Statement of the Public Protector Thuli Madonsela regarding her report on an investigation into allegations of maladministration and corruption in the procurement of the Riverside Office Park to accommodate the head offices of the Electoral Commission issued in terms of Section 182(1)(B) of the Constitution of the Republic Of South Africa, 1996 and Section 8(1) of the Public Protector Act, 1994

26 Aug 2013

"Inappropriate Moves" is a report I have issued today on 26 August 2013, in terms of section 182(1) (b) of the Constitution of the Republic of South Africa, 1996 and section 8(1) of the Public Protector Act, 1994.

The report communicates my findings and directives on appropriate remedial action to be taken following an investigation into a complaint lodged by the Honourable General Bantu Holomisa, a Member of Parliament and the President of the United Democratic Movement (Hon. Holomisa), on 15 October 2011, alleging suspected irregularities in the procurement of the Riverside Office Park to accommodate the head offices of the Electoral Commission (the Commission) the validity of the lease agreements entered into by the Commission in respect thereof and various payments to Abland.

Further allegations pertaining to a conflict of interest between the Commission's  former Chief Electoral Officer (CEO), Advocate Pansy Tlakula (Adv. Tlakula), and Parliament's Finance Portfolio Committee Chairperson, Hon. Thaba Mufamadi's (Hon. Mufamadi), Chairperson of Manaka Property Investments , which owns a 20% stake in Abland, by virtue of their co-directorship in Lehotsa Investments (Pty) Limited, appeared in a newspaper article of 28 April 2011 entitled: "Electoral Commission's office partly owned by the boss's business partner".

Two other anonymous complaints were lodged by a group which referred to itself as the "Concerned IEC Employees" through memoranda dated 20 July 2012 and 24 August 2012 respectively, whose allegations included an alleged romantic relationship between the Chairperson of Manaka Property Investments and the CEO of the Electoral Commission. The group further alleged that it was the CEO who had irregularly caused the award of the tender to Abland.

I apologise for the delay in issuing the report, particularly to the Complainant Hon Gen Holomisa and the Electoral Commission, with special reference to the Chairperson thereof, Adv Tlakula. To Advocate Tlakula, I also apologise that although my findings do not differ fundamentally from the provisional report she received in July, receiving the report in the early hours of today was not ideal. I apologise unreservedly for the inconvenience.

The report should have been released in early 2012. However, after a preliminary investigation, issues came up that I decided needed to be clarified through interviews. Unfortunately there were delays in securing interviews particularly of Commissioners. Adv Tlakula on the other hand responded with information immediately and we were also able to secure an interview with her and her lawyer, expeditiously.

The following seven (7) issues were considered and investigated:

(a) The propriety of moving the Commission's Head Office from 260 Walker Street, Sunnyside to the Riverside Park Offices in Centurion;

(b) Alleged maladministration and possible corruption in the procurement process followed for the Riverside Office Park consisting of alleged flaws in the demand management process, the budget process, the procurement procedure, bid evaluation process and award;
(c) Alleged impropriety relating to inconsistent monthly rental amounts paid to the Riverside Office Park Trust from September 2010 to September 2011;

(d) Alleged irregularity of the Commission's payment for the old building whilst the building stood empty;

(e) Alleged irregular advance payment of a lump sum in the amount of R22 603 374.00 in March 2010;

(f) Alleged irregular payment of a lump amount of R26 979 155.00 in December 2010; and

(g) Alleged conflict of interest arising from a close business relationship between Adv. Tlakula, and Hon Thaba Mufamadi, MP, an Executive Chairman and co-director with Adv. Tlakula in Lehotsa Investment (Pty) Ltd who also happens to be a Chairperson of Manaka Property Investments, a BEE Partner and 20% shareholder in Abland, the company awarded the contract for the provision of the Riverside Office Park leased accommodation, for the Electoral Commission.

Allegations regarding the existence of a romantic relationship between Adv. Tlakula and Hon. Mufamadi were not investigated as they were not backed by anything tangible. Furthermore, the employee who was alleged to have been the whistle-blower on these allegations, denied this when interviewed and also in a statement that she was made to sign by the Commission Chairperson, Adv. Tlakula.

