Enforcement agencies (SIU, Hawks and NPA) on COVID-19 corruption cases

Meeting report

The Chairperson said that this meeting was to update the Committee on Covid-19 related corruption and the progress that has been made with all the cases concerned. The Committee wanted to see whether the arrests made result in successful prosecution. There will only be joy if there are actual recoveries of funds and those responsible were sent to prison. The first presentation would be a briefing by the SIU and the second presentation would be a joint briefing by the Hawks and the NPA. He wanted General Lebeya to provide an explanation as to why the Hawks and NPA were doing a joint presentation. It was the Committee’s view that under the current circumstances every institution must be held accountable for their own set of functions and responsibilities.

Briefing by the Special Investigating Unit (SIU)

The SIU presentation was primarily delivered by Adv Andy Mothibi (Chief Executive Officer). There were also contributions made by Mr Andre Gernandt (Chief Financial Officer), Mr Leonard Lekgetho (Chief National Investigations Officer) and Dr Jerome Wells (Chief Legal Council). 

The presentation by the SIU provided an overview of Covid-19 expenditure. The total Covid-19 expenditure from April 2020 to August 2020 was R15.6 billion. The current amount under investigation by the SIU was R10.5 billion rand. That meant that 67% of the total expenditure of R15.6 billion was currently under investigation. The presentation highlighted the value of PPE contracts under investigation by tier of Government, province and category of procurement. Gauteng had R4.3 billion PPE contracts under investigation, followed by the Eastern Cape at R1.9 billion and KwaZulu-Natal at R533 million. The top three municipalities under investigation were Tshwane at R533 million, followed by the Cape Town Metro at R459 million, and Ethekwini Metro at R457 million. The presentation then detailed the matters that had been finalised, the matters still in progress, outcomes and then the overview of irregularities emanating from investigations. A total of 18 cases were finalised and there were currently 58 cases still under investigation. The presentation also made systemic recommendations to help combat irregular procurement. It was recommended that legislative amendments be considered to provide for safeguards when State Institutions were to contract with domestic prominent influential persons and their immediate family, as well as entities in which they have an interest, or are beneficial owners of. All State Institutions should be bound by such safeguards. It is not suggested that the mere fact that someone falls in this category would render the contract unlawful, but it should be a prerequisite of all supply chain management processes that a disclosure must be made that a potential service provider falls within the category set out above. Failure to make such a disclosure must be unlawful and should constitute a statutory cause of action to attack the validity of the process. Intentional non-compliance with such a prescript, should be a criminal offence. The presentation also highlighted some concerns with regards to service providers and then provided mitigation steps to alleviate those risks.

(See Presentation)

Briefing by the Hawks and National Prosecuting Authority

The presentation was delivered by General SG Lebeya, the National Head of the Directorate for Priority Crime.

General Lebeya cleared the confusion as to why the presentation of Hawks was joined to that of the NPA. There was a mix-up with the communication from the Committee. The separate invitation sent to the Hawks was not received on time. The Hawks and NPA were dealing with the same matters and thought it appropriate to have a single presentation. The presentation outlined the work of the Fusion Centre as assigned by the Anti-Corruption Task Team (ACTT). The Fusion Centre was tasked with real time risk detection, followed by prompt coordinated action by law enforcement entities to ensure expedited investigation, prosecution and recovery of assets. The Fusion Centre was comprised of the Directorate for Priority Crime investigation (DPCI), National Prosecuting Authority, Specialised Commercial Crime Unit (SCCU), Asset Forfeiture Unit (AFU), Detective Service in the South African Police Service (SAPS), Special Investigating Unit (SIU), Financial Intelligence Centre (FIC), South African Revenue Service (SARS) and State Security Agency. The presentation noted the interventions needed to address corruption and maladministration related to Covid-19 relief funds. It provided an overview of the current cases in court. It noted that there was a huge influx of cases. Auditor General’s Special Report stated that there were 80 000 exceptions or illegal payments identified which need to be investigated. The Fusion Centre did prioritise cases identified to be heard in court. Finally, it was stated that a multi-disciplinary and collaborative approach between the various law enforcement agencies in the Fusion centre had yielded positive results.

(See Presentation)

Discussion

Ms N Tolashe (ANC) congratulated the different organisations on the work that they have embarked on. South Africans were looking towards these institutions to take them out of the quagmire of corruption within the country. She was impressed with the work they had done and it was clear that these institutions took their mandate seriously. The information provided was quite clear as it detailed the steps that had already been taken. She was happy to hear that action was being taken against those who have allegedly been involved in corruption and were resigning from their posts. She was happy that these institutions were not allowing anyone to get away with crimes that have been committed.

