North-West: The pathology of a corrupt province

The National Prosecuting Authority (NPA) has begun compiling a series of provincial corruption snap-shots to demonstrate the work that is being done to hold criminals to account. In the first, we look at progress being made in cracking down on corruption in North-West Province.

By Dr Rachel Makhari-Sekhaolelo,

Acting Director of Public Prosecutions, North West Division

North-West is one of the provinces hardest-hit by public sector corruption. This led to President Cyril Ramaphosa in May 2018 invoking section 100 of the Constitution and establishing an inter-ministerial task team to intervene in the governance processes of the province. Section 100 provides that “when a province cannot or does not fulfil an executive obligation in terms of the Constitution or legislation, the national executive may intervene by taking any appropriate steps to ensure fulfilment of that obligation”.

The NPA’s North West division was previously understaffed with the specialist skills necessary until additional capacity for the Specialised Commercial Crimes Unit (SCCU) and the Asset Forfeiture Unit (AFU) was appointed permanently from March 2020, to deal effectively with these cases.

The province is now the focus of more than 50 criminal cases involving the theft of public money. There are 17 cases currently enrolled in court, involving 19 people – including a former head of department, three former municipal managers and a mayor. The cases relate to public funds amounting to R53.5-million, and most of the charges relate to fraud and corruption.

Thirteen of the cases have already been finalised by the National Prosecuting Authority (NPA) resulting in five convictions on charges relating to over R2-billion. There have been two acquittals and eight cases have been withdrawn.

Two cases are currently being assessed for prosecution, and 19 are with the Directorate for Priority Crime Investigation (DPCI) for further investigations.

Even a cursory examination of the cases currently before the courts shows a breathtaking scale of corruption that has taken place in almost every part of the province – in Ventersdorp, Wolmaranstad (two), Orkney (two), Rustenburg, Makapanstad, Zeerust, Mmabatho, Setlagole, Potchefstroom, Christiana and Taung.

The 19 cases currently under investigation, in particular, show startling levels of corruption around the provision of basic public services such as houses, health care centres and roads in a province that has shown a desperate need for basic infrastructure.

These include allegations that:

• The former HOD of Public Works who colluded with four district directors and the CFO of the Department of Public Works to award a tender to construct roads without following tender procedures in Bojanala, Dr Ruth Segomotsi Mompati, Ngaka Modiri Molema, and Kenneth Kaunda districts.  The majority of the road construction projects were not completed and investigations are ongoing in the limited projects where the construction of roads was undertaken.
• In Brits, the provincial department of health unlawfully appointed service providers for the upgrading of the local hospital. The upgrading of the hospital was partially completed by the appointed service providers and a new contractor had to be appointed to do remedial work.
• In Rustenburg, CMS Water Engineering was appointed fraudulently without following procurement processes and procedures. The tender was for the upgrading and extension of Bospoort Water Treatment Works in Rustenburg. The company also allegedly falsely invoiced the municipality for the delivery of goods to be used in the said upgrading and extension. The upgrading and extension of the water works has not yet commenced.
• In Mahikeng, the Former MEC of Public Works is under investigation for alleged misrepresentation for signing housing documents pretending to be the MEC of Local Government and Human Settlements. The documents were used to unlawfully register non-deserving beneficiaries of government houses.
• In Mmabatho, the provincial health department colluded with Raliform Investment and Mr Property to inflate the prices of medical equipment at Vryburg and Brits Hospital. In some cases, payment was allegedly made without services rendered and some equipment was not delivered.
• Also in Mmabatho, Public Works Road and Transport officials colluded with service providers around the irregular appointment of 150 scholar transport service providers. Alleged false or inflated claims for the transport of scholars form part of the investigation. A second case, involving a different scholar patrol contract, is also under investigation.
• In Mogwase, there was collusion with unnamed mining companies by the traditional leader and/or council of the Bakgatla-Ba-Kgafela tribe, which led to the misappropriation of tribal funds.
• A company named Ayama Consulting was irregularly appointed by the Department of Public Works to build roads across the province in a tender valued at R103-million. Furthermore, the question currently under investigation is the extent to which the service provider has done work on the project.
• Big Time Strategies was appointed and paid to provide IT services to Mogwase municipality – but were paid for services not rendered. It has been established that the company was appointed unlawfully without going through proper processes.

The NPA has taken note of some criticism that the SAPS and NPA have been lax in investigating and prosecuting contraventions of the Municipal Finance Management Act (MFMA).  It is important to highlight that some of the cases currently being pursued – including a fraud case in Orkney, which has been remanded for pre-trial conference, and a matter against the former municipal manager of the Rustenburg Municipality which relates to irregular expenditure for the provision of alternative energy to indigent households - are taking place in terms of alleged transgressions of this Act. The latter case has been remanded to 4 April for trial.

Money-laundering

One of the most high-profile cases in the province was referred to in the Zondo Commission on State Capture’s second report last month; a contract with SA Express that didn't go through a competitive tender process. The contract was for the rehabilitation and reintroduction of flights at Mahikeng and Pilanesberg Airports. The money was paid to SA Express through a money laundering scheme involving a number of bogus entities.

Another case already in the public domain involves the Social Housing Regulatory Authority (SHRA) and a Restructuring Capital Grant for a project to build 2 400 housing units in Mahikeng -- using money that had been re-directed to SHRA from the Eastern Cape and Free State Departments of Human Settlements. The construction of the said housing units has only been partially completed by the contractor.

Significant amounts of public money were involved in a number of cases – for example, a case in Mmabatho where a company was appointed as an implementing agent for the North West Department of Rural Environment and Agricultural Development. The company was allegedly paid a total of R604-million despite a number of procurement irregularities. The said funds were supposed to have been paid in respect of various farm infrastructure and agricultural projects. The extent to which these goods and services were delivered, as well as alleged double payments to service providers, are  under investigation.

Sound depressing? There is some light at the end of the tunnel – in particular, in some of the 13 cases that have been finalised by the NPA and the DPCI.

In Bloemhof, for example, the owner of an auction company was jailed for five years for auctioning obsolete municipal assets and not paying the proceeds over to the municipality. Another auctioneer was given a three-year sentence (suspended for five years) for doing a similar thing in Mmabatho with property belonging to Botshelo Water.

In Klerksdorp, an employee of Matlosana Local Municipality was fined R50 000 or three years’ imprisonment for misappropriating almost R70 000 intended for volunteers working in the municipality’s Indigent Unit. The employee issued stipends on their behalf and then demanded that some of the money be paid back into a personal account.

Similarly, an employee in Rustenburg Municipality’s salaries department connived with colleagues to issue “acting allowances”, which would then be shared with the salary department staff. One of the employees was given a 10-year sentence, of which five years is suspended.

In Vryburg, R454 000 was recovered from the former municipal manager of Naledi Local Municipality after a service provider was paid despite not building the required 3 000 low-cost houses. The accused was sentenced to an effective eight years in prison, and charges are being assessed against the service provider, Khasu Engineering.

Corruption is killing South Africa. It literally kills people because basic services are not provided to the poor and vulnerable. And it kills the rule of law and the social contract. It must become the exception, not the norm. And not just the high-level type detailed in Zondo reports. But also the local level variant that deprives our citizens of basic services, and destroys their faith in governance. The North West cases are sad examples of both. Fortunately, steady progress is being made by the DPCI and the NPA in restoring the rule of law and ensuring that justice is served for the communities at grass roots level. This is an important step towards reclaiming our country from the grip of corrupt capture, at all levels.