The downfall of Jim Miller, a British-born technology salesman, may be his frankness. When a partner objected to his large expense claims, he admitted to paying what amounted to kickbacks.
Miller started working for a United States technology company in South Africa in 1974. When it divested he set up local operations to fill the gap.
By the late 1990s he was chief executive of DSE Technologies (DSE), a joint venture between Malaysian businessman Dato Samsudin and the Empowerment Trust, whose five founding trustees were associated with the Inkatha Freedom Party. The chairperson was Mandla Msomi, then a senior IFP MP.
DSE was set up ”to tender for the KwaZulu-Natal government contract for the electronic monitoring of the gaming within such province”.
But the introduction of limited payout machine gaming, which this contract was to monitor, faced protracted delays. DSE and the Trust were spending money hand over fist — mainly to pay for the services of Msomi and Miller.
By 1999 the only real income was from IT outsourcing contracts, valued at R33-million, that DSE, and later a subsidiary, Vital, had with Vista University.
In March 2000 Malaysian shareholder Samsudin, apparently concerned about DSE’s financial woes, commissioned a forensic investigation. It found that Miller had ”personally paid funds to Vista University official(s) responsible for the tender awarded to DSE, which have been reimbursed to him by the company”.
In a memo to the investigator, Miller wrote: ”Please find attached detail of personal commission payments to Mr Saint Mofokeng, IT director of Vista University. The payments were all made at the express request of Mr Mofokeng, as commission for business concluded between the university IT department and DSE/Vital.”
The amount totalled R106 824, but Miller noted: ”This excludes personal payments I have made on behalf of the Empowerment Trust to Dr Mbuli, Vista University’s registrar, and legal adviser, of three lots of R10 000, totalling R30 000.”
Meanwhile, DSE and the Empowerment Trust had to clean up their act if they still wished to bid for the monitoring contract.
Regulations prohibit bidders for gambling-related contracts from having links with serving politicians, which meant the trustees had to change. Out went Msomi and some others, but minutes of a trustees’ meeting suggested this was a sham.
The resignations were ”purely for the purpose of tendering” and Miller said: ”The onus is on the trust [to ensure] that those trustees who resigned share the rewards should we win the bid.”
Senzo Mfayela, a former IFP election organiser, took over as chairperson of the trust.ÂÂ
It was also necessary to distance the players from the liabilities that had accumulated under DSE, so Miller recommended that a new company be created and that the Trust, DSE and Vital be liquidated ”using friendly liquidators”.
A new company was formed: Newinvest 179 ”trading as DSE Technologies”, with Mfayela as director and Miller as CEO. It was a new company in the guise of the old; and carried on the Vista work.
Meanwhile, KwaZulu CMS had been formed to pursue the provincial monitoring contract. The chief executive of this new company was Mfayela again. Miller was described as a ”consultant”.
It was important to the IFP that the tender was secured. KwaZulu CMS won the tender in December 2003, even though it had scored marginally lower than a competing bid. With the elections that were to remove the IFP from provincial power looming, IFP legal adviser Mario Ambrosini was sent in March 2004 to intervene.
The gambling board had stalled on signing a final contract with KwaZulu CMS, but Ambrosini allegedly told them he had been sent by then-premier Lionel Mtshali to ensure the contract was signed the same day. It was.
The contract was suspended by the new ANC provincial administration after the elections, as national government argued that limited payout machine monitoring is a national competency. KwaZulu CMS is suing the gambling board for R137-million in damages.
There is evidence that R50 000 flowed from DSE to the IFP at the time of the 1999 elections. But there is no proof that the IFP would benefit directly from the KwaZulu CMS contract.
A senior IFP source said the party had considered the tender an ideal means to test the legal boundaries between national and provincial power, and that it was not pursued for party benefit.
Mtshali this week said that ”to the best of my knowledge” the IFP had no financial interest in KwaZulu CMS.
Asked about ”pressure” on the gambling board to finalise the contract, he said: ”During my term of office, I placed pressure on any matter which was overdue and required under the law. It was my duty to do so, as well as my commitment to efficiency. After the awarding of a contract, the finalisation of a [service level contract] is mandatory. It was long overdue and there were threats of litigations.”
He said it was also necessary to have the monitoring contract in place before the limited payout machine bids could be processed, which was urgent.
Miller did not respond to repeated requests for comment.