The presentations discussed maladministration. She wanted to know whether there were timelines that the Departments had to adhere to for matters of disciplinary processes? She heard Adv Mothibi state that the SIU had to hand over some cases to the departments to finalise. Were the departmental heads given timelines on the issue of disciplinary processes within Departments? This was a matter that should not get lost within the cracks. Could the Committee make those Departments account directly to the Committee? The Departments should be given timelines to deal with disciplinary matters so that this issue does not go on forever.

She was happy that the teams were following up on cases where the PFMA was being undermined and disciplinary action was being taken. The Committee was setting a good precedent. As the Committee was going to follow this matter it should hear directly from provinces. As the team was doing investigations and culprits were being identified, the Committee should hear from those Departments and provinces on what they were doing because the taxpayers were waiting for Government to act once the wrong had been identified.

She congratulated the Premier of Gauteng for the work the province had been doing. The cases needed to be finalised as soon as possible. Adv Mothibi also discussed how his team was working on the reinforcement of FICA. What was the timeline being given to complete that? If there was anything that the Committee could do to assist the office of the SIU it would do it.

She then started discussing the resource requirements. The Committee needed to be made aware of what resources the different institutions needed. The Committee could assist so that whatever resources were needed to complete work was made available. The resources needed to be made available with necessary speed so that by the end of this year the Committee would see more people appearing in court for the allegations made against them.

She then discussed the presented made by General Lebeya. She was impressed with the coordination taking place between these different bodies in making sure that corruption was dealt with in its totality. She was happy that coordination was taking place so that when the cases were taken to court nothing would be left to chance. Everybody who was alleged to have been involved in corruption must face the law. She was excited by the progress reports that the Committee received.

Ms B van Minnen (DA) asked questions related to the SIU and its completed matters. The presentation discussed the Gauteng South-West TVET college issue. It was indicated that there was an unknown value and an unknown number of service providers. If that was the case, then how could the matter be deemed to be complete?

She then had a question on the cash recovered. The presentation indicated a number of acknowledgement of debts. Was the money reflected the amounts reflected in the acknowledgment of debt or was it the money actually reclaimed? In terms of the AODs, what was the remedy if there was default by the parties who have signed? She then had a question on the matters in front of the special tribunal of the SIU and the preservation orders. Money tended to move rapidly. That much was evident from the presentations. What was the efficacy of the preservation orders? Was the SIU able to get those preservation orders timeously before money started moving from account to account? If the money does move was the SIU able to trace where that money goes in such a way that the preservation order would be effective?

Mr A Lees (DA) said that the amount of work taking place on this malfeasance of PPE was impressive. He hoped to see appropriate consequences coming out of all this good work. He requested that the finalised investigation reports done by the SIU be made available to the Committee. The Committee could then deal with those reports as it deemed appropriate. While the work done was impressive there was a huge volume of work for these agencies. A lot of work was coming out of the Zondo Commission and all sorts of places. While it was important that the Committee looked at the resources that were required the key issue was actually funding. The medium-term budget policy statement was coming up. It was a proposal on the part of the Minister of Finance and Cabinet. Parliament can, and should, look very critically at that proposal and make recommendations on the budget. He was going to look very carefully at the coming budget and work with the Committee support staff to see if there were further budgetary amounts that could be allocated. He was sure there would be as there were lots of wasteful expenditure taking place as could be seen from the presentations today.

Mr S Somyo (ANC) agreed that this was an impressive picture on the current standing of these worrisome matters. Government, through the President, has shown some kind of prudence in advancing the fact that things must happen as institutions spend these amounts. The Auditor General had been involved in assisting, through the audit operations, to advise various Departments on a number of defective matters in as far as expenditure was concerned. The real, on-time, audit was pre-emptively assisting to drive away any attempts at financial infringement in terms of management and accountability. The one area he had concern over was the synergy of actions as other steps prevail. He highlighted how the SIU would look into its own investigations. Some claims and referrals would be made. The actions would be derailed by particular areas of infringement. It would be of help if such interventions were quick so that a form of deterrent is shown. Those who want to take a corruptible route would then be encouraged not to do so by seeing certain kinds of acts by law enforcement agencies.

He then discussed the Fusion Centre. The wisdom of setting that institutional basis for the ability of enforcing the observance of the law to ensure that the findings that were made were followed. He used the example of the Auditor General making findings that were followed by the various agencies. This highlighted that Government needed to fight matters of corruption urgently. These matters were litigious and needed support with the investigative capability which would ensure a high standard of investigations. Prosecutorial authorities needed to be supported by qualitative investigative capacity. The existence of the Fusion Centre to support this kind of investigative work should be praised. These centres were helping fight the scourge of corruption and crime. The anchoring and supporting of that infrastructure was needed.

