North West Intervention: HAWKS, SIU & SAPS update on cases affecting intervention

Meeting report

The Chairperson convened the virtual meeting and welcomed Members and the delegations from the Directorate for Priority Crime Investigation, (the Hawks) and the Special Investigating Unit (SIU). The purpose of the meeting was for the Committee to be briefed on cases affecting the section 100 Intervention in the North West Province.

The Chairperson stated that the Hawks and the SIU had an important role to play in the North West Province, given that the Provincial Government had been placed under administration by the invocation of section 100 of the Constitution by the National Government. Various allegations had been made in relation to corruption, crime, and maladministration in the province. It was the role of the Hawks and the SIU to investigate these allegations and to make sure that wrongdoers were held accountable. It was paramount that the Committee fulfilled its oversight role and ensured that Members had the necessary information at their disposal to report back to Parliament regarding the section 100 intervention in the North West.

Briefing by the Hawks

Lt. Gen. Dr Godfrey Lebeya, Head of the Hawks, told the Committee that ten cases had been referred by administrators for investigation. There was one case from the Provincial Department of Finance, Economy, and Enterprise Development; one case from the Provincial Department of Rural Economy and Agriculture Development; one case from the Office of the Premier; one case from the Provincial Department of Transport and Community Safety; one case from the Provincial Department of Public Works and Roads; and five cases from the Provincial Department of Education and Sports development.

Summary of cases from government departments in the North West

There were currently 29 open dockets relating to investigations into the North West’s Provincial Government. Of these, two cases were currently being heard in court, seven cases had been referred to the National Prosecuting Authority (NPA) for decisions relating to prosecution, and the remaining 20 cases were still under investigation by the Hawks. In total, the monetary value involved in these 29 matters amounted to R122.51 million. Before the section 100 Intervention, the Hawks had nine registered cases relating to the province. The additional 20 cases were added after the North West was placed under administration by the National Government.

Provincial Departments under intervention in terms of section 100(1)(a)

The Committee was told that five Provincial Departments had  been placed under Section 100(1)(a) Intervention. These were the Departments of Social Development; Local Government and Human Settlements; Finance, Economy and Enterprise Development; Tourism; and Rural Economy and Agriculture Development.

Regarding the Provincial Department of Social Development, three investigations were underway:

-A case at Mahikeng where the offence was fraud involving R258 000. It was alleged that an official connived with a service provider and submitted fraudulent claims for building materials that were not delivered. This docket was submitted in January 2021 to the NPA for decision.

-A case at Morokweng where the offence was fraud involving R121 000. It was alleged that the Department funded Moledi Care Center, an NGO, to sustain projects intended to uplift the community. The grant was misused. This matter was still under investigation by the Hawks.

-A case at Mmabatho where the offence was fraud involving R420 000. In this matter, it was alleged that an employee of the Department connived with service providers and solicited money from the service providers. The matter was still under investigation.

Regarding the Provincial Department of Local Government and Human Settlements, three investigations were underway:

-A case at Mmabatho where the offence involved fraud was fraud with a loss that still had to be determined. It was alleged that the Department of Human Settlements advertised a tender for building houses for the Reconstruction Development Programme (RDP) and appointed a service provider. All procurement procedures were followed, but the service provider was paid for services not rendered between 2016 and 2018.  

-A case at Rustenburg where the offence was fraud involving R84.42 million. It was alleged that R134.42 million was transferred from the Department of Human Settlements to the Bojanala District Municipality where it was not accounted for, while the money was originally intended for the Rustenburg Local Municipality.

-A case at Mahikeng where the offences were fraud and forgery with a loss that must still be determined. It was alleged that houses had been transferred from the Department to private persons unlawfully.

Regarding the Provincial Department of Finance, two investigations were currently underway:

-A case at Mmabatho where the offence was fraud with a loss that must still be determined. It was alleged that a Supply Chain Manager misrepresented credentials when applying for a post.

-A case at Mmabatho where the offences were fraud and forgery with a loss that must still be determined. It was alleged that a law firm involved was paid inflated fees.

Regarding the Provincial Department of Tourism, one investigation was underway. The investigation related to a case at Mahikeng involving fraud and the loss of R 2.56 million. It was alleged that two security companies were appointed at different times under similar specifications but were paid vastly different amounts by the Department of Tourism.

