SCORPIO

Digital Vibes scandal: Meet ‘Dr’ Pelo, the National Health Insurance’s literal R1.1-million cash cow

By Pieter-Louis Myburgh for Scorpio 16 June 2021

Illustrative image | Sources: Health Minister Zweli Mkhize. (Photo: EPA-EFE / Kim Ludbrook) / Health Minister Zweli Mkhize, Tahera Mather (left), Naadhira Mitha (black top, glasses) on 26 March 2019. (Photo: Facebook) / ‘Pelo', the 3D Nguni cow character that Digital Vibes paid a local animation studio to create.

Before Covid-19, South Africa’s pending National Health Insurance programme presented the politically connected communications firm Digital Vibes with ample opportunity to milk the public purse. We can now shed light on an animated National Health Insurance cow mascot with a 314% mark-up, along with other dubious billings from the firm.

Pieter-Louis Myburgh for Scorpio

One of South Africa’s first significant National Health Insurance (NHI) contracts became an alleged looting frenzy, with close associates of Zweli Mkhize, the health minister currently on special leave, adding massive mark-ups on invoices for questionable communications services rendered to the Department of Health (DoH).

The latest instalment in Scorpio’s months-long investigation into the Digital Vibes saga focuses on the firm’s earlier DoH billings, from the period before its original NHI mandate was changed in late March 2020 to include Covid-19.

Digital Vibes bagged the lucrative communications deal in late 2019.

By all appearances, the company was effectively controlled by Tahera Mather and Naadhira Mitha, two close associates of Minister Zweli Mkhize, who has taken special leave in the wake of Scorpio’s investigations.

Digital Vibes ultimately pocketed R150-million from the DoH. 

At least R23-million of this amount can be attributed to billings linked to NHI communications work.

According to documents we’ve obtained, Digital Vibes paid a local animation studio roughly R266,000 to create Pelo, a 3D Nguni cow character outfitted in a doctor’s coat and spectacles.

Digital Vibes delivered Pelo, an animated mascot for the National Health Insurance, at a grossly inflated cost.

Pelo was due to be rolled out as a mascot for the NHI, sources familiar with the matter have told Scorpio.

The DoH ended up paying a grossly inflated price for the work. In an invoice submitted in February 2020, Digital Vibes first billed the DoH R800,000 for “animation 3D development”. 

Another invoice from March 2020 included a further R300,000 charge with the same description.

In other words, Digital Vibes billed the department R1.1-million for an outsourced animation project that cost only R266,000. This translates to a massive 314% mark-up and netted the firm R834,000 in pure profit.  

Financial records in our possession confirm that the DoH settled the bills for Pelo. All indications are that the animation project was not the only time Digital Vibes successfully milked the department’s coffers for NHI work. 

Between December 2019 and March 2020, Digital Vibes submitted invoices for NHI-related billings valued at R23-million. All of these invoices were settled in full by the DoH. 

Much of this expenditure can be attributed to other questionable line items. 

An invoice from December 2019 – presumably the company’s first after it had signed the DoH deal the previous month – reflects a total bill of just under R7.5-million. Financial records confirm that the DoH paid Digital Vibes for this invoice in late January 2020.

The invoice includes a R1.2-million charge for an “NHI creative proposal” and another R1.2-million bill for NHI “branding and brand book”.

According to this post on social media, Digital Vibes’ alleged masterminds, Tahera Mather and Naadhira Mitha, worked at an ANC event with Health Minister Zweli Mkhize in 2016.

Scorpio has not yet had sight of the creative proposal or the other documents Digital Vibes referred to in its invoices. 

However, judging by the descriptions on the invoices, some of these documents don’t sound like billable items but instead sound as though they should have formed part of the company’s pitch for securing the contract.

“The NHI Creative proposal explained what we wanted to accomplish to achieve our goal. The client needed to see and understand the objective and outcome of the project. In this case, a template was created to guide us. This became the reference point for the NHI project,” reads the firm’s justification for the R1.2-million charge.

The company also billed the DoH R600,000 for a “design and concept” and R500,000 for what it described on its invoice as the “look and feel” of its envisaged NHI work.