He highlighted the arguments the various Portfolio Committees in terms of policy needed to deal with. A percentage of the money recovered should remain with the respective law enforcement authorities so that they can continue with their work. This would encourage and enhance their work. The functionality of these institutions needed to be based on more capacity. His view was that there needed to be a deepening of synergy so that matters were not left to lie for longer once they were finalised by particular institutions. The fast-tracking of some matters needed to take place. He appreciated the work and commitment of the law enforcement agencies. It was good for Government, through the President, that these steps were taken.

Mr B Hadebe (ANC) said the next arrest would be on Thursday and the Committee would be paying close attention to it. The Sixth Administration was really serious in the fight against corruption. He appreciated the great work done thus far. The wheels of justice were turning and soon he wanted to ‘see consequence management on steroids’. Having said that he had a few issues of concern. He first responded to the report of the SIU. On slide 20 case number two it was alleged that there was an irregular appointment of service providers for relatives and friends by the principal of the college. The number of service providers was unknown and the contract value was unknown. How could the SIU conduct the investigation and arrive at the conclusion that the tender was irregular yet the service provider and contract value was unknown? He wanted an understanding as to how that was possible? Surely if there were irregularities the SIU should have been in a position to determine the contract value and how the service provider was. Looking at the fast pace the Hawks were moving in he advised them to ensure that there were enough orange overalls for the arrests that were going to be made. He then discussed the ‘matters in progress’. On slide 23 there were certain cases where individuals were mentioned. For example, on slide 23 case number two it stated that ‘it is alleged that high profile individuals are implicated in PPE tender fraud’. Why were they mentioned as high-profile individuals when on the same slide on case number eight it states that the CFO of the Department of Correctional Services was alleged to have awarded PPE contracts to friends and family members? By stating that it was the CFO of the National Department the SIU was indirectly indicating who that individual was. He wanted to know why there was an inconsistency in the reporting of matters in progress? He mentioned a few other cases, on slide 27 case number 43 it stated a tender was awarded to a prominent official. He highlighted how other individuals were directly mentioned by name and others not. Why were there inconsistencies? He raised these issues because these were now public documents. The Committee meetings were conducted in public and he did not want an assumption that certain high-profile individuals were protected while certain individuals were mentioned. He wanted the logic behind this style of reporting.

He then moved on to discuss the report given by Hawks. He raised the issue of the timeline of cases under investigation. He wanted to get a sense and understanding of the Fusion Centre cases. The presentation said that Fusion Centre cases are mostly ready for enrolment within months in contrast with general corruption cases taking years. Will all the Covid-19 cases be allocated as Fusion Centre cases so that the finalisation of all the cases could be sped up?

 He then discussed the factors that were affecting the timelines of cases. The tender processes and all bid documents processes was listed as one of the issues that were affecting the timeline. He noted that the Inter-Ministerial Committee (IMC), which was established on 6 August, gathered information. Does that information not contain all the information that was required? The reason that the IMC was established was to assist and speed up the processes of information collection to enable the agencies to move with speed in dealing with cases. Was the information gathered relevant? If yes, then why was it listed as a challenge affecting the timeline of cases?

He then raised the matter of obtainment of search and seizure warrants. The nature of these cases was such that they needed to be concluded expeditiously. Why was it a challenge to obtain search and seizure warrants? What can the Minister of Justice do to assist in the obtaining of search and seizure warrants? Was there anything that could be done to expedite the process because the Committee wanted to see all of the culprits in orange overalls? The Committee needed to be aware of any hindrances so that they could be dealt with. He believed that any bottlenecks should be expeditiously resolved.

Ms K Mkhonto (EFF) said that a lot of cases were being dealt with. She wanted a timeline of identified cases in terms of progress reporting. In the presentation by the SIU it was stated that there was a possibility of duplication of beneficiaries. She did not understand why some of these institutions spent so much money on PPEs and other Covid-19 related procurements. For example, the Department of Human Settlements. Who were the beneficiaries of those PPEs? The SIU was not the first institution to report about employees resigning when they are confronted with allegations of corruption. Some of the SoEs highlighted the same risk of employees resigning. Do labour relations laws allow institutions, where it has been alleged wrongdoing has occurred, to put the resignation of employees on hold until investigations have been concluded? Does the law allow for that? She thought that institutions should first give employees clearance certificates once they have been cleared of any wrongdoing before allowing them to resign. State resources were being stretched into looking at individuals who were resigning. If the resignation of employees could be put on hold that would be better for investigations.

