The laborious and expensive inquiry into State Capture, popularly known as the Zondo Commission, produced a number of significant findings.

Among these were that the boards of South Africa’s state-owned entities had sometimes played central roles in enabling State Capture, and that the members of such boards needed to be selected with great care.

Another was that whistle-blowers reporting misconduct or corruption in South Africa’s public or private spheres deserved far greater protection – as well as the gratitude of the country.

Extensive lip service has been paid by government leaders to the importance of the Zondo Commission’s conclusions. But the example of what is currently happening at one relatively small government agency may serve as a disturbing microcosm for a wider picture: one in which the lessons of State Capture appear to have been barely absorbed at all.

MDDA board chaired by ex-SARS exec fingered by Nugent

Hlengani Mathebula was the Chief Officer: Governance, International Relations at the South African Revenue Service (SARS) during Tom Moyane’s tenure as commissioner of the tax collection body.   

Mathebula’s close relationship with Moyane was no secret: indeed, Moyane was accused of violating SARS’s conflict of interest policies by permitting Mathebula to continue serving on the board of BMW SA while working for SARS.

Mathebula was found by the Nugent Commission in mid-2019 to have acted in “extraordinary” ways as regards his conduct at SARS during the tail end of the State Capture years. SARS subsequently opted to place Mathebula on suspension “pending the finalisation of a disciplinary process in respect of serious allegations of misconduct”.

Less than a month later, before that disciplinary process had played out, SARS and Mathebula chose to “end the employment relationship”, to quote a terse statement from the revenue collector at the time.  

Today, Mathebula is chair of the board of the MDDA – despite the fact that the MDDA Act states that a person may not be appointed as a board member if they have, “as a result of improper conduct, been removed from an office of trust”.

MDDA spokesperson Rudzani Tshigemane told Daily Maverick that this clause of the MDDA Act was not relevant in Mathebula’s case.

“Prof Mathebula has [neither] been removed from any office nor was he ever dismissed at SARS, so the cited section of the MDDA Act doesn’t apply to Prof Mathebula,” Tshigemane said.

“Prof Mathebula was appointed to the board in 2021 through a public participation process which included him being interviewed publicly by the standing committee on communications. The standing committee on communications, after satisfying itself of the eligibility of Prof Mathebula, recommended him for appointment to the National Assembly.

“He was duly appointed after being vetted by the necessary security agencies.”

Tshigemane added that the appointment of the MDDA board chair was ultimately the prerogative of the sitting state president: in this case, President Cyril Ramaphosa.

MDDA: a small but important body in the state ecosystem

By the standards of government agencies or state-owned entities, the MDDA is a minnow – with an annual budget of barely R100-million.

But that does not mean its function is unnecessary. One of the organisations which have been observing, with concern, recent developments within the MDDA is Corruption Watch, whose spokesperson Kavisha Pillay described the MDDA to Daily Maverick as “an important state agency which contributes towards media diversity in South Africa by focusing on community media and small commercial media”.

Pillay pointed out that many people in South Africa still rely on small local radio stations or newspapers for access to news and information.

“In this regard, the MDDA plays an imperative role in ensuring that community media is strengthened and can thrive, especially in the context of big media monopolies and high levels of digital news penetration,” she said.

Corruption Watch was one of a number of civil society groups that wrote to President Ramaphosa last month to express concern over several issues.

In an open letter dated 8 February 2023, the organisations noted that the MDDA “escaped the attention of the Zondo Commission, perhaps because of its size and budget”, but appeared to be in the grip of a “governance crisis”.

The open letter cited the appointment of Mathebula as board chair as one cause for concern, but there were many others. A central issue was felt to be the treatment of former MDDA CEO Zukiswa Potye, who was credited along with the former board with having improved the “governance and policy environment” of the agency.

It is clear that the MDDA has [acted] and continues to act in a biased and inconsistent manner to the prejudice of deserving grant recipients.

Potye clashed with the board under Mathebula, culminating in her blowing the whistle to both the erstwhile Minister in the Presidency, Mondli Gungubele, under whose ambit the MDDA fell, and the Public Service Commission (PSC) in February 2022. 

Potye requested that the board be investigated for pushing her to sign an allegedly irregular permanent contract with the CFO. (The MDDA board maintains it was Potye who committed misconduct by failing to finalise the CFO’s contract.)

When the PSC forwarded Potye’s complaint to Gungubele, the minister responded by sending the complaint to Mathebula and the board – thus revealing Potye’s identity as the whistle-blower. The MDDA board then placed Potye on suspension.

Corruption Watch wrote to Parliament in July 2022, describing Potye’s treatment as being “in contravention of Section 3 of the Protected Disclosures Act of 2002” and “an act of whistle-blower victimisation”.

