IEC row: Lease deal flouted regulations
Abland, the company that the Independent Electoral Commission (IEC) awarded a contract for leasing office space, did not submit a tax clearance certificate as part of its bidding documents as required.
This is revealed in a report from the treasury after its analysis of public protector Thuli Madonsela's findings on allegations of irregularities into tender processes by the IEC.
The treasury wants answers from the IEC on why treasury regulations were ignored during the process to acquire space at the Riverside Office Park in Centurion.
After reviewing Madonsela's report, the treasury recommended that, among other things, the IEC should:
- Submit Abland's tax clearance certificate to the treasury;
- Explain why the non-submission of a tax clearance certificate was not considered to be a serious matter during the evaluation and adjudication of the tender, and whether this non-submission was disclosed to the commission;
- Explain why the rate per square metre in the bid and other documents was recorded as R102, but had increased to R115.35 in the lease agreement; and
- Explain the commission rate charged by Riverside Park Office Trust, which is not recorded in the lease agreement.
The Mail & Guardian has seen a copy of the report on the review of documents, as well as analysis of the public protector's report on the IEC lease of office space for its headquarters.
The IEC said it was still consulting about its next course of action.
"The commission, as part of implementing the directives of the public protector, is consulting a legal firm on appropriate steps to be taken on all matters that the public protector indicated the commission should consider taking action on," said IEC spokesperson Kate Bapela.
In an executive committee meeting in June 2009, when only two recommended suppliers were left to choose from, the treasury found that Abland had not submitted its tax clearance certificate.
This certificate is essential to confirm that the company's tax affairs are in order with the South African Revenue Service.
At a meeting of the IEC's commission on July 6 2009, the treasury review found that IEC chairperson Pansy Tlakula reported that the process for renting new office space was "redone" because the previous one did not adequately follow required procedures.
"At this stage, Abland has not yet submitted its tax clearance certificate," said the treasury report.
The next day, however, at the meeting of the procurement committee, it was reported that the commission had approved the appointment of Abland a day before. Abland's tax clearance certificate was still outstanding.
The treasury wanted to know when Abland submitted its tax clearance certificate, but eventually found no evidence that it was submitted at all.
Like the public protector's report, the treasury review takes issue with incomplete minutes of meetings provided by IEC officials.
But several members of the party liaison committee that deals with the IEC told the M&G that the evidence was not withheld, it simply did not exist to the level of detail that the public protector required.
"They must keep minutes of all decisions, not of all discussions," said one party liaison committee member.
"I personally went through the senior officials: they gave her [Madonsela] the minutes as they exist. If she doesn't like that, it does not mean they withheld evidence."
In August, Madonsela found that the process followed by Tlakula in securing a R320-million lease for the commission's head office was "irregular and violated procurement rules".
Madonsela also found that Tlakula did not declare a conflict of interest – she is a business partner of ANC MP Thaba Mufamadi, whose company, Manaka Property Investments, owns a 20% stake in Riverside Office Park.
Madonsela recommended that the IEC's chief procurement officer consider commissioning a forensic investigation into the lease agreement.
She also said the IEC should –in consultation with the treasury – consider reviewing the entire lease agreement and implement remedial action..