Gauteng ?health coughs up for ANC

2014-07-27 15:00

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Hundreds of thousands of rands of Gauteng health department money allegedly flowed to the ANC while patients in South Africa’s richest province went without life-saving treatment and medication.

This is the picture that emerged this week of rampant corruption and fraud. It implicates a top ANC office bearer and senior government officials in the fleecing of the provincial health department between 2006 and 2009.

A forensic audit report – filed in the South Gauteng High Court on Monday in support of an application to freeze the assets of Gauteng ANC chief whip Brian Hlongwa and his cronies – says health department money was channelled to ANC coffers.

At the time, Hlongwa was health MEC, a position he allegedly abused, exercising his powers in an “illegal, dishonest, unauthorised, incomplete and biased” manner.

The court also issued a preservation order against 3P, the consulting company involved, which is now being liquidated. The company’s CEO, Richard Payne, who allegedly paid bribes, has reportedly left the country.

The report, compiled by forensic auditor André Prakke, found that 3P had tenders worth hundreds of millions of rands with the department. The company:

»Paid R700?000 to the ANC without any supporting documentation or explanation why and what this was for;

»Paid R130?000 to the ANC Women’s League; and

»Paid an organisation called Friends of the ANC R40?000.

Prakke’s report was compiled earlier this year for the anticorruption task team. His findings are supported by another forensic report by chartered accountant and former Auditor-General staffer Sunette Joubert, for the Special

Investigating Unit which, along with the Hawks, is now sifting through thousands of pages of evidence that detail the waste and theft of hundreds of millions of rands.

The drama centres on Hlongwa who, when asked how he could afford his R7.2?million house in Bryanston, said he didn’t need his MEC job and earned 10 times more from his businesses.

But this week, it emerged that 3P gave him R2.6?million towards the property and paid for renovations on it.

On Tuesday, Judge Frans Kgomo granted the national director of public prosecutions a preservation order on Hlongwa’s property, preventing him from selling it.

Holidays galore

Hlongwa, his wife and other top officials were allegedly showered with gifts like overseas holidays and spa treatments. In 2008, for example, 3P treated Hlongwa and other officials to an eight-day holiday in Spain and Cuba, which cost R600?000.

3P also flew other officials around the globe to Dubai, London, Vienna and a number of other world capitals.

Prakke’s report found the department’s supply chain management director, Valdis Ramaano, received R400?000 in gifts and R448?000 in cash. He was instrumental in the relationship between the department and 3P.

How the ANC benefited 

Investigators found evidence that the proceeds of the corruption and fraud found its way to the ANC’s 2009 election campaign.

The allegations, first revealed in the Mail & Guardian on Friday, include that three months before the elections, in

January 2009, another consortium that hoped to do billion-rand business with the health department allegedly paid R100?000 into a bank account controlled by a senior official. The account was intended for ANC fundraising and the company, Amethst, noted the payment as “election education”.

Between 2006 and 2009, health department suppliers were reportedly made aware that they were expected to pass 1% of the value of every contract back in bribes.

3P’s many, many millions 

Prakke’s report deals mainly with 3P being appointed to compile Hlongwa’s department’s 2007/08 budget, and later asked to draft and prepare its “turnaround strategy”.

The contract’s value was R68?million but was later hiked to R137?million. 3P submitted invoices for R455?million and were paid a staggering R339?million.

In his 99-page report, Prakke details how 3P became nothing but a cash machine for its own directors, corrupt health officials and Hlongwa himself.

3P’s financial director was also Hlongwa’s financial adviser. The director drew large amounts of cash which were allegedly given to Hlongwa and his wife. The director also allegedly set up “offshore structures” for Hlongwa – clearly an attempt to stash and hide ill-gotten gains.

The report also details how several million rands in cash were drawn by the director and dished out to top health officials. Hundreds of thousands of rands were allegedly spent on renovating their homes. Prakke found that 3P submitted irregular time sheets for which they were paid almost R40?million.

The bribed officials authorised and ensured the payments. 3P was so entrenched in the health department that even the department’s acting chief financial officer was an employee of the company.

Public health trashed 

Prakke says the graft was “disruptive and detrimental”, and public health services were severely “prejudiced”. National Treasury had to urgently intervene to keep services running.

In 2008, the department froze all its 22?000 vacant posts because they had run out of money. At the time, Gauteng hospitals needed 8?974 nurses and 1?417 “clinical professionals”.

What they said

Hlongwa couldn’t be reached for comment this week but he told the Gauteng legislature on Friday that over the past five years he had to “live with the pain, the anger and the shame of having been continuously tried, prosecuted and sentenced” by the media.

He said if he was found guilty, he would face the “full consequences” of the law. ANC spokesperson Nkenke Kekana denied the party in Gauteng received “a donation from the person mentioned”.

Thabo Masebe, spokesperson for Premier David Makhura, said: “It was the Gauteng government who asked

for this investigation.” – Additional reporting by Thuletho Zwane

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