On request from Hon. Mufamadi, that the Public Protector removes from the report any reference to the allegations regarding a romantic relationship, the detailed allegations regarding such alleged relationship are omitted from this report. It must be noted however, that Hon. Mufamadi was invited to indicate whether he would like the Public Protector to investigate the allegations to enable her to consider his request that she makes a definite finding that such relationship did not exist, no feedback was received.

The conduct of the current CEO, Mr Mosotho Moepya, his Deputy, Mr Norman du Plessis and the manager in the office of the CEO, Mr Stephen Langtry in relation to cooperation with regard to information requests and treatment of employees that cooperated in the investigation, eventually became an issue of concern.

Despite repeated requests, information such as the full sets of the EXCO and the Commission's minutes of meetings as well as the budget in connection with the procurement of the Riverside Office Park building was not provided during the investigation. Only extracts from the minutes were provided with some not having the actual dates when the meetings were held.

The investigation included interviews with Commissioners and former Commissioners of the Commission, including the former Chairperson, Dr Brigalia Bam and her former Deputy Chairperson, Ms Thoko Mpumlwana, the current Chairperson, Adv. Pansy Tlakula, Deputy Chairperson Mr Terry Tselane, Commissioners, Rev. Bongani Finca and Ms Raenette Taljaard. Other interviews were held with former and current officials including but not limited to, the current CEO, Mr Mosotho Moepya and his Deputy responsible for Corporate Services, Mr Norman Du Plessis as well as former and current members of staff in the employ of the Commission.

During her interview, Adv. Tlakula was in the company of Senior Counsel, Adv. Ismael Semenya, who was allowed to assist her during the proceedings. Various documents relating to the procurement of the Riverside Office Park were obtained and analysed. Correspondence was exchanged with the Commission, including lawyers, Mkhabela Huntley Adekeye Incorporated firm of attorneys retained by Adv. Tlakula.

Adv. Tlakula conducted virtually all her correspondence, including submissions on questions asked on what happened, through her lawyers. This included simple administrative tasks such as asking for an extension of time for comment on the provisional report with the last task performed by the lawyers being a letter dated 22 August 2013, asking for a copy of the report before its public release as planned on Monday 26 August 2013.

De Klerk Mandelstam Incorporated Attorneys also corresponded with the Public Protector, acting on behalf of Hon. Mufamadi. Mchunu Attorneys also interacted with the Public Protector during the investigation ostensibly on the instructions of the Commission.

The investigation also covered the consideration of applicable laws, including constitutional provisions, the Electoral Commission Act, 1996, the Public Finance Management Act, 1999 (PFMA), Treasury Regulations, the Procurement Policy and Procedures approved by the Commission on 10 March 2005 and other institutional polices of the Commission as well as reports such as the King III report on corporate governance and the July 2006 report of the Public Service Commission on managing conflicts of interest in the public service.

References were also made to principles developed in previous reports issued by the Public Protector dealing with investigations into similar procurement and conflict of interest matters. Such principles are referred to as touchstones.

The sequence of events that emerged from the evidence I have accepted, tells the story of what happened as outlined in the attached flow chart.

On the issues I alluded to above, my findings are the following:

(a) On the propriety of moving the Electoral Commission Head Office from Walker Street, Sunnyside to the Riverside Park Offices in Centurion.

1. There is satisfactory evidence supporting a genuine need for the Electoral Commission to move from the 260 Walker Street Sunnyside Offices to Riverside Park Offices in Centurion. Evidence includes the fact that the building posed a health and safety hazard, the Electoral Commission needed additional space for its staff and the rent had increased unacceptably. The decision to move, accordingly, does not constitute improper conduct or maladministration.

(b) On alleged maladministration and possible corruption in the procurement process followed for the Riverside Office Park consisting of alleged flaws in the demand management process, the budget process, the procurement procedure, bid evaluation process and award of the tender

1. While there was no impropriety with regard to the Commission handling its own procurement of immovable assets as a constitutional institution, the process followed by Adv. Tlakula and her EXCO in the procurement of the Riverside Office Park building was grossly irregular as it was characterized by a violation of procurement legislations and prescripts such as section 38 of the PFMA, Treasury Regulation 5.1,and 16A6, section 2(1)(e) of the PPPFA as well as chapter 4 of the Electoral Commission's  Procurement Policy and Procedures of 10 March 2005.