Regarding the Provincial Department of Rural Economy and Agricultural Development, one investigation was underway into a case at Mmabatho involving fraud, corruption, and money laundering with a loss that must still be determined. It involved an agreement that the Department entered into with a company, AgriDelight, as an implementing agent. It had been established that payments were made to AgriDelight. The matter was still under investigation by the Hawks.

Provincial Departments under intervention in terms of section 100(1)(b)

The Committee heard that five Provincial Departments of the North West Province had been placed under section 100(1)(b) intervention. These were the Office of the Premier and the Provincial Departments of Health; Education and Sports Development; Transport and Community Safety; and Public Works and Roads.

Regarding the Office of the Premier, one investigation was underway. It related to a case at Mmabatho involving fraud and corruption with a loss that must still be determined. It was alleged that a service provider, NEPO Data Dynamics, had received suspicious payments from the Office of the Premier. NEPO Data Dynamics was appointed to provide IT services to the Office of the Premier and numerous municipalities in the North West province. This matter was still under investigation by the Hawks.

Regarding the Provincial Department of Health, five investigations were currently underway:

-A case at Mahikeng where the offence was fraud with a loss that must still be determined. It was alleged that a vacancy for the Head of Department had been advertised and improper processes had been followed. The case was currently before court and had been set down for hearing on 14 April 2021.

-A case at Mmabatho where the offence was fraud and corruption involving R30 000. It was alleged that the Head of the Provincial Department of Health signed a service level agreement with Cureva-Mediosa without following tender procedures. An upfront payment was made. The case was currently before court and had been set down for hearing on 26 July 2021. 

-A case at Mmabatho where the offence was fraud to a loss that must still be determined. It was alleged that the Provincial Department of Health appointed a service provider to transport patients from the clinics to the hospital. It was alleged that tender procedures were not followed. The matter was still under investigation by the Hawks at this stage.

-A case at Mmabatho involving fraud and corruption to a loss that must still be determined. It was alleged that a service provider was appointed unlawfully for the upgrade of the Brits Hospital. The matter was currently with the NPA.

-A case Mmabatho where the offences were fraud and corruption to a loss that must still be determined. It was alleged that the Provincial Department of Health appointed a service provider to upgrade and service medical equipment at the Vryburg and Brits Hospitals. Officials connived with the service provider to defraud the Provincial Department of Health by inflating prices as well as paying for services not rendered.

Regarding the Provincial Department of Education and Sports Development, the Hawks reported that there were six investigations underway:

-A case at Itsoseng-case where the offence was fraud involving R1.23 million. It was alleged by an internal investigator that the suspects, a school principal and his administrative assistant from Reatlegile Special School, stole money from the school by using the school’s cheques for their own personal gain. The matter was currently with the NPA.

-Four investigations relating to a case at Mahikeng where the offence was fraud with a loss that must still be determined. It was alleged that a forensic company submitted a report about a flawed tender process. The matters were still under investigation by the Hawks.

-A case at Mmabatho where the offence was fraud involving R498 000. It was alleged that a service provider was appointed without following the proper tender processes because no quotations were obtained from other companies, and the services were never rendered. The matter was still under investigation by the Hawks.

Regarding the Provincial Department of Transport and Community Safety, the Hawks reported that there were three investigations underway:

- A case at Mmabatho where the offences were fraud and corruption with a loss that must still be determined. It was alleged that departmental officials colluded with service providers, and that the proper supply chain management processes were not followed during appointments for scholar transport. It was further alleged that the service providers inflated travel claims. This matter was submitted to the NPA for a decision on prosecution.

-A case at Mmabatho where the involved offences were fraud and corruption with a loss that must still be determined. It was alleged by the Head Department that the entity unlawfully entered into a contract with South African Express because competitive bidding processes were not followed. The contract was for the rehabilitation and reintroduction of flights at the Mahikeng and Pilanesberg Airports. The matter was still under investigation.

-A case at Mmabatho-case where the offences were fraud and corruption with a loss that must still be determined. It was alleged by the departmental administrator that there were irregular appointments of service providers relating to scholar transport, and that the travelling claims were inflated. The matter was still under investigation by the Hawks.

Regarding the Provincial Department of Public Works and Roads, the Hawks reported that there were four investigations underway:

-A case at Mmabatho where the offences were fraud and contraventions of the Public Finance Management Act with a loss that must still be determined. It was alleged that the former Head Department, together with four District Directors and the Chief Financial Officer of the Provincial Department of Public Works and Roads colluded to award a tender without following the prescribed tender procedures for construction of roads for the four districts: Bojanala, Dr Ruth Segomotsi Mompati, Ngaka Modiri Molema, and Kenneth Kaunda. The Department appointed the Open Water Forensic firm to conduct a forensic investigation. The docket was submitted to the NPA in November 2020 for decision.