Digital Vibes’ second invoice, dated 3 February 2020, included more questionable NHI line items. This time, the total bill was nearly R7.9-million, and the DoH settled the invoice in early March 2020.

Apart from the first bill for Pelo the cow, this invoice included a R1.5-million charge for “data driven sentiment behaviour change on NHI”; “media monitoring – all platforms worldwide”; and “real time alerts”, among other items.

The February 2020 invoice also included an R800,000 charge for “Campaign 1 – what is NHI”.

Scorpio reached out to Mather and Mitha to learn more about the “what is NHI” campaign and Digital Vibes’ other NHI billings. 

They ignored our queries. 

Zweli Mkhize and Tahera Mather in 2017.

Digital Vibes submitted its final invoice for purely NHI-related work on 3 March 2020, a few weeks before its focus was diverted to Covid-19. 

Later invoices would still include minor NHI billings, but after March 2020, the bulk of Digital Vibes’ charges emanated from Covid-19 work.

The final NHI-related invoice came with a total bill of R7.82-million. This time around, the DoH settled the invoice within just 10 days, according to financial records. 

Along with the second bill of R300,000 for Pelo’s animation work, the final NHI invoice included another R1.5-million charge for “data driven sentiment behavior”. 

The company also charged the DoH R250,000 for “WordPress completion” (WordPress is a free, open source website tool); R200,000 for “raw video footage” and R150,000 for “placement of opinion pieces”, among other curious billings.

Digital Vibes also charged the DoH R155,500 for “stakeholder management”.

Judging by an appendix included in the invoice, this entailed the department paying Digital Vibes for enjoying coffee with stakeholders from the medical industry.

In January 2020, for instance, someone from Digital Vibes met with a representative from the South African Dental Association “at Woolworths coffee, Rosebank Mall”, according to the invoice. 

The South African Dental Association representative “supports the theory & principals of a universal healthcare system”, the document tells us. 

Scorpio asked the DoH whether it had received any value for money for the payments it made to Digital Vibes for the NHI work, or whether it had instead been ripped off. 

“The Digital Vibes matter is under investigation by the SIU. I implore you to give the process space to conclude. Most answers can only be responded to by Digital Vibes,” responded the department. DM

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All Comments 42

  • Mazeltov! 11 days for payment! Wow.
    Nice having friends in the right places.

    I’ve got to wait at least 4-5 months from DPW for professional work.
    Even had one invoice take 11 months to be settled in April
    I saw 9 signatures on one payment advice… nine people to approve a professionals’s invoice that was budgeted and approved … “bloated public service” comes to mind.

    • I should invoice through these people! Government rented space from me for the school sanitary pad project in March 2020. It is now June 2021 and the DA Department of Social Services has still not paid me. Sue them? Hilarious, try and sue and try and recover legal fees …

      They found it in themselves to buy 20m plus packages at 35c less than what Shoprite sells single units at. One order, one delivery : I can imagine how legit that tender must be when the manufacturer would supply truck loads at 35% off.

  • Stirling work by a stirling investigative journalist.They should build acstatue for you Caryn Dolly, Marianne Thamm,etc.South Africa’s citizens have become a milk cow for a criminal goverment. How have the holier than thow (only we can safe south Africa)anc turned into a fraudulent, stealing syndicate of mind boggling proportions.Yep, we are being run by a criminal organization.

    • Agree 100%. The anc is criminal in it’s DNA. All government are, but these anc imbeciles feed in such a frenzy more than comes in, which is just plain stupid.

    • Good job PLM, keep it up. The ANC is thieving its voters and South Africa. May the new generation of voters stand to be counted when the rot is exposed by Maverick journalists. And may the irony of it all be cartooned by master Zapiro.

