• BEE News

Why being corrupt is harder than you think – and why that should worry you

NEWS24 / 02 MAY 2018 - 08.46 / HELEN ZILLE

A red tape forest of rules has been created to prevent corruption in government. Honest officials must apply the rules without fear or favour. This is why I am more and more amazed at how people get away with corruption in South Africa.

Many of us have become inured to daily revelations of corruption in government.

Helen Zille, premier of the Western Cape. Photo: Archive

In contrast, I become more and more amazed. Not by what happens. But because I cannot fathom how it happens.

When I make this point during dinner-table conversations, people seem amazed at my amazement.

So in this column I will try to explain why each revelation amazes me more, using an example from my own office.

Last week, during our routine administration meeting, my Chief-of-Staff informed me that a formal investigation by our “internal control sub-directorate” had established that our office had incurred irregular expenditure.

“What?” I asked. “How was that possible?”

The answer I received is summarised below, including the relevant background and context.

It started with a small governance problem in a Western Cape town. This required my attention because provincial government has a constitutional responsibility of support and oversight towards local government. It is complex legal terrain, governed by many laws and regulations. So when a problem emerges in a municipality, I usually send in a legally qualified expert to assess the situation first, and advise me how best to proceed. This system works well.

In this case, the expert, Mr X, was duly dispatched to investigate municipality Y. He had to stay overnight.

My office went through the complex procurement process, choosing the cheapest of three quotes, in order to book Mr X into Guest House A.

When he arrived on the designated night, he found Guest House A was full. So he booked himself into the nearby Guest House B.

The problem arose because Guesthouse B was R76.90 more expensive than Guesthouse A. And this automatically triggered a chain reaction that resulted in a full-blown investigation lasting six months.

It produced two reports (comprising over 70 double-sided pages, with annexures), that had to be read and signed off by no fewer than seven officials.

I went through the two lengthy reports, page by page, to get a clearer understanding of how the system worked (which, after almost ten years as Premier, I still don’t understand) and why an over-spend of R76,90 could trigger an investigation costing many times the amount of the alleged irregular expenditure (which had, in any event, been fully explained).

I must stress that my intention in writing this column is not to target the officials involved. Quite the contrary. They did their job with extraordinary zeal, dedication, integrity and commitment.

The rationale behind the system (imposed by national Treasury) is to prevent a hypothetical situation from arising where a government official, for example, having to travel out of town regularly to a particular destination, might start his own guesthouse and charge government inflated amounts to stay there (perhaps for extended periods).

Or the (more common) example of a government official colluding with a service-provider for “extras” that are disguised as part of the procured service. In this instance, for example, the official may have ordered a bottle of wine, and asked for it to be disguised within the cost of accommodation.

A red tape forest of rules has been created to prevent these, and many other abuses that most honest human beings would be incapable of devising, even if they tried.

But honest officials have to apply the rules, without fear or favour, as they did with my office’s over-expenditure of R76.90.

Reading through the reams of correspondence on the matter, I must confess that I considered sending it to a stand-up comedian for a skit on the inner workings of government.

The first letter, from our Directorate: Financial Management (Internal Control), asks my office to provide reasons why 1) the cheapest quote was not utilised; 2) who had approved the change of guest house; and 3) why the Supply Chain Management office had not been informed of this, with reasons.

My office duly apologised and explained the background (that Guest House A had been full, despite the booking), and that Mr X needed to find another room, at short notice.

One would think that might be the end of the matter. Not so.

The next letter from “Internal Control” asked:

“Could you kindly indicate why [Guest House A] was fully booked?”

To which my Chief of Staff responded:

“We are, unfortunately, not in a position to indicate why [Guest House A] was fully booked… I understand that only on arrival when [Mr X] tried to check in, did he discover that [Guest House A] had been over-booked – hence the need for urgent alternative accommodation”.

This letter was dated 13 October 2017.

Because no adequate proof of the above explanation was provided (with supporting documentation) a full investigation was launched.

Six months later, the investigation resulted in a report, sent to my office, with a covering letter dated 18 April 2018.

“The purpose of this communication,” the letter begins, “is to inform you of the outcome of an irregular expenditure investigation in respect of [XYZ Travel] amounting to R76.90.”

After a full exposition of the legislative and regulatory framework (including the Supply Chain Manual 2017), the letter instructs my office to comply with the ameliorating recommendations in “Section 6 of the Approved Submission”, implement four remedial steps (in paragraph 5), and “complete the areas highlighted in yellow in the condonation template”.

It then concludes sternly: “You hereby have 14 days from receipt of this correspondence in which to execute the necessary, and provide proof thereof to Sub-directorate: Internal Control.”

The Annexures to this submission include 30 pages, comprising the full paper trail documenting the guest house booking, the requisitions and the subsequent payments.

