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Open-chequebook bribe unreported

Craig McKune

Adjudicators of a previous social-grants tender failed to tell the police about the bribe.

An alleged attempt to influence one of South Africa’s biggest state tenders with an ‘open chequebook” bribe was effectively swept under the carpet by the high-level committee deliberating on it in 2008.

The bid-adjudication committee, chaired by top advocate Norman Arendse, failed to report the incident to the police, an oversight that could be deemed an offence under South Africa’s anti-corruption legislation. No further investigation was undertaken.

The tender in question, worth R7-billion at the time, was for the payment of social grants throughout the country over five years. It was cancelled in November 2008, for reasons unrelated to the alleged bribe attempt, but a subsequent version, worth R10-billion, was awarded to Cash Paymaster Services (CPS) this January.

Last week the Mail & Guardian revealed an allegation by Arendse that top sports administrator Gideon Sam had visited him, claiming to hold an ‘open chequebook” on behalf of CPS, which ‘had lots of money” and was one of the bidders. Both Sam and CPS strenuously denied the allegation. Had it been investigated, the incident might have influenced the ­current award. Arendse said his first step was to call his secretary immediately to record the incident and he reported it to the adjudication committee the following day.

The committee resolved that he should write to CPS to record Sam’s alleged approach. This was the only action taken.

On the same day the committee finalised its report, which recommended that no tender should be awarded ‘because the evaluation process was completely and utterly flawed”, Arendse said.

The committee included Arendse, department of social development director general Vusi Madonsela, public service director general Richard Levin, treasury deputy director general Marion Mbina-Mthembu and treasury chief director Willie Mathebula.

CPS director Serge Belamant confirmed receiving Arendse’s letter, but his lawyers replied at the time that the company did not know of Sam, or a bribery attempt.

Speaking for both the South African Social Security Agency (Sassa), to which the committee reported, and the department of social development, Lumka Oliphant confirmed Arendse’s account, but said the alleged briber’s ‘particulars cannot be confirmed”.

Arendse and Oliphant said the incident did not influence the committee’s recommendation or the subsequent decision to cancel the tender.

However, in terms of the Prevention and Combating of Corrupt Activities Act, it is an offence for a person holding ‘a position of authority” not to report an offer of a bribe of which they have ‘knowledge or suspicion”.

The definition of a ‘position of authority” includes a director general of a national department and the chairperson of a committee.

The Act applies to a bribe or offer of R100000 or more. As Arendse alleged that Sam’s offer was ‘open”, it is not clear how a court would find in the matter.

Asked whether the matter was reported to the police, Oliphant said: ‘In view of the denial and in the absence of any further evidence, the [adjudication committee] continued with its work unaffected by the incident, but agreed that the matter would form part of Arendse’s briefing to the chief executive of Sassa [Fezile Makiwane], as part of its [the committee’s ] report.”

However, Arendse said the matter was never disclosed to Sassa or to Makiwane because it had not influenced the committee’s decision.

‘It is not something that I swept under the carpet. If I did, I wouldn’t have mentioned it to anybody.

‘I felt it was my duty to say it and I said it to the people who are the accounting authorities [directors general Madonsela and Levin], so they knew about it.

‘I will co-operate fully with the authorities if a complaint is lodged. But as I said earlier, the matter was reported to [Madonsela].”

Sassa reports to the social development minister, not to the department, but both Madonsela and Arendse hold ‘positions of authority”, as defined in the Act.

At least one competing bidder for the recently awarded tender — AllPay, controlled by Absa — has applied to the North Gauteng High Court in Pretoria to have the contract set aside. The matter will be heard in April.

Levin referred all questions to Arendse, whom he said was the ­committee’s ‘spokesperson”.

Mathebula said he could not recall any details, while Mbina-Mthembu said that she was overseas at the time and had no knowledge of the incident.

Makiwane referred questions to Sassa.

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