DA REFERS GAUTENG CORRUPTION REPORT TO ZUMA
I have today referred to President Jacob Zuma the Resolve Group report into corruption allegations in the Gauteng Roads and Transport Department.
I have taken this step as Gauteng Premier Nomvula Mokonyane disclosed last week that this report had not been referred to other investigation agencies but had only been dealt with by her office.
This is despite recommendations in the report that further investigation is needed into allegations by former Gauteng MEC Ignatius Jacobs of a "criminal conspiracy" in which friends and associates of former Head of Department Mr Sibusiso Buthelezi received large government contracts in return for bribes or other unjust enrichment.
There are also eight findings in the report concerning gross irregularities that suggest possible corrupt interests. These include:
The Jabulani Hospital in Soweto - Buthelezi failed to submit a Record of Decision to explain why he overturned the decision of the Departmental Acquisition Council and unilaterally appointed Ilima and Tau Pride as the service providers to the Project without a competitive bidding process. He furthermore failed to request an updated tax clearance certificate from Ilima Projects prior to reappointing them to the second Jabulani contract even after they failed to perform the first time around. The price of this hospital more than doubled, costing more than R300 million higher than originally budgeted.
TT4 consultants - Buthelezi contravened section 38(1)(a)(iii) of the PFMA by irregularly appointing TT4 without following a competitive bidding process. All monies paid to TT4 were therefore irregular expenditure and therefore financial misconduct. The amount involved for the period April 2008 to October 2008 was R17 542 873.79.
Tsosanang Project Management cc - in May 2008 a payment of R344 352.96 was paid to this company, represented by Ms Thandi Senoamali who resigned from the TT4 consortium in March 2007. According to the report "It is apparent that the Department and Tsosanang did not enter into an agreement specifically related to the work that was undertaken by Tsosanang as part of the TT4 ... This is indicative of reckless contracting processes. Furthermore, the requisite Department procurement process in relation to the appointment of Ms Senoamali and Tsosanang, to the UTF were not followed." It is relevant to note that according to then MEC Ignatius Jacobs "(Ms Thandi Senoamali) recently gave birth to a child born of the relationship between herself and Buthelezi." Although Buthelezi has denied a relationship with Ms Senoamali, a paternity test on the child would establish definitively whether or not this is true.
Mncedisi Ndlovu & Sedumedi (MNS) Attorneys - this company was irregularly appointed in contravention of section 38(1)(a)(iii) of the PFMA, which means that "all monies paid to MNS in respect of the extension of their extended SLA amounts to irregular expenditure. This amounts to financial misconduct in terms of section 81 of the PFMA ... The signed service level agreement which extends the scope of MNS's work with the Department to cover the Gautrain Project does not specify a total contract amount. It is our finding that this amounts to reckless contracting in the extreme to contract with a service provider and not detail the specifics of the financial arrangement. It is, in effect, giving the service provider a blank cheque." More than R69 million was paid to this law company despite the Department having a full-time legal department - the Report finds the payments to be "exorbitant and unjustifiable".
Data Mobility - R101 124 119.66 was paid to this company between October 2006 and August 2008, but assets purchased by this company could not be verified. The original invoice was never reconciled either. Mr Stan Thusini was appointed a director of this company shortly after it got the contract and a Mr Aziz Kara was a director at the time when the company was appointed. Kara was the CEO of Bahlodi Construction, which was one of the contractors in the Maziya Joint Venture that was irregularly given the second stage of the Jabulani Hospital contract.
The total wastage for all the above cases amounts to about R500 million.
With regard to the "criminal conspiracy" allegations made by former MEC Ignatius Jacobs, the Report says "...it was a limitation of this investigation that the investigators do not have the powers of the South African Police in terms of search and seizure of premises or documentation. More importantly, the investigators in this investigation do not have the powers to requisition bank statements. It is submitted that the only method of proving the very serious allegations made by the MEC, would be to requisition the bank statements of a number of individuals mentioned by the MEC.."
Furthermore "There are a number of serious allegations made by the MEC which require further investigation. These include the precise linkages between the individuals in the various companies mentioned by the MEC that have received government contracts. In particular, the role of Stan Thusini and the fact that he has significantly benefitted from a number of government contracts emanating from the Department of his close friend, the HOD, requires deeper examination and analysis in order to ensure the granting of these contracts was above board."
It is therefore clear that Mokonyane has been derelict in not referring this report for further investigation. Even worse, it appears that she lied when she released the Report on 3 May 2010 as her press statement said that "The Resolve Group's report was passed on to other relevant institutions which are competent to conduct further investigations on any of the matters where adverse findings were made and if necessary they will conduct such investigations and take appropriate action."
According to a Sapa report on 3 May 2010: "Mokonyane handed the report over to the presidency so the relevant investigating bodies could decide what action needed to be taken."
My view is that she intended to hand it to President Zuma, but had to bury the report after she lost against Paul Mashatile in the race to become ANC Gauteng Chairperson which took place days after she made public the Resolve Group report.
It is well-known that Mashatile and Buthelezi are close friends, and her release of the report was widely seen as an effort to discredit Mashatile ahead of the ANC Gauteng Conference.
The names that Jacobs identifies in his "criminal conspiracy" are also those of the "Alex Mafia" that is alleged to be linked to Mashatile and to have benefited handsomely from government contracts.
Buthelezi faced disciplinary charges based on the Report, but left with a R1 million settlement. He has faced controversy throughout his career, but has survived because of apparent high-level political protection.
I have requested President Zuma to issue a presidential proclamation that authorizes the Special Investigating Unit to probe the "criminal conspiracy" accusations as well as the eight identified cases of irregularities involving about R500 million.
I have also sent the Report to Mr Willie Hofmeyr of the Special Investigating Unit and to Finance Minister Pravin Gordhan.
I have done this as it is essential that criminal charges are laid where necessary, rather than the perpetual pattern of officials leaving with golden handshakes.
The Resolve Report has partially lifted the lid on the wholesale looting and waste in the Gauteng Roads and Transport Department over many years. More fishy deals worth billions of rands have been identified by the Auditor-General.
We will never defeat corruption unless there is the political will to proceed no matter who may be implicated.
Mokonyane has failed to confront the corruption monster because key implicated officials are politically protected.
She has surrendered to the "Alex Mafia" that aptly fits Zwelinzima Vavi's description of the "predatory elite".
The DA will apply maximum pressure to clean up the corruption rot that is ruining this province.
Statement issued by Jack Bloom, MPL, DA Gauteng Caucus Leader, June 22 2011
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