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The A – Z of SA’s Fraud & Corruption Scandals

03 April 2014, 10:37

Arm’s Deal - Finalised in 1999, this became arguably the biggest political scandal in post-Apartheid SA.  It has been alleged that bribery by politically connected individuals (Jacob Zuma, Thabo Mbeki, Shaik brothers, Joe Modise) was used to gain defence contracts worth billions of rand.  Source - Wikipedia

Bitou Local Municipality (Western Cape) – Major problems came to light when the DA took over in 2001.  Apart from councillors being overpaid, the AG discovered that R188m of the municipality’s assets could not be verified, millions of outstanding debts were owed, some of which lied in a suspense account and an official had taken a second vehicle which exceeded his annual salary.  The Mayor, who was given the most expensive mayoral car in the country (R740,000 with GPS costing R40,000) and incurred R4 million on VIP protection in just one year, and the Municipal Manager had incurred unauthorised credit card expenses of R104 307 on a trip to Paris. This trip was claimed for twice. It also emerged that Seitisho took out a new vehicle loan of R90 000 while he still owed R163 924 on an earlier loan. Seitisho earns a whopping R960 000 per annum, yet holds no degrees, and has only five year experience in municipal management.  The airport ceased to schedule flights due to neglect, a R20 million in effective water desalination plant was built and the municipality was bankrupt.  The cases of fraud and corruption are too long to list.  Source - Politicsweb

Cele – A corruption investigation found that police chief Bheki Cele and a government minister were involved in property deals that were "improper, unlawful, and amounted to maladministration."  Public protector investigated leases for buildings that were to have served as police headquarters in Pretoria and Durban, and found that the buildings were leased from a well-connected company (Roux Shabangu) at inflated prices.  Source – The Times

Dina Pule - Pule laundered a R6-million gift of taxpayers' money to her boyfriend, lied publicly about their relationship and got her department to pick up her boyfriend’s tab for lavish overseas trips, knowing he was not entitled to such perks.  Source – The Times

Emfuleni Local Municipality (Gauteng) – Amid wide scale service delivery failure (housing backlog of R1.8 billion) and gross mismanagement, the AG found that council officials had received a R1 million kickback for selling council land, officials in the municipality had colluded with outside parties to sell off council assets at prices considerably lower than the market value.  Allegations of nepotism emerged as the Chief Financial Director had employed his wife, his two sons and his daughter in his department.  A Councillor was also alleged to have written off a debt owed by his business to the municipality.  More than a dozen officials were dismissed for misconduct.  Source – News24, MG

First Strut – Described as one of the most massive and longest running con jobs, First Strut was allegedly involved in the multiple financing of single assets, VAT fraud, black economic empowerment fronting, dodgy invoicing, bribes and more. Insiders say the wonder is that it went undetected for so long.  Source M&G

Gold Fields – A New York law firm, commissioned by Gold Fields, found that the South African mining house had hugely increased ANC Chairperson Baleka Mbete's cut in a contentious empowerment deal in response to an alleged threat by her representative.  Source - MG

Hlophe – Judge John Hlophe allegedly tried to influence two Constitutional Court judges to make a ruling in favour of President Jacob Zuma relating to the multibillion rand arms deal.  Source - Citypress

Inkwanca Local Municipality (Eastern Cape) – After an annual report showed that R54m was unaccounted for, a recent forensic investigation has revealed that the municipality is battling with fraud, corruption, nepotism and maladministration. The municipal manager is also under qualified.  Source – SABC

Joematt-Pettersson – The public Protector found that Pettersson wasted taxpayers' money, behaved unethically and tried to interfere in an investigation into alleged misconduct by her and her department relating to an R800m tender in which the tender award process showed evidence of collusive tendering and/or bid rigging.  The public protector has announced she will be taking Pettersson to court.  Source – The Times

Kokstad Local Municipality (KZN) – While devastating water shortages, lack of sanitation, a deficit of R39 million and overall service deliver failure it was found that  the municipal manager had awarded lucrative contracts to the tune of R2 811 375 to a friend who had set up a BEE front company.  A forensic audit also found that unsecured loans made to councillors and previous councillors had been granted with little indication of repayment.  Violations of the pension fund and inflated salaries were also taking place.  Source – News24

Landbank – amongst others, the CEO on the Landbank and former Housing MEC were arrested for using funds to purchase private cars and houses.  (See Roux Shabangu) Source - IOL

Mbombela Local Municipality - 8 children died from Cholera after the water treatment plant for the township of Matsulu broke down.  This occurred during shocking levels water and sanitation was occurring and after an earlier AG report which indicated that the municipality had failed to punish corrupt officials who had cost the taxpayer R47m through fraud and incompetence.  A senior director was found guilty of using taxpayer’s money for a fancy holiday in Cape Town and trying to fly to Germany to watch a football tournament.  The former manager was charged charges for alleged tender corruption in the construction of the Mbombela World Cup soccer stadium worth R1.2 billion.  Source - Citypress

Nkandla – Costing about R246 million, from an initial estimate of R27 million, the president’s home has become the main centre of attention besides the Oscar case.  Ignoring media reports in 2009 when costs were sitting at R65 million, spending continued on things like tuck shops, sports field, fire pool and more.  Source – Citypress

