- In November 2019, the NLC stopped publishing beneficiary lists and amounts.
- A couple of media Davids started investigating some of those causes, a ragtag "astroturf army" sprang up to defend the NLC and keep beneficiaries secret.
- If the plan was to silence questions about the NLC, it has backfired badly.
It must have seemed like a good idea at the time.
On 5 June, an organisation calling itself United Civil Society in Action (UCSA) resolved to institute legal action against GroundUp, a nonprofit news site which focuses on matters affecting vulnerable communities.
The UCSA resolution was aimed at stopping GroundUp from publishing details about beneficiaries awarded grants: who got money via the National Lotteries Commission (NLC), how much, and what they did with it.
A second target was the NLC itself, though this was a red herring because UCSA and the NLC were entirely on the same page regarding the need to keep beneficiaries secret, as we shall see.
This was not always the case.
For 18 years the NLC had the practice of publishing details of beneficiaries who received a portion of the lotto money that gets paid over to it for distribution. These were routinely attached to the NLC's annual report - and sometimes the NLC even boasted about particular projects.
However, in November 2019, the NLC announced that for the first time it would not publish beneficiary lists and amounts.
The NLC invoked a section of the Lotteries Act, but the inescapable conclusion from what went before and came afterwards is that this was a pretext prompted by challenging reporting on some of the NLC's projects that emerged in late 2017 and has continued ever since.
At the centre of that reporting were two lonely voices: Anton van Zyl, publisher of the Limpopo Mirror, and Ray Joseph, a veteran freelancer given space and support by GroundUp to pursue the story.
In November 2016, Joseph attended the African Investigative Journalism Conference at Wits University.
Over drinks with global colleagues they discussed the possibility of an investigation into the transnational links, architecture and impact of the global lottery industry.
What emerged the following year, the Gaming the Lottery investigation, was a collaboration from Africa, Europe and the United States.
In South Africa, civic tech outfit OpenUp captured 16 years of lottery grant details from the NLC's published reports and for the first time created a searchable database of beneficiaries.
Joseph started publishing the broad findings in August 2017, notably the disproportionate funding that the South African Sports Confederation and Olympic Committee enjoyed.
But it was Van Zyl who first made use of the database to drill down and explore who had benefited in his own Vhembe district. The story published in November 2017 was not reassuring.
It introduced troubling features that would become a staple for investigations by Van Zyl and Joseph - individually and when they teamed up: the mixing up of commercial and non-profit ventures, the use of one nonprofit organisation (NPO) as a conduit for another, and the lack of interest in accountability displayed by both the NLC and the NPO directorate of the Department of Social Development.
It is worth focusing on one article because it introduces two characters that will feature in a follow-up story: flamboyant Pretoria lawyer Nkhumbuleni Lesley Ramulifho and the NLC's chief operating officer, Phillemon Letwaba.
It recounts how, in 2016, Ramulifho took over a dormant Limpopo NPO, Denzhe Primary Care, and obtained R27.5-million in lottery funding to build a new drug rehabilitation centre. Then the construction contract was turned over to a company allegedly controlled by a brother of the NLC's Letwaba.
Letwaba and Ramulifho initiated separate legal actions against Joseph and GroundUp, which are being defended.
The 2018 stories focused on Limpopo, which made sense both because of Van Zyl's local knowledge and because the NLC had long been rumoured to be in thrall to a Limpopo influence network.
The NLC did not emerge looking good.
Thus, in December 2018 the first salvo was fired in what appears to be a phoney war which culminated in the formation of USCA in June 2020.
On 6 December 2018, one Torong Ramela wrote to the Speaker of Parliament, to the NLC and to the Minister of Trade and Industry to express "disgust". The department oversees the NLC.
What disgusted Ramela was "the publication of NPOs information by the media, presenting them in a very negative light, particularly the Black run NGOs".
Clearly referring to OpenUp's searchable database, Ramela said he learnt that "certain media houses have developed systems containing this information" which, he fumed, was regarded as "an attack on our member organisations and their directors".
Ramela then proceeded to quote "Regulation 8" issued by the minister under the Lotteries Act, which prohibits disclosure of "any Information in connection with any grant application or the grant Itself" - a legal argument that has formed the basis of the NLC's newfound resistance to publishing beneficiary information.
Ramela styled himself as the executive director of the Communication Access Organisation of South Africa (Caosa), and purported to be representing "many organisations in the sector [of which] some are the beneficiaries of the National Lotteries Commission".
However, Caosa appears to exist virtually in name only.
Ramela did not respond to amaBhungane's emailed questions about his role.
Days later, on 10 December 2018, one Kenneth Thlaka also wrote along similar lines to the department, the NLC and the Speaker to complain about the investigation of lottery recipients.
"I would like to register our concerns regarding the way the NGO sector and NLC has been projected in the media lately," Thlaka wrote, citing an article in the Lowvelder newspaper which quoted Joseph's "global investigation".