  • Pieter-Louis, as I’m reading this brilliant article, it occurred to me that maybe, just maybe, the forces of yin and yang are at play here, and they can’t find each other, for now. All the incredible investigation that took place here, accompanied by highly credible journalism, point to the fact that yin has taken control, and it refuses to let yang into its domain, its territory.
    In particular I want to comment on your very last paragraph, consisting of a mere two sentences. “The DV matter is under investigation by the DIU. Most answers can only be responded to by Digital Vibes” responded the department! Now that is hogwash, or just plain bullshit. It is not DV that gave themselves the money, it is the Department of Health that gave them the money, that was then totally used for self-enrichment by a pack of disgraced corrupt individuals including DoH officials. They formed a cartel together with DV. Pieter-Louis, who is this person at the DoH that you spoke to? A department can’t speak. It is a body. It is people or a person that speak(s).
    When the whole truth of this sickening saga eventually comes out, likely by the NPA and not the SIU, it will find that there were tens of people at the DoH that likely shared in this scandal/profits, not just Mkize. They are the ones responsible, they are the looters, DV was merely the channel, although they no doubt shared in the loot. This whole investigation should be focussed on the top structure of the DoH.
    Like Jcdville says in his comment, “South Africa is been run by a criminal organisation”. And it starts at the top of the governing party. And the top is the so-called NEC of the ANC, not parliament, And the NEC members are there because of the ANC branches. And the whole damn lot are criminal. And have been criminals since the branches selected the chief architect of corruption as both their president and the president of the country, in 2007. He set the tone, the path, to endless corruption. Anmd iot has become part an d parcel of the ANC’s DNA. And still the masses vote for them…”Father, forgive them what they are doing, because they do not know better!”

  • How does an inexpert PR consultant have an intelligent discussion about strategic health reform with stakeholders? Over coffee?? And who pays an invoice for this? And to pay millions for a cow mascot for NHI… You can’t make this stuff up

  • Company and branding is a great rip-off opportunity, because it is based on perception. You can’t quantify perception properly because it is so different in different contexts. I worked for a major global company that apparently spent GBP 25 million on a branding exercise. What did they get? A new logo, a new one-line slogan and a new set of fonts.
    But there are two key differences. With this and a few outlandish acquisitions the CEO didn’t last. And this was private company money.
    Quite apart from fictitious invoices for coffee parties and preparation of proposals, etc uncovered by Scorpio, why does the DoH need a branding exercise unless they know their proposal for NHI and their handling of covid is widely unpopular? If they know their proposal for NHI is widely unpopular, why as the “government for the people” do they go ahead with it? Under this ANC government NHI will go ahead if the ANC decides it should whatever the public backlash. A right-thinking government official would have realised that spending ZAR 150 million on repairs to Charlotte Maxeke hospital, or building more rural clinics, or improving ambulance services, or.. , or.. , or.. would have gained more perception kudos than a branding campaign.

    • As a 30+ year veteran of both local and UK, European and US branding/advertising agencies, I can tell you with absolute certainty the the amounts invoiced to DoH are obscenely inflated, even if they’d been outsourced in USD or Euro!!
      Even the most specious of marketing agencies/consultancies would not have dared to charge even 30-40% of these amounts – clearly it makes a big difference when your line item descriptions are nothing more than fluff on what is really just a filthy
      bung.

  • So much for Ramaforia New Dawn. The whole cANCer is terminally sick. The only solution is euthanasia. Starting with Local Elections. I see today the Rand is near $14 again. The World is not fooled. They see Eksdom, State Capture, failed Vaccination Programme, and a useless cANCer cadre President who sat beside Zuma as Deputy and MUST have known, and he was in control of the now infamous ‘Deployment Committee’. He must have failed big time at the G7 to see the Rand bounce like this.

    • I failed to understand the whole ramaforia from day one, this man was there while all this corruption was happening, said nothing, while in a position of power and the second in charge, then he’s shocked?

      But then again one expects that from someone who’s claim to fame was to advance the interest of the workers as a union representative, fast forward to now the employees he claimed to represent are worse off while he is a billionaire?

      • Can you truly not feel an improvement in the flow since CR became president? Can you imagine how hard it must be to effect positive change with such a massive percentage of your colleagues neck deep in corruption? We have freedom of speech (and to moan) and in my humble opinion there is an attempt to right the ship in progress …Rome was most certainly not built in a day.

