Tentacles of the fraud octopus will `be chopped off with a sharp machete’, reports Justin Arenstein
THE former head of one of Mpumalanga’s regional councils, Gerhard Smith, went down in history as the main tentacle of a “muddy and smelly octopus” this week after he was fingered for milking at least R3,24-million from the province.
On digesting the findings of a commission of inquiry into the council’s shenanigans, Mpumalanga Premier Mathews Phosa de-scribed Smith — a former public administration lecturer at Pretoria Technikon — and his accomplices as “a muddy and smelly octopus whose long and twisted arms and legs must be chopped off with a sharp machete before its ugly head can finally be crushed”.
Phosa clashed with Smith and the Regional Service Council (RSC) co-chairman, Paul Brood-ryk, during the local government elections in 1994, when he accused them of deliberately sabotaging the elections.
After expressing his disgust, recovering R3,2- million for the government and establishing strong legal arguments for the recovery of the remaining R454 800, Chief Magistrate Heinrich Moldenhauer, who conducted the commission, advised Mpuma-langa to ditch all regional service councils, which have now been transformed into district councils.
As chief executive officer of the Highveld Ridge Regional Service Council, Smith had a budget of more than R213-million on hand.
According to the commission, Smith’s crimes included fraud, theft and using state resources for personal enjoyment.
Moldenhauer ordered criminal charges to be brought against Smith to recover R1,2-million allegedly paid into his private bank account under false pretenses.
During the hearing Smith was described as a wilful liar who had repeatedly misled his colleagues for his own financial gain and who resorted to childish excuses when cornered.
It emerged that anyone who stood up to Smith and his multi-million spending spree, which was unwittingly bank-rolled by the state, was dismissed or discredited.
Mismanagement and overspending during his reign resulted in questionable expenditure totalling a further R11,7-million, for which Smith admitted that no proper audits had been conducted.
Other instances of what Moldenhauer calls “outrageous” mismanagement and financial misappropriation include the awarding of a R20 000 allowance to Smith to write a doctoral thesis.
Smith reportedly convinced both the RSC and the Regional Local Government Association of South Africa each to award him an amount of R10 000 between April and August 1994.
Smith admitted that although one year had passed, he “had not yet started with his studies”.
The figure of R10 000 appears at least three more times during the 150-page commission report, including an instance where Moldenhauer writes that he was shocked to learn how Paul Broodryk had been given R10 000 spending money for a foreign trip.
Smith also authorised a “questionable” donation of R10 000 to the Middelburg South African Police Club, a R15 000 donation to the Eastern Transvaal Youth Choir, where Brood-ryk’s son was a member, and a
R150 000 donation to Pretoria Technikon for a `techno-library’ in Witbank.
Possibly the most bizarre charge against Smith involves the illegal installation of a two-way radio belonging to the ambulance service in his private car. Smith had allegedly used the radio to eavesdrop on traffic officers’ communication and avoid speed traps during his frequent and “very fast” trips on the highway between Pretoria and Middelburg.
Realising their days were numbered Smith and Broodryk reportedly convinced the RSC to grant them power of attorney to design a new severance settlement agreement for council employees.
According to the proposal, staff members resigning under certain conditions were eligible to be paid out their full salary for five years, as well as outstanding amounts on all loans for motor vehicles, houses and furniture. Study loans and outstanding amounts on clothing and other subsidies also had to be paid in full.
In the end, it was his refusal to report to the police an illegal shooting of a cow that led to his downfall. He withdrew the charges laid against the shooter by a junior employee and sought to discipline him. The junior promptly reported his reprobate ways. to the provincial governor.