This is part 3 of a new 5-part series by Lily Gosam (not the author’s real name)
The first two parts have already been published. You can find them here:
PART 1: The truth about the ANC’s descent down the ladder of power
PART 2: Is Zuma to blame for the decline of the ANC?
South Africa’s elite corruption-busting government body, the Anti-Corruption Task Team (ACTT), was set up by Zuma in 2010. Its role was to fast track high priority corruption investigations and prosecutions in the private and public sector for cases involving more than R5 million, by maximising cooperation between relevant agencies, including – amongst others – the Directorate for Priority Crime Investigations (the Hawks), the National Prosecuting Authority (NPA), and the South African Revenue Service (SARS)[1].
On the 14 of September 2016, members of ACTT appeared for the first time before Parliament’s Standing Committee on Public Accounts (Scopa).
The Hawks was represented by its boss, Berning Ntlemeza, who a Judge had found was “biased and dishonest … lacks integrity and honour and made false statements under oath”[2].
The NPA was represented by its deputy national director, Nomgcobo Jiba and special director Lawrence Mrwebi[3], both of whom a Judge declared had, “displayed an ulterior motive…failed the citizens of this country…brought the image of the legal profession and prosecuting authority into disrepute… should be found to have ceased to be fit and proper person to remain on the roll of advocates.”[4].
And SARS was represented by its commissioner, Tom Moyane, whose actions finance minister Pravin Gordhan said raised, “serious concerns about the stewardship of a vital fiscal institution”[5] Gordhan’s quote was in response to a report that Moyane had allegedly failed to act appropriately regarding findings by the Financial Intelligence Centre which flagged “suspicious and unusual”[6] payments of R1.2 million made to Moyane’s second-in-command at SARS. (Moyane is the source of the Hawk’s investigation/harassment of Gordhan for the so-called “rogue” intelligence unit at SARS).
That makes one helluva team Zuma put together to fight corruption.
(Although, remarkably, in a short space of time the following has occurred. Jiba is on special leave, and may face suspension by Zuma while disbarment hangs over her head for going above and beyond the call of duty to serve, guess who, none other than Zuma. Zuma enjoys so many rights as president that there will be nothing left.
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In addition, the police minister Nathi Nhleko circumvented various legislative requirements when appointing Ntlemeza as Hawk’s head, including failing to inform parliament of the appointment in the prescribed time, and thus Ntlemeza’s appointment was procedurally flawed and could serve as grounds for his removal[7].
And, Moyane is coming under increasing pressure in his handling of the serious claims by the FIC of his second-in-command, for which Moyane could potentially face up to 10 years in jail if a court were to find he had contravened the Prevention and Combating of Corruption Activities Act[8] – Marianne Thamm reported in the Daily Maverick that Corruption Watch is planning to charge Moyane for his actions, or lack thereof, in this regard[9]. And adding to Moyane’s woes amaBhungane Centre for Investigative Journalism uncovered that Moyane’s nephew had been awarded a debt collection contract with SARS worth as much as R220 million[10]. Moyane denied knowing his nephew was a shareholder in the company involved[11], while SARS has initiated a process to cancel the contract[12].
Besides the above, other Zuma lackeys, like Hlaudi Motsoeneng of the SABC, are facing the chop along with what remains of the board; Zuma Foundation and South African Airways’ chairperson Duduzile “doo-doo” Myeni, has been side-lined by a strengthened board and reduced to having only a one year contract; and one of Zuma’s main benefactors, the Guptas, are being hemmed in from all sides, by legal and financial organisations and functioning investigative authorities.
Much of the above has happened in a very short space of time, which perhaps explains the haste in which the NPA charged Gordhan, for it may have been a desperate attempt to apply the brakes to the fast derailing Zuma train.)
