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31 March 2011 at 10:23 - Posted by Anonymous

State corruption bombshell


National police commissioner Bheki Cele. Photo: Melinda Stuurman

The Special Investigating Unit (SIU) on Wednesday provided a rare glimpse into rampant corruption in the government when it told Parliament that 16 departments and public entities were under investigation for fraud, corruption and maladministration.

National police commissioner Bheki Cele, who is already under fire for his role in a multi-billion-rand headquarters lease in Pretoria, faces new questions after the SIU revealed that the construction of 33 police stations - valued at more than R330 million - was under investigation for “significant irregularities”.
The SIU has prioritised investigations into the Pienaar, Hazyview, Brighton Beach and eSikhawini police stations after an initial probe revealed fraud and corruption that included SAPS officials having undeclared interests in suppliers awarded work by the police; the lowest quotations not being accepted; no quotations received from winning bidders; and actual payments far exceeding budgeted costs.
SIU chief Willie Hofmeyr told visibly shocked MPs from the National Assembly’s justice committee on Wednesdaythat more than half of the government’s approximately 10 000 subsidised housing projects were suspect. This included instances where “contractors were paid for building houses which may not exist at all; were extensively incomplete; seriously defective; or were paid for more houses than were built”.
He said the investigation by public protector Thuli Madonsela into the Pretoria and Durban police office leases was “only one part of a far wider investigation” into the police’s procurement division.
So widespread is corruption at this department that the SIU has been forced to prioritise only the 20 “top cases”, which alone total over R2 billion.
At the SABC the SIU uncovered that between September, 2007 and March last year, about 20 employees had undeclared interests in firms that did business with the broadcaster to the tune of R2.4bn. This follows an earlier auditor-general investigation that uncovered corruption involving 20 SABC employees to the tune of R3.4m.
According to Hofmeyr, a joint investigation with the Brixton commercial crimes unit had so far resulted in eight criminal cases, of which five had been referred to the National Prosecuting Authority. “There is serious criminality that is being investigated at the SABC,” said Hofmeyr.
The Department of Public Works is being investigated after the SIU discovered that R35m had been paid to entities in which department officials had undisclosed business interests. A contract issued by this department for the construction of “accommodation” at an undisclosed border post - valued at R375m - was also under the microscope.
The public protector has already slammed Public Works Minister Gwen Mahlangu-Nkabinde for “unlawfully” entering into the police headquarters lease in Pretoria. Now the SIU is looking into another Pretoria lease, this time for a single residence which the department had leased as “residential accommodation” at an astronomical R217 000 a month - without “relevant approval”. The contractor had been “positively linked to a DPW official”.
The Department of Arts and Culture is being probed for misusing funds ring-fenced for the 2010 World Cup.
The Tshwane Metro had paid R185m between 2007 and 2010 to businesses in which 65 municipal staff members had either had undisclosed interests or, brazenly, were the vendors doing business with their own municipal council. Further procurements of R80m were also under investigation.
Ten waste management tenders at the Ekurhuleni Metro - valued at R500m and involving 19 different contractors - were under investigation. In one of these, payments totalling R37.8m had been made to service providers without delivery notes and no one at the metro could confirm whether the goods were ever delivered.
Also in Ekurhuleni, information and communication technology contracts worth R32m had been awarded to a company with which the municipality’s executive director of IT services had an undisclosed relationship.
“He has since resigned and is now employed full-time by the company,” Hofmeyr said to astonished gasps from MPs. And the municipality’s director of infrastructure had admitted to approving invoices valued at R12.4m for services that were never delivered.
The Department of Rural Development and Land Reform is being probed - at the request of minister Gugile Nkwinti - in what is likely to be the country’s biggest-ever “data uplifting project”.
So far, fraud and corruption charges have been laid against three officials and a KwaZulu-Natal businessman relating to land reform grant fraud totalling R50m. And working with the Hawks and the Assets Forfeiture Unit, the SIU has seized KwaZulu-Natal farms worth a further R50m.
The SIU can only investigate at the request of a department or government entity - and only after the president has signed a proclamation authorising such a probe.
President Jacob Zuma has signed 16 proclamations for the 2010/2011 financial year, including one proclamation to investigate all 23 municipalities in North West.
Asked by one MP whether South Africa was losing the fight against corruption, Hofmeyr said: “I think we should all accept that corruption is a serious problem in our country, but I am hopeful that we will make good progress over the next few years.”
He also said he was encouraged by the fact that the president had issued 16 SIU proclamations - the most in a single year - and that “significant resources” were being devoted to the problem. - Political Bureau
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