ANC leaders are not backing Free State premier Patrick `Terror’ Lekota in a fight against corruption, reports Rehana Rossouw
Free State premier Patrick “Terror” Lekota has exposed abuse of almost R6-million of public money.
A Mail & Guardian investigation has found that some of the money was allegedly spent by senior members of the provincial administration on unauthorised overseas trips, staff loans, a loan to the liquor board, pub lunches and compact discs.
And Lekota’s supporters — furious at the failure of the African National Congress to come out in support of the premier in the face of recent speculation that he was about to be fired — claim the party’s national leadership is attempting to cover up the corruption scandal to protect the party from embarrassment.
The allegations are contained in a report drafted by the director general of the Free State government Dr DB Setai which was handed to the attorney general’s office, claiming former MEC for economics and tourism Ace Magashule illegally established two section 21 companies — and deposited government funds totalling R5 784 000 in their accounts.
The companies were called the Free State Promotion Agency and the Free State Tourism Company.
The report says: “The executive committee was informed about the existence of the agency on July 3 and July 9 1996. Banking accounts had been opened and funds had been withdrawn.
“There was no need for section 21 companies. It seems the only reason for establishment of the companies was to bypass cumbersome financial, procurement and personnel provisions of the public administration and to avoid control measures. The registrations of the companies were therefore terminated.”
A cabinet committee of the Free State was approached by the Department of Economic Affairs and Tourism on April 29 to obtain approval for the establishment of a section 21 company. The proposal was vetoed as the committee felt such work fell within the ambit of their department. The treasury board was also approached and turned down the request.
Yet, accounts in the name of the Free State Promotion Agency were opened on March 22 with a deposit of R5-million. R784 000 was deposited in a separate account for the Free State Tourism Company.
Setai’s report claims funds were used to purchase furniture, pay consultants and for overseas trips. People were employed and due to start work on July 1 and August 1. The Free State government was advised by lawyers it was not obliged to keep these people in employment.
His investigation into the two companies runs into hundreds of pages, detailing alleged infringements of treasury regulations, tender procedures and staffing contracts.
The accounts had been opened at banks that did not tender for government business, expensive equipment was purchased from companies that neither tendered for the contracts nor had existing contracts with the Free State government. And neither Section 21 company had boards of directors.
The Free State Promotion Agency was launched to “promote increased direct foreign investment in the province, set up joint ventures, offer advisory services to business which relocated and establish a database for monitoring and assessing exports in the Free State”, according to founding documents discovered by Setai.
It was to have employed a staff of 15. An undated inter-office memorandum attached to Setai’s report was sent from Magashule to his director complaining about the manner in which staff recruitment was conducted.
“You are directed to re-advertise in the Sowetan and Sunday Times and give 10 days for people to apply,” Magashule wrote. “An impression has been created that persons have been earmarked for these positions. I find this totally unacceptable.” A massive R225 810 was spent on advertising the posts.
Staffers in the department went on three overseas trips to Amsterdam, Germany and China financed from the funds in the account. There was no approval for the trips from the director general’s office.
The apparent justification for setting up the Section 21 companies is contained in the report. The Free State Tourism Company was established supposedly to correct the Free State’s apartheid legacy. “There is no marketing sinegy (sic), no database, borders have changed in the province, shebeens, taverns and taxis are not included in tourism marketing and Bophuthatswana and QwaQwa have since been incorporated into the province,” its founding documents read.
R784 000 was deposited in an account for the company and when the account was frozen on July 6, there was R184 711 remaining. Money spent included several allocations for staff loans, pub lunches, CDs purchased by staffers and a loan made to the Free State Liquor Board.
A report has now been sent from the attorney general of the Free State to the regional commissioner of the SAPS and the commercial branch has been instructed to investigate the charges.
Meanwhile supporters of Lekota rallied to protect him from the ANC national structure’s “meddling” in provincial affairs.
Sources in the Free State government say the political row in the province has been engineered to shift the focus away from a police investigation into fraud allegedly committed by Magashule.
In June, Lekota dismissed Magashule from his position as MEC for economic affairs and tourism. At the time, he cited “insubordination” as his reason, but sources in the Free State said Lekota had already begun to suspect Magashule was allegedly involved in corruption. Lekota declined to comment on this issue.
Lekota’s supporters say although he did not make Setai’s investigation public, they had no doubt that his dismissal of Magashule from the provincial government was in the interests of “good governance”.
They say he did inform ANC national executive committee members Steve Tshwete and Joe Nhlanhla of the alleged corruption when they were sent to the Free State last month to investigate the row.
“The ANC wanted to handle it internally, to keep it quiet. But the government of the Free State has to follow the rules and leave the matter in the hands of the attorney general and SAPS. At every step of the way, formal and proper procedures were followed,” said a member of the provincial legislature who did not want to be named.
“Magashule seems to have some political clout with ANC head office, though. Terror has been forced to reinstate him and Magashule managed to get a hearing with the ANC leadership outside of Tshwete’s formal visit to the province.
“At the meetings Tshwete had with the provincial executive committee everything was sorted out. Terror was told he could exercise his prerogative to arrange the ministries as he saw fit, with the proviso that he appoint an advisory committee to assist him.
“But two weeks ago, everything fell apart again when we heard Magashule and some of his supporters had met [ANC deputy general secretary] Cheryl Carolus and Tshwete without Terror being informed,” the source said.
ANC spokesman Ronnie Mamoepa said the organisation was satisfied that the Free State’s “political problems” were in the process of being settled.
He denied that Carolus had met Magashule to plot Lekota’s removal and said ANC headquarters was committed to solving the Free State’s problems with a view to building unity in the province.
“The ANC’s national leadership acted responsibly with regard to that problem,” Mamoepa said.
Asked if the ANC’s leadership was informed of the allegations of corruption, Mamoepa said the organisation would not countenance corruption from any quarter and that the “due process of the law” should take its course with any member found to be involved in corruption.
Magashule’s office was repeatedly approached for comment this week, but no reaction was available by the time of going to press.