-A case at Mmabatho where the offence was fraud with a loss that must still be determined. It was alleged by the departmental administration that a service provider provided misleading information to lead the entity into believing that he was a qualified engineer. He was subsequently awarded an emergency tender to carry out structural assessment at 68 schools around the Dr Kenneth Kaunda District. The matter was still under investigation by the Hawks.

-A case at Mmabatho-case where the offence was fraud with a loss that must still be determined. It was alleged that the Head of the Department misrepresented information regarding the rendering of services to build roads within the province. An upfront payment of R103 million was paid to the service provider, but no services were rendered. The docket was closed in November 2020 as the NPA declined to prosecute. The Hawks intended to request the NPA to review its decision.

-A case at Mmabatho where the offence was fraud with a loss of R3 million. It was alleged that the Department made an upfront payment of R3 million for the renovations of the Mmabatho Stadium without services ever being rendered. This matter had been submitted to the NPA for a decision on whether to prosecute.

Dr Lebeya thanked the Committee for the opportunity to present the briefing. He expressed the Hawks’ commitment to ensuring that wrongdoers were held accountable though these investigations.

The Chairperson thanked the Hawks for a comprehensive presentation. He stated that the information presented to Members showed a great improvement from previous engagements.

Briefing by the SIU

 Adv Andy Mothibi, Head of the SIU, reported that the SIU was investigating 44 matters related to the North West province. The matters involved the Provincial Departments of Transport and Community Safety; Health; and the Public Works and Roads – all of which had been placed under administration in terms of section 100(1) of the Constitution. In addition, the SIU was conducting investigations related to the COVID-19 pandemic which involved the Departments of Social Development; Health; and Education and Sports Development.

A total of 29 matters were closed due to a lack of evidence to support the allegations, two matters had been referred to other law enforcement agencies, three matters were under investigation by the Hawks, and the remaining ten investigations were being conducted by the SIU. All the referred matters related to allegations of corruption and following improper procurement processes for the awarding of tenders

The breakdown of allegations was as follows:

-Regarding the Office of the Premier, the allegations included the illegal sale of land in the province, the illegal transfer of property, and contracts concluded with AgriDelight and NEPO Data Dynamics.

-Regarding the Provincial Department of Social Development, the allegations included the irregular award of a tender worth R18 million.

-Regarding the Provincial Department of Human Settlements, Public Safety and Liaison, the allegations included the mismanagement of public funds, and the awarding of tenders to pre-selected service providers in a biased manner that did not adhere to the proper procurement processes.

-Regarding the Provincial Department of Finance, Economy, and Enterprise Development, the allegations included the irregular issue of a biodiversity permit and service provider.

-Regarding the Provincial Department of Rural, Environment, and Agricultural Development, the allegations pertained to illegal permits issued relating to rhinos and elephants.

-Regarding the Provincial Department of Community Safety and Transport Management, the allegations included the irregular appointment of service providers for the transportation of learners, and failure to follow a fair process relating to the community joining the Expanded Public Works Programme (EPWP).

-Regarding the Provincial Department of Public Works and Roads, the allegations included the irregular award of a tender for refurbishing and resealing of six roads, and the EPWP.

-Regarding the North West Development Cooperation (NWDC), the SIU was investigating the sale of the Christiana Hotel and the sale of wild animals at the institution, and the illegal award of a tender.

-The SIU had also been tasked to conduct an investigation at the Moretele Local Municipality into allegations about an the awarding of an illegal tender for ICT services amounting to R129.98 million, and an investigation at Madibeng Local Municipality into allegations of about the awarding of an illegal tender for a fleet of municipal vehicles amounting to approximately R190.36 million.

In relation to the Provincial Departments placed under administration in terms of section 100 of the Constitution, it was reported that the SIU had referred nine matters for prosecution. The investigations into the remaining matters were scheduled for completion by the end of April 2021.

The total amount of public funds involved in corrupt activities could not be quantified at this stage as investigations were still underway. Matters that had been referred to the Special Tribunal for determination had been valued at R59 million. No cases of irregular expenditure had been referred to the SIU for further investigation. However, should the SIU make a finding of irregularity regarding a specific process relating to supply chain management, the resultant contract and expenditure would be irregular in nature.

