POLITICAL SCRUMDOWN
MEC Anton Bredell turns up heat beneath Theewaterskloof officials in Rugby World Cup ‘official state visit’ probe
Theewaterskloof Municipality deputy mayor John Michels and speaker Derick Appel allegedly used public funds for their trip, which they claim to have paid for themselves.
MEC for local government, environmental affairs and development planning in the Western Cape, Anton Bredell has begun efforts to probe the allegations surrounding the trip taken last month by two senior Theewaterskloof Municipality officials to the Rugby World Cup Final.
Read in Daily Maverick: ‘Official state visit’ to watch Rugby World Cup final kicks up Theewaterskloof Municipality funding spat
“We have started the process to determine if a Section 106 investigation into the matter can be launched… The legislative framework requires that before the Minister can initiate an investigation he is required to afford the municipality with an opportunity to comment on the allegations and then conduct an assessment to determine if a provincial investigation is necessary,” said Bredell’s spokesperson, Wouter Kriel.
Section 106 of the Municipal Systems Act provides the MEC for local government with the power to request information, and if necessary designate a person or team to investigate if the MEC is aware of allegations of maladministration, fraud or corruption in a municipality.
Kriel told Daily Maverick that Bredell had requested answers from Theewaterskloof municipality regarding the visit, but the municipality had declined to respond to the MEC.
Theewaterskloof Municipality deputy mayor John Michels at the Rugby World Cup in Paris, France on Saturday, 28 October 2023. (Photo: Facebook)
Theewaterskloof Municipality speaker Derick Appel at Cape Town International Airport on Monday, 23 October 2023. (Photo: Facebook)
Theewaterskloof Municipality deputy mayor John Michels and speaker Derick Appel travelled to France and the UK from 23 to 31 October to be in Paris for the Rugby World Cup Final on Saturday, 28 October, Daily Maverick reported.
The trip was dubbed as an “official state visit” in a letter to the Department of International Relations and Cooperation (Dirco) director-general Zane Dangor, from the municipality’s municipal manager Wilfred Solomons-Johannes.
In the letter, Solomons-Johannes had requested a note verbale be provided by Dirco for the duo, who would also pay a “courtesy visit to the Embassy in the UK and France and meet with the relevant officials to discuss the trade and investment.”
Questions were soon raised by the DA’s constituency head in Theewaterskloof, Isaac Sileku concerning the real reason behind the trip and who was footing the bill.
In a statement, Sileku had called for “immediate answers” from the PA, ANC and Good coalition on the deputy mayor and speakers jaunt to the Rugby World Cup “under the guise of an official state visit”.
Theewaterskloof Municipality, in the Overberg region of the Western Cape, is led by a coalition of the ANC, Patriotic Alliance and Good party. The local municipality includes the towns of Greyton, Grabouw, Genadendal, Villiersdorp, Tesselaarsdal, Riviersonderend, Caledon and Botrivier.
It has been plagued by financial woes for years; made worse by the recent Heritage Day weekend storm which wreaked havoc in the Overberg region of the Western Cape.
Read in Daily Maverick: Western Cape hospitality and tourism industry still counting the ‘massive’ cost of mudslides and flooding
On 25 October, Sileku lodged a complaint with the provincial treasury to investigate whether public funds were used for the trip.
In the letter of complaint, seen by Daily Maverick, Sileku said if the official visit was indeed being used “as a guise to attend the Rugby World Cup, it raises serious ethical and financial concerns.”
“Should you believe the National Treasury should investigate this matter, to determine whether this proposed excursion genuinely serves the interests of the people of Theewaterskloof, you are welcome to escalate it to the relevant officials.
“The citizens of Theewaterskloof deserve clear and honest explanations regarding this trip and its implications for their municipality,” he said.
In a response to Sileku’s letter, Western Cape Finance and Economic Opportunities MEC, Mireille Wenger referred his request for an investigation to Bredell’s office.
“The Municipal Finance Management Act does not provide powers of investigation. However, the Provincial Treasury will be monitoring the municipality’s monthly financial reports for any indicators of financial mismanagement or any possible violations of the cost containment regulations,” said Wenger in a letter, dated 2 November.
Speaking to Daily Maverick about Bredell’s move to probe the matter, Kriel said: “The issue is about who funded the trip, and if it was the municipality, if financial regulations were followed.”
“There are questions about whether this was an official trip or not,” Sileku told Daily Maverick. “If we can get that information then we need to determine if there were any costs incurred by the municipality, in terms of visa application fees etc.”
Both Michels and Appel claimed to have paid for the trip themselves.
Appel, who is also the treasurer for the Western Cape ANC, is currently facing a criminal case, for which he is appearing in court, after allegedly assaulting three law enforcement officers during centenary celebrations in Riviersonderend in September, News24 reported. As for Michels, he was reportedly facing charges in an internal investigation by the Good party in March this year, following sexual harassment allegations.
