December 14, 2018

Briefs that show all: A start has been made on the official state capture inquiry

Here is something for those who are wondering when the state capture investigation will get underway. It turns out that a small start has already been made.

Parliament's Announcements, Tablings and Committee Reports (ATC) volume 80 of 2018 reported that Deputy Chief Justice R M M Zondo, Chairperson of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State, on 4 April 2018 requested transcripts of the proceedings of all portfolio committees that have so far conducted hearings into state capture.

It’s a start.

That would be the Portfolio Committees on Home Affairs and, of course, Public Enterprises, whose impressive inquiry took on the appearance and scale of an official investigation, and probably accomplished more than an average state inquiry has ever done. Sadly, though, it was prevented at the very end from getting the evidence that could have sent people to jail by the untimely disappearance of its main witnesses, Duduzane Zuma, Ajay Gupta‚ Atul Gupta and Rajesh Gupta. They were all subpoenaed, along with former SAA chairperson Dudu Myeni, but declined the invitation.

As is now widely known, Myeni submitted a medical certificate saying she was "not in fit and full capacity" to appear before the Committee, and objected to being "stripped" of her rights. Dudu, no one is interfering with your rights. You are the one breaking the law because, as you know, parliamentary Committees may subpoena anyone to appear before them, up to and including the President, and failure to comply with a subpoena is an offence.

Dudu’s attorney, Gary Mazaham, said in a letter that he had not received transcripts of evidence presented to the inquiry related to his client and therefore didn’t know what questions to prepare for so he, too, would therefore not be able to appear before the Committee.

BDK Attorneys sent a letter on behalf of the Gupta brothers saying the Committee couldn’t really expect them to trawl through all the evidence it had collected, and anyway the brothers were not in SA "being absent for business reasons" and they therefore also declined the invitation to appear before the committee.

When did a subpoena become an invitation? And when did lawyers get to decide what evidence they’re willing to consider? If these attorneys find themselves in a real-life court case, which under the circumstances is not impossible, they will have to go through all the evidence. So here is a handy list of what the state can provide if, like Zondo, they simply ask for it.

Is there an easier way of getting your ID or passport?

Dirk Stubbe (DA) asked how many cases under the Prevention and Combating of Corrupt Activities Act, Act 12 of 2004 has the Minister of Home Affairs had to refer to SAPS or the Hawks for investigation since this law was passed. The answer: 286 cases of fraud and corruption in the Department of Home Affairs have been investigated and arrests made. How many were convicted: “The Department does not readily have the number of convictions.” Just to put this in context. The Minister of Rural Development and Land Reform reported 10 cases, the Minister of Tourism 6 cases and the Department of Public Works 46 cases.

More from Home Affairs. How easy is it to get refugee status asked Mohammed Hoosen (DA)? It’s not easy. Out of a total of 24,174 applications made in 2017, 2,267 or fewer than 10% were successful. :

Will NSFAS ever get it right?

Belinda Bozzoli (DA) asked the Minister of Higher Education and Training how many universities and vocational education and training (TVET) colleges have experienced “disruptions” resulting from delays in payment to students reliant on their National Student Financial Aid Scheme (NSFAS) bursaries, and what is being done about this?

Hasn’t she asked this question before?

This time she was told that 121,974 university and college applications have been affected by the delay in payment of 2018 bursaries. Of these, 100,963 are university student and 21,011 those at vocational colleges. That amounts to a lot of students who have been kept waiting.

It is a problem across the country, but unsurprisingly it appears the formerly disadvantaged institution are hardest hit. Universities include Mangosuthu University of Technology, Nelson Mandela University, University of Fort Hare, the University of Limpopo, etc, etc. (It must be pointed out that at universities not all disruptions relate to NSFAS delays. They also erupt when there is no security on campuses or no student housing.) Affected colleges include Goldfields, Umgungundlovu, Buffalo City, Tshwane North…and the list goes on.

So what happens now? Bozzoli was assured that universities and TVET colleges know that they have to pay allowances upfront and between January and April 2018 made upfront payments for allowances to all funded students. Read this sentence again. Upfront payments – made in three tranches and totalling R4.5 billion for the university sector and R2.5 billion for the college sector – have been made to all universities and TVET colleges.

But at the same time we are told there are allowances that haven’t been paid upfront, and that NSFAS is “finalising the implementation of the bursary agreement, standardised allowances and data integration issues to enable it to generate the agreement forms and get contracts signed”.

It should comes as no surprise to learn that 23 higher education institutions have experienced student protests so far this year over delays with their NSFAS bursaries.

Minister uses lesson on racism to teach H&M about development

Parliament tells us that something good may yet come out of the disastrous display of racism by Swedish retailer, H&M, who earlier this year featured an advert of a black child wearing a sweatshirt with the words “coolest monkey in the jungle” etched on the front.

The Ministry of Economic Development, who had added its voice to the national and international outrage, also used the opportunity to point out that the African continent is not purely a consumer market for goods but also a source of clothing and textiles. In response to a question by Michael Cardo (DA), Parliament learned that discussions were facilitated by the Swedish ambassador between the company, government as well as NGOs, and it was acknowledged that every single item in H&M stores from assets, stock in trade and consumables is imported.