2. By her own admission, Adv. Tlakula issued a directive on 11 February 2009 for the procurement process to be handled by EXCO to the exclusion of the procurement committee in violation of her own Commission's Procurement Policy and Procedures. In so doing, she countermanded the decision of the Commission, which had on 12 January 2009 made a decision to award the office space tender to a different company in respect of Menlyn Corporate Park premises.

3. There was no separation of roles and responsibilities between the various committees within the Commission that are tasked with administration of the procurement process i.e. the bid specification, bid evaluation and bid adjudication committees. Though these structures may have existed under different names, they were not used in the matter under investigation.

4. The initiation of the procurement process was handled by the user department in consultation with the Supply Chain Management within Commission and by the office of the Deputy CEO, Mr Norman du Plessis, resulting in Adv. Tlakula approving the needs analysis on 13 February 2009. The needs analysis prepared by Mr du Plessis and approved by Adv. Tlakula was not comprehensive enough to include fixtures and the other items subsequently procured as part of a turnkey solution, resulting in poor demand management, leaving a blank cheque to be filled during negotiations with Abland as a sole supplier.

5. The Commission confirmed that the initial procurement of the Menlyn Corporate Park premises was not concluded according to a competitive bidding process as the need for the said property was not advertised. This resulted in Adv. Tlakula directing in a memorandum of 11 February 2009, referred to above, that a new open procurement process involving a Request for Proposals be embarked upon by the Commission's EXCO. However, the contents of this memorandum raise serious concern as the approach appeared high-handed and Adv. Tlakula failed to obtain a resolution of the Commission rescinding the Menlyn Corporate Park award before she could commence with the new process.

6. Adv. Tlakula accordingly, gave a directive that the Menlyn Corporate Park award be discontinued. Thereafter what would have been expected was for her to obtain a resolution of the Commission prior to commencing with the process that culminated in the acquisition of the Riverside Office Park building. Instead, Adv. Tlakula individually decided that the "EXCO should embark on an open process and thereafter, place all options before the Commission for a decision."

7. The Commission only decided to rescind its decision in March 2009. This is according to the extracts of the Commission's meeting which did not provide the actual date in March when the meeting was held. The conduct of Adv. Tlakula in this regard was highly irregular.

8. The current CEO of the Commission, Mr Moepya as well as his Deputy Mr du Plessis and the Manager in the office of the CEO, Mr Langtry were requested to furnish the Public Protector with the full sets of minutes of the Commission's meetings. By the time of reporting, they had not provided same as would have been expected of them by virtue of their constitutional obligations to cooperate with the Public Protector

9. Adv. Tlakula went further in the same correspondence and directed that Mr du Plessis must "draft a request for proposals and submit it to me for sign-off. We will have to approach the Commission again after the outcome of the public process". (emphasis added) With respect, this was also highly irregular. In essence, Adv. Tlakula obtained the Commission resolution to rescind the award to Menlyn Corporate Park ex-post facto as she had already commenced with the new procurement process with advertisements having been placed on 27 February 2009, inviting potential bidders to submit their proposals whilst she did not have official authorization from the Commission to do so. Adv. Tlakula's conduct in this regard was improper and constituted maladministration.

10. With regard to the procurement of the Riverside Office Park, a Bid Specification Committee was not set up to analyse the needs of the Commission and draft specifications that would be suitable for the needs of the Commission. Even though the need to make the move as seamless as possible was identified at the needs analysis stage, this was not incorporated in the terms of reference of the request for proposal.

11. The EXCO approved a request for proposal in respect of the Commission's accommodation in violation of the provisions of the Chapter 4 of the Commission's Procurement Policy and Procedures, 2005 which provides for three methods of procurement depending on the thresholds. These procurement processes do not include a request for proposal that was suddenly utilized in the procurement of the Riverside Office Park. According to the institution's procurement policy, amounts above R100 000 should be subjected to a tender process.
12. Accordingly, there is a process that must be followed in respect of tenders and/or procurement which was not followed in respect of the procurement of the Riverside Office Park.

13. The advertisement of a "request for proposal" for the office accommodation as opposed to a comprehensive competitive tender bidding process violated the provisions of Chapter 4 of the Commission's procurement policy and was accordingly irregular and constituted maladministration.