Investigations relating to the COVID-19 pandemic

The SIU reported that four matters relating to investigations concerning the COVID-19 pandemic had been referred to the NPA. There were ongoing investigations into the Provincial Departments of Social Development; Health; Education and Sports Development; and the municipalities known as Ratlou Local Municipality, the City of Matlosana Local Municipality, and the JB Marks Local Municipality.

Systemic recommendations and conclusion

The SIU recommended that there should be a strict system to monitor, evaluate, and report on services rendered by contracted service providers, and that the policy guidelines on the scholar transport tender should be strictly adhered to, with a strict verification of kilometres claimed for travel, and adherence to the tender requirements and specifications.

Some challenges reported included the risks of wrongdoers tampering with or destroying evidence, the closure of offices because of reported COVID-19 positive cases, demonstrations and protests at government institutions, and the prioritisation of the investigations related to the COVID-19 pandemic.

Discussion:

The Chairperson thanked the SIU for its comprehensive presentation. He stated that the information presented to Members showed a great improvement from previous engagements. He commended both the Hawks and the SIU for the progress made and the adherence to the guidelines of the Committee.

Mr S du Toit (FF+, North West) said it was clear that there was sensitive and confidential information that the law enforcement agencies could not share with the Committee on a public platform. Was the previous Premier of the North West being implicated or investigated in any of the cases currently under investigation? Quite a lot of allegations had been made against the previous Premier, but no investigations mentioned any investigations or charges made against this official. These allegations included donations of game and a deal that was concluded for a game reserve valued at R100 million.

Exceedingly small values had been mentioned by the Hawks and the SIU amounting to a combined value of R360 million in the investigations that were being conducted. The Auditor-General of South Africa (AGSA) had reported that the irregular expenditure in the North West amounted to R1.3bn in the 2017/18 financial year, and this had massively increased to R3bn in the 2019/20 financial year. Why had this expenditure not yet been investigated by the SIU or the Hawks? The Committee had previously welcomed the freezing of assets or pension funds relating to those people involved in wrongdoing in the province, and more concrete action was required from the SIU and the Hawks in this regard. Has similar action been taken against other wrongdoers?

The Chairperson reminded Committee Members not to refer to specific persons by name or office, as the Hawks and the SIU might not be at liberty to divulge the sensitive and confidential information related to their currently ongoing investigations. The meeting was streamed on a public platform, and thus it was necessary to ensure that no unnecessary details were mentioned or reported. Only when the necessary legal processes had been completed, and a person had been charged or arrested could the sensitive information be discussed.

Ms C Visser (DA, North-West) thanked the SIU and the Hawks for the comprehensive presentations made to the Committee. She raised the matter of the Bojanala District Municipality where it was alleged that R34.42 million transferred to them from the Provincial Department of Human Settlements was unaccounted for. The Hawks had reported that the forensic report for the matter was still outstanding. She asked for clarity on why this case was reopened when it was previously reported to the Committee that the matter was closed.

She thanked the law enforcement agencies for exposing the tip of the iceberg to Members regarding the situation in the North West Province and within its Provincial Government. It was clear that the North West’s Provincial Government was riddled with fraud, corruption, and blatant theft without any checks or balances in place. There was no accountability or consequence management for the implicated wrongdoers. These people seemed to have just silently disappeared or were reassigned to other municipalities. It was deeply concerning that the people residing in the North West were subjected to such a corrupt and malicious government. The maladministration in the Provincial Government was the root cause of why the schools in the province were in such a state of dilapidation, why there was insufficient access to water and electricity, and why the roads and other public facilities, including hospitals and pharmacies,  were in a terrible state, with almost no services being delivered properly or efficiently. She requested that the law enforcement agencies be required to focus their mandates on ensuring commitment to investigate and prosecute every instance of the misappropriation of funds or financial misconduct within the Provincial Government. The uncontrollable disease of fraud and corruption within the North West province must be addressed at its core.

Ms Z Ncitha (ANC, Eastern Cape) appreciated the reports by the SIU and the Hawks and thanked the entities for properly responding to the briefs issued by the Committee on what was required. She asked for clarity from the SIU on the amounts involved in their investigations into the various Provincial Departments. She raised the issue of the Premier of the North West causing delays in the SIU’s investigations by failing to sign the required documents. She asked whether there were any implications for the Premier in this regard. What were the timeframes of the law enforcement agencies in wrapping up their investigations?

Ms M Gillion (ANC, Western Cape) agreed with Ms Ncitha on the issue of the Premier of the North West Province. She asked what measures had been taken to fast-track this issue in relation to the Hawks.