Taking the figures supplied by the NPA[13], the ACTT[14][15], and the Governance and Administration cluster[16], and having calculated that an estimated R293.5 billion has been misspent by government between 2011 and 2015 (five years) based on the AG’s reports, disciplinary action should be brought against the following number of government officials: (It is assumed the same officials repeated the same offences each year for five years):
Estimate based Associated:
on total misspend Estimate Value
Dismissed: 50 500 officials R139.3 billion
Fined: 13 000 officials R 36.0 billion
Demoted: 4 000 officials R 10.9 billion
Final Warnings: 27 200 officials R75.1 billion
Prosecuted: 11 700 officialsR 32.2 billion
106 400 officialsR293.5 billion
(Although as much care as possible has been taken, the figures of government officials for total misspend is a pencil-sketch estimate, and should not be viewed as fact.) [see Note 1]
Out of the total R293.5 billion misspent, approximately R50.7 billion (17%) should have been recovered (including R398 million from docked pay); meanwhile, the NPA recovered R3 billion on average over the same period. 1 972 officials should have been convicted for high priority offences. In reality, over the same period, on average: 110 government officials were convicted for high priority offences valued at R5 million or more; 688 government officials were convicted of offences valued at less than R5 million. And while 94 745 government officials should have been dismissed, fined, demoted and received final warnings stemming from to the government’s anti-corruption hotline; only 1 324 officials faced disciplinary action. [Note 1] “Have you looked at our annual report? Have you looked at what we have achieved over the last year?” boasted NPA Boss Shaun Abrahams[17].
In case you are under the impression that government officials can only be charged with corruption, theft or fraud for their financial creativity, you would be overlooking what ANC parliamentarian Vincent Smith called “the most important law governing public finances”[18], namely the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA). As Corruption Watch explained, it is a criminal offence for an accounting officer to make improper payments, or allow them to be made, or fail to prevent them from being made, or even for failing to report them. They do not have to financially benefit from the transaction to be convicted. The offence is punishable by up to five years imprisonment[19]. Furthermore, according to the AG, any improper expenditure a political office-bearer or official of a municipality makes – be it as a result of fraud, corruption, theft, or plain old ineptitude – the official is liable for those expenses[20].
So there you have it, legislation exists to protect us, but as Corruption Watch stated, society needs to pressure the requisite institutions to enforce the law[21]. The Hawks, when questioned by parliament on the nature of their cases, said the ACTT tended to focus mainly on fraud and corruption, and less on transgressions of the PFMA (and MFMA), to which Smith responded, “We want to hold managers accountable and the only weapon we have is the PMFA [and MFMA].” [IOL][22]
All told, about 106 400 civil servants out of approximately 2.7 million (or 1 in 25) are denying citizens billions of rands of benefits each year for which they are entitled to for a better life. How many benefits have been lost?
Although R293.5 billion was misspent, this figure is a straight nominal amount, which fails to take into account the change in purchasing power as the years progress (that is, R100 stolen five years ago denied you far more than R100 stolen today). So, in today’s value of money, the government misspent about R503 billion from 2011 to 2015 [Note 2]. Or to put it in terms Zuma cannot pronounce, it is R 502 716 000 000.
You may be wondering what R503 billion means these days. Below are the equivalent benefits that were denied the citizens of SA each year on average for five years, because of greed, incompetence and criminality (monetary values cited are in today’s terms) [Note 3]
- 201 086 university students could have attended varsity, with R100 000 per student per year (to cover tuition, food, residence, and books); plus
- 263 state-of-the-art schools (with science labs, specialist classrooms, a computer room, and a dedicated sports field) could have been built per year at over R76.5 million per school, each with 32 class rooms for about 1160 students, and including student meals, student transport, school furniture, textbooks, stationery, and other learning support material; plus
- 1 million public school pupils could have been educated, at R20 000 per student per year. (In 2015 there were 3.1 million young people aged 15 to 24 who were not working or studying); plus
- 164 000 families could have become new RDP homeowners per year, at cost to government of R122 600 per house; plus
- 2.8 million South Africans (including 1.4 million children) living in acute poverty (that is, those living on less than US$1 a day) could have received double their annual income, with an additional R7 210.
So after five years, the misspent funds could have helped 335 100 university students graduate; 1 million students matriculate; 306 000 school students either obtain their form seven or matric in a state-of-the-art school; 3.3 million South Africans secure a solid RDP roof over the heads; and double the income for 2.8 million of the poorest of the poor for five years. But instead, a total of 7.7 million benefits were lost because of the actions of approximately 4% of civil servants, who want to live the high life, while treating everyone else as low life’s. And as a result, the suffering and inherited injustice of millions of SA citizens is agonisingly prolonged.
