A forensic audit report said to have found evidence of corruption at the top of the embattled South African Municipal Workers’ Union is being suppressed by Samwu’s leaders, union insiders say.
The Cosatu-aligned union, with about 150 000 members, is the country’s biggest municipal union. But Samwu has been weakened by factionalisation and persistent allegations of financial mismanagement by its leaders. It has also been plagued by purges of officials who have allegedly come up against its president, Pule Molalenyane, an issue that Cosatu general secretary Bheki Ntshalintshali has raised concern over.
Union sources have accused Molalenyane of withholding the findings of an E&Y report commissioned in 2016 to investigate how millions of rands in membership fees went missing.
But Molalenyane says this claim is merely an effort to deflect attention away from a corrupt faction in Samwu.
The report was commissioned by the union after an internal battle over R178-million that was allegedly stolen from union coffers under its previous leadership. The report is expected to be tabled before the union’s central executive committee in January 2019, though Samwu general secretary Simon Mathe had previously said it would be made public in May this year.
A well-placed union official familiar with the investigation said she met the auditors before the finalisation of the report and was concerned because the findings implicated key union leaders in the theft of the money.
The official, who asked not to be named for fear of reprisals, said she tried to alert Molalenyane to this, but was brushed off.
According to her notes from a 2016 meeting with the auditors, two people had already been implicated in the findings of the investigation — Samwu deputy general secretary Moses Miya and Samuel Phaswane. Phaswane was arrested in March 2015 and was the first person to be arrested in connection with the stolen money. Miya was later arrested and charged with fraud and theft. But he was only suspended this year, shortly after Molalenyane received the report in September. At the time, Molalenyane described the arrests in 2015 as a “political plot”. The case against Miya was dismissed in 2017.
The official said she believed Miya had been suspended now because he and Molalenyane had fallen out. Molalenyane denied this and Miya could not be reached for comment.
“We believe we should have access to the report,” North West provincial secretary Thebeitsile Mokoto said. He made it clear that he was opposed to Molanyane’s faction.
“It is in the interest of the members of Samwu to make sure that this report is in the open so that anyone implicated in it is named and shamed. Those individuals must face the might of the law,” Mokoto said.
It was the responsibility of the union’s leaders to make sure that any union member could access the report, he said.
He believed Molalenyane did not want the report released because it implicates more people than just Miya.
But Molalenyane said, if any Samwu officials had been implicated, they would have been suspended, as Miya was.
“The people who are actually in the wrong are trying to divert attention from themselves,” Molalenyane said about the allegations levelled against him.
He has been accused of financial mismanagement several times in the past year, partly because a leaked 2017 financial audit revealed that Samwu had that year taken out an R11.8-million loan from the now defunct VBS Mutual Bank, allegedly using its Johannesburg headquarters as collateral.
But the audit could not establish whether the union’s central executive committee had approved the loan, as required by Samwu’s constitution. More than R9-million of the loan was used to buy printers from an information technology company, Samserv.
Both the unnamed official and Mokoto said no new printers could be found in any Samwu offices.
Molalenyane has dismissed claims that there was anything irregular about these transactions, adding that Samwu was never implicated in advocate Terry Motau’s report on VBS, which named 53 people of interest in the alleged looting of the bank.
According to Molalenyane, the auditors could not prove the loan was compliant because they did not have the relevant documents. The documents would have shown that there was nothing irregular about the loan, he said, adding that the allegations that there being no new printers at Samwu offices were “pure lies”.
The financial audit report also revealed that Samwu was operating at a loss of almost R6-million by the end of 2017, but Molalenyane said the union’s financial standing was improving.
Cosatu also seems hopeful that the union is stabilising. The federation’s spokesperson, Sizwe Pamla, said Samwu’s financial position had improved significantly and it had recently been paying its subscription fees to the federation, although it was still not in good standing.
Ntshalintshali said Cosatu has not yet seen the E&Y report.