Michael Sutcliffe, eThekwini Metro manager, faces growing questions over his management style and his promotion of procurement practices perceived by his critics as favouring well-connected individuals.
Deals that have raised questions admittedly relate to a small portion of the council’s R3-billion annual procurement budget — but critics, including the Democratic Alliance’s Metro executive committee member Lynn Ploos van Amstel, say they point to the inherent risks of what she describes as Sutcliffe’s ‘centralised and politicised” style of management.
African National Congress leaders counter that Sutcliffe is simply ensuring that the policies of the ruling party are implemented.
No one is accusing Sutcliffe of corruption, but they have accused him of what one senior city manager termed ‘political expedience”. If the critique has substance, it may explain what has led the Metro manager down some odd paths.
One example was an attempt, revealed by the Mail & Guardian last year, to conclude an office-rental deal when, as it turned out, the council had under-utilised property of its own.
Interviews by the M&G with some senior council staff suggest that Sutcliffe, himself a prominent ANC member, was open about his desire to stamp a new political direction on the management of the city following his appointment in mid-2002.
Several noted that at his first meeting with his senior managers Sutcliffe introduced them to ANC provincial MP Bheki Cele, who was neither a councillor nor a city official, but instead chaired the ANC’s powerful Durban regional executive committee (REC).
Says one manager who, like others, spoke on condition of anonymity: ‘He made it quite explicit that we were to consider ourselves accountable to that structure [the REC].”
Said another: ‘It was clear that Mike himself was not going to be accountable to Obed Mlaba [eThekwini’s ANC mayor], or even really to the Metro executive committee. He was deployed by the ANC when the city had begun to lose political and administrative direction.”
The manager said Sutcliffe introduced weekly briefings to the ANC REC and liaised closely with key office-bearers, including Cele and regional treasurer John Mchunu.
Sutcliffe has declined to respond to questions from the M&G but Cele, who is now a provincial minister, defended this relationship.
He said it was the case all over the world that administrators interacted with the office-bearers of the ruling party: ‘We have an oversight role, to make sure the policies of the ruling party are implemented.”
Responding to criticism of Sutcliffe’s dominance of the Metro, Cele pointed out that Sutcliffe, not Mlaba, is the city’s accounting officer and thus carries the can for decisions.
Mlaba himself dismissed the idea that he had been sidelined from his role as political leader: ‘Mike is completely accessible to me. I can call him at any time … Of course we have had disagreements about this or that, but that doesn’t mean he is running his own show.”
He said the council had delegated extensive powers to Sutcliffe in order to promote efficiency and transformation.
However, some officials the M&G spoke to have asked whether efficiency has been achieved at the cost of accountability and have questioned the politicised nature of that transformation.
For instance, it is alleged that one objective for the new management of the city was the reform and redirection of the tendering system.
Managers said Sutcliffe openly questioned why people who had been with the ANC in the struggle had not benefited from empowerment opportunities from the city and several sources claimed Sutcliffe gave the example of Dr Diliza Mji, the former ANC provincial treasurer, as the kind of person he had in mind.
Not long afterwards, Mji’s Remant/Alton consortium won a R1,3-billion contract to take over the running of the city’s bus service, the Durban Metropolitan Transport Board.
Some hailed the deal for the significant stake it gave to transport board employees, but others questioned its rationale, saying the contract retained a significant amount of risk for the city.
Mji, who failed to return calls, is a respected Durban activist-turned-businessman.
Said one manager: ‘Sutcliffe would ask: ‘Where are our own [Durban] Ramaphosas?’ It was well known that he believed there was a need to identify certain individuals who were going to benefit from transformation.”
Says another: ‘Sutcliffe was urging people to start organising themselves to take up the opportunities. Maybe that was not a bad thing, but in practice Sutcliffe doesn’t see beyond the political group to which he belongs, with whom he socialises, does business and so on. If you don’t have the political credentials, you don’t feature.”
One of the managers interviewed said that in late 2002 Sutcliffe and his deputy, Derek Naidoo, had been summoned to a meeting with ANC treasurer general Mendi Msimang at Durban airport. The source said Sutcliffe indicated the discussion with Msimang related to possible opportunities for ANC investment vehicles.
When contacted, Msimang did not deny the meeting took place, but refused to discuss the matter further.
‘Tell me what ANC investment vehicles?” he demanded.