Gordhan, speaking at Cape Chamber of Commerce & Industry’s Rumble in the Urban Jungle event said, “We can very easily pay for some of the things that we are pressured for at the moment. Fees for university students who come from poor backgrounds…Just stop some of the corruption that is going on… If you end even a quarter of that‚ we’ll get R30-R40 billion‚ that the poor will benefit from…You must be serious about solving the problem of poverty and unemployment, and the way you do it is stop the bloody nonsense…”[23]
The World Bank Institute found (in 2004) that countries that tackle corruption and improve their rule of law can increase their national incomes by as much as four times in the long term, and child mortality can fall as much as 75%[24].
And yet incomprehensibly there are those who argue that good governance stands in the way of social transformation and black empowerment[25][26]. Clearly this is oxymoronic, with heavy emphasis on moronic. As illustrated above, nothing is more disempowering and dehumanising than bad governance and bad policies.
Thus, the choice is simple – either the NPA must start making arrests (without fear or favour), or SA will continue to suffer arrested development.
The overall conviction rate of the NPA is more than 90%. But this statistic is “almost meaningless”, said researcher Jean Redpath for the Institute for Security Studies [AfricaCheck][27]. This is because the number of convictions is being measured against only those cases the NPA brought to court. One would have to include all cases, namely those which the NPA chose to prosecute and not prosecute. Such decisions are at the discretion of the Zuma-fearing-and-favouring NPA boss, Shaun “the sheep” Abrahams.
To illustrate the conviction distortions, Abrahams charged finance minister Pravin Gordhan – a G-man for good governance, and Zuma’s nemesis – and two others, with theft and fraud relating to a R1.1 million pension pay-out to a senior SARS employee[28][29]. (Cathleen Powell – senior lecture in public law at the University of Cape Town – highlighted in The Conversation that the NPA unit which decided to pursue fraud and theft charges against Gordhan was set up to prosecute international crimes such as war crimes and crimes against humanity, as well as terrorism, treason, sabotage and offences under the Internal Security act[30][31]. Thus the firepower used by the NPA against Gordhan is grossly disproportionate to the alleged offence.)
Gorhan’s case was set down for the 2 of November 2016, but the charges were withdrawn by Abrahams just two days before the trial was set to begin (on the 31 October), after strong social and legal-expert criticism and court challenges against the charges (together with allegations of kidnapping by the Hawks and the bodyguard of SARS commissioner Tom Moyane, while trying to gain access to documents that were damaging to the case against Gordhan[32][33]). Prior to the dropping of charges, law experts had concluded that: the NPA’s actions regarding this case displayed a “reckless disregard of the…law” [Powell in the Conversation][34]; that a conviction was “highly unlikely” [Constitutional law expert Pierre de Vos in the Daily Maverick][35]; and, the charges were “legally flawed and factually unfounded” [retired Constitutional Court justice, Judge Johann Kriegler of Freedom Under Law in PoliticsWeb][36].
In comparison, Abrahams – and the Hawks – as part of the ACTT, has seemingly shown precious little vigour and pageantry when it comes to the auditor general’s recommendation that R9.3 billion of irregular misspending by the Zuma-aligned North West local government be “adequately investigated and action taken”. As the auditor general stated, there has been, “a lack of investigations, disciplinary steps or action taken against those responsible or who continue to transgress.”[37] The chairman of the Passenger Rail Agency of SA (Prasa), Popo Molefe, made the same complaint to Business Day, saying that he and Prasa’s acting CEO had tried and failed to petition the ACTT to investigate billions for rands in improper expenditure at the state-owned entity[38]. Then there is the NPA’s concerted effort to ensure Zuma never faces the music over 783 counts of criminality, including alleged racketeering, money laundering, corruption and fraud[39]. These are just three example of selective investigation and prosecution by law-upholding agencies (and even the possibility of malicious prosecution in regards to Gordhan’s case[40]).