The SIU stated that one of the risks was not having enough resources. She asked the Chairperson to call the IMC to report to the Committee so that it was able to explain what exactly was going on. The IMC promised to support these institutions and ensure that they have adequate resources. It was disappointing to hear today that these institutions were still complaining about not having adequate resources. She then discussed the Fusion Centre approach and methodology. General Lebeya mentioned the prevention phase where there was ethics management. Under the current conditions she did not think that there were any ethics in management. Looking at the reports presented there were no ethics at all. Could the institutions look into the huge amount of funds mistakenly deposited into accounts? Was there no collusion between Department officials and the owners of those accounts?

Mr Hadebe asked a question on the Rand value of the contracts being investigated. It was now known that it was not R500 billion that has been squandered. It was actually R15.6 billion that has been spent to date and only around R10.5 billion was under investigation. Will the R10.5 billion increase in the near future or was that all that has been investigated? Looking at the cases that have been referred to the Special Tribunal it was only R222 million out of R10.5 billion. He wanted to know if there was a possibility that the value of R10.5 billion increasing? According to the information provided to the Committee only 67% of the procurement were under investigated and 37% was done overboard.

The Chairperson qualified the appreciation of the law enforcement agencies that were present. The appreciation the Committee had was conditional. It was conditional in that the Committee wanted to see the progress, arrests and investigations the agencies made translate into effective consequence management. By that he meant convictions, successful prosecutions, recoveries for the State and that the internal disciplinary processes of Government Departments run their full course. All of that was dependent on thorough investigations which would not leave loopholes for people to escape justice. He made this point because ultimately what the Committee heard today was looting during a time of extreme health crisis. This has sharply exposed the fault lines of inequality and the challenges the people of South Africa have. A lot of work needed to be done to ensure that there was access to health care for all South Africans. School structure also needed to be available to combat inequality. Ultimately, this was all a humanitarian, social and economic question that was anchored in political will to do the right things. Anybody who was looting during a time of crisis compounds the problem of poverty and inequality. In his view this type of corruption was a crime against humanity. Therefore, if the law enforcement agencies were not in a position to successfully prosecute then the State was aiding and abetting a culture that it was acceptable to loot because there were no consequences. That was the mammoth task and responsibility which was the last line of defence for law enforcement agencies. South Africa was in a crisis and law enforcement agencies needed to push back on the kind of corruption that has occurred during Covid-19 and generally during procurement processes. Deterrents needed to be embedded as a norm. That was why he wanted to qualify the appreciation of members who were happy that the law enforcement agencies have moved with speed. Confidence needed to be given to South Africans that when all else was failing law enforcement did not. The independence of law enforcement agencies was important. This kind of grand looting of resources intended to save people’s lives cannot be allowed. Grand looting cannot be normalised by unsuccessful prosecutions. Successful prosecutions needed to be the ultimate goal.

He then had a question for the SIU in relation to Gauteng. Has the SIU investigated the Covid-19 infrastructure projects built? There has been an issue of field hospitals. What was the progress being made on that matter? He agreed with members that the issue of resources was important. The Committee needed to have the IMC back because commitments were made that resources would be made available. While the Committee would ensure that resources would be made available the law enforcement agencies must function with what they have currently. Work can still be done but there was merit in that request because a commitment was made. The Committee would have to look at the medium-term budget policy statement closely to be able to respond to the pleas that have been made today.

He then discussed the imminent arrests that would take place and praised the publicity of the arrests. The public arrests inspired confidence in South Africans when law enforcement took a ‘boots on the ground’ approach. Public arrests were a necessary part in deterring criminals. Having heard all the good stories what was the challenges still faced by the law enforcement agencies? Issues around cooperation needed to be looked at. The Committee needed to know where the problems were that would impede agencies from moving at an even greater speed. He also highlighted the resignations made on the eve of disciplinary processes. He suggested that the Committee meet with departments like Public Administration, Employment and Labour, and Cogta as an initial step to see what kind of operation frameworks could be built into the law. People also needed to be blacklisted. There cannot be a situation where people are moving from Department to Department. That was an issue that also needed to be dealt with. It was one Government and one public purse. The wrongs an individual makes must follow them until it was brought to a legal conclusion.

Adv Mothibi agreed with the qualification for appreciation that the Chairperson mentioned. He agreed that the ultimate test was whether there was consequence management in all its forms. Whether that was civil litigation or disciplinary action or any other form of consequence management. The SIU took the advance to heart and would ensure that would be the ultimate result.

The SIU noted the comments by the Committee of employees resigning to get away from corruption allegations. This was an issue that the SIU was still dealing with and it would be appreciated if some framework could be facilitated. The SIU would make any input that it was required to do.

He responded to Ms Tolashe’s question about whether there were timelines in taking disciplinary action. At the moment when the SIU recommends that disciplinary actions should be taken against officials there was an expectation of speedy action. The SIU did, however, not provide specific timelines. Perhaps it was something that the SIU needed to take into account that when it does a referral that it asks the State institution to report within a certain timeline. The SIU expected that the accounting authorities and the accounting officers should take action speedily once the matter has been brought to their attention. It would be helpful if the SIU could augment that referral with a specific timeline by which the institution should report back.

