The SIU has uncovered R2 billion of stolen money from the Tembisa Hospital through three key syndicates enabled by junior officials at the institution and in the Gauteng health department. (File Photo)
The Special Investigating Unit (SIU) has uncovered R2 billion of stolen money from the Tembisa Hospital through three key syndicates enabled by junior officials at the institution and in the Gauteng health department.
The money was intended for the provision of healthcare to the most vulnerable, but instead was “ruthlessly siphoned off through a complex web of fraud and corruption, representing an egregious betrayal of the nation’s trust” SIU head Andy Mothibi said at the release of an interim report on Monday.
“An analysis of 2 207 procurement bundles has revealed serious maladministration and procurement fraud. Key officials from the Gauteng department of health and Tembisa Hospital are accused of benefitting from corrupt payments that facilitated the irregular appointment of service providers, involving money laundering and fraud through fronting and the use of false Supply Chain Management documentation,” he said.
The total value of corrupt payments linked to officials at the Gauteng department of health as well as in Tembisa Hospital amounted to R122 228 000, the interim report showed.
At least 15 current and former officials were proven to be involved in corruption, money laundering, collusion and bid rigging with “improperly appointed” service providers at the hospital.
“These individuals abused their positions throughout the procurement process to benefit these providers and enrich themselves,” Mothibi said.
The officials range from entry-level clerks to management-level officials, but the junior officials have caused “more losses” to the hospital.
The SIU has prepared 116 disciplinary referrals against 13 officials, 108 of which were delivered to the Gauteng department of health for maladministration as well as irregular appointment of service providers at the hospital.
Two hundred and seven service providers traded with the hospital under 4 501 purchase orders and each purchase order was linked to a “purported three-quote procurement process purportedly involving three competing bidders”, the investigation showed.
The first of the syndicates mentioned was linked to Hangwani Morgan Maumela, in which the SIU reviewed 1 728 bundles worth R816 560 717 and completed 924 analyses. The SIU traced 41 service providers linked to this particular syndicate and three of the companies that were awarded contracts to the tune of R13 538 292 were linked to Vusimuzi “Cat” Matlala.
Matlala has been implicated in the ongoing Madlanga Commission of Inquiry on allegations KwaZulu-Natal police commissioner Nhlanhla Mkhwanazi made about the infiltration of the criminal justice system by syndicates.
Some of the allegations against Matlala are that his private vehicles were fitted with blue lights and registered as official municipal vehicles in Ekurhuleni. He was also allegedly involved in the improper appointments of senior police officials and contracts. Matlala is also facing murder charges.
The assets identified in the Maumela syndicate amounted to about R520 million, and included several upmarket properties and vehicles.
The SIU also identified a syndicate linked to Rudolph Mazibuko, in which 651 bundles to the value of R283 504 291 were reviewed; and 392 completed analyses showed assets totalling R42 646 356, which also included properties in Gauteng and the Western Cape.
The SIU is also reviewing 1 237 procurement bundles to the value of R596 424 356 linked to an unnamed syndicate “X”. Assets tied to this syndicate were valued at R 150 000 000.
The unit will be working with the National Prosecuting Authority’s (NPA) Asset Forfeiture Unit to seize and liquidate assets that will be redirected to the hospital and departments for proper use.
In addition, the SIU identified six other smaller syndicates operating in the Tembisa Hospital, the details of which are still undergoing investigation.
The SIU said the service providers were appointed using fraudulent documents with many of the procurement processes being circumvented.
“The SIU’s findings indicate severe breaches of trust and authority within Tembisa Hospital’s operations, including fronting and syndicated activities,” Mothibi said.
Furthermore, the investigation found that unsuccessful bidders were also part of the scheme.
“To date, the SIU has been able to identify payments to the combined value of R1 113 270, which were made directly or indirectly by or on behalf of the successful bidder(s) or the syndicates to the unsuccessful bidders who purportedly competed against the successful service provider for specific request for quotes,” Mothibi told journalists.
“The CEO of Tembisa at the time, authorised the appointment of non-compliant bidders raising questions of the lack of oversight from the previous CEO’s office given the frequent approvals of requests for quotations.
“The investigation really highlights a comprehensive disregard for duty by officials at Tembisa and the department. Those responsible for procurement ignored fundamental regulations. Accounting officers abdicated their oversight role entirely.
“The failure of officials to perform their duties allowed for the untapped spending of public funds with no verification of whether what was procured was necessary or represented fair value for the state.
“In a sense, officials were active participants in the malpractice or turned a blind eye, effectively allowing the public purse to be looted through a combination of maladministration, corruption and collusion with third parties,” he added.
The Democratic Alliance’s Gauteng spokesperson on health, Jack Bloom, said the party would closely monitor the referrals made by the SIU report including 116 disciplinary referrals and the four criminal matters sent to the NPA.
“The important thing is that the big fish should not be allowed to get away … We await further criminal referrals to the NPA which should not delay in pursuing charges against the syndicate bosses and their accomplices,” Bloom said in a statement.
“We are disappointed that implicated companies have not yet been blacklisted, and some of them may still be benefiting from government contracts.”
He reiterated the DA’s call for Gauteng premier Panyaza Lesufi to remove Gauteng health and wellness MEC Nomantu Nkomo-Ralehoko and head of department Lesiba Malotana. “They need to be held accountable for continuing irregular spending and service delivery failures.”
Health Minister Aaron Moatsoaledi said the SIU needs to expand its investigations into other hospitals where corruption is also rampant.