urgency of dealing with looting.

The briefing revealed that the corruption-busting initiative remains a moving target. And more of the same is predictable – unless, as the auditor-general and prosecutions boss cautioned, measures are taken to cut off the potential for corruption in public administration. DM

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