SIU uncovers massive state corruption, says Hofmeyr

The Special Investigating Unit (SIU) has been inundated with new cases revealing staggering corruption in the police, the public broadcaster, the land-reform and housing subsidy systems, state departments and municipalities, MPs heard on Wednesday.

SIU head Willie Hofmeyr told Parliament’s portfolio committee on justice: “We have received a flood of new cases. Some of them are very big.”

He outlined 16 new proclamations received by the anti-graft unit in the past financial year, the most ever in its 15-year history, before commenting wryly that “few professionals in South Africa are honest”.

The SIU was investigating the entire procurement chain in the public works department and had so far found that R35-million was paid to entities in which officials had undeclared business interests.

The probe also found that an official had signed a lease for a residential property in Pretoria for R217 000 a month without the relevant approval, Hofmeyr said, stressing that it was “a single house, a big and expensive house, but just one house”.

The contract value to date exceeded R7-million.

Deeply flawed
SIU investigators have also found that the police’s procurement process for the building or renovating of 33 police stations to the tune of R330-million was deeply flawed.

Hofmeyr said at several stations the work was not put out to tender but contracts were instead awarded on what he facetiously called a “three-quote” system.

“You have one quote for the desks and another quote for half the bricks, and another quote for the other half of the bricks. It is not, I think, a very desirable system.”

The probe was focusing on Pienaar, Hazyview, Brighton Beach and eSikhawini police stations and had also found black economic empowerment fronting and instances where South African Police Service (SAPS) officials had interests in the contracted companies.

The longest-running project on the SIU’s plate, its investigation into public housing corruption, has shown that at least half of all projects undertaken by the department of human settlements were “problematic in some way”.

Investigators were probing contracts worth R2-billion. Contractors were being paid for houses that did not exist at all, were extensively incomplete, seriously defective or fewer than the number agreed upon.

‘Serious criminality’
Hofmeyr said the SIU’s probe into the cash-strapped South African Broadcasting Corporation had uncovered “serious criminality”, with R2,4-billion paid out to businesses in which 20 company employees held interests between 2007 and 2010.

The unit opened eight criminal cases against staff members, of which five had been finalised and handed to the National Prosecuting Authority.

Hofmeyr said the unit not only uncovered extensive corruption in the Tshwane and Ekurhuleni metros, but had been asked by the national government to investigate all 23 municipalities in North West province.

In Tshwane, it found that 65 officials had interests in companies doing business with the metro that had received payments totalling R185-million between 2007 and 2010.

Officials colluded with service providers, paid them for work that was not done and tampered with tender specifications.

At Ekurhuleni, “a number of people are in the process of being dismissed” for wrongdoing that included a director signing off on invoices to the value of R12,4-million for services that were not delivered.

Hofmeyr said it was heartening that government departments were increasingly calling on the SIU to probe endemic abuse and noted that the department of land reform and rural development had asked it to scrutinise the entire land-reform process.

He was expecting it to ask that the unit do the same on the land-restitution system.

Land-reform investigation
The land-reform investigation saw the SIU conduct its biggest ever data swoop, with investigators effectively seizing more than 50-million documents to track fraudulent or irregular awarding of grants and funds.

With the help of the Hawks and the Asset Forfeiture Unit, the SIU has seized farms and assets in KwaZulu-Natal worth R50-million and brought fraud and corruption charges against a businessman and three officials from the department.

In another new probe, the department of arts and culture was found to have incurred unauthorised expenditure of R42-million related to the 2010 Soccer World Cup

Hofmeyr treaded carefully on questions relating to the Public Protector’s report on the R500-million contract for the police’s new headquarters in Pretoria, in which she found that the deal was fatally flawed and fingered police National Commissioner Bheki Cele as the organisation’s chief accounting officer.

But he conceded that on occasion the SIU had been “crippled” by the lack of cooperation from accounting officers, and like the Protector, suggested that Treasury should step in.

“The Public Protector’s solution was that Treasury should look at it and take the necessary steps, which may mean persuading the accounting officer to do it ... they carry a lot of persuasive value.”—Sapa

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