14. The request for proposal did not comply with provisions of the Treasury Regulations, the PFMA, the PPPFA and the Commission's own procurement policy and procedures, where applicable in respect of:

14.1 The thresholds for a tender process, which the Commission policy puts at R100 000 unless otherwise approved;

14.2 The number of days that it needed to be advertised;

14.3 The evaluation process i.e. the evaluation and procurement committee were not involved in the evaluation process; and

14.4 The evaluation criterion was not clearly defined at the point of advertising.

15. Treasury Regulations provide for deviation from procurement policy in the event of an emergency. There was no motivation from the Commission's EXCO to deviate from a tender process in line with Treasury Regulations. The procurement of the Commission's building was not motivated as an emergency. In any event the circumstances of the move do not qualify as an emergency as defined in paragraph 4.7.5.1 of the  Treasury Guides which provides that an emergency is a case where immediate action is necessary in order to avoid a dangerous or risky situation or misery.  In this regard, the conduct of Adv. Tlakula and her EXCO was accordingly improper and constitutes maladministration.

16. The irregularity in respect of the procurement of the Riverside Office Park building was also confirmed by the Auditor General in the 2011 audit, recorded in the 2010/2011 Annual Report of the Commission which indicates that "sufficient appropriate audit evidence could not be obtained that the assets with a transaction value of over R500 000 were procured by means of a competitive bidding process as per the requirements of the TR 16A6.1, TR 16A6.4 and National Treasury Practice Note 6 and 8 of 2007/08".

17. An advertisement calling for bids for a provision of office accommodation for the Commission was placed on 27 February 2009 and closed on 09 March 2009. In addition to prompting the decision of the Commission regarding whether or not to rescind its decision to acquire the Menlyn premises, the conduct violated the provisions of the Commission's procurement policy which stipulate that an advertisement in terms of a tender be placed for a minimum of 14 ordinary days. Mr Norman du Plessis was the responsible official directed to execute this function in Adv. Tlakula's memorandum of 11 February 2009. The conduct hereof was accordingly irregular, improper and constituted maladministration.

18. Treasury Regulation 16A6 stipulates that bids be advertised in at least the Government Tender Bulletin for a minimum period of 21 days before closure, except in urgent cases when bids may be advertised for such shorter period as the accounting officer or accounting authority may determine. The media schedule was signed on 25 February 2009 by Mr J H Pretorius and there is no evidence that approval was obtained to advertise for a shorter period.

19. The Commission approved the appointment of Abland to provide accommodation for Electoral Commission. The approval did not mention the appointment of Abland for the turnkey solution and the estimated cost of the related services. Abland's proposal stated that this would be negotiated in the future and related costs subjected to an open market process. However, the costs related to the turnkey solution were neither subjected to an open market process nor approved by the Commission as Adv. Tlakula and her EXCO failed to obtain the Commission's approval for the use of a turnkey solution. Their conduct in this regard was irregular and constituted maladministration.

20. The occupation by the Commission of the building in September 2010 as opposed to April 2010 as indicated in their advertisement is problematic in that bidders who proposed a later date were not considered during the evaluation process. This could have also prejudiced other bidders who did not submit their proposals based on the requirement for occupation being April 2010.In this regard, the conduct of Adv. Tlakula and the EXCO in handling the entire move was improper and constituted maladministration.

(c) In connection with allegations of impropriety relating to inconsistent monthly rental amounts paid to the Riverside Office Park Trust from September 2010 to September 2011:

1. The amounts did vary as evident in Table 14 covered in paragraph 6.3.28.6 of the main report and this was conceded by the Commission. For example, rental was R1 440 524.17 for the period September 2010 to March 2011 but increased to R1 730 412.43 from April 2011 to September 2011.

2. The Explanation that water and electricity charges are not consistent, is accepted.

3. However what is not accepted is the argument that the rest of the payments comprised of rentalisation in respect of fittings and furniture which formed part of a turnkey solution agreement reached with Abland subsequent to the main agreement and added as an addendum to the main lease agreement. As these expenses were not included in the lease agreement signed on 21 August 2009 between Abland and the Commission and were not approved by the Commission, the conduct of Adv. Tlakula in that regard was irregular, improper and constituted maladministration.

