/ 23 September 2016

​Hawks’ probe into Prasa on a slow track

The passenger rail agency is set to act against officials implicated in former public protector Thuli Madonsela’s 2015 report on corruption and maladministration

Although the Hawks have doggedly hounded Finance Minister Pravin Gordhan, they’ve only dedicated a lone investigator to handle a complex multibillion-rand fraud and corruption scandal unearthed at the Passenger Rail Agency of South Africa (Prasa).

In stark contrast to the Hawks’ inadequate investigation, a formidable civil investigation team has been set up by Prasa’s lawyers, Werksmans Attorneys, and the treasury. The Prasa team consists of about three dozen lawyers and advocates, 11 information technology experts, nearly 30 forensic auditors and specialised investigators, plus several engineers.

Yet the Hawks are able to commit generous resources to dog Finance Minister Pravin Gordhan in the highly politicised battle raging at the South African Revenue Service (Sars) about a unit accused of conducting rogue investigations.

Curiously, explosive allegations of fraud and corruption made against Sars’s second-in-command, Jonas Makwakwa, seemingly slipped by the Hawks.

Prasa’s civil investigation has so far scrutinised 1.2-billion documents relating to 142 dodgy tenders with a contract value of about R24-billion.

Civil litigation to nullify two multibillion-rand contracts and recoup money spent, including on the acquisition of locomotives that were too tall for the local rail network, has been initiated.

On top of this, the treasury is investigating another 240 matters at Prasa and has appointed about 20 law firms, including forensic attorneys, to assist its chief procurement office in its investigation. Yet even the law firms are struggling to make progress. This is largely because some Prasa officials refuse to co-operate.

Although the civil investigation might be successful, it’s highly unlikely that any tenderpreneur or fraudster will have their day in court if the evidence unearthed is not converted into solid criminal cases.

The Hawks’s investigating officer has been tasked with what has been described as an impossible undertaking: to review all the relevant material unearthed by Werksmans and the treasury, to gather witness statements and to liaise with foreign governments and policing agencies — all this in the face of extreme political pressure.

The investigator, a career policeman with the rank of colonel and a background in cybercrime, who is described by his peers as “diligent and committed”, has been “doing his utmost to further the [Prasa criminal] case”. His name is known to the Mail & Guardian but has been withheld for his own safety.

In addition, the Prasa case load is just one of several investigations assigned to the Hawks investigator — “almost as if by design”, says a former police officer and Unisa lecturer in policing, Rudolph Zinn.

“It sounds as if someone is just keeping this dossier open and letting time pass by. It will take years to work through all the data.”

The extensive Prasa criminal investigation followed findings by the auditor general and the public protector. The latter recommended an investigation by the treasury and Prasa into all contracts awarded since 2012 exceeding R10-million.

Zinn says a successful criminal investigation by a single investigator into the Prasa criminal case is “actually impossible. A team working on a case like this also needs to be guided by an experienced prosecutor to finalise it as quickly and efficiently as possible. More so because the Prasa investigation is high-profile and politically very sensitive,” he says.

National Prosecuting Authority spokesperson Luvuyo Mfaku said the relevant prosecutors received only one docket about the matter from the Hawks about a year ago. But it was sent back to the Hawks “with requests for further investigation”.

Zinn says the onus is on the Hawks to conduct a “fair investigation”, and one that drags on for an unreasonable amount of time “might never reach the courts”.

Criminal complaints emerging from the civil investigation are contained in three dockets opened in July and September last year. They include allegations of corruption, fraud and tender rigging linked to several entities and people related or close to former Prasa chief executive Lucky Montana.

In the public protector’s report, titled Derailed, these entities and people are accused of being at the centre of major impropriety at the rail parastatal. They include Prasa’s chief procurement officers, Chris Mbhata and Josephat Phungula, the M&G has learned.

The dockets also include allegations that “Dr” Daniel Mtimkulu falsified his qualifications to be appointed to the top engineering job at Prasa.

Sources close to the criminal investigation are adamant that the dockets compiled so far do not contain any statements of material importance, and sources in the Hawks claim the investigation is progressing slowly.

Hawks spokesperson Hangwani Mulaudzi declined to comment, saying that the directorate “does not discuss or comment [on] matters that are under investigation”.

The M&G could not confirm that any of those considered to be persons of interest have submitted statements. Several, including Phungula, Prasa’s chief procurement officer from 2013 to 2015, said the Hawks have not contacted them. Others have seemingly refused to co-operate with the investigation.

Montana did not respond to phone calls or messages, but in a tweet last month said he had not been “summoned” by the Hawks and that there was “not even a case against” him.

Businessperson Nandisa Gschwari, who is closely linked to Mtimkulu, said the Hawks questioned her in August last year about her connections to former Prasa executives. “I haven’t heard from them since, except for SMSs last month, which I ignored,” she said.

Auswell Mashaba, the former director of Swifambo Rail Leasing, speaking through his attorney Ulrich Roux, said the Hawks had not contacted him.

Mashaba is key to an allegation that the ANC may have benefited from dodgy Prasa contracts through a third party, which has been strongly denied by the ANC.

Prasa chair Popo Molefe last month officially expressed his concern about the political pressure being brought to bear on the investigation and about poor progress in the Hawks’s investigation. In a letter sent to Transport Minister Dipuo Peters, Molefe said: “I am not aware of any instance where they [Hawks] have begun taking statements or any other investigative action of significance.”

He asked Peters to intervene on their behalf because it is of “national importance”.

The issue became so heated towards the end of last year that Molefe and two other board members thought it necessary to employ bodyguards.

Meanwhile, Makwakwa was suspended last week after a banking regulator revealed that payments of about R1.2-million, which could not be accounted for, had found their way into his bank account.

A criminal complaint was apparently laid with the Hawks in May.

Mulaudzi said he was “not at liberty to comment or discuss ongoing investigations. This does not suggest that we are investigating.”

ANC MP Enoch Godongwana said the investigation of Gordhan was “concocted” and opposition parties have dismissed it as a witch-hunt.

And in the middle of this political powder keg is a lone Hawks investigator trying to do his job.

How the investigator ended up with three dockets
The findings of civil investigations can only be used in civil court matters, which includes review applications and efforts to overturn awarded tenders and to recoup money spent. 

A civil procedure culminates in a criminal procedure only once a complaint is laid with the police. However, civil and criminal investigations can run in tandem, meaning that one is permitted to sue someone in a civil procedure as well as lay a criminal charge against them.

Several complaints in the Prasa matter were laid with the Hawks and are included in three dockets being investigated. On top of the complaints contained in the three dockets, an additional 120 complaints which fall under the ambit of Section 34(2) of The Prevention and Combating of Corrupt Activities (Precca) Act must be investigated by the Hawks. The Precca Act places an obligation on any person in a position of authority to report any wrongdoing, even if only a suspicion of wrongdoing exists.

The 120 matters relate to instances of wrongdoing identified by both the Auditor-General and the Public Protector in their respective reports on the Prasa scandal.