Thlaka questioned "who gave this institution the mandate to conduct this kind of investigation" - and countered with fulsome praise of the NLC and a plug for it to support his own organisation.
Thlaka is the executive director of the SA NGO Network (Sangonet).
Sangonet and the related SA NGO Coalition (Sangoco) were once powerful voices for the nonprofit sector, but are a shadow of their former selves, with one senior ex-staffer alleging to amaBhungane that they are now run virtually as personal fiefdoms.
Sangonet receives funding from the NLC as does another non-profit run by Thlaka, Cyraspex.
Thlaka did not respond to emailed questions from amaBhungane.
The concerns raised by Ramela and Thlaka were remarkably in tune with the growing antagonism within the NLC concerning the disclosure of funding.
Indeed, the official sounding letters from Caosa and Sangonet provided convenient props for the NLC when it launched its first formal bid to shut down GroundUp's disclosures.
On 12 March 2019, the NLC wrote to the information regulator complaining about the "unlawful receipt and dissemination of beneficiary/npo information" by the two journalists, Joseph and Van Zyl.
The regulator is the custodian of the Protection of Personal Information Act (POPIA) which is meant to enable the legitimate protection of privacy.
The NLC attached the two letters "from NGO coalition movements" and called on the regulator to intervene "to assist the NLC to enforce the provisions of POPIA".
This gambit failed. The NLC's plea was ignored.
Instead, Joseph's investigation ramped up. GroundUp published more than 30 NLC stories in the course of 2019 and the allegations gained wider traction.
In May last year, Joseph reported that the Trade and Industry Minister, Ebrahim Patel, had instructed the NLC board and his department's internal audit division to institute an investigation.
Last September, he reported that Patel was dissatisfied with the NLC's internal investigation, especially around attorney Ramulifho, NLC chief operating officer Letwaba and the Denzhe project.
Correspondence that emerged later shows the NLC was forced into escalating damage control with Patel, whose audit unit was unimpressed with the NLC's deflections.
In October, Letwaba issued a summons suing Joseph and GroundUp for R600 000 and demanding the removal of six articles.
The NLC also lodged a complaint with the press ombud, but the NLC withdrew, stating it intended to litigate instead.
(A second complaint in 2020 was not adjudicated because of Letwaba's pending litigation and NLC's threats to lay criminal charges. Under ombud rules, complaints may be deferred if they are the subject of litigation. The complaint was also ruled out of time.)
In November, the NLC faced a rough ride in Parliament with questions about GroundUp's allegations and the NLC announcement that "following legal advice and complaints received by beneficiaries", it had decided to no longer publish their names.
By the end of January 2020, the NLC was reduced to the ignominy of writing an "open letter" (since removed from the NLC website) to Joseph, castigating his reporting as "based on incorrect information obtained in contravention of Regulations... as well as fabricated documents".
But help was at hand.
On 2 February this year, a new organisation calling itself the Independent Beneficiaries Forum (IBF) wrote to Patel, saying GroundUp's allegations were "ungrounded, very serious, damaging to the integrity of the institution that is the NLC, its entire leadership and that of our nation as a whole".
What concerned the forum was not allegations the lottery had become a lootery, but instead "the total disregard by... Mr Raymond Joseph, of our right to protection of information in line with our country's laws".
It described Joseph's conduct as "total anarchy that must be stopped" because he was "trampling on the rights of NLC beneficiaries by sharing highly confidential financial records with the public".
Among the forum's founding directors was Torong Ramela, from Coasa, who had expressed similar sentiments in December 2018.
Three days later, on 5 February 2020, Thlaka of Sangonet also wrote to the chair of the NLC expressing similar concerns about GroundUp's "attack".
"We feel that the situation is now getting out of hand. Therefore, [we] have decided that, for us to be heard, we must embark on a national march."
That same day, United Civil Society in Action was born.
By its own account, UCSA was "a lobby group campaign" representing various NGOs, "inclusive of #NotInMyNameSA, Sangoco, Independent Beneficiaries Forum and Sangonet".
Three of these we have already met.
NotInMyNameSA was co-founded in 2017 by Siyabulela Jentile, who describes himself as "a multi-award winning South African youth leader, social activist, author and social entrepreneur".
NotInMyNameSA, according to its website, is aimed at "strengthening the foundations of our democracy... by standing up for the rights of women and be an advocacy group against femicide, rape culture and commoditising of Women and Children".
It is not clear whether it receives funding from the NLC. Neither Jentile nor the organisation responded to emailed questions.
UCSA appears to operate out of the same offices as NotinMyNameSA and uses the same address and telephone number.
NotinMyNameSA president Jentile is also the UCSA president.
Sangonet's Thlaka emerged as the secretary of UCSA.
UCSA's spokesperson and treasurer, Tebogo Sithathu, appears to be a professional sock-puppet.
He is the founder of the Gospel Music Association, which has received funding from the lottery but appears to be inactive.
Sithathu has cycled through a variety of music industry organisations and was allegedly asked to resign by the Musicians Association of South Africa, according to a senior industry source who asked not to be named.