4. Also not acceptable is the fact that the turnkey features went beyond what was anticipated in the contract, which envisaged permanent features and included items such as furniture which the Commission already had, having purchased most of such furniture whilst it occupied the 260 Walker Street Building.

5. It was also not acceptable that Abland charged handling fees for procuring the turnkey features between 5 and 12%, in contravention of the 2% of the cost plus VAT agreed to in the contract signed between 12 and 19 April 2010 with Adv. Tlakula representing the Commission and Mr D S Savage of Abland.

6. It was further recorded that the monthly rental payable in terms of the lease will be adjusted to provide for the rentalisation of the actual cost incurred in respect of the immovable items. According to the addendum, the additional tenant specific item which classify as immovable will be rentalised over the period of the lease agreement, provided that the cost incurred with regard to such items will not exceed the amount of R20 000 000 excluding VAT. The parties agreed that the monthly rental would be adjusted by the amount of the cost incurred with regard to such immovable items multiplied by 0.135 and divided by 12.

7. According to the second addendum to the lease agreement, the amount of R20 000 000 in respect of fitting out of the lease premises was increased to R22 603 374.00.

(d) On the allegations of irregularity in connection with payments made by the Electoral Commission in respect of the old building whilst standing empty

1. It is correct that an amount of R6 753 880.42 was paid in respect of the 260 Walker Street lease commencing September 2008 and expiring in August 2012 while the building was standing empty between October 2010 and July 2011.

2. However, the said amount was refunded to the Commission on 21 February 2012, without interest. Evidence indicates that the financial loss to the Commission in terms of interest was due to factors including not having a termination clause in the lease agreement and what can be termed as haphazard handling of the move, and, possibly, reckless use of public funds.

(e) On allegations of irregular advance payment of a lump sum in the amount of R22 603 374.00 in March 2010,

1. It is true that advance payments were made to Abland in respect of the Riverside premises in March 2010 in the amount of R1 653 215.46.

2. Adv. Tlakula's explanation that the amounts were part of a 50% deposit for the fixtures and movables forming part of the turnkey solution is not contradicted by evidence. It is of grave concern though that this is part of the procurement that was done in contravention of the contract between Abland and the Commission, which contract had required that the procurement of these be subjected to an open market.

3. No evidence could be found indicating that an amount of R22 603 374.00 was paid in March 2010 by the Commission.

4. An amount of R R22 603 374.00 was approved as an amount for the fitting out budget in respect of the second addendum between Riverside Office Park Trust and the Commission which was signed on the 25 and 31 March 2011 respectively. This amount was to be rentalised over the period of the lease.

(f) With regard to the allegations of irregular payment of a lump sum amount of R26 979 155.00 for the building in December 2010; and

1. Indeed, there was payment of R26 716 023.92 to the Riverside Office Park Trust but part of the amount was eventually credit noted resulting in the final payment for the month of December being R11 014 325.12.

2. This amount was in respect of the December 2010 and January 2011 rentals as well as payment of movables forming part of the turnkey. There was no irregularity in this regard. However, as stated earlier, the fact is the procurement process in respect of the turnkey solution was not subjected to an open market, making it irregular.

(g) In connection with allegations of a conflict of interest arising from a close business relationship between Adv. Tlakula, and Hon Mufamadi, an Executive Chairman and her co-director in  Lehotsa Investment (Pty) Ltd, who also happens to be a Chairperson of Manaka Property Investments, the BEE Partner which holds a 20% stake in Abland, the company awarded the contract for the provision of the Riverside Office Park leased accommodation for the Commission

1. There was indeed an undisclosed and unmanaged conflict of interest between the then Commission Chief Electoral Officer, Adv. Tlakula's responsibility to act in the best interests of the Electoral Commission as its Accounting Officer and her special business relationship with Hon Mufamadi, her Chairperson and co-director in Lehotsa Investment Holdings.

2. Adv. Tlakula confirmed that she was a director of Lehotsa Holdings. Hon Mufamadi is her Chairman and co-director in that company. Hon Mufamadi is also Chairman of Manaka Property Investments, the BEE partner and holder of a 20% stake in Abland which was awarded a contract to lease the Riverside Office Park building to accommodate the Head Offices of the Electoral Commission. Adv. Tlakula was highly involved in initiation, evaluation and adjudication of the bids for the procurement of the building in her capacity as the CEO and Chairperson of the Commission's EXCO at the time.

