Thirty allegedly crooked leases are central to the latest fraud, corruption and money-laundering charges brought against top Northern Cape ANC politician John Block this week.
This emerges from an affidavit by a senior treasury forensic auditor, Ryno de Water, who will be a key prosecution witness in the trial.
The case throws the Northern Cape's ANC leadership and government into disarray. Block, the ANC provincial chairperson and finance MEC, was joined in the dock by the social development MEC and deputy ANC provincial secretary, Alvin Botes, as well as ANC MP and provincial treasurer Yolanda Botha.
They allegedly received payments and benefits from property company Trifecta Holdings in exchange for their influence in securing hugely profitable leases for the company.
The sensational court appearance comes nearly two years after the Mail & Guardian first exposed Trifecta's "kickback circle". Also facing the charges are Trifecta Holdings director Christo Scholtz and three senior Northern Cape social development department officials, Rodney Saal, Kelvin Rayland and Palesa Lebona.
They were released on bail of up to R50 000 each on Wednesday in the Kimberley Magistrate's Court.
Last week, Block delivered a keynote address to a provincial government anti-fraud seminar in Kimberley. He already faces charges in connection with "commissions" he allegedly received from Gaston Savoi's Intaka Holdings for ensuring the company was awarded hugely inflated tenders by the Northern Cape health department.
The M&G has seen a sworn affidavit by De Water, the treasury's deputy director of forensic audit services, to the Hawks setting out the case against some of the Trifecta accused.
In the affidavit De Water states that with the connivance of government officials, the Trifecta group concluded 30 lease agreements with Northern Cape government entities that broke every procurement rule.
He points out that:
- The leases were all awarded to the same group of companies, which he describes as "suspicious and indicative of an absence of competitive bidding";
- None of the leases was advertised in the government tender bulletin and although several procurement deviations took place, none was reported to the treasury; and
- Of the 30 lease agreements signed, 15 were more expensive than their market value in the towns and areas in which they are located. A total of 19 were signed for properties that were smaller than the floor sizes the government was paying for.
De Water's affidavit says that, armed with already favourable lease agreements signed with the provincial government, Trifecta took out bank loans to fund the purchase and renovation of further properties. The company repaid the loans to the bank within the 10-year lease period and then enjoyed unadulterated profit from the padded rental fees for the remainder of the leases.
De Water points out that if the departments had bought the properties they could have saved millions. Instead, the money flowed to the bank, but mostly to Trifecta.
Contracts for shares
While head of the social development department, Botha signed seven suspect leases between December 2006 and August 2008 with a total value of R98.4-million.
All the leases were concluded after Botha accepted an offer, in 2005, from Trifecta director and "close friend" Sarel Breda to nominate someone who would receive a 10% shareholding in Breda's 55% portion of the company.
Botha – who is childless – nominated a family trust whose beneficiaries are her five nieces and nephews. Botha also allegedly received a R15000 payment from Trifecta.
In exchange, she allegedly ignored statutory procurement processes to ensure that her department awarded Trifecta lease deals for buildings in Kimberley, Upington, Springbok, Kuruman and Douglas.
In three cases cited by De Water, Botha overruled her tender committee's recommendations that five-year leases be given to Trifecta, doubling them to 10 years.
A Trifecta insider told the M&G that the company was more likely to get bonds from the bank for 10-year lease deals.
De Water said there was "a reasonable suspicion that the shareholding was given to Ms Botha to ensure that the Trifecta companies would be awarded the leases on terms beneficial to them and to circumvent the competitive bidding process".
Trifecta also allegedly paid Block and Botes to influence the awarding of lease agreements to Trifecta.
Magdalena Buizer, Trifecta's accountant from 2004 until 2010, told the M&G last year: "Scholtz always said that we would use politicians higher up in the ranks for their influence to get lease agreements signed." She said Trifecta hired Block and Botes between 2006 and 2009 as a "facilitator" in transacting lease agreements with the appropriate government department.
"A facilitator was used to negotiate the rental agreement between the lessor [Trifecta] and the lessee [the government] … Basically they would use their influence to ensure that the tenders were awarded to Trifecta."
Scholtz has accused Buizer of fabricating gossip, saying "Buizer's perception that a person can facilitate rental agreements with government organs is a false perception. But the charge sheet presented in court this week shows that the Hawks believe Buizer was right.
Block is accused of instructing a departmental official, who has apparently turned state witness, to ensure Trifecta was awarded leases. He is also accused of receiving a total of more than R1.3-million from the company.
The M&G has seen documents showing that Trifecta paid Botes a R25000 monthly salary, totalling R900000 between 2006 and 2009.
In addition, Botes's family trust was allocated a 10% stake in Trifecta subsidiary Green Marble Investments 3 in October 2008.
In exchange, he allegedly used his influence to ensure that Trifecta was awarded a lease. His involvement is said to have cost the department nearly R9-million.
Block has steadfastly declined to comment, but Botes claimed that Breda hired him to "provide mentorship with regard to his personal life [and] building a cohesive and healthy family nucleus" and said Green Marble did not do business in the Northern Cape. He has denied any wrongdoing.
Breda, their benefactor, died mysteriously in an aeroplane crash near Kimberley in March 2009.
Scholtz, who owned 45% of Trifecta, has distanced himself from Breda's dealings with Botha and others. But De Water's affidavit points out that Scholtz signed one of the seven agreements between Trifecta and Botha's department. Breda signed the other six.
Nevertheless benefits continued to flow to Botha from Trifecta after Breda's death.
In April 2009, two months after Breda died and during national elections, Botha stepped down as department head and was deployed to Parliament, where she later became chairperson of the social development committee.
In November 2009, her family trust was allocated a 70% stake in another Trifecta subsidiary, Albasync. Ownership of a R4-million building in Kimberley was later transferred to Albasync and then leased to the provincial water affairs department.
In December 2009, Trifecta began renovating Botha's Kimberley home to the tune of R1.5-million.
In February 2011, the M&G revealed Trifecta's alleged largesse to Botha, which she had not declared to Parliament.
Trifecta and Botha claimed it was a loan, but the loan agreement Botha later presented to the parliamentary ethics committee was dismissed and Botha was flayed for wilfully misleading the committee.
Parliamentary censure followed, but by then the Hawks had started investigating.
Botha's assets were frozen by the National Prosecuting Authority last month as the suspected proceeds of corrupt activities.
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.