He has been active in support of the Google-backed Copyright Amendment Bill, taking a public position contrary to that of the SA Music Industry Council, where he also resigned recently.
Completing the circle, Sithathu is also a director of the Independent Beneficiaries Forum, which wrote to the minister in February.
Sithathu did not respond to emailed questions.
After its establishment, UCSA's first order of business appears to have been to lobby in support of the NLC and against the publication of NLC beneficiaries.
By 10 February, Jentile was being quoted in Sunday World praising the NLC and criticising Joseph.
"We would like to address Mr Raymond Joseph openly and challenge him to produce evidence of his allegations through relevant authorities," Jentile was reported as saying.
By 2 March 2020, UCSA had caused its attorneys to write to the NLC to complain about "continuous [negative] media reporting" and to protest at how the minister had been pressured to put the NLC under administration if it did not disclose its beneficiaries.
Three days later, UCSA staged a march to Patel's Pretoria office and handed over a memorandum demanding the minister end the publication of beneficiaries' names and allocations.
USCA was only in existence for a month, but had the resources to engage lawyers and organise a march of around a thousand people.
Protesters were bused in from different provinces, UCSA T-shirts were handed out and there were speeches delivered from a foldout stage built into the box of a truck, similar to those used at big political rallies.
Speechmakers led the crowd in chants of "Voetsek Raymond Joseph" and "Pansi Raymond Joseph".
An article in GroundUp noted that some people interviewed at the march were unaware of its purpose, with one mentioning that she was invited by "someone at the NLC".
AmaBhungane put it to both UCSA and the National Lotteries Commission that UCSA appeared to have been set up as a front for the interests of the current NLC leadership.
On 10 March, when NLC chair Alfred Nevhutanda appeared before Parliament's trade and industry portfolio committee, ANC MPs rallied round him and dismissed the GroundUp allegations as "noise" from the media.
The meeting was also attended by supporters of the commission's board and management, including UCSA's Sithathu, who was involved in an altercation with Joseph.
Nevhutanda, for his part, claimed that the information on beneficiaries had been "stolen" and called on the State Security Agency to investigate the matter.
Despite the NLC refusal to release the funding details for 2019, Joseph obtained a leaked list of payments made from April to December 2019 and on 25 May GroundUp began publishing stories about some of the more questionable projects.
This was too much.
On 9 June, UCSA launched its High Court application in Pretoria for an order that GroundUp "immediately cease" publishing details of beneficiaries and take down all existing articles.
In UCSA's founding affidavit, Jentile said he had instructed attorneys to institute legal proceedings after becoming aware of GroundUp's 25 May article.
And although the NLC was cited as a co-respondent (alongside GroundUp) the NLC's answering affidavit - fully backing UCSA and expanding their case - suggested that UCSA was acting simply as a stalking horse for the NLC.
Indeed, GroundUp made that allegation squarely in its answering affidavit.
"GroundUp believes that the NLC is itself behind this application, or at the very least, that it is complicit in the applicant's attempts to stifle reporting on maladministration and corruption in respect of the allocation of funds administered by the NLC."
GroundUp director Nathan Geffen said in his affidavit that from the inception of their investigation, Joseph and Van Zyl had experienced obstruction and attacks from the NLC."I also have a concern that [UCSA] is nothing other than a so-called astroturfing entity..."
"It also appears to have acquired funding to institute this application on behalf of unnamed grant recipients.
"I can only surmise that this application, taken together with the other conduct of the NLC... is part of the concerted effort to stifle investigation into the use of the NLC's public funds and silence GroundUp and other media outlets from disclosing the outcome of investigations to the public."
GroundUp challenged UCSA's standing to bring the case, its claims of urgency and its interpretation of the Lotteries Act and regulations.
UCSA's response was delay - and finally capitulation.
Instead of filing an answer, the organisation on 20 July withdrew its application and tendered to pay GroundUp's legal costs, suggesting the application was simply an attempt to intimidate GroundUp on behalf of the NLC.
As Geffen put it: "It is not clear how the UCSA is funded, what purpose it has beyond trying to stop information about recipients of lottery grants being published, or what standing it had to have brought this court case. All this leads us to suspect the UCSA is acting in cahoots with the NLC."
However, the withdrawal may have come too late to shield the NLC.
On 22 July, lawyers acting for Media Monitoring Africa and the South African National Editors Forum applied to join the case and have the court declare unconstitutional and invalid the regulation on which both UCSA and the NLC have relied to claim confidentiality.
The case is set to proceed, despite the withdrawal of UCSA.
The NLC has also suffered another setback, bowing to pressure from Patel and from Parliament.
Following a legal opinion from the Chief Parliamentary Legal Adviser that the NLC was obliged to disclose beneficiaries, the organisation published a list of grants for the 2018/19 year.
Why has the NLC fought so hard against transparency?
For some of the answers, look out for the next installment of Gambling on secrecy