3. Of grave concern, is that on 11 February 2009,  a month after the Commission's meeting where it had formally resolved to accept the bid for premises in Menlyn, Adv. Tlakula issued a written directive to Mr du Plessis to start a new procurement process and that such procurement process be handled by EXCO. This was irregular. The irregularity was compounded by the fact that this new bid process was managed from her office. This included the submission of the proposals that were handled by Mr Langtry from her office. Hon. Mufamadi was indicated in the proposal from Abland as the Chairperson of the BEE partner, Manaka Property Investments, which owned a 20% stake in Abland.

4. During the evaluation of the bids by EXCO, there was no way in which Adv. Tlakula could not have been aware of this fact as the evaluation and the adjudication of the proposals was done by the EXCO which included and was chaired by her.

5. Adv. Tlakula only declared her interest in Lehotsa Investments in the Commission's annual and general declaration of interests' forms in compliance with the annual Financial Disclosure Framework which is a standard disclosure of interest form and which did not relate to a specific procurement transaction. This declaration said nothing about her business relationship with Hon Mufamadi.

6.  The declaration only covered Lehotsa as a company in which she has shares and not the names of her co-directors or share-holders. All the members of EXCO, including Adv. Tlakula, failed to disclose their business interests prior to participating in evaluation committee meetings that considered the procurement in violation of Chapter 4 of the Electoral Commission's Procurement Policy and Procedures. The conduct of Adv. Tlakula and her EXCO colleagues in this regard was improper and constituted maladministration.

7. When the name and involvement of Hon Mufamadi became evident during the evaluation of the bids in which Adv. Tlakula was involved, it would have been prudent of her to declare, to her colleagues and fellow panellists, her relationship with him in Lehotsa Holdings as her Chairperson and co-director and recused herself from the procurement process. Her argument that they were mere directors and shareholders in that company and the fact that neither she nor Lehotsa Investments had direct or indirect financial interest in Manaka Property Investments is not accepted.

8. Such argument is in fact, a source of concern it would have been reasonably expected that the Chairperson of a body such as the Electoral Commission should understand that things that can undermine objectivity transcend financial interests. The fact of the matter is that there was a conflict of interest arising out of her business relationship with Hon Mufamadi in Lehotsa which should have been declared in all the meetings that she participated in the evaluation of the bids. Her conduct in this regard was improper and constituted maladministration.

9. The ideal way that Adv. Tlakula could have mitigated and managed this conflict was through declaration of the relationship and recusal from the procurement process. By her participation in the procurement process involving her Chairperson and co-director where they have a common interest in Lehotsa Investments, her independence and the objectivity in the entire process may have been compromised.

10. Adv. Tlakula failed to declare her business relationship with Hon Mufamadi to the team that had to evaluate the bids in respect of this particular procurement. Her disclosure was only limited to the general disclosure of financial interests, which complied with the letter of the Commission's policy but not the spirit that underpins disclosure and management of conflict of interest as a good administration practice seeking to optimise objectivity and ultimately integrity in procurement and other business processes.

11. The situation was exacerbated by the fact that Adv. Tlakula not only managed the bid selection and evaluation process, but also prompted the retraction of the original award of the contract to Menlyn Corporate Park though the final decision was taken by the Commission following her presentation when she recommended the two bidders resulting in the Commission awarding the contract to Abland.

12. As the Accounting Officer of the Commission at the time, Adv. Tlakula was expected to ensure that the Commission' s supply chain management processes give effect to the core principles of behaviour as envisaged by the five pillars of procurement which are fairness, equity, transparency, competitiveness and cost effectiveness. Fairness includes compliance with ethical standards, recognizing and dealing with conflicts of interest or the potential thereof.

13. She had a duty to eliminate any threats to objectivity and independence in the procurement of the Riverside Office Park to accommodate the Head Offices of the Commission. The procurement policies and procedures of the Electoral Commission requires all parties to comply with the highest ethical standards in order to promote:

13.1 Mutual trust and respect; and

13.2 An environment where business can be conducted in a fair and reasonable manner and with integrity.

14. Furthermore it requires all officials / employees associated with procurement:

14.1 recognise and deal with conflicts of interest or the potential thereof;

14.2 deal with suppliers even-handedly;

14.3 provide all assistance in the elimination of fraud and corruption (as defined in the public service anti-corruption strategy); and

14.4 adhere to the instructions issued by the CEO.

