Especially egregious: In 2020, ordinary people donated food and sanitary products to fill a void left by the South African Social Security Agency’s bungling of aid distribution, for which it budgeted R45.5-million. This was beset by corruption and non-delivery, and for which it has yet to experience legal sanction. Photo: ER Lombard/Gallo Images
The National Prosecuting Authority (NPA) has failed to deal with all but one of the 386 criminal referrals stemming from R7.8-billion in Covid-19 procurement corruption unearthed by the Special Investigating Unit’s (SIU) graft investigation.
According to the SIU’s consolidated Covid-19 graft report, which was released by the presidency on Tuesday, the NPA has not even assigned a prosecutor to 114 of the 386 criminal referrals the unit made to the prosecuting authority, with cases dating as far back as October 2020.
In nine criminal referrals that were made in October 2020, the NPA declined to prosecute alleged fraud found in the KwaZulu-Natal education department, including two companies, Esomkhulu Trading and Espani Labour Outsourcing, which collectively scored about R2.7-million to supply cloth masks and other personal protective equipment (PPE) in June 2020.
In its report, the SIU said the NPA “has been requested to provide the basis for declining to prosecute”.
But the NPA rebuked suggestions that it was an impediment to the prosecution of alleged Covid-19 fraudsters. NPA spokesperson Mthunzi Mhaga emphasised that many of the cases brought to prosecutors “were not trial ready”, adding that the referrals needed further investigations by law enforcement agencies.
“What we [as the NPA] will not do is give a blow-by-blow account to the SIU through the media on which cases are not trial ready and what is needed,” Mhaga told the Mail & Guardian.
Case against Ndlovu
The only SIU referral to have gone to court, its report found, is the case against the notorious Hamilton Ndlovu, who is alleged to have fraudulently and corruptly received R172.7-million worth of contracts from the National Health Laboratory Service (NHLS). The SIU said Ndlovu made his first appearance in November.
The alleged fraudster rose to infamy in 2020 when pictures of his fleet of luxury cars circulated online. They were apparently purchased with what the SIU said were funds flowing from “an abuse of the emergency procurement procedures that were adopted by the [NHLS]”. Ndlovu is also before the Special Tribunal, where the SIU seeks to recover the money paid to him, and his civil trial begins in March.
Meanwhile, President Cyril Ramaphosa asserted this week that the NPA would play an important role in decisively dealing with “individuals and institutions who believed they could exploit a moment of national vulnerability to enrich themselves and those with whom they colluded to abuse public resources”.
”The final report details matters referred by the SIU to the National Prosecuting Authority, departments and entities in the public sector and other parties, who will finalise the process of bringing wrongdoers to book and addressing weaknesses identified by the SIU investigation,” Ramaphosa added.
The president said the submission of the SIU report was an important step in the fight against corruption in the public and private sector, as well as against maladministration.
“This investigation targeted individuals and institutions who believed they could exploit a moment of national vulnerability to enrich themselves and those with whom they colluded to abuse public resources,” he said. “It is unacceptable that so many contracts associated with saving lives and protecting livelihoods were irregular, unlawful or fraudulent.”
In July 2020, Ramaphosa signed the proclamation for the SIU to begin its probe into supply-chain fraud and corruption related to the government’s spending in dealing with the global pandemic. In total, the government’s Covid-19 spend was more than R152.5-billion from April 2020 to September 2021, the SIU’s report stated.
Sassa stealing exposed
An apt example of Ramaphosa’s assertion of wrongdoers exploiting a national vulnerability was the combined R45.5-million that the South African Social Security Agency (Sassa) “fraudulently” gave to two companies, Bendalo Holdings and Kwasa Food Service, to distribute food parcels in the Eastern Cape.
The SIU found that Sassa had no means to distribute food parcels, and had to rely on ward councillors for a list of applicants.
The SIU added that this led to the “manipulation of the process” for the distribution of 33 379 parcels in the province, resulting in the benefit to “non-qualifying beneficiaries”.
“The SIU investigation found that the service providers did not arrive at the venues on time and, in certain instances, the food parcels were incomplete. It was further established that Sassa vehicles and personnel were used to deliver the food parcels to the recipients,” the SIU found, adding that there was also an alleged gross inflation of prices.
In October, the SIU made six fraud referrals to the NPA for criminal prosecution arising from the alleged Sassa corruption, with the unit saying that it was still awaiting a case number in the matter.
Gauteng goes rogue
Professor Mkhululi Lukhele, the former departmental head and accounting officer of Gauteng’s health department, had 33 referrals against his name made to the NPA for alleged irregular contracts worth almost R168.6-million to supply PPE to the province.
The SIU said in its report that a criminal case was opened against Lukhele in December 2020 for the alleged gross financial misconduct in contravention of the Public Finance Management Act.
“Prosecutors were appointed to the matters,” the SIU added, but no further movement occurred in the different cases.
Meanwhile, in May last year, the SIU applied at the Special Tribunal to freeze R17-million in Lukhele’s pensions held by the Government Employees Pensions Fund and the Government Pensions Administration Agency. The two government agencies were named respondents in the Special Tribunal, together with Lukhele.
“The respondents agreed to the order of the SIU and the SIU applied to have the matter heard on the unopposed roll and are awaiting [a] hearing date from [the] registrar of the Special Tribunal.”
(John McCann/M&G)
NPA and SIU respond
SIU spokesperson Kaizer Kganyago did not respond to a query on whether the unit believed that the NPA was stalling in commencing with prosecutions, saying only: “We work closely with the NPA.”
On whether the SIU followed up with the NPA on stalled cases, some of which date back more than a year, Kganyago said: “Yes, we do follow ups on a continuous basis.”
Mhaga, on behalf of the NPA, referred the M&G to a May 2020 announcement made by Justice and Correctional Services Minister Ronald Lamola, who said that the government had established a “fusion centre” to strengthen “the collective efforts among law-enforcement agencies to prevent, detect, investigate and prosecute Covid-related corruption”.
The fusion centre included the Financial Intelligence Centre, the Independent Police Investigative Directorate, the NPA, the Directorate for Priority Crime Investigation (the Hawks), the SIU, the State Security Agency, as well as the South African Revenue Service.
Mhaga said all the cases should be enrolled with the fusion centre to enable speedy finalisation.
“It should be noted that these cases are not prosecution or trial ready and need some investigation by law enforcement. Kindly note that SIU and NPA have different mandates, where they [the SIU] are dealing with maladministration, while we [the NPA] deal with criminal prosecutions,” he explained.
“The approach on securing and presenting evidence is different as with SIU where the onus is on the balance of probabilities, while we have to prove cases beyond reasonable doubt. Investigating teams would therefore need to investigate the matters further.”
This week’s report showed that the SIU has retrieved more than R34.2-million in assets and cash; is chasing a R551.5-million in potential cash and assets; prevented losses amounting to more than R114.2-million and set aside irregular contracts worth more than R170.4-million.
The SIU is still investigating 476 service providers linked to 964 contracts valued at more than R961.6-million, the outcomes of which, the presidency said, would be provided in a supplementary report to be submitted to Ramaphosa at the end of June.
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