At a broader level, Sutcliffe acted to remove many key procurement decisions from the ambit of the municipal tender board and placed them in the hands of departmental technical committees over whom he exercised closer control.
There was some justification in doing this, one senior manager told the M&G, as the tender committee was slow and by no means immune from manipulation by special interest groups.
But when the pendulum swung the other way, some officials were concerned.
‘Sutcliffe got sweeping authority from the executive committee,” explained one. ‘Line managers were no longer allowed to make their own presentations to the Metro executive committee; everything had to go through Mike or Derek Naidoo.”
Even some ANC councillors reportedly expressed frustration that they were now simply informed of decisions taken elsewhere.
Said one manager: ‘The issue is that when you have just a handful of people who are the only channel through which everything flows, you open yourself up for problems.”
Sutcliffe’s tender troubles mount
- An investigation by the municipal ombudsperson into last year’s aborted office-rental deal is pending.
- A challenge to the awarding of a parking management contract, reported in the Mail & Guardian earlier this year, has been referred for internal appeal and is expected to proceed to court.
- A R312 000 damages suit has been served on the council by local publisher Haresh Oudherajh over the award of the printing and distribution contract for one of Sutcliffe’s pet projects, a new weekly municipal newspaper.
- There have been questions raised, including by the South African Federation of Civil Engineering Contractors (SAFCEC), about the awarding of certain construction contracts. In the case raised by SAFCEC, a contract that had been awarded was then withdrawn before being re-awarded, under a different number, to another company that had not even made the shortlist the first time round. When SAFCEC took this up with Sutcliffe he simply withdrew the tender again without explanation.
Black out
For four weeks the M&G has, in various ways, tried to get comment from eThekwini Metro manager Mike Sutcliffe. He has not responded to attempts to get his side of the story. Sutcliffe’s office said he has decided not to talk to the newspaper.
The men behind the halo
In August last year Metro manager Mike Sutcliffe instructed the municipal ombudsperson to investigate some of his senior managers, asking her to use lie detector tests if necessary. And he called in the National Intelligence Agency to check if members of staff were providing information to people who ”aim to subvert municipal policies”.
Sutcliffe’s crackdown was prompted by a Mail & Guardian story about how the Metro narrowly failed to enter into a R68-million office-rental agreement with a mystery trust.
Sutcliffe’s response to the leaks appeared excessive, given the fact that he claimed he himself initiated the decision to back out of the deal.
Now a possible reason for the Metro manager’s sensitivity has emerged: the fact that the undisclosed beneficiaries of the trust had past links to Deputy President Jacob Zuma and his financial adviser, Schabir Shaik. It is something Sutcliffe was apparently unaware of initially — and might have found politically embarrassing, given his perceived closeness to Zuma’s traditional political rivals in the ANC.
When he was touting the office-rental proposal to his managers last year, all Sutcliffe allegedly knew about the beneficiary of the deal was that it was something called the Yorker Trust, which had a 51% empowerment component.
Subsequently, the M&G established that this 51% beneficiary was a company called Halo Trading, led by two men, Shadrack Dladla and Lawrence Mazibuko.
Dladla, a former policeman, owned a small security company, KZN Security Services, that in 1998 bid for, but failed to secure, a contract with the city council.
Then Mazibuko, a former police bodyguard of Zuma, came on board, as did, allegedly, Zuma’s nephew Khula Zuma. Next time round, KZN’s bid was successful and the council contract has been rolled over ever since.
Dladla now angrily denies that Khula Zuma or the deputy president ever had anything to do with his company. But in his 2000 bid to provide bodyguard services to the council, Dladla himself listed Khula Zuma as a shareholder.
In 2001 Dladla and Mazibuko had established another company, Ba-lengwe Holdings, which is described on the company website as ”incorporating” KZN Security Services.
Among the founding directors of Balengwe was Schabir Shaik, who handles Zuma’s finances.
Company records show that after barely two months, Shaik resigned on October 19 2001. Asked about this, Dladla said he was a friend of Shaik’s and they had linked up for a specific deal that had fallen through.
Another explanation may be that 10 days before, on October 9, the Scorpions had launched their first raid on Shaik and his businesses. Asked about his involvement with Balengwe, Shaik refused to comment.
Zuma’s office said he had no financial interest in KZN Security or Balengwe Holdings, or with Mazibuko and Dladla, and could not be expected to account for the business dealings of former government employees — or those of people he might happen to know.– Sam Sole
