Officials off the hook in NGO fraud racket

After a lengthy court battle spanning the past four years and involving the disappearance of millions of Rands, the case that exposed dodgy conduit transactions between NGOs and the Gauteng Department of Social Development has fallen into obscurity.

The decision on what happens next now lies either with the police’s Organised Crime Unit or the Hawks, depending on who you speak to, after the department exonerated all officials involved in the transactions of any wrongdoing, according to head of department Thembeni Mhlongo.

Mhlongo, the last of several officials The Citizen’s questions were referred to for this matter, said she was made to understand the investigation was with the South African Police Service (SAPS) Organised Crime unit. The Hawks have also indicated they were handling the investigation, which was at an ‘advanced’ stage.

The investigation sought to understand how government approved over R23 million for the Life Recovery Centre, a rehabilitation centre approved for funding and constructed in 2016.

The amount was to be paid urgently, according to the Gauteng department of social development, to a Life Esidimeni account using A Re Ageng, another NGO, as a conduit because the new establishment did not yet have a vetted account.

E-mail correspondence between the Treasury and A Re Ageng at the tie showed that the national department could not confirm that the amounts in question were legitimately transferred and were from the department.

This culminated in a court battle in which the department sought to be reimbursed and to freeze A Re Ageng’s bank accounts after R5 million destined for the Life Recovery Centre was transferred into a private business account instead.

The department claimed at the time that an agreement between it and A Re Ageng was signed, in terms of which the NGO would be the conduit for the transfer of R23 million to be sent in two tranches, R13 million in June 2016 and R10 million in October. The NGO denied this, saying that the agreement only covered the first amount.

In 2017, the shelter for abused women and children brought an application to force the department to make the outstanding payment for their fourth quarter which began in January of that year. The failure to make these payments had lead to workers at the shelter not being paid for several months.

Since then, there has been nothing but confusion surrounding the case, with it being unclear who is investigating the matter, and now all officials seemingly being let off the hook by the department.

It took three nearly a week of back-and-forth between several police officials to figure out which law enforcement agency was handling the investigation into the conduit transactions between the department and the NGO.

It appeared there had been little communication between the department and law enforcement, as The Citizen was bounced back between several officials in getting a straight answer as to what happened to this case.

“It is an old story,” one of the officials said.

Eventually, Mhlongo said that as far as department officials were concerned, no wrongdoing was found on the part of officials involved in the transactions and it was now up to law enforcement to find out what happened to the money.

Director of ARA, Mpule Thejane Lenyehelo said the case had left her organisation in a state of limbo as a dark cloud now hung over her name, which had yet to be cleared from when the department initially accused her of stealing the funds. The department continued to fund the NPO, which looked after abused women and children, even though it was accused of being behind the disappearance of government funds, and with no officials facing the book, it was now up to law enforcement to finally put this matter to rest.

While unable to divulge whether representatives of ABSA Bank and First National Bank had been questioned, Hawks’ spokesperson Captain Lloyd Ramuvha said persons of interest had been identified and the unit was confident it had built up a strong case in figuring out where the remaining R5 million which government had yet to recover, disappeared to.

“No one has been arrested yet, but the investigation has taken place of course. There are people of interest who have been identified, but I cannot name anyone. In this case, nobody has been charged… but the case is at an advanced stage and we will have direction from the (NPA) as we rely on prosecutorial guidance,” said Ramuvha.

Meanwhile, a board member of embattled NGO A Re Ageng (ARA) was awaiting trial for extortion after allegedly trying to blackmail an implicated third party. Initially coming out as a whistleblower, Nomawethu Kunene handed herself over to the police this year on charges of extortion linked to the missing millions, after initially disappearing out of the country as a fugitive.

Kunene is understood to have appeared at the Special Commercial Crimes Court in Pretoria on Monday. An officer close to the matter told The Citizen, the NPA was under pressure to drop the charges against her, because of a lack of evidence.

– Simnikiweh@citizen.co.za

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