Obed Mlaba - EThekwini mayor Obed Mlaba’s family was linked to a R3 billion alleged tender “hijack” in Durban.  Mlaba was allegedly a “silent partner” in a firm identified as the preferred bidder for the tender, of which 20 percent was apparently owned by the Mlaba Family Trust.  According to an AG report, close family members of Mlaba and an unnamed senior city official have previously received three tenders from the city to the value of R88,31 million. It was also reported that one of Mlabla’s daughter, Thandeka, received two contracts for container toilets.  A year later the now former Ethekwini mayor Obed Mlaba and former city manager Michael Sutcliffe were among the top officials fingered for wrongdoing, corruption and maladministration in a damning forensic report which found the municipality’s irregular spending of over R2 billion.  At least 10 serving and former municipal councillors and more than 13 city officials were accused of corruption and breaking the law by trading with the municipality and not declaring their business interests.  Mlaba was recently appointed as the new High Commissioner.  Source – IOL, New Age

Public Works – Investigations into almost a million transactions over a four year period, involving billions of rand (R90 billion), are taking place.  Besides the hundreds of millions spent on Zuma’s Nkandla (see Nkandla), government offices housing PW officials were renovated at the cost of R330 million (up from the initial budget of R59 million), a prison construction in Kimberly budgeted at R100 million ended up costing R1 billion and renovations to 10 Ministerial houses in the Cape Town cost R100 million.  Allegations of tender rigging, kickbacks and price inflating are being investigated.  Source – Business Day, Public Works ?

Qwa Qwa vehicle fraud – A Qwa Qwa businessman was charged with more than 30 counts of fraud totalling over R19 million in 2003.  The charges related mostly to orders of luxurious vehicles in the names of big companies and fictitious enterprises.  Source - IOL

Roux Shabangu – Several years back, Shabangu was investigated for millions of rand that went missing from the Land Bank.  Last week the Land Bank brought a claim against several ANC heavyweights, high-ranking government officials and property mogul Roux Shabangu for failure to repay a loan relating to a North West development which appears to have been bungled due to corruption.  Shabangu has also been probed by the Public Protector and the Special Investigating Unit regarding two multimillion-rand leases concluded between Shabangu and the police for headquarters in Pretoria and Durban (see Cele) – Source MG

Selebi – Former National Police Commissioner, Jackie Selebi was convicted on corruption charges in July 2010, for receiving (at least) R1.2 million from alleged crime-syndicate boss, Glenn Agliotti.  Source - Wikipedia

Travelgate - in which 40 members of parliament (mostly ANC) were found to have illegally used parliamentary travel vouchers worth R18 million for personal use.  Many of these MPs still enjoy their seats in parliament.  Source - MG

Unilever & Co - South Africa's construction companies could be facing crippling civil claims from their affected clients who paid too much for their construction projects due to the collusion that was allegedly rife in the sector.  Jail terms and fines amounting to billions are also on the cards.  Unilever and many other large clients were amongst the victims.  The construction of Unilever South Africa's head office also allegedly fell victim to collusion.  Source - MG

Vavi - allegations of corruption against Cosatu general secretary Zwelinzima Vavi have surfaced regarding the sale of Cosatu's old building in Braamfontein, which Vavi has been accused of mishandling. The senior investigator on the case was recently murdered in his car outside his office thus delaying the investigation.  Source - MG

Watergate - Government's R15 billion plans to replace its ageing municipal water system is being dogged by accusations of corruption as officials in several provinces repeatedly appoint a shadowy company called Lesira-Teq to install water meters that keep breaking down.  Lesira-Teq clocked up more than R614m worth of contracts.  These revelations follow the release this week of a damning report by the auditor general that found municipalities misspent R11 billion in 2010-11 and red-flagged 95% of councils for poor financial controls.  In some cases, more than 40% of these meters have failed – compared with an industry norm of a less than 2% failure rate -- leaving residents fuming and forcing government to pay extra to fix the problem.  Now the Sunday Times can reveal Lesira-Teq was secretly awarded a three-year R205 million contract by Erkurhuleni municipality last year without following proper procurement procedures.  Source – The Times

Xhariep district mayor – He managed to rack up R28, 410.00 per month in fuel for eight months during the 2011/2012 year.  Source - DA

Yengeni – A police station commander, Siphiwo Hewana, was found guilty of attempting to defeat the ends of justice for tampering with the docket for convicted fraudster Tony Yengeni's arrest for drunken driving in 2007.  Yengeni was arrested in 2001 during an investigation by then National Director of Public Prosecutions, Bulelani Ngcuka, into allegations of misuse of power against Yengeni and Jacob Zuma.  Yengeni placed full-page advertisements in all Sunday papers (except the Sunday Times) proclaiming his innocence and this cost about R250,000.  In 2004, Yengeni was convicted of defrauding parliament by accepting a discount on a luxury car during the tendering process for a controversial arms deal while he was the member of a parliamentary committee reporting on the same deal.  Source - Wikipedia

Zuma & Zondwa – Khulubuse Zuma, JZ’s nephew, and Madiba’s grandchild (Zondwa Mandela) were at the forefront of the Aurora scandal.  Amid a desperate situation where creditors owed over R100 million, workers not being paid for two years and mines turning to ruin, Zuma was reported to have bought his fiancée a Maserati, which sells for between R1-million and R1.6 million, for Christmas. Source – The Times

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