He then discussed sustaining the work that has been happening in Gauteng. When any evidence presents itself the SIU takes action. The work was done on an even-handed basis so that no one was left out. He then responded to the question on politically exposed people. The legal deal had done research and the current position had been articulated with Scopa. The SIU had also made some recommendations. It would be helpful if the Committee could guide the SIU with regard to the possible legislative changes. As it sits now when a procurement process has been followed and all the compliance areas were in order the fact that an individual was linked to any politically exposed persons does not make the procurement process irregular. Going forward there could be considerations for legislative changes. The SIU was heartened that the issue of resources would be supported by the Committee. He made this point because if it were not addressed the business of the SIU would be affected down the line. The SIU hoped that in the adjustment budget there would be positive news.

He noted the comments made about the Fusion Centre coordination. He then responded to Ms van Minnen’s question on the acknowledgement of debts. It was one of the processes that the SIU used. The service providers would approach the Department or the SIU, in the process of investigating, and when they were confronted with allegations they would offer to pay. That payment was then discussed with the Department to ensure that the interests of the Department were protected. When the Department and the SIU were in agreement with the deal made then one of the mechanisms was to sign an acknowledgement of debt. The follow-up question was how the SIU enforced the acknowledgment of debt when it was not adhered to. The SIU would then institute a civil litigation process. The payment would be demanded and if that were ignored then a summons would be sent. If that failed, then the SIU would pursue a civil litigation process. He informed the Committee that all the acknowledgement of debts that have been signed have been paid. The acknowledgement of debts has been honoured and paid. That would be some of the money transferred back to the State institutions.

He then responded to whether the Special Tribunal would be able to trace the money in such a way that the freezing becomes effective. This was one example where the Fusion Centre has proved to be very effective in helping agencies to trace where the monies have moved. This was done with the help of colleagues from the Financial Intelligence Centre. The agencies have been able to trace where the monies have ended up. The SIU was then able to obtain restraining orders relating to the case. There was the initial step of freezing and then the investigation went to the special tribunal where the parties argue whether the interim order should be made permanent. The next steps follow; of setting the contract aside and making recoveries. When the SIU recovered it ensured that those amounts frozen become part of the recourse to those amounts so that ‘hollow judgements’ were avoided.

He then responded to Mr Lees’ question relating to making the final investigation report available to the Committee. There was working going on and there were outcomes which had been articulated to the Committee. The progress report was presented to the President last week on 14 October. When the President addressed the Nation, he did indicate that the SIU report will be made public. The full progress report has been presented to the President. The President intends on making that report public. Adv Mothibi did not have the timeline of when that report would be made public.

He then discussed the total amount budgeted for the agencies. He was uncertain whether Mr Lees wanted the agencies to make those amounts available now. The SIU could answer that question in writing to the Committee indicating those various amounts.

He then discussed the concern raised by Mr Somyo about financial management and accountability. The SIU wanted to ensure that the integrity of public accounts be returned to an improved status. Those responsible will be held to account. The SIU will continue to indicate the findings that has been made and would make recommendations wherever required. The SIU has taken into account the synergy and speed of actions.

He then responded to the issue of recovery mechanisms. He hoped that this concern would find its way forward. In the legislative amendment of the enabling Act the SIU was also looking at the amendment of the funding model of the organisation. The SIU would certainly welcome the idea of holding a certain percentage of what was recovered. This would be a subject of engagement with all the relevant parties.

He then responded to the questions raised by Mr Hadebe and noted Ms van Minnen concern over slide 20 item number two. He apologised that the presentation sent to the Committee did not have much detail. This was because for it to have the not applicable note and not known note. He was informed by the investigating team that when the matters were reported what happens is that the matters get assessed and the allegations are investigated. The finding of the investigating team was that there were no PPEs procured by the TVET college. As a result of that finding there was obviously no value. The findings of the investigations relating to those allegations was that they could not be substantiated because there were no PPEs procured by the college.

He then responded to the related question on slide 23. He noted the comments by Mr Hadebe for the need of consistency in the presentation. He clarified the manner in which the SIU presented the summary of allegations in the presentation. In the presentation the SIU wanted to present the allegations as they were reported. For example, the SIU would receive allegations from a whistle-blower indicating high-profile individuals were involved like in the case of slide 23 number two. It was then up to the investigating team to investigate and find the evidence. When the SIU made a finding it would make a finding against a specific person. The SIU would not mention the name of the person until the matter has appeared in court. Once the allegations have been tested and the SIU makes appropriate findings it would deal with the case along the lines of guarding and mitigating the legal risk of not mentioning the names. He was emphatic that the SIU was not in any way seeking to protect anyone at any level. If the evidence was sufficient to make a finding against an individual then a report would be filed. He provided the example from Gauteng where people were named directly. Those names appear on the summonses and are public documents. That was why the SIU was able to mention them by name in the presentation.