Speaking at the Ahmed Kathrada Foundation Heritage Day banquet in September 2016, Gordhan said there are real counter-revolutionaries in the country who are preventing people, including himself, from improving the lives of South Africans. He said there are people who made it their duty to protect the corrupt and attack enemies of corruption. (Carol Paton pointed out in Business Day, that Gordhan had to circumvent institutional failures within the NPA, the South African Police Service and SARS in order to publically expose “suspicious transactions”[41] by Zuma’s benefactors, the Guptas.) Gordhan went on to say, “Today we even have a propaganda machine that’s unashamedly protecting the corrupt, attacking the enemies of corruption and constantly co-opting, obviously with a lot of money, individuals and state institutions to serve their very narrow purposes.” [EWN[42]]
NOTES
1. Misspending/Government officials calculations:
RECOVERY RATE per Conviction
Convictions: 234 govt officials
Years: 7 (from 2009 to 2016)
Recovery: R4.210b (assumed to be private-public and public-public corruption)
Recovered/yr/conviction: R5 140 415
(More money is collected per conviction than the actual number of convictions, because it includes money that has been frozen by the courts, completed forfeitures, and the recouping of money despite no conviction. Thus the figure of R5.14m does not mean it is recovered from the convicted person, just that R5.14m is recovered by the State per conviction. This is because the figure includes freezing orders, completed forfeitures, and money recovered without a conviction.)
(Figures from ACTT and the NPA are in some cases contradictory, for instances the NPA said they made 206 convictions in 2015/16, with 104 convictions by the SCCU and 118 convictions by the NPS/MTSF, but that adds up to 222 convictions, not 206. Clearer distinctions need to be made by the authorities as to whether figures quoted relate to: “persons” – which could include non-government – or specifically “government officials”; value “recovered” and value “involved”, and whether these values involve “private-private”, “public-private”, or “public-public” corruption-related offences so corruption involving government can be isolated from purely private corruption; “cases” versus “government officials”; and the offence the government official was convicted for e.g. corruption, fraud, theft, or an offence as prescribed by the PMFA and MFMA.)
(A similar figure to the R5.14m is arrived at based on the NPA’s 2015/16 report that from 2014 to 2016, or 2 years, R1.7129b related to government corruption only was recovered with 336 = 130+206 convictions of govt officials.)
VALUE per Conviction
Total ACTT Case Value R10 592 488 388
Total ACTT Cases 189
ACTT Cases Finalised 68
% of Cases Finalised 36% (68/189)
People convicted 128 (convicted for corruption involving R5 million or more)
Years 5.8 (from Oct 2010 to august? 2016)
Case Value per year R635 175 671 (=R10.592b*36%/6)
Convictions per year 21 people (=128/6)
Value/yr/conviction R29 773 860
(See recovered/yr/conviction comment above. One could interpret this to mean that for corruption cases involving R5 million or more, the ACTT on average achieves one successful conviction for every R30m involved, of which R5.14m is recovered.)
TOTAL OFFICIALS who should be DISIPLINED
106 431 officials = R293 553m misspent*17% recovery rate*1488 officials / R141.67m average recovered by hotline in 5 yrs/5 same officials over five years
RECOVER FUNDS via DOCKED PAY
Average Govt Salary pa (6% rate)
2015/16 R140 256.00
2014/15 R132 316.98
2013/14 R124 827.34
2012/13 R117 761.64
2011/12 R111 095.89
2010/11 R104 807.44
Total R731 065.30
Ave per Year R121 844.22
Per Month R10 153.68
Officials fined 13 058
Total Docked pay R397 758 708 (=13 058 officials*R10 153.68 pm salary*3 months)
RECOVERED FUNDS relative to CONVICTIONS
Total Misspent R293 553 000 000
Recovery Rate 17%
Recovery value R50 681 514 194
Convictions 1 972 govt officials (=R50.7b / R5.14m recovered per conviction / 5)
(Assumed the same officials misappropriated funds over the five years.)
REALITY
110 govt officials convicted = 128 ACTT convictions/5.8 years*5 years
688 govt officials convicted = (931 convictions – 128 ACTT convictions)/5.8 years*5 years
1 324 govt officials disciplined =706 dismissed+183 fined+55 demoted+380 final warnings
R3 007 142 857 recovered = R4.21b/7 years*5 years
2. The misspending figures include irregular, fruitless and wasteful, and unauthorised expenditure, as reported by the AG. The future value is based on an inflation rate of 15%pa. This government inflation rate from corruption, fraud, theft and incompetence is based on recent comments by Kenneth Brown, the chief procurement officer of National Treasury, who stated in an interview that of the R600 billion goods and services government purchased, R240 billion or 40% was where overpricing and fraud occurred, amounting to 20-30%. But this is just irregular spending, so one also has to make allowance for fruitless and wasteful expenditure, which on average for 2011 to 2015 equals 5.7% of irregular spend. Putting it all together one gets: ((R600b*40%*30%)+(R600b*40%*30%)*5.7%)/600=12.7%. But this excludes salaries for ghost workers and unqualified personnel, and golden handshakes etc, and bad and/or immoral leadership decisions, so I’ve bumped it up to 15% for good/bad measure. This percentage does not, however, include unauthorised expenditure, because it is difficult to determine if value for money was still obtained or not, so government was given the benefit of the doubt (undeservedly).
