Hlongwa should resign over Gauteng corruption allegations
27 July 2014
I congratulate the National Prosecuting Authority for its court action against companies and individuals implicated in alleged corruption involving contracts with the Gauteng Health Department (see M&G report).
This vindicates my exposure of fishy contracts in this department and my questioning of former Health MEC Brian Hlongwa's R7.2 million purchase of a house in Bryanston, Johannesburg.
In April 2009 I exposed the fact that he had bought this house and questioned how he could afford it, and why Mr Richard Payne, the Managing Director of 3P Consulting had helped him buy the property. This project management company had contracts worth hundreds of millions of rands with the department between 2006 and 2009.
In November 2009 I was suspended for five days from the Gauteng Legislature for refusing to apologise for my statements in this regard.
According to reports, the NPA's asset forfeiture unit has obtained a freezing order for R1.4 billion in claims against Gauteng Health Department contractors, including 3P, and has also seized Hlongwa's property at Eccleston Crescent in Bryanston. The state is seeking to forfeit these assets as the proceeds of crime.
NPA spokesman Nathi Mcube says that 3P was allegedly irregularly awarded a Project Management Unit (PMU) contract with the department, and allegedly then awarded contracts to friends and family, defrauding the department of R35m in the process.
A R1.2 billion Health Information System contractual claim by the Baoki consortium has also been seized.
Heinz Smidek, an Austrian citizen who is the CEO of one of the Baoki companies, is alleged to have used a Cyprus-registered company to buy Hlongwa's old house at 26A College Drive, Bryanston for R4.75 million.
Payne is alleged to have paid R1.6 million towards the purchase of the R7.2 million house in Eccleston Crescent Bryanston, and R640 000 through various fronts to refurbish it.
Mr Niven Pillay, the CEO of Regiments Healthcare which was awarded a PMU contract, also allegedly paid R700 000 for Hlongwa's deposit on the house, and then R1 million to prevent the offer from falling through.
There are a host of other allegations including money from health contractors used to fund ANC election expenses and to fight internal ANC political battles.
It confirms my impression that the department was looted by unscrupulous contractors who paid kickbacks and damaged health delivery to patients.
Hlongwa's present position as the ANC's Chief Whip in the Gauteng Legislature looks increasingly untenable.
Whilst he is innocent until proven guilty, and due process must be followed in this matter, the huge corruption cloud over his head compromises Premier David Makhura's pledge to run his administration with integrity and free of corruption.
It's a test of the ANC's 2012 Policy Conference proposal that all deployed ANC members in government step down immediately when accused of misconduct or incompetence. Makhura was quoted at the time as saying that stepping aside doesn't mean a person is guilty, but the idea is that no-one will be able to "hide behind" the argument that they are innocent until proven guilty, and thereby worsen the "troubled image" of the party.
The Gauteng Health Department has still not recovered from the damage inflicted when Hlongwa was Health MEC.
Hlongwa should do the honourable thing by resigning his position in the Legislature and facing his accusers in court.
Statement issued by Jack Bloom MPL, DA Gauteng Health Spokesperson, July 27 2014
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