/ 24 July 2014

Top ANC man fleeced Gauteng

Top Anc Man Fleeced Gauteng

If the allegations are ultimately proven, the implications are staggering: a provincial health department purposely re-engineered to act as an ATM for the corrupt – with at least a taste of the money flowing to the ANC to help to fund a winning election campaign.

The numbers are dumbfounding: multiple deals worth billions of rands, possibly several hundred million rand stolen, millions in cash bribes, years of lies, fraud and theft, a bewildering web of front companies. The evidence is prodigious: thousands of pages of documents and ­affidavits, with the promise of more to come as investigations continue.

Yet the details of what transpired at the Gauteng department of health between 2006 and 2009, details that imply the ANC was a beneficiary of dirty money and that a man currently serving as the ANC chief whip for Gauteng received and acted as a conduit for bribes, slipped into the public domain nearly unnoticed this week.

On Monday, the National Prose­cuting Authority (NPA) lodged with the high court in Johannesburg a series of connected, but apparently inconsequential applications, asking for orders that would freeze the assets of a smattering of almost entirely unknown companies and a partly built house in Johannesburg. These assets, the NPA told the court, were considered the proceeds of crime, and the state would seek to declare them forfeit as such.

In support of the applications, the NPA submitted statements from the leaders of teams at the anticorruption squad of the police’s Hawks and the Special Investigating Unit (SIU) that have spent four years picking away at dubious-seeming transactions to find what they say is the pure criminal intent beneath.

Page of evidence
In support of their statements, both the Hawks and the SIU submitted thousands of pages of evidence spanning contracts, emails, interviews and the written testimony of more than 60 witnesses, several under Section 204 of the Criminal Procedure Act, which will grant them immunity from prosecution for their involvement in criminal deeds should they be found to have been truthful.

Just the index of the evidence runs to 11 pages.

Much of what is recorded in the evidence is relatively humdrum corruption: details of foreign holidays, cash sums and other gifts lavished on officials, as well as an array of schemes that appear calculated to separate the province of Gauteng from its money with nothing in return. But there are also eye-popping allegations with political ramifications well beyond the province scattered throughout the documents, including that:

  • R300 000 was diverted from Gauteng health funds to the ANC’s 2009 election campaign in the province;
  • A key figure implied that money was being siphoned off to fund the political ambitions of specific figures within the ANC, with an eye on the presidency;
  • Suppliers to the Gauteng department of health, with contracts worth billions of rands cumulatively, knew that they were expected to pass 1% of the value of every contract back in bribes;
  • That the Gauteng government paid to conduct a 15-year review of health services in the province with the sole purpose of measuring the performance of the ANC against its manifesto promises; and
  • That the virtual collapse of the Gauteng department of health over a period of half a decade, leading to key suppliers threatening to withhold life-saving equipment and services because they had not been paid, was linked to deals seemingly designed to create opportunities for corruption.

The quiet release of the documents, after so many years of investigations, caught many of those involved and implicated entirely off-guard. Businesspeople alleged to have benefited from graft said they had not seen the papers, officials peripherally involved said they had not been aware the matter was nearing conclusion, and the two major players in the tale, Gauteng’s ANC chief whip Brian Hlongwa and former corporate high-flyer Richard Payne, could not be reached.

Stripped of details and intricacies, prosecutors say Hlongwa, then the MEC for health in Gauteng, and Payne, his friend, fleeced the province over a number of years, through a number of mechanisms, by way of a “generally corrupt relationship”.

Payne, prosecutors allege, paid Hlongwa as much as R3.5-million in cash, another R1.6-million to buy a house, and lavished holidays, meals and various other benefits on him. In return, they say, Hlongwa abused his position, violated his legal duties, and exercised his powers in an “illegal, dishonest, unauthorised, incomplete and biased” fashion.

Procedural failures
Although various other officials were also involved, and procedural failures by many of them are documented, prosecutors focused much of their attention on Hlongwa, saying he appears to have influenced or misled others to flout rules.

Likewise, although many other companies and individuals were involved beyond Payne and his company 3P – a major contractor to the Gauteng health department – prosecutors believe he was the major beneficiary of profits made through corruption.

Between 2006 and 2009, 3P, a project management consultancy, held contracts, ultimately worth hundreds of millions of rands in themselves, that put it in charge of a large chunk of the Gauteng health department’s budget.

The company seconded an employee to act as the chief financial officer for the department, investigators say, and took a commission of 5% of all the public money it spent, including the salary of the acting chief financial officer. It directed contracts to family and friends, overbilled, bought non-medical equipment that was not needed and services that were never delivered.

The NPA on Thursday said criminal charges against involved individuals are in the pipeline, but did not provide details. It confirmed that charges will be pressed against Hlongwa, and said it would seek the extradition of Payne if he is, in fact, no longer in the country.