The Department and some of the NGOs pointed out that a full and complete mea culpa would include using South Africa as a source for clothing and other consumables, which would create local jobs and help bring down unemployment.

This is not the first time that the government has convinced retailers to localise more of their sourcing and H&M agreed to send a technical delegation to South Africa to identify local capacity. In May the Department arranged a meeting between H&M and a retailer who had invested in local sourcing to demonstrate the opportunities in local industry, and arranged for H&M to visit a number of factories in Johannesburg, Cape Town and Durban.

Let’s hope for a positive outcome. H&M has not only learned a lesson about racism. It may also have learned something about economic development, and what this country and continent has to offer the global economy.

Minister still has faith in SOEs

Mosiuoa Lekota (Cope) asked the Minister of Public Enterprises whether, given the perilous state of many State Owned Enterprises (SOEs) under that department, he thinks that the government will have to provide further financial support and guarantees to keep SOEs in operation. If so what would this mean in terms of “policy projections”, as he delicately put it?

The Minister’s response will worry those of us already concerned about the current state of the fiscus because he clearly indicated that he has no intention of giving up. If you are wondering what your 2018/19 taxes will be used for, his actual response was: “I believe that short to medium-term financial support (or guarantees) combined with changes in Boards and Management and a review of business strategies will be beneficial and fundamentally change the outlook for State Owned Enterprises.”

For the record, State Owned Enterprises that have already been given maximum government guarantees (in compliance with the PFMA) include Eskom ‑ R350 billion; Transnet – R5 billion; Denel – R4 billion; and South African Express – R0.8 billion. SAA wasn’t mentioned.

“Further financial support will be subject to SOEs providing a viable business case, clearly demonstrating that financial support will be utilized solely for advancing both commercial and developmental mandates. This will also be conditional on SOEs proving that they will adhere to prudent financial and risk management which will be closely monitored by the Department,” said the Minister. The form that financial support will take is subject to the Minister of Public Enterprises and Minister of Finance’s joint assessment and concurrence on each application received, he added.

Minister reminds Parliament of how and why it must fight corruption

Dirk Stubbe (DA) is the latest Member to ask a Minister if she has conducted the life style audits demanded by President Cyril Ramaphosa in his February reply to the State of the Nation debate as a first step in the fight against corruption. A number of Members have put the same question to other Cabinet Ministers, but the replies have usually been a simple “no”. This time the question was aimed at International Relations and Cooperation Minister.

To her credit, she took the question seriously, and Notes from the House decided her reply was worth publishing verbatim and in full. This is not only because it is encouraging when Cabinet Ministers demonstrate that they know that they are accountable to Parliament, but also because her answer may remind other Ministers that their President issued a (very necessary and reasonable) instruction.

Reply

The Honourable Member is raising a pertinent matter, that of fighting corruption both in the public and private sector. Accordingly, the President in his response to the debate on the State of the National Address on 20 February 2018 underscored this point and asserted:

The work we must undertake to tackle corruption and state capture has, quite correctly, featured prominently in the debate. It is time that we implement our resolutions on the conduct of lifestyle audits of all people who occupy positions of responsibility, starting with members of the executive….

“As we indicated in the state of the nation address, we are equally determined to tackle corruption and other economic crimes in the private sector. Institutions like the SA Revenue Service, the Reserve Bank, the Financial Intelligence Centre and our law enforcement agencies work together to detect and prosecute tax evasion”.

“Lifestyle audits will go a long way in identifying corrupt practices and assist with the fight against corruption. Therefore, my department will implement any directive issued in this regard. I can assure the Honourable Member that the Government is serious about its commitment to fight this scourge. We have taken the necessary steps towards ensuring that this is realised. I wish to point out to the Honourable Member that public servants are now prohibited from doing business with the state or its organs. Incidentally, it was during my tenure as Minister for the Public Service and Administration that the Public Administration Management Act of 2014, which introduced this prohibition, was drafted, processed through Cabinet, [was] approved by Parliament and assented to by the President in 2014.

“Honourable Member, the prohibition referred to above is currently enforceable through section 13 (c) of the Public Service Regulations. The said section stipulates that an employee shall not conduct business with any organ of state or be a director of a public or private company conducting business with an organ of state, unless such an employee is in an official capacity a director of a company listed in schedule 2 and 3 of the Public Finance Management Act.

“The Financial Disclosure Framework which is currently implemented in the public service and applicable to all Middle Management Staff (MMS) and Senior Management Staff (SMS) is meant to identify and manage conflict of interest situations, ensure transparency and accountability (good governance), promote an ethical culture and prevent corruption in the public service.

“In addition to the measures which we are already implementing, senior managers in the public service and Chief Executive Officers of our public institution are required to go through a vetting process, which is conducted by the Department of State Security.

“[With respect to] Members of the Executive, Ministers and Deputy Ministers declare their financial interest in compliance with the Declaration of Members’ Interest Framework and the Executive Members’ Interests to Parliament and the President respectively.”

Thank you for your straight answer, Ms Minister! Does anyone still not get this? Minister, implement your departments' lifestyle audits.

 

Last modified on Wednesday, 20 June 2018 17:53

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