He then responded to Ms Mkhonto’s question on the beneficiaries of the PPEs. As the SIU investigates it does go into those details whether PPEs were ordered appropriately and whether they reached the intended destination. Once the SIU had made that determination it would then make an appropriate finding. He was glad that Ms Mkhonto made a comment on people who resign. This was a matter that required urgent attention. Ms Mkhonto suggested that the SIU should consider instances where resignations were kept on hold. The employer-employee relationship was governed by the Labour Relations Act and all other related legislations. The current legal position was uncertain as to whether an employer can actually refuse an employee from resigning. The SIU required some framework that would ensure that this recycling of people who have been accused of wrongdoings was deliberately addressed. If the SIU became aware of those instances there was a section of the Public Service Act which states that the disciplinary process could be transferred to the new Department which has received the individual accused of wrongdoing. The SIU would then follow up on the matter. On a broader scale the SIU required a specific framework to address this issue. He then responded to Mr Hadebe’s question on the Rand value of the contracts investigated. Currently, the SIU was investigating about 930 service providers and these numbers kept on going up. Since the proclamation was issued the SIU has been receiving allegations relating to specific contracts so the number continues to grow. The SIU sets out a timeline to investigate each of the allegations received and reach an outcome. The amounts of the contracts being investigated will vary depending on the matters that continue to be reported. The SIU cannot say to the public that if they have not reported by a certain date their allegations will not be taken. The SIU was duty-bound to receive the allegations and to investigate those allegations. He then discussed infrastructure. There was already processes underway to investigate the infrastructure that has been built in all the provinces. Initially the focus was on the PPEs but the SIU was now looking to investigate the infrastructure that was built. He discussed the impediments that hamper the SIU from investigating with speed. The Fusion Centre has addressed the kind of overlaps and encouraged cooperation and collaboration between law enforcement agencies. Going forward the cooperation mechanisms would provide the law enforcement agencies with the benefits that they were looking for.

Gen Lebeya said that the Hawks and NPA appreciated the observations made by the Committee members on the efforts put in place by law enforcement to deal with corruption. The law enforcement agencies will continue to strive to improve on the work that they were doing. He responded to the comments of Mr Lees regarding the total budgets of the agencies. For the current financial year, the DPCI has been allocated R2.1 billion. He then responded to the question raised by Mr Hadebe on why the agencies still struggle if the information was made available. The information that was available does assist the agencies but for the purpose of putting that information into a case docket to be produced at court, where the authenticity was something that needed to be proved, the information needed to be obtained in a particular way. For example, if there was a copy and the original was not produced that needed to be verified. It was in this regard that the original documents needed to be located and it needed to be shown that the original documents were not tampered with.

He then moved on to discuss search and seizure warrants. There was a need for the basics to be covered to convince those who authorise the warrants. It needed to be ensured that the warrant was given in a legal way. That was based on the initial investigations and affidavits that needed to be attached to the application for a search warrant. Jurisdiction also needed to be taken into consideration when issuing a warrant.

He then answered the question by Ms Mkhonto on the issue of ethics and money that was deposited into some accounts. People who receive money into their accounts were supposed to declare and return the money. If someone keeps and uses something that was not theirs that was in itself theft. The element of collusion was one aspect which the investigations were focusing on. The agencies want to prove that the misappropriation of funds was not accidental but intentional. If the element of intention were not found, then negligence might be the cause. He then highlighted the challenges facing the Hawks. He indicated that the DPCI had put together a package of the challenges facing them and the proposed solutions. When the IMC engaged with the Committee it would have indicated those resources that were needed. He noted that some of those resources that the DPCI needed they were in the process of acquiring. By 1 November there will be new officials who would be brought into the DPCI. Posts had been advertised and qualified people were going to be appointed. This would help address cybercrime as well as financial investigation. The DPCI was aware of the challenges facing them and attention was being given to those challenges. If the DPCI could get those resources in the form of human resources it will assist them in ensuring that the process of investigation was sped up. There were still cases that need the DPCI’s attention although they were not as prioritised as the Covid-19 related cases. There were no less than 21000 cases and there were 11000 accused at courts. Those cases could not be allowed to collapse. While the DPCI was dealing with the new cases they wanted to make sure that the older cases equally receive attention so that convictions can be made. Those were some of the challenges facing the DPCI.

