Senior Democratic Alliance politician Kent Morkel has been accused of taking a bribe in a multimillion-rand corruption case that came before the Cape High Court on Wednesday.
In a plea-bargain agreement made an order of the court by Judge Siraj Desai, micro-loan provider Gilt Edged Management Services (Gems) consented to fines totalling R5-million on two counts of corruption.
One of the counts involved a R10 000 payment to Morkel.
Gems also agreed to pay claims that could total R60-million to about 34 000 municipal employees fraudulently persuaded to take out loans with the company.
It was represented in court by director Brett Morse.
Asset Forfeiture Unit head Willie Hofmeyr told journalists the agreement, the result of an 18-month investigation, will be followed by a round of Scorpions arrests ”in the next few days”.
He said the corruption charges resulted from Gems bribing 33 South African Municipal Workers’ Union (Samwu) officials and Morkel.
Morkel did not want to comment, but said he is sure he has ”done nothing wrong”.
He was elected Western Cape chairperson of the DA last month, and leads the party’s 70-member caucus in the Cape Town city council, where he has his sights set on mayoral office.
He is a son of former city mayor and provincial premier Gerald Morkel, who experienced his own share of controversy in the Jurgen Harksen saga, and brother to DA MP Craig Morkel, who has been named in the parliamentary travel scam.
At the time he allegedly took the bribe, in December 2001, he was a member of the city’s executive committee.
Though Morkel was named in the court papers, Hofmeyr and Scorpions spokesperson Sipho Ngwema would not commit themselves on an arrest.
”Evidence is now officially at our disposal that the bribes have been paid,” Hofmeyr said when asked about Morkel. ”The Scorpions will continue their investigation and arrests will follow when there is sufficient evidence to warrant the arrests.”
DA federal council chairperson James Selfe said any public representative of the party who is arrested for a serious offence, including bribery and corruption, will be suspended from the party, and expelled if found guilty.
”Mr Kent Morkel has not been arrested or charged. If he were to be arrested, the applicable decision of the federal executive would be operative,” he said.
Hofmeyr said Gems, a subsidiary of holding company African Bank Investments Limited (Abil), had sought to provide micro-loans to municipal workers.
However, municipalities, for administrative reasons, have agreements with unions to recognise only one loan provider per union.
Gems had tendered to be Samwu’s provider, but lost out to First National Bank, and instead bribed Samwu officials to encourage their members to take out loans with Gems regardless.
The officials also ensured Gems had stop orders on the workers’ pay, despite the single-provider agreement.
Hofmeyr said the Gems loans were significantly more expensive than those of Samwu’s preferred service provider, not so much in terms of interest, but in high administration charges.
He said Morkel was essentially paid both to promote the Gems loans within various DA municipalities, including George in the Southern Cape, and to ensure Gems got on to their payroll schemes.
”Gems is pleading guilty to corrupting him by paying him for using his influence,” he said.
The R60-million payout — the difference between what Gems charged and what workers would have paid an approved service provider — is being underwritten by Abil, as Gems had only R23-million to its name.
Average compensation would be about R1 800 per person.
”From an Asset Forfeiture Unit point of view, this is by far the biggest thing we’ve done to compensate victims of crime,” Hofmeyr said.
He said it is important for municipal workers and former workers who took loans with Gems between June 1999 and August 2002 to register their claims.
A hotline has been set up on Tel: (011) 256 9106, and Samwu will also assist through its Cape Town office, on Tel: (021) 697 1151.
He said the court order gave Gems a year to try to find the victims, after which the job will be given to tracing agents paid by the state.
Abil is taking steps to shut down Gems, and the senior staff involved in the corruption are ”no longer in the employ of Gems”.
Samwu secretary general Roger Ronnie said about nine Samwu officials, including a Western Cape provincial secretary, were dismissed from their union jobs after hearings by an independent chairperson.
Two others resigned, and one was found not guilty. The bulk of the remaining 33, who included shop stewards, have been dealt with at shop-floor level.
”We’ve acted as decisively as we could under the circumstances,” he said.
”The settlement order basically is a vindication of the stance we’ve taken all along to clean the union of corruption.
”We will do our utmost to ensure the members who have been affected get their compensation.” — Sapa