WeeklySA_AdminCLEAN-UP: The unit presents findings to parliament portfolio committee, saying the NPA let the team down, only one case out of 19 referred to it, in court…
By Raymond Joseph
Out of 19 separate matters involving Lottery corruption that have been referred to the National Prosecuting Authority (NPA), only one is currently before a court, with no progress in getting the rest before the courts, Parliament was told on Tuesday.
Some of the charges, which include fraud, corruption and money laundering, date back to early 2022. This is according to two reports presented to MPs serving on Parliament’s Standing Committee on Public Accounts (SCOPA).
Senior Special Investigating Unit (SIU) officials presented a pared-down progress report with highlights of their investigation to the committee during a virtual meeting.
MPs were also given a more comprehensive 128-page version, which went into detail about what they had uncovered and named many of the people involved.
Among those named and referred to the NPA for prosecution are several former NLC executives and board members, who oversaw the NLC at a time when it was overwhelmed by corruption.
The list of names, headed “key players in the lottery corruption”, is broken into two: “internal players” and “external players”, consisting of people the SIU has previously described as “kingpins”, and family and business associates.
The SIU identified four NLC executives and board members as key players in the looting. The SIU provided SCOPA with detailed information on Lottery corruption in which they were involved.
· Former NLC COO Phillemon Letwaba: Last week, Letwaba was included in a Special Tribunal judgment that froze R25-million in assets acquired using plundered lottery funds.
· Former NLC board chair Alfred Nevhutanda: He used lottery funds to buy a Rolls-Royce and a luxury mansion, among other things.
· Former NLC board member William Huma. The Special Tribunal recently interdicted Huma from receiving R10-million from the sale of his Waterkloof mansion, which was paid for with lottery money.
· Former NLC Commissioner Thabang Mampane: Her weekend home on a golf estate was paid for with lottery money
Members of SCOPA listened in silence as the SIU explained in detail how they were currently investigating R2-billion in fraud and corruption.
But they were told this amount could increase substantially as the SIU was continually receiving new information about further Lottery corruption, which would have to be investigated.
“This amount keeps increasing because we are currently receiving new tip-offs about corruption, as well as uncovering more and more during our investigations,” SIU chief operating officer Leonard Lekgethoa told MPs.
MKP MP Emerald Madlala asked the SIU how far it followed the flow of money. “I do not believe that such a scale of corruption can happen without politicians being involved.”
Delinquency list
So far, the Special Tribunal and the Asset Forfeiture Unit had successfully frozen properties, vehicles and pensions worth almost R122-million.
The SIU has completed two phases of its investigation, with phase one involving R280-million and R247-million in phase two. It has also delivered its first report on its findings to President Cyril Ramaphosa.
Phase three, which is expected to be completed by 31 December, so far involves R905-million. With new tip-offs coming in and investigations yet to begin, the SIU says that this will exceed the R2-billion “value of contracts under investigation with potential civil litigation” it previously estimated.
It has also referred Huma (an advocate), Ramulifho (an attorney who has been implicated in lottery corruption), and suspended NLC legal head Gugulethu Yako to the Legal Practice Council (LPC). Ramulifho is already in the midst of a disciplinary hearing at the LPC, following a GroundUp complaint against him.
The SIU has also referred seven people and 14 companies to the Companies and Intellectual Property Commission (CIPC), asking for them to be placed on a delinquency list and be barred from registering companies in the future.
Litany of corruption
The SIU laid out in detail how hundreds of millions in siphoned grants were used to buy houses and farms, cars and other assets. This, while multimillion-rand, lottery-funded projects like old age homes, drug rehabilitation centres, stadiums and sports facilities meant to benefit poor communities were abandoned unfinished because the money had been “chowed”.
Organisations, particularly those funded for multimillion-rand infrastructure projects, would be told which companies to use. “These companies often belonged to officials at the NLC,” he said.
“Sometimes funds were channelled via trusts and then paid to [NLC officials] or their companies, and used to pay school fees or channelled via attorneys to buy properties. Sometimes people who got money were expected to pay 10 per cent, a tithe, to [a] church.”
Proactive funding, where the NLC could allocate funding without requiring an application, was at the heart of the looting. It was suspended in 2023, soon after a new board was appointed. It was intended for dire circumstances, like drought relief or natural disasters, but was instead abused to allocate tens of millions of rands to projects. Often, money was allocated for big infrastructure projects, like this one in Limpopo which was abandoned, despite being allocated R26-million.
“Proactive projects would be initiated by board members or executives, which had already been approved. The project would be sent to the distributing agencies [which assess applications], just for payment approval without doing any adjudication.” Payment of millions of rands for these projects was often done within days, Netshikwera said.
Companies were also set up for the specific purpose of looting Lottery funds, Netshikwera said. Often, when the SIU investigated dodgy grants and followed the money using bank statements, it found a series of interlinked companies that would then also need to be probed.
“The reason why our investigations take so long is because of the layering of the money laundering to hide the source of money. It can also take up to two to four weeks to get a single bank statement. But we are committed to tracking down every cent,” he said.
“Ninety-eight per cent of the [suspect] non-profit organisations and companies that we looked at were opened just to get money from the NLC. Trusts were also formed by the looters as a way to launder lottery funds, he said.
In most cases, at least “60 to 70%” of the allocated funds were looted. While in some instances, like this sports centre in Soweto, the funds were looted without anything being built. – GroundUp