        • Can you truly not feel an improvement in the flow since CR became president? Can you imagine how hard it must be to effect positive change with such a massive percentage of your colleagues neck deep in corruption? We have freedom of speech (and to moan) and in my humble opinion there is an attempt to right the ship in progress …Rome was most certainly not (re)built in a day.

          • All these armchair politicians are quite annoying. CR has been playing a long game. Sure he could possibly have done more, but if he had been too vocal or presented too much opposition earlier, he would have been removed and neutralised and we would still have JZ and his RET cronies running the show. The man has been walking a tightrope and has done so rather magnificently – certainly better than anyone else in our current lineup.

    • CR actually got rave reviews from G7 – the Rand has bounced because the US Fed has taken a more hawkish stance on local interest rates, as well as speeding up the end of the C-19 bail-out package – all of which have instantly spiked the dollar. Simple economics, little to do with Cyril… let’s keep a rational perspective through all this?

  • The NHI is already achieving it’s true purpose, milking the taxpayer to fund corrupt politicians and their cronies under the guise of ‘social justice’.

    For as long as the people who have the numbers to put these thugz into power aren’t the ones paying the taxes, but rather an immoral lot that’s happy to profit without working, this is unlikely to change.

    The minority of taxpayers is being terrorized by the majority who are happy to take without contributing.

  • Shameful ……all invoices paid and nothing to show ! The mandarins in the DOH who approved these fraudulent payments should be criminally charged 😡

  • Susan, it just depend on how many maggots one wants to unearth. Unfortunately this all goes back to the narrative that white didn’t work for anything and everything fell into our laps because of our advantage. This is a typical ‘our turn to eat’ scenario.

  • A cow in a coat to symbolise the NHI! Only one of many crazy overpriced accomplishments of DV. We are supposed to place trust in the DOH for our health care? Ai khona!!

    • You are probably right. We think we know how much they ripped us off through Transnet and Eskom (and others). The amount of money flowing through NHI is going to be extreme in comparison, no doubt there will be lots of leaks in that bucket

  • This is why I subscribe to DM. Imagine the rot that would go undetected if it were not for investigative journalists exposing it. Thank you DM, Scorpio and Amabhungane.

    NHI will be a feast for politicians, and will literally result in the deaths of poor people because of corruption and exorbitant pricing.

  • Thank God for the free press in SA! This is the last stand we have against the criminal behavior-shine the light on the individuals and throw the proverbial book at them!
    God helps us all in all his/her/they forms.

  • If there is one positive thing that has come out of this pandemic, it is the glaring truth that SA is miles away from being ready to introduce a National Health scheme.

  • The theft started at a time when the NHI is still in a discussion stage. Just imagine the thieving the moment the NHI becomes a reality.

  • This article exposes the frightening reality. The heart of state capture. When we hear “state capture”, we associate the Guptas, Zuma, Ace, etc. – stealing professionally at a grand scale. But to me, the heart of the issue is that “cadre deployment” became the euphemistic term meaning “let’s deploy our selected comrades, and reward them for loyalty to the ANC by allowing them to go skim the cream off the state budget”. The best way to do that is by overcharging, getting paid for soft “deliverables” which are unquantifiable, etc. This started way back in 1994, as soon as the selected many entered the civil service. Where was the AG? They are supposed to verify receipt of deliverables against payments made; value for money.
    I suggest that the Zondo Commission must be continued via a permanent structure that can keep digging.
    I fear that they may find a majority of “petty” criminals at large (i.e. those that only steal millions, not billions).

  • Yet another powerful piece of brilliant journalism by Mr Myburgh, so vital for SA right now. Sadly though, reading these revelations did not surprise at all but instead made me feel…almost homicidal. The ANC is a criminal outfit that can only be toppled from the top – the head of the snake.

  • We musnt forget the Cuban doctors(I’m not even talking about the water mechanics)What leaves in those planes and what comes back besides the doctors.Also the students who went there and wanted to come back because of a lack of money.Somewhere in all this shenanigans of criminal activity ,there are certain individuals who are making a lot of money.

  • A mascot is a symbol. How exactly does a cow represent the medical professions? And why isn’t she wearing a mask? I suppose she does represent the milking of the DoH …

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