Cipro saga: red flags were ignored, whistleblowers persecuted
Trade and Industry Minister Rob Davies posed a startling question this week when Cipro appeared before Parliament's standing committee on public accounts (Scopa). With reference to the numerous warning signs and concerns raised during the R 152.7 million corrupt tender saga involving Cipro and ValorIT, Minister Davies asked: ‘When is a red flag a red flag?'
Given the scale and severity of the Cipro case, and the many instances where whistle-blowers were silenced or ignored, this question seems very disingenuous indeed. If Minister Davies had been paying due attention to this issue, he would have noted three critical moments when ‘red flags' were waved.
Red flag one: Melanie Bernhard-Fryer, Chief Operations Officer at Cipro, requests that Cipro puts a stop to the Enterprise Content Management (ECM) tender with ValorIT, citing possible irregularities.
Ms Bernhard-Fryer raised the issue of possible irregularities regarding the ECM tender in January and requested that the process be stopped. She was ignored. She raised her concerns again at a meeting of the Cipro executive team in February 2009. Failing to get the green light for a forensic audit, Ms Bernhard-Fryer issued a statement in terms of the Protected Disclosures Act. This statement was forwarded to the Director-General of the Department of Trade and Industry. She eventually resigned, citing occupational detriment.
Red flag two: Rocco de Lorenzo, head of compliance and internal auditing at Cipro, was one of a number of whistle-blowers who reported their suspicions to the Auditor General.
De Lorenzo was himself suspended, while at least four others had their contracts cancelled. De Lorenzo's suspension lasted until April 2010, despite a labour agreement that the maximum term for suspension may not exceed 60 days. The Democratic Alliance then put a written question to the Minister of Trade and Industry regarding the reasons for this extended suspension. The Acting CEO of Cipro (Lungile Dukwana) responded quickly by lifting the suspension and presented De Lorenzo with three charges, including one accusing him of sharing information regarding a Cipro official with the investigating officer of the SAPS.
Red flag three: Two senior managers at Cipro acknowledged before Scopa that they were aware of potential wrongdoing with regard to the procedures followed in the evaluation of the ECM contract.
These revelations were made four months before the corrupt tender contract was signed. Instead of acting decisively and halting the process, they went ahead and signed off on the R 152.7 million ECM tender with ValorIT, a small and until then unknown IT company.
Senior managers at Cipro and the Department of Trade and Industry failed to act decisively when red flags were first raised. They should be brought to book for this. A formal investigation should also be launched into why whistleblowers were not only ignored, but actively persecuted. At this week's Scopa meeting, the Democratic Alliance (DA) noted with concern that only three out of the seven Cipro Executive Team members are currently in their positions.
How can the Minister expect to run this key business information and registration agency when those who hold it to account are actively undermined?
The DA will be writing to the Minister to ask him how he intends to act against negligent department officials in the future.
Statement issued by Andricus van der Westhuizen, MP, Democratic Alliance deputy shadow minister of trade and industry, May 21 2010
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