This is a characterisation that the MDDA board vehemently disputes. In a response to the February 2023 open letter from civil society, the board stated that when Potye’s matter reached the CCMA, Potye’s dismissal was recommended by an independent commissioner on the grounds that her conduct was “unbecoming of a CEO”.

Corruption Watch is still unconvinced. Pillay told Daily Maverick: “We remain concerned about the board’s interpretation and understanding of whistle-blowing in South Africa – and the necessary rights and protections that should be afforded to whistle-blowers in this regard”.

Further whistle-blowers point to other issues

Over the past weeks, further whistle-blowers have approached Daily Maverick with additional concerns about the performance of the board under Mathebula. Although their identities are known to Daily Maverick, they would speak only under condition of anonymity – citing Potye’s experience as a deterrent to openness.

A significant concern in general raised by these sources was the lack of transparency from the MDDA when it comes to the community media projects it funds. Indeed, Daily Maverick confirmed that there is no public list available anywhere of the projects currently being financed by the MDDA.

Asked for comment on this apparent lack of transparency, MDDA spokesperson Tshigemane said that the MDDA website would be “overhauled in due course”, and that all funded projects are reported in the MDDA’s annual report.

When asked if he could provide some examples of notable successes by the MDDA under the current board, Tshigemane replied: “We won’t be doing justice if we list all success stories of our funded beneficiaries.”

He said the current MDDA board supported 25 broadcast projects and 10 print projects in 2021/22, and 23 broadcast projects and 10 print projects in 2022/23.

The MDDA will also launch “approximately 33 community radio projects across the country between January 2023 and August 2023”.

Large chunk of budget going on litigation

One of the issues brought to the attention of Daily Maverick by the whistle-blowers was the quantum of the MDDA’s relatively small budget which currently has to be devoted to litigation.

Tshigemane confirmed that over the 2022/23 financial year, the agency’s legal bills amounted to R7,375,951.

Daily Maverick understands that a more usual allocation of the budget for litigation would be in the region of R750,000 annually, meaning that the MDDA is currently overspending by 10 times in that department.

One source described this allocation as a “massive chunk” of the budget, relatively speaking, and suggested that this fact alone was emblematic of the agency’s wider governance crisis.

Some of the litigation is being brought against the MDDA board by former staff members, and some by unhappy former grantees. In one such instance, papers were filed in December 2022 in the Gauteng Division of the High Court by Cosmo FM on the grounds that the MDDA allegedly unfairly and irregularly pulled funding from the radio station.

Cosmo FM’s legal papers cite “a similar project which had similar circumstances as that of our client but [for] which the MDDA set aside the decision to terminate the grant aid agreement and agreed to reinstate the funds which had been pulled from the project”.

The court papers allege: “It is clear that the MDDA has [acted] and continues to act in a biased and inconsistent manner to the prejudice of deserving grant recipients.”

Unhappiness about alleged bias, inconsistency and conflicts of interest in the MDDA’s selection of projects to fund has also spread to the agency’s staff.

In emails seen by Daily Maverick, internal objections were raised to the decision by the MDDA board’s projects team in December 2022 to award funding to Inside Education, a Gauteng-based “small commercial media entity focusing on education news from early childhood development to higher education”.

Documents seen by Daily Maverick show that the outlet was initially rejected for funding because of its commercial nature and because it was felt that it could access funding elsewhere – such as from the Department of Education.

Inside Education, run by the Mail & Guardian’s former political editor, Matuma Letsoalo, subsequently launched a spirited appeal against the decision and was then granted funding by the MDDA board – over the objections of staff who pointed out that there is no formal appeal process for unsuccessful grant applicants ordinarily.

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Asked about this case, MDDA spokesperson Tshigemane told Daily Maverick the reversed decision was “the result of funding that had become available” because of the board’s decision to no longer fund Sentech broadcast signal distribution fees for broadcast projects. He confirmed that there was no appeal process available to unsuccessful grant applicants.

Daily Maverick understands, however, that funds freed up from broadcast projects cannot technically be used to fund print or digital media projects – which would mean that Inside Education was ineligible for the funding in any event. The MDDA did not respond to a follow-up question on this matter.

Although the amount disbursed to this particular project was relatively small – around R400,000 – sources say the incident is illustrative of the wider problems in the MDDA, and concerns around the board’s consistency in decision-making and operational propriety.

Minister meeting with board

Although Parliament’s portfolio committee on communications was due to discuss the issues at the MDDA last week, the new minister in the Presidency, Khumbudzo Ntshavheni, has reportedly requested a chance to meet with the MDDA board first.

Corruption Watch, meanwhile, says it is engaging with its partners to determine its next steps.

“Corruption or misconduct at any state entity, regardless of its budget, should be exposed and addressed accordingly,” spokesperson Kavisha Pillay told Daily Maverick. DM