MISSPEND National & Provincial Local Total FV (2016/17)
2014/15: R28 259 million R31 421m R59 680m R78 927m
2013/14: R66 540m R23 562m R90 102m R137 034m
2012/13: R30 800m R21 590m R52 390m R91 6300m
2011/12: R33 149m R20 696m R53 845m R108 302m
2010/11: R25 815mR11 721mR37 536mR86 823m
TOTAL R184 563m R108 990m R293 553m R502 716m
3. These figures are based on the 2011 findings of the Open Society Foundation of South Africa, together with a 2013 report by the IRR – both of which have been re-valued to the present-day, as well as media and government reports. Misspent government funds were calculated based on auditor general reports.
NOTES:
[1] http://www.tomorrowsleaders.co.za/files/Presentations/Breakaways/Claudia_O_Brien_TLC2013.pdf
[3] https://pmg.org.za/committee-meeting/23269/
[6] http://www.financialmail.co.za/coverstory/2016/09/22/the-man-breaking-sars
[8] http://mg.co.za/article/2016-09-12-sars-mystery-payments-tom-moyane-could-face-jail-time
[11] http://www.rdm.co.za/politics/2016/10/15/moyane-didn-t-know-nephew-got-lucrative-sars-contract
[12] http://www.rdm.co.za/politics/2016/10/15/moyane-didn-t-know-nephew-got-lucrative-sars-contract
[13] http://businesstech.co.za/news/government/124335/the-truth-about-the-ancs-jobs-and-corruption-claims/ AND https://www.npa.gov.za/sites/default/files/annual-reports/NPA%20Annual%20Report%201516.pdf AND https://www.npa.gov.za/sites/default/files/annual-reports/Annual%20Report%202014%20-%202015.pdf
[15] https://pmg.org.za/committee-meeting/23269/
[16] http://ewn.co.za/2016/09/22/Over-3500-govt-officials-found-guilty-of-corruption-related-misconduct
[18] http://www.iol.co.za/news/politics/scopa-blasts-anti-corruption-task-team-2068219?ref=yfp
[19] http://www.corruptionwatch.org.za/how-sa-law-deals-with-wasteful-expenditure/]
[21] http://www.corruptionwatch.org.za/how-sa-law-deals-with-wasteful-expenditure/
[22] http://www.iol.co.za/news/politics/scopa-blasts-anti-corruption-task-team-2068219?ref=yfp
[24] http://oldwww.wbcsd.org/web/publications/doingbusiness/key-facts/FACTS_Voice&Accountability.doc.
[25] http://mg.co.za/article/2016-10-14-00-the-plot-against-gordhan-has-backfired
[26] http://ewn.co.za/2016/09/26/ANCYL-Pravin-Gordhan-shouldnt-in-the-trap-that-hes-Jesus-Christ
[27] https://africacheck.org/reports/conviction-rates-an-unreliable-benchmark-of-npa-success/
[30] https://theconversation.com/charges-against-finance-minister-show-misuse-of-south-african-law-67177
[32] http://mg.co.za/article/2016-10-28-00-violent-showdown-in-sars-office-exposes-plot-against-gordhan
[34] https://theconversation.com/charges-against-finance-minister-show-misuse-of-south-african-law-67177
[36] http://www.politicsweb.co.za/documents/gordhan-charges-legally-flawed-and-factually-unfou
[37] https://www.agsa.co.za/Portals/0/MFMA%202014-15/Section%201-9%20MFMA%202014-2015/fullReportMFMA2014-15.pdf pg 103
[39] http://www.iol.co.za/capetimes/ruling-puts-jz-on-the-spot-2079209
[42] http://ewn.co.za/2016/09/26/ANCYL-Pravin-Gordhan-shouldnt-in-the-trap-that-hes-Jesus-Christ
http://www.rdm.co.za/politics/2016/11/02/zuma-s-last-five-years—106-400-bent-officials-and-r293.5bn-unaccounted-for
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