Recipients of generous ‘golden handshakes’ continue to occupy management positions at Pact, reports HAZEL FRIEDMAN
ACCUSATIONS of golden handshakes and secret slush funds are being hurled at Pact’s upper echelons following the recent discovery of a mysterious “employer’s fund” set up years ago by Pact management. A substantial percentage of the fund, which in total amounts to a whopping R14 275 000, was given to five of Pact’s 11 heads of department as “severance pay” after they voluntarily resigned from Pact in 1995. Yet until recently, four of the old- guard managers continued to be in Pact’s employ. And almost a year after the generous packages were paid, two of the recipients remain in management positions.
The scandal comes in the midst of Pact’s restructuring and the imminent arrival of new CEO Alan Joseph. It threatens to raise the spectre of financial mismanagement by a cultural body which continues to receive the lion’s share of the arts budget while community arts organisations struggle desperately to survive.
The “employer’s fund” was uncovered by members of the new Pact board soon after they took office in November 1995. After demanding to know the origins of the R14-million, they were told by acting CEO Eghard van der Hoven that a small sum, taken from Pact’s existing fund- pool, had been invested in the late 1980s as a retrenchment fund or in the event that there was no money to pay staff salaries.
The board then approached the Ministry of Arts, Culture, Science and Technology to conduct a financial audit of Pact. But the investigation commissioned from Deloitte and Tusch examines Pact’s future financial prospects and neglects to examine allegations of past and present misuse of government funds.
In addition, the Performing Arts Staff Association of South Africa (Pasasa) — which officially represents Pact employees but is described disparagingly by staff members as a “sweetheart union” — undertook to investigate the matter this year. In a newsletter faxed anonymously to the Mail & Guardian, Pasasa claims to have completed the investigation on February 12, when “all parties agreed to withhold final decisions until after February 20 when management will meet with Minister of Arts, Culture, Science and Technology Dr Ben Ngubane”.
But at an executive board meeting, held on February 16, board members were informed that the investigation was still under way. Furthermore, in its in-house newsletter, Pasasa insists that both it and the Paper, Printing and Allied Workers’ Union (Ppawu) were “ignorant of the employer’s fund”.
Van der Hoven insists both Pasasa and Ppawu were fully aware of the existence of the fund. He also claims the fund was established long before plans to restructure Pact were put in motion.
The M&G has in its possession a confidential document detailing Pact’s “special funds and trust funds”. The document reports that both Ppawu and Pasasa were party to the employer’s fund agreement drawn up on behalf of all Pact employees. It also reports that the contract was signed on April 3 1995 by then-CEO of Pact Louis Bezuidenhout, by Gabu Nycenya, standing in as secretary of Ppawu, and by Sandra Laubscher, chair of Psasa.
Managed by an in-house board of trustees comprising Michael Cook (former chair of the Pact board), Bezuidenhout, Gabu Twala (secretary of Ppawu) and Laubscher, the fund was established, the document states, to create financial security for Pact employers whose services are terminated between April 3 and September 30 1995 due to “the present uncertainty surrounding the future of the performing arts”, and between October 1 1995 and September 30 1997 due to Pact’s “restructuring, or due to intimidation, victimisation, unilateral amendment of employment conditions, unfair labour practices or insufficient funds for salaries”.
Until recently, few of the intended recipents of the fund seem to have been aware of its existence, except for the 11 department heads whose contracts were amended in accordance with the provisions made by the fund.
No one is saying exactly how much of the fund has been used to date. But in August 1995, the artistic director of opera and the heads of personnel, wardrobe and the State Theatre department resigned and received substantial severance packages including 12 months’ salary, 12 months’ share of Pact’s pension contributions, housing subsidies, medical aid and the writing off of car loans.
The Arts and Culture Alliance (ACA) has calculated that this “golden handshake” amounts to over R250 000 per staff member. In an open letter to Ngubane, the ACA condemns “this misuse of funds … which makes a mockery of our hopes to build a vibrant national culture”.
Although their severance pay has not been returned, two of the staff members who received the package have remained at Pact, according to Van der Hoven “at the request of Dr Ngubane, because of their skills and experience”.
Last year, the Council of Culture Ministers – — made up of Ngubane, Deputy Minister of Arts Culture, Science and Technology Bridget Mabandla and the provincial MECs responsible for arts and culture — placed a moratorium on all retrenchments at Pact until the new board was in place. A statement released on behalf of Ngubane expresses extreme concern over the “golden handshake” allegations and adds that if the moratorium decision was ignored by Pact management, the matter would be viewed “in a very serious light”.