Adv Shamila Batohi, National Director of Public Prosecutions, NPA, discussed the budget. The NPAs budget for 2021, after adjustment, was R4.5 billion. She acknowledged that Covid-19 was placing a lot of pressure on the fiscus but pleaded that if proposed budget cuts were implemented it would cut the R1.3 billion increase that was given to the NPA in the previous year. The R1.3 billion was given to the NPA to deal with the crisis that the organisation was in so it was crucial that the NPA budget was not reduced. The NPA needed to spend the budget properly to ensure that it was efficient. The budget was a key issue for the NPA because it had made a lot of progress in trying to capacitate the organisation. If the budget cuts were implemented the NPA would not be able to recruit as aggressively as they had been. The NPA would also not be able to pay those that it recruited. This was trying to capacitate the NPA to the bare minimum. She echoed the concerns of Gen Lebeya. If the Hawks were not capacitated properly, particularly relating to financial investigations, it would make the work of the NPA ineffective. It was important that the DPCI has the capacity to properly investigate these matters otherwise the entire value chain is affected. The NPA would then not be able to ensure ‘consequence management on steroids’. Those who have looted needed to be held responsible. She stressed that a lot more money needed to be spent on the Hawks if law enforcement agencies wanted to be effective in combating corruption. She fully supported the conditional appreciation of the members of the Committee. The Fusion Centre was the start of what could work well but it is still the start and it has only been in place for a couple of months. It was showing reasonably good success and it should show more success as it moved on. She did believe that the Committee needed to wait and see how the model works. The law enforcement agencies needed to collaborate in a way that ensure maximum efficiency. So far what has been achieved has been promising. The NPA appreciated the comments made by members highlighting the need for consequence management and ultimately convictions. She noted the important work done by the officials in the FIC, SARS and the Auditor General’s Office. She emphasized that this was a collaborative effort and the work performed by colleagues from different agencies needed to be appreciated.

Adv Rodney de Kock, Deputy National Director of Public Prosecutions, NPA, confirmed from the prosecutions side that as far as the sourcing was concerned the NPA had allocated the work to its dedicated capacity within the specialised commercial crimes units. These units were located within the provinces. The NPA was also building capacity in the provinces that currently do not have the specialised commercial crimes units. There were only four provinces that had these units. In consultation with the Department of Justice the NPA would ensure that capacity is built in those provinces. These units within the provinces work very closely with the DPCI. He responded to the question of ensuring that there was consequence management. There were matters that were lined up for enrolment within the next three months. This was very good news. Within the next three months the NPA expected another 12 cases will be enrolled.

He then responded to the comments made on obtaining of warrants. Part of the challenge in obtaining a warrant would be the processes that needed to be followed. The warrants needed to be properly motivated so that they could be used effectively once it has been activated. This was all work in progress and was not a general problem. The list of the factors affecting the timeline of cases were not generalised problems. Those were specific problems in some matters. The prosecution needed to ensure that the timeline of the case was shortened so that they could make a quick decision for enrolment. 

Adv Ouma Rabaji-Rasethaba, Deputy National Director of Public Prosecutions: Asset Forfeiture Unit, explained that the AFU has been seizing assets and profiting it to the State for the last 20 years. There were 600 reported cases. She believed this work should grow with impetus. The unit was sitting in between investigations and prosecutions. For any asset to be seized there has to be unlawfulness or unlawful activity detected. The capacitating of the DPCI and the Asset Forfeiture Unit was very critical. She was grateful that this Committee was going to make sure that the unit and respective agencies were capacitated. The unit would provide very detailed plans indicating the kind of resources that were needed. This unit was embarking on retrieving the stolen money. Beyond seizing assets and working with other law enforcement agencies the unit wanted to retrieve the billions that have left South Africa. This was a social issue as the criminals have been allowed to get away with their ill-gotten gains. This was where the NPA stepped it. The NPA would not allow that to happen. This unit was leading a process within the NPA of retrieving those assets which were offshore.

The Chairperson reminded those in the meeting that this meeting was meant to discuss Covid-19 corruption and that a meeting discussing the resources needed should be held on another occasion.

Adv Mothibi discussed the budget of the SIU. In view of the growing proclamations and allegations reported the SIU has mapped out its growth. In view of the number of cases and the skills that were required the SIU had drafted a budget accordingly. The SIU had advertised for positions recently. It needed added skills to ensure that investigations were propelled with speed. These skills were urgently required. The SIU required forensic accountants to interpret the big balance sheets and accounts that were under investigation. The SIU also advertised for litigation specialists because the special tribunal work required even more attention. There were about 26 positions that were advertised requiring various skills. The applications were being processed and appoints should be made in due course. The funding model of the SIU was two-fold. The SIU received a grant through the Department of Justice and a fee is charged for the services rendered. Some of the Departments were paying but a significant amount of the Departments were not paying and the debt levels continue to escalate. This has given the SIU the view that the current funding model was not sustainable and hence the need for reengagement.