When contacted, the municipality declined to comment at this time.
On Friday, the Good party’s Brett Heron slammed Bredell for his intentions to investigate allegations “made by members of his party relating to recent overseas travel” by the Theewaterskloof deputy mayor, a member of GOOD, and the municipality’s speaker.
“Bredell’s hypocrisy is staggering.
“The mayor of Theewaterskloof has already publicly confirmed that no municipal funds were used to pay for their travel, but the gossip is too sexy for Bredell to resist with an election around the corner,” said Herron.
He added that if it was true that Bredell intended to investigate the matter on the basis that the Municipality refused to answer questions posed by him, “then he is abusing his office for party political purposes and is unfit for the office he holds.” DM
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Brett Heron stating that someone is ‘unfit to hold public office’ is the funniest irony I’ve read in a long time.
Critical Trends: Falling Off a Cliff
Since 2017, mSCOA, the standard municipal accounting system, has required that every municipality report monthly and annually on their accumulated or available cash reserves, compared to the overhead cost of keeping the doors open, as a so-called stable “going concern”. The ‘Fixed Monthly Operating Expenses’ of TWK. this includes office overheads, depreciation of equipment, rates, electricity, transport, and especially salaries of the people that must serve the community (40% of total costs). The’Net Cash & Cash Equivalents’ on hand (inc. Revenue, Grants, Borrowings, etc.), are the funds they have to keep the doors open for business.
Obviously, in a 6% inflationary marketplace, municipal costs go up year after year. Prior trends showed that TWKM had “cut its cloth according to its means” for decades. It had earned a clean audit from Treasury for many years (including last year). But, in early in 2022 costs went up from R43m to R47m. And in the past few months they jumped again, to R52m. This, among other issues, was the obsession of “Jobs, Jobs, Jobs” that was the strategy the Coalition came in with. It’s a much longer argument whether that was much worse than running on a half-empty Top Team, which was what blighted the previous Council. That’s for another day.
At the same time, they indulged in a range of other excesses, like the infamous “TWK 1” & “TWK 2” new cars, forgiving Rates arrears over Xmas, and, and, and. When the former CFO wouldn’t sign off on some of the seriously dodgy deals, he was pushed out for trumped-up reasons. (He reportedly secured a R3m settlement through the CCMA because of the unjustness of his dismissal.
He was EXCELLENT at running a tight ship, and getting collections of Rates & Services money in. His successor(s), not so much. Collections declined from 81-85% to 73% last month. Figures circulated on social media showed that 2/3 of that comes from the two areas that get electricity directly from Eskom (Grabouw & Genadendal), so the municipality has no leverage. (That’s been like that since the beginning.)
This trend shows that since March 2022, when the ex-CFO was pushed out, available cash fell off a cliff. Whereas we’d had R140m to R170m on hand to meet operating expenses, that evaporated to a -R45m deficit this month. There was a brief respite at the end of last year, where the Coalition borrowed R74m to ease cash flow, but that was soon swallowed up. Treasury had approved that loan, but the disbursement is being reviewed, because it breaks the cardinal rule: “Never borrow long to spend short!”
Financial reviews in annual reports, etc. often focus on ‘Financial Accounting’ which reveal the health of the entity (i.e. is it liquid – assets & liabilities) versus ‘Management Accounting’ – which tries to answer the question: Is it headed in the right direction?
The former focus generally deals with the current month, or current year, sometimes compared to last year. Whereas understanding whether things are getting better or worse requires a long trend of data – usually a decade or more. wheras previously, this was focused on economic growth and the woefully inadequate capital deployment – Capex failure and serial reimbursement to the Fiscus. Now it is the lifeblood – cash flow.
Impact of Cadre Deployment
When the former Municipal Manager (MM) (who was bright, capable, and honest) pushed back against some of the things going on, the Coalition threatened him and forced him out. As required by law, they canvassed Nationally for a new MM, using a formally-constituted Selection Panel. They duly recommended Candidate #1, who scored much better in the interview and on the assessment scores, and was adjudged “Advanced”. At the 11th hour, Coalition politicians interfered (unlawfully) and manipulated the process so that the Exec Mayor, the late Kallie Papier, recommended Candidate # 2, who’d scored much lower, and was assessed as merely “competent”. He’d been appointed Acting MM in the interim. Council duly appointed Wilfred Solomons-Johannes (WSJ). The DA-led Opposition objected, and appealed to the WCG Dept Local Governance MEC, who has the lawful oversight responsibility, to intercede.