15. The procurement provisions contained in Chapter 4 of the Commission's Procurement Policy and Procedures, 2005 are consistent with the requirements of the Electoral Commission's Act, 1996 as the provisions thereof clearly state that,  "where a possible conflict of interest arises or where an employee has or obtains a financial or other interest in a company or firm with which the Electoral Commission enters into a business transaction, or where an interest is such that it may influence the outcome of any decision or benefit any person or company or firm, the interest must be disclosed in writing to the Electoral Commission as soon as it arises, and the employee must refrain from participating in any way in related business dealings." (emphasis added)

16. Adv. Tlakula had a duty in law to procure goods and services according to a system which is fair, equitable, transparent, competitive and cost effective. All employees of the Commission, including the CEO have a duty where an interest is such that it may influence their objectivity in making any decision or benefit any person or company or firm, the interest must be disclosed in writing to the Electoral Commission as soon as it arises, and the employee must refrain from participating in any way in related business dealings. Such interest in this instance relates to the existing business relationship through common directorship thus creating a threat to independence and objectivity.

17. Adv. Tlakula's improper conduct and maladministration in this regard, in particular the non-compliance with relevant procurement prescripts as well as her undisclosed and unmanaged conflict of interest had the impact of:

17.1 Risking of loss of public confidence in the Electoral Commission as an organ of state in open and transparent procurement of goods and services;

17.2 Risking impairment of the reputation of the Electoral Commission as an impartial constitutional body with optimal levels of integrity;

17.3 Fostering a perception from potential service providers that they cannot expect fair and equal treatment from Electoral Commission; and

17.4 Risking the possibility of an asset procurement process that is not cost effective, through failure to ensure that the procurement of assets is tested in the open market, a systemic problem that afflicts most organs of state.

i) The appropriate remedial action to be taken as envisaged by section 182(1)(c) of the Constitution is the following:

(1) The Speaker of Parliament, in consultation with the Electoral Commission to the exclusion of the Chairperson, consider whether or not action should be taken against Adv. Tlakula for her role in the procurement of the Riverside Office Park building to accommodate the Head Offices of the Commission in light of the undisclosed and unmanaged conflict of interest and her contravention of the procurement laws and prescripts dealt with in this report.

(a) The Electoral Commission to take urgent steps to:

(1) Consider the expenses in respect of the turnkey solution as irregular,  fruitless and wasteful expenditure and in consultation with the National Treasury, consider ratifying such expenditure;

(2) In consultation with the National Treasury, consider reviewing the entire lease agreement with Abland including its appendices with a view to ratifying same;

(3) In consultation with the Chief Procurement Officer, consider commissioning a forensic investigation into the entire lease agreement and the related expenditure in order to determine a fair market value of the contract and related expenditure and recover any extravagant expenditure incurred and further, to investigate the cession of the agreement from Abland to Riverside Office Park Trust.

(4) Consider taking appropriate action against all members of EXCO who may still be in the employ of the Commission, who participated in the procurement of the building for their contravention of the procurement laws and prescripts dealt with in this report.

(5) Consider taking disciplinary action against the CEO, Mr Moepya, his Deputy, Mr du Plessis and the Manager in the office of the CEO, Mr Langtry for their failure to provide the Public Protector with the budget as well as full sets of minutes of the EXCO and Commission's meetings in connection with the procurement of premises to accommodate the head offices of the Commission in violation of their Constitutional obligations of cooperation with the Public Protector in the investigation of this matter.

(6) In consultation with the National Treasury to urgently review its Supply Chain Management structures and processes to align with Treasury Regulations and good practice.

(7) To ensure that no retaliatory action in the form of subjecting to occupational detriment is taken against any of the officials and employees of the Commission that cooperated and assisted the Public Protector in the investigation referred to in this report.

(8) To review its Conflict of Interest policy and procedure for declaring conflict of interest within 60 days.

Issued by the Public Protector South Africa, August 26 2013

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