R1.4bn in municipal corruption has seen only R55m recovered

The Democratic Alliance on Thursday pointed out that there seems to be a woeful lack of consequence in corruption and fraud cases being investigated in local municipalities.

DA member of parliament Cilliers Brink said in a statement that the agencies that enforce the law were seemingly not committed to investigating and solving cases.

“Law enforcement agencies seem reluctant to investigate and prosecute cases of criminal conduct by municipal officials and persons doing business with municipalities.

“According to a report presented by the Department of Cooperative Governance and Traditional Affairs (Cogta) earlier this week, the total cost of local government fraud and corruption cases currently under investigation amount to more than R1.4 billion,” Brink said.

The Special Investigating Unit (SIU) revealed that, since 2002, only 32 corruption investigations were solved. Only 13 convictions were made along with the R55 million recovered.

“Municipal capture crooks seem to be getting away,” Brink said.

He said the DA would draft and send questions to Minister of Justice Ronald Lamola to “determine exactly why section 173 prosecutions have been so few and far between”.

According to Brink, National Director of Public Prosecutions (NDPP) Advocate Shamila Batohi admitted to Cogta’s portfolio committee there was a possibility that some criminal cases could “disappear”, but vowed to end the practice.

“Cases of tender fraud and criminal financial misconduct in the country’s metros are disappearing from the radar of law enforcement agencies, including the NPA, SIU, and the Hawks,” Brink claimed.

Brink said the DA wanted the NPA to explain why the prosecution of two directors of a company called Setheo Engineering was provisionally withdrawn in October 2018.

“The case arose from a R126 million tender awarded by the City of Johannesburg to Sotheo Engineering in 2015. Substations were to be built in Eldorado Park and Hopefield to stabilise the supply of electricity to these communities.

“Two Joburg officials, who were subsequently suspended, arranged for Setheo Engineering to receive forward payments to the value of R66 million, but by 2017 the then DA-led City government discovered that only R2 million of the work had actually been done.

“Setheo Engineering was also found to have submitted a fraudulent bank guarantee for the performance of its obligations,” he said.

He added that the DA wanted to know why the SIU and the Hawks had not taken up the smart meter scam in the City of Tshwane.

“There is no evidence that a financial feasibility study was ever done on the smart meter project.

“By the time the municipality realised the deal was going to bankrupt the City, about 13,000 meters had already been installed, and billions of rands in commission had been paid to PEU. The Auditor-General found every cent of this money to have been irregular.

“National Treasury had warned Tshwane against the smart meter deal, but the former mayor, Kgosientso Ramakgopa, failed to disclose this fact to Tshwane councillors when the ANC-majority voted to approve the PEU contract.

“Today Ramakgopa is an adviser to President Cyril Ramaphosa,” added Brink.

Brink acknowledged it was difficult to prosecute municipal officials suspected of criminal conduct before the enactment of section 173 of the Municipal Finance Management Act because of the heavy burden of proving fraud and corruption.

However, he said it was not an excuse as there had been a low number of convictions in the MFMA section 173 since 2004.

“Since 2004, this provision has criminalised financial misconduct by municipal officials, including their deliberate or grossly negligent failure to implement supply chain management policies or prevent irregular expenditure. Why, then, have we seen so few MFMA section 173 convictions?” he asked.

“The DA will write to the NPA and the SIU to track the progress of the Setheo and PEU cases,” he concluded.

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