ANC corruption: DA reveals evidence of ANC mayor's attempted extortion

Note to editors: The following statement accompanied a press conference held at Parliament this morning:

The Democratic Alliance (DA) has this morning released the contents of a letter that was written by the ANC's executive mayor of Hessequa municipality in the Western Cape and which reveals that the ANC has been engaging in acts of political and economic extortion. We shall be immediately asking the Speaker of Hessequa municipality to conduct an investigation into possible breaches of the code of conduct regulating councillors and shall further be referring the matter to the police for investigation into possible offences against two pieces of national legislation.

On 20 January, the ANC's Executive Mayor, Christopher Taute, sent letters to local companies that the municipality does business with in order to extort donations for the ANC ahead of the upcoming municipal elections. He did this in his capacity as the mayor, using the official municipal letterhead to convey his message. A copy of the original letter, in Afrikaans, can be found below. The letter reads as follows:

Hessequa Municipality
Office of the Executive Mayor

2011-01-20

Dear Manager/Owner,

I herewith wish to request your company for a donation to the ANC for our election campaign. As you currently have contracts with our municipality - which were made possible by this ANC-run council, I would like to make a friendly request that you contribute a donation to the ANC for the election campaign, in order to continue building on your good relations with this ANC-run council. If you would like to make a donation to our election campaign, it would be appreciated if you could do so by cheque, made out to the "ANC."

Best wishes
CP Taute
Executive Mayor

This letter poses a number of serious legal, ethical and administrative problems that exemplify the difficulty the ANC has in understanding the distinction between party and state and between transparent good governance and closed corrupt government. One of the reasons why people do not receive basic services and why many ANC municipalities are failing to deliver to South Africans is because they are riddled with this sort of behaviour. We need to root out people who abuse public office for any gain other than serving the people.

There are a set of reasons why this incident is problematic:

Firstly, this letter was printed on official municipal letterhead, meaning that Mayor Taute was soliciting party funds in his capacity as the Executive Mayor, a public position. He did not write in his personal capacity, nor as a party member, but as the mayor who is involved in crucial decisions about the awarding of tenders to those same companies. Given this fact, we believe that the letter provides evidence of a potential breach of the Code of Conduct for Councillors:

According to Item 11D, Intervention in Administration, of the Code of Conduct of Councillors as contained in Schedule 1 of the Municipal Systems Act:

‘A councillor may not, except as provided by law- encourage or participate in any conduct which would cause or contribute to maladministration in the council.'

Additionally, we believe that Mayor Taute could have breached two pieces of national legislation:

The Municipal Finance Management Act (MFMA) sets strict legal parameters regarding such behaviour:

118. Interference

No person may-

a) interfere with the supply chain management system of a municipality or municipal entity; or
(b) amend or tamper with any tenders, quotations, contracts or bids after their submission.

173. Offences

(5) A councillor, an official of a municipality or municipal entity, a member of the board of directors of a municipal entity or any other person is guilty of an offence if that person deliberately or in a grossly negligent way-

(e) contravenes a provision of ... section 118 ...;

174.     Penalties

A person is liable on conviction of an offence in terms of section 173 to imprisonment for a period not exceeding five years or to an appropriate fine determined in terms of applicable legislation.

And the Prevention and Combating of Corrupt Activities Act is also clear on what constitutes an offence in these contexts:

2. Interpretation.

(3) (a)  A reference in this Act to accept or agree or offer to accept any gratification, includes to-
i) demand, ask for, seek, request, solicit, receive or obtain any gratification.

3.   General offence of corruption.

Any person who, directly or indirectly-

(a) Accepts or agrees or offers to accept any gratification from any other person, whether for the benefit of himself or herself or for the benefit of another person; or
(b) Is guilty of the offence of corruption.

7.  Offences in respect of corrupt activities relating to members of legislative authority.

(1) Any-

(a) Member of the legislative authority who, directly or indirectly, accepts or agrees or offers to accept any gratification from any other person, whether for the benefit of himself or herself or for the benefit of another person; or
(b) ... ,is guilty of the offence of corrupt activities relating to members of the legislative authority

Read together, there are grounds not only for an investigation by the Speaker of the municipality but also by the SAPS. We will be referring this matter to both authorities today.

Secondly, the letter has serious ethical implications. The mayor's letter repeatedly reminds recipients that the council is run by the ANC, inferring that these companies owe something to the party because it controls the council that awards the tenders they compete for. Mayor Taute essentially calls for the creation of a corrupt relationship between the companies and the party, suggesting that the businesses' obligations to the party go beyond the service they provided to the municipality after winning the tender. In reality, companies that win tenders and provide the services stipulated in the contract have no further obligations to the municipality, and especially not to the political party that happens to control it.

Thirdly, the message contains a thinly veiled threat that amounts to political extortion. When the mayor says that these companies' contracts "were made possible by this ANC-run council," and that they should give money to the party "in order to continue building on your good relations with this ANC-run council", he is blatantly implying that only businesses that give money to the ANC will enjoy further "good relations" with the council, and therefore receive preferential access to tenders in the future. If the companies do not donate to the ANC (by cheque, so that the party can keep track of who gave what), they risk losing business because they are not favoured by the "ANC-run council."

This desire for corrupt relationships and the conflation of party and state is precisely what hampers service delivery, because it awards tenders based on favours, not on criteria that will assure that services roll out efficiently.

It is for this reason that the DA opened up the tender process in the City of Cape Town after taking over from the ANC in 2006. Now all public tenders are posted on the City's website, along with all of the contract awardees. This has eliminated backdoor deals and allowed many more businesses to apply for and receive tenders without fear of bias. It has made for a more efficient and indeed prosperous city.

At one level, this letter by Mayor Taute is a case of an individual who has used his position of authority to try to extort money from companies that do business with the Hessequa municipality on behalf of the ANC. But at a larger level, it exemplifies the ANC's casual disregard for the division between party and state. While we leave it to the voters to decide how best to respond to the ANC's behaviour, we believe that Mayor Taute must be held responsible for his actions.

Statement issued by Dr. Wilmot James MP, Democratic Alliance Federal Chairperson, January 31 2011

Click here to sign up to receive our free daily headline email newsletter