Mr I Sileku (DA, Western Cape) urged the Hawks and the SIU to augment their working capacity within the North West Province. How often did the various law enforcement agencies meet with each other to discuss  cases? It seemed as if referrals were made and then there were lengthy delays in receiving responses. What had happened to the contract under investigation pertaining to the procurement of a municipal fleet of vehicles? Had this contract been suspended or terminated? What assistance was given to whistle-blowers in these cases to ensure that the cases that had been closed because of a lack of evidence could be reopened and further evidence obtained? He was of the view that lengthy investigative processes without outcomes were undesirable and he called for the speedy conclusion of these investigations and prosecutions. It iwas unacceptable that these investigations had been ongoing for years without any convictions or solid conclusions to the matters.

Mr K Mmoiemang (ANC, Northern Cape) stated that there was a tremendous improvement in the presentations and information that the Committee received from these law enforcement agencies. The Committee was now in a much better position to appreciate the progress made regarding the Section 100 Intervention in the North West Province. He emphasised the importance of allowing the SIU and the Hawks to fulfil their mandates independently and without fear, favour, or prejudice.

The Chairperson commended Dr Lebeya and Adv Mothibi on their comprehensive presentations. However, he said there remained a magnitude of work that still needed to be done. The nature of the investigations being conducted was quite serious, and there were many matters that needed the attention of the law enforcement agencies. He asked the SIU and the Hawks why additional teams had not been deployed to the North West Province to aid in the investigations. He urged the law enforcement agencies to augment their  human capabilities to ensure effective investigations and prosecutions regarding the corruption within the Provincial Government of the North West province. The patience of the people on the ground in the province was running thin. The public was losing faith in the law enforcement agencies’ ability to bring about a stable government. It was clear that there was an overlap in the cases being handled by the SIU and the Hawks. What measures of collaboration on these matters had been undertaken by the law enforcement agencies? He asked the SIU to submit the report dealing with the interventions into different municipalities to the Committee.

Responses

Dr Lebeya thanked Members for the questions and concerns raised. He stated that the Hawks had been consistent in their presentations to Parliament regarding the non-mentioning of names of parties that could be the subject of an investigation. He agreed with the Chairperson that only when the necessary legal processes were completed, and a person had been charged or arrested, could the sensitive information be discussed. This was paramount in ensuring that the due processes of the law were followed to the letter. It was not prudent or ethical to mention the names of people that were under investigation before such a person had been warned of such investigation in line with their constitutional rights.

Regarding the question of timeframes for the completion of the matters under investigation by the Hawks, he stated that most of their investigations were dependent on external role-players. However, the Hawks remained committed to ensuring that these investigations were concluded speedily. There were various measures for collaboration in place between the law enforcement agencies, but the Committee should be reminded that the decision on whether to prosecute remained the exclusive legislative mandate of the NPA, and law enforcement agencies could not override or unduly influence the decisions of the NPA. He informed the Committee that the Hawks had appointed 90 additional staff members, predominantly investigating officers. Some were scheduled to be stationed in the North West to ensure the fast-tracking of the investigations in the province. He stated that any unanswered questions would be responded to in writing following the meeting.

Adv Mothibi agreed with Dr Lebeya’s comments regarding the legal risks of naming parties who might be the subject of ongoing investigations. He stated that while there was an overlap in the investigations of the SIU and the Hawks, each law enforcement agency was tasked with specific obligations regarding those investigations to ensure that there is no duplication of work done. He expressed the SIU’s commitment in following up with the AGSA to determine if there were any further matters that required attention by the law enforcement agencies regarding the North West province. The freezing of pensions remained a deterrent for wrongdoers, and the SIU was actively using it as a measure to ensure that these wrongdoers did not profit from the crimes they had committed through the use of civil litigation. The SIU expressed its commitment to capacitating its team in the North West after a process of conducting a needs assessment and quantifying the existing gaps. 

The Chairperson thanked the Hawks and the SIU for their comprehensive briefings. He stated that the Committee welcomed the assurance from the Hawks that 90 additional staff members had been appointed, and that some were scheduled to be stationed in the North West Province. In addition, the Committee noted the commitment expressed by the SIU to capacitate its team in the North West. He reminded Members that the Committee was scheduled to conduct an oversight visit in the North West the following week to assess progress in stabilising the province and to examine the impact of the section 100 Intervention.

The meeting was adjourned.