Mr Gernandt said that the operational budget for the SIU was R820 million. The capital expenditure budget was R42 million. The SIU goes into a financial year with a Government grant of only R443 million which just took the SIU over 50%. The long-term funding model of the SIU needed to be revised. It was very difficult going into a year not knowing whether there would be enough money to fund salaries and operational expenditure.

Dr Mike Masiapato, Executive Manager: Monitoring and Analysis, Financial Intelligence Centre (FIC), responded to the question by Ms van Minnen on the framework of the Fusion Centre in following the movement of funds. The FIC had a structure that has been created in collaboration with the banking community in the country called the Southern African Anti-Money Laundering Task Force. That mechanism allows the FIC to have an operational agreement with the banking community. When banks start picking up suspicious transactions taking place in the movement of funds they were able to alert the FIC as quickly as possible. The FIC would then be able to move with speed as provided for in section 34 of the Financial Intelligence Centre Act. The FIC was then able to freeze those transactional activities for a period of ten days. This was done to ensure that the funds were not dissipated. Around 64 bank accounts were frozen by the FIC for the purposes of assisting the work done in the Fusion Centre. The ultimate work done by the FIC was following the money so that it could guide the work done by the Asset Forfeiture Unit. The FIC helped law enforcement agencies to investigate where the money ended up. He noted that because of the fourth industrial revolution money moves very fast and that is why a special dispensation was needed with the banking community to assist on these issues. The FIC also helped the investigating community to be able to get the bank statements speedily from the banking community. Under normal circumstances a request would be sent to the bank and the investigating unit would have to wait a month. With the current arrangement the FIC would be able to intervene. Within a week the FIC was able to ensure that the bank statements were received and that speeds up investigations taking place. All the stakeholders within the Fusion Centre were effectively serviced.

Mr Hadebe had a follow up question for Adv Mothibi. He fully understood the standard approach in relation to matters under investigation. The question he had was in relation to matters in progress as indicated in the report. In the report it stated that the National Department of Correctional Services CFO was implicated. That indirectly indicates who the person was. On the same page it refers to high profile individuals and prominent officials. In those cases where it only stated ‘high profile individuals’ did the whistle-blower not give details of who the corrupt individual was? Did the whistle-blower actually say that the CFO of the Department of Correctional Services was involved? All these matters were still in progress. He wanted this matter to be clarified.

Adv Mothibi responded that whistle-blowers report to the SIU in various ways. These reports were drawn from the whistle-blower platform. In many instances the whistle-blower would report allegations within a Department.

Mr Leonard Lekgetho, Chief National Investigations Officer, SIU, said that the allegations made was how the matters were registered within the system. A whistle-blower will call in and state an allegation happening within a Department. In some cases the allegations are broad and it was up to the investigating team to make a follow up with the whistle-blower for more information.

Adv Mothibi said that it was a subject of allegations report. The allegations were investigated as reported. The SIU would then make findings based on the evidence that has been uncovered from the investigations.

The Chairperson thanked the teams that presented and responded to the questions of the Committee. The Committee expected that this good work will continue and that there would be greater collaboration within the law enforcement agencies. It was a huge indictment on South Africa that of all the things that more money was needed for it was money to investigate corruption. If things were done right, there would be no need for Scopa to exist. The fact that money needed to be continuously pumped into law enforcement agencies meant that the war on corruption was not yet won. It needed to be reflected on that money was being pumped into agencies to recover money that has been stolen. It was a vicious cycle that needed to end. He noted the pleas of law enforcement agencies to receive the resources necessary to investigate corruption. He noted that the reports of the SIU were sent to the President. The Committee needed to engage with the Presidency on the recommendations made within those reports. The Committee was not satisfied with the work of the ACTT. The Committee would be scheduling a meeting with the ACTT soon.

The Chairperson hoped that the integrity which has characterised the work of the Hawks will not leak any future arrests that were made. He noted the heightened excitement for the arrests that were going to be made. He wished the Hawks well for the arrest that would be taking place on Thursday. The Committee would pay close attention to the mid-term budget report keeping in mind the concerns raised by the law enforcement agencies on their budgets. It was clear that resources must be made available to law enforcement agencies as a means of safeguarding the public purse. The Chairperson reiterated that the Committee appreciated the work done by the law enforcement agencies but that appreciation was conditional on the integrity of the offices being on par with the expectations of the Constitution. Law enforcement agencies were not outside the scope of State capture and they needed to be cleaned up themselves.

The meeting was adjourned.