MEC Declared Appointment Unlawful – Set Aside
On review, especially alerted by Opposition whistle-blowers, the MEC took WSJ’s appointment on review and declared that he was both unqualified, and the appointment process was unlawful. He directed that the appointment was null and void, must be set aside, and WSJ must vacate his office. The Dep Mayor hit back with a legal opinion that the MEC’s directive was “noted”, that TWKM differed, and that WSJ wasn’t going anywhere. The MEC advised that if TWKM failed to implement his directive he would enforce it through the Courts.
TWKM’s Coalition secured a postponement to allow them to obtain a definitive legal opinion, which was eventually received. The DA-led Opposition in turn secured various assessments and (pro bono) legal opinions of its own, which rubbished the various arguments TWKM’s lawyers trotted forth.
At a Special In-Committee Council Meeting last Wednesday 8 October 2023, the Coalition motion to oppose the MEC’s directive, on the (seriously questionable) advice of Counsel, was narrowly defeated 13-12 by the Opposition motion to implement the MEC’s directive, and remove WSJ as MM within 7 days. Accordingly, the Opposition notified the Mayor and the MEC of Council’s decision. The deliberations were in-committee, so they’re not in the public domain, but insiders in Caledon leaked the gist of the standoff.
We’re Bankrupt! True or False?
One of the issues receiving in-depth scrutiny is the liquidity of TWKM, because WCG Treasury warned (public domain) that if these trends (graphically depicted above) aren’t reversed, TWK Municipality will be “in administraship by year end”. Our local Greyton Cllr Chris Cloete is on the critical Finance Portfolio. In these and public Council meetings, in his prescribed oversight role, Cllr Cloete pointed to these very concerning trends, commenting that the Municipality is “basically Bankrupt”. He was asked to withdraw the statement.
The same issue is at the heart of the argument whereby the Coalition politicians contested that they were at liberty to nominate and select WSJ, over Candidate #1, because they had the privilege of assessing his performance as ACTING MM, and he’d done a “excellent” job, and that the Municipality was doing just swimmingly under his direction. Many would have seen WSJ try to get ahead of that argument on social media, where he published a whole range of silly arguments, ostensibly supported by Treasury opinion, that things are just “tickety-boo” at TWKM. Nothing can be further from the truth.
There are serious operational reasons to intercede in the current dysfunctional management.
ONE of the other issues raised is that there are between 23-27 senior Executives that have been suspended, resigned in disgust, or have been booked off sick, for stress-related reasons. At present, various Officials and Politicians are releasing alternative statements on social media, in an attempt to spin the situation. Until clarity is defined by reliable authorities, we should all be circumspect.
An excellent and detailed response, Michael. Thank you.
At 1151 words, do you have a special dispensation to exceed DM’s 1500 character limit?
Hi, William by your calculations – it was not exceeded? I should also like to make clear that this is in the main the work of my friend Michel Rouillard as a dedicated analyser of the TWK s@@@t show.
Er, no Michael. I hope the maths in your article was better. 1,150 words does not equal 1,500 characters, unless your average word size was 1,3 characters per word, which it wasn’t.
@rod, you’re not targeting the right person in your comment. It was William who is incorrect, not Michael.
I wager that I know what happened there. They really should fix that loophole; it’s quite old-fashioned. 🙂
Brett Heron really is a “See You next Tuesday” type of guy, ain’t he. Also, in related news, calling your party the GOOD party is exactly like a 2nd-hand car dealer calling his business “Honest Harry’s Cars”.
Michael Ash, thank you for taking the time and trouble – literally putting your head above the parapet – to give us readers a thorough insight to TWK’s dubious situation.
My limited response to Victoria’s article is simply that the next time I see a similar image of Appel’s and Michel’s in the DM as above – with their hand’s raised above their head – the caption will read “under arrest” 😎
It is always funny that the countries most defied are also the ones most visited on official business. I believe that one can discuss trade and investment mostly over Skype nowadays and then if France is hated as a former colonial power by a lot of our brothers in Africa, maybe we should not go there? Also prior to such visits, I think the objective must be clearly stated and if it that achievemunt was reached. Let us take Zuma going to Great Britain: Apart from impregnating the kitchen staff, what else did he have to do? Did he also manage to do so?
We are spending millions on fact finding missions and learning tours – why? Do the people that are voted in office not have this knowledge? I am sure there are a lot of people that can also assist with trade and investment in any region in RSA and these people do not necessarily live outside RSA, they usually do live sommer right here, except off course in Nkandla.
The odds of this not being a smokkel are miniscule. If they paid for themselves they could prove it in a few minutes.
Some time back I asked if Brett Heron had the balls to confirm or deny the allegations of misuse of public funds. Apparently he does not. Not much GOOD in the GOOD party. Hangers on so that they can earn fat salaries and have free trips to France?