And after a detailed analysis the report’s finding is as follows:

“Based on the analysis above, the R76.90 should be regarded as irregular expenditure as no prior approval was received to utilise [Guest House B]. However, as this was due to unforeseen circumstances, no disciplinary action should be taken against any official.”

What a relief!

I spoke to the Province’s Director General, Brent Gerber, and asked him why this lengthy and costly procedure had been necessary to reach this conclusion. He explained that if Mr X had obtained prior authorisation, the amount would not have been classified as irregular expenditure. However, due to the circumstances at the time, he did not. Treasury rules required the investigation, irrespective of whether the amount involved was R76.90 or R7,600.90. If we had not complied, we would have risked forfeiting our clean audit.

Now that I have explained this process, it may be easier for readers to understand why I am amazed that it is possible for executive office bearers to get away with the type of corruption that we read about in the media every day.

Let’s take a recent and relatively minor example involving “only” R1,5m.

On 22 April, the Sunday Times ran an article detailing how North West Premier, Supra Mahumapelo, gifted Jacob Zuma a herd of cattle worth R1,5m using public funds. The newspaper did not use the word “allegedly,” so I presume they are absolutely certain of their facts.

According to the article, the herd, comprising 24 Bonsmara cows and a bull, was procured from cattle breeder, Mr Lucas Msiza, by a company called AgriDelight, which has a three-year contract to implement support for emerging farmers in the North West province.

The herd was then transported to Nkandla, and delivered to then-president Zuma personally, who is pictured on the Sunday Times’ front page, signing a document to acknowledge receipt of the cattle in October 2016. Apart from the fact that Zuma can now hardly claim ignorance of their origin (which is an issue all on its own) there are several other matters that need to be addressed.

Given the number of transactions each individual procurement in government requires, can you imagine how many transactions must have been involved in this “delivery chain”?

There had to be a needs analysis that resulted in a motivated decision to procure the cattle. Then there had to be a tender process (because of the large amount involved), a bid evaluation process, and a bid adjudication process, involving different committees.

Then, because the use of a “middleman” opens a whole set of new opportunities for potential corruption, this also triggers a series of additional processes which I do not pretend to comprehend.

The transfer of the funds would have required yet another Lever Arch file of paperwork. And eventually, the team who delivered the cattle to Nkandla would have required vehicles, trailers, and at least one, if not more, overnight stops. (I wonder whether they stayed at a guesthouse?)

So, knowing what I know (which is actually very little about the procurement minefield), I am totally stunned that this sort of corruption is actually possible. When I try to get my head around how the Guptas managed to corrupt the procurement systems throughout most state-owned enterprises and many government departments, my mind goes into lock-down. It is literally beyond my comprehension.

The only logical explanation is that there must have been scores (and sometimes literally hundreds) of co-conspirators working together, taking a cut, and enjoying political cover at the highest level.

The fact that the corruption network is so large, ironically explains why there are so few consequences. If anyone is charged with corruption, they won’t go down alone. They will bring down the entire edifice.

And that is why the ANC cannot be salvaged. It has degenerated into an enormous spiderweb of interlocking corruption networks, who have faith in another kind of ANC — Absolutely No Consequences.

Jacob Zuma has stated that his defence in his forthcoming corruption trial (involving his dealings with Schabir Shaik) will be that he was merely fulfilling BBBEE commitments. He can make a strong case on this basis. The ANC’s version of BBBEE, in many instances, amounts to nothing more than legalised corruption benefiting a connected elite.

And, what’s more, if it has taken over 15 years to get the former president into court to account for Shaik’s corner-shop corruption, imagine what it will take to expose the industrial-scale Gupta network. The stakes are so high, and there are so many people involved, that even if President Cyril Ramaphosa has the political will to deal with it, he would not politically survive an attempt to do so.

Take Premier Supra Mahumapelo. Despite what seems to be a smoking-gun corruption case, together with photographic evidence, he has not been formally charged, let alone suspended, so that a full criminal investigation can take place. And this case, comparatively speaking, is relatively small beer.

The ANC is unsalvageable. It is that simple. Yet most commentators and analysts still assume South Africa’s future will be determined by the outcome of an epic battle between the “good guys” and the “bad guys” in the ANC for control of the party. This is a diversion.

This conclusion has many profound implications for South Africa, which I do not have the space to analyse here.

But one of the minor consequences is that we will have to continue working with a ridiculous procurement system. One that prevents honest officials from getting the job done, while providing no protection at all against looters and vampires bleeding the state dry, under high-level political cover.

- Zille is premier of the Western Cape.


LINK : https://www.news24.com/Columnists/GuestColumn/why-being-corrupt-is-harder-than-you-think-and-why-that-should-worry-you-20180502

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER


© 2019 BEE Chamber (PTY) Ltd, All Rights Reserved