Publications
Partners
President Jacob Zuma closed last month’s national general council meeting by calling for lifestyle audits for civil servants – especially those with the authority to award tenders.
He may like to begin in the city of Klerksdorp in North West, where, last month, the Matlosana municipality’s chief internal auditor, Mpho Seero, was suspended for allegedly leaking details of damning internal audit reports “to members of the community without approval”.
Seero hit back, claiming to Public Protector Thuli Madonsela in a blistering complaint that he was targeted “for revealing malpractice, maladministration and indicators of criminality and corruption”.
Seero’s complaint includes questions about how various senior officials came to own fleets of luxury cars. One of them is municipal manager Ross Motsemme, who owns five cars that eNatis records show are three BMWs, a Mercedes-Benz and a R1.2 million Maserati GranTurismo.
eNatis records also reveal that executive mayor Michael Khauoe owns 19 cars, including a Hummer H3, two Mercedes-Benzes and a BMW 5 Series.
The 400 000-resident municipality was placed under administration in December after racking up R1.8 billion in irregular expenditure and R54 million in fruitless and wasteful expenditure since 2009.
Administrator Seth Ramagaga arrived in January with a team of eight specialists, who he says have discovered:
. A chaotic fleet- and fuel-management system: “Every Thursday, we would end up paying close to R700 000 just for fuel.”
. Massive infrastructure backlogs: “The waste treatment plant had not been maintained for such a long time that there was actually a heap of shrubs in the plant and a funnel was dug to divert everything else into a nearby river.”
. Ghost employees, officials asking for kickbacks from suppliers and staff members transferring municipal funds into their own bank accounts.
“The situation was not a very good one,” said Ramagaga. “The policies and procedures were there, but because there was no leadership, it had just become a Sunday school picnic.”
A plethora of reports
In March, a report compiled by a council subcommittee looked at about 30 different tenders awarded between 2012 and last year. Signed off by chairperson and ANC councillor Lazarus Phakoe, the report found widespread collusion by officials and “indicators of bid rigging were evident in almost all tenders”.
In one example, a multinational company was eliminated as a potential bidder in an unspecified tender because its municipal account was a mere 13 cents in arrears. The local company that ended up being granted the tender failed to submit any identity numbers, a company registration number, tax reference number, VAT registration number, tax clearance certificate or broad-based BEE certificate.
There are 10 other reports in City Press’ possession that contain damning findings, some of which are being acted on by the administrator and others that are forming the basis of a forensic investigation.
MacGyver’s contracts
Last year, a report by investigators from Nexus Forensic Services, who were brought in to assist Ramagaga, identified how 11 companies – linked through family members, business associates or shared addresses to a local businessman, TP “MacGyver” Mokasule – received R165 million in tenders between 2012 and last year.
Internal audit reports found that many of these contracts were awarded without following proper supply chain management processes, and the prices in some cases were highly inflated.
Ramagaga said the Nexus report “revealed that you had all these appointments that were done, different companies on face value – but when you look into it, you find they share the same physical and post box address”.
The Nexus investigators also found evidence of “cover quoting” and recommended a forensic audit into “all contracts pertaining to MacGyver and related entities”.
However, the report did not claim that Mokasule financially benefited from any of the companies. Mokasule vehemently denies having more than a passing acquaintance with these companies.
“It was going to be nice if those forensics came to me and asked me questions. I was not afforded an opportunity to say anything. Now they come with allegations,” said Mokasule. “We businesspeople, we know each other … Sometimes we meet for business ideas, for exchanging ideas, and I don’t know if it is illegal if you know people changing business ideas – there’s nothing wrong with it.”
Mokasule insisted all contracts he received were awarded after an open tender process, and were “small tenders”.
Manager suspended for months
In February, municipal manager Motsemme was suspended after “allegations of serious misconduct”, according to his suspension letter quoted in court papers filed in his failed bid to challenge his suspension. One of those allegations was that he improperly awarded contracts to a number of companies linked to Mokasule.
He denies any wrongdoing and remains suspended on full pay of R102 602 a month. He has gone to court again to challenge the provincial government’s decision to place Matlosana under administration on the basis that the decision was invalid and therefore Ramagaga had no powers to suspend anyone.
“I want to clear my name and the only place I can do that is through the courts,” he told City Press.
He confirmed that he drove a Maserati, but said there was nothing untoward about it.
“It’s not like I stole money from the municipality and bought it with cash,” said Motsemme. “It was R1.2 million, it was a 2011 car … The fact that I’m black and drive a Maserati shouldn’t raise eyebrows.”
Motsemme, who has not declared any other income apart from his R1.2 million-a-year salary, says the car is financed through WesBank.
Motsemme is also suing Seero for defamation for the claims he made in a letter. City Press contacted Seero for comment, but he refused to say anything.
Executive mayor Khauoe also maintains there is nothing suspicious about his fleet of cars.
“Some are old and have been sold but not transferred out of my name,” he said.
“I had a taxi business that I had long before I became a councillor. I am also in the construction business – there are many cars registered in my name for business purposes.
“The impression has been created that I’m siphoning off money from the municipality. I called for the suspension of the municipal manager; how could I do that if I am corrupt?
“I can tell you without a blink of an eye that I am innocent.”
Seero remains suspended.
Handing back municipality would be ‘suicide’
The North West government’s intervention was supposed to last for a year at most, but administrator Seth Ramagaga says it would be “suicide” to hand executive control of the city back to its elected officials.
“Terminating the intervention at the end of December would be suicidal,” Ramagaga told City Press.
“If I were to leave with the entire administration team, the likelihood would be that, within two or three weeks, this municipality would be back to where it was in January when we arrived.”
When Ramagaga took over, Matlosana owed more than R200 million to Eskom, which threatened to cut its power. It also owed Midvaal Water R50 million.
“There were areas of the municipality where people had been without water for five months or so,” he said.
“Today, we have done so much … We have gone into repayment plans with creditors. At the moment, I’m paying Eskom R12 million and Midvaal R6 million every Thursday, and we are keeping a positive bank balance.”
Ramagaga said cases were being pursued against those responsible. However, Ramagaga also said corrupt officials were hampering his efforts.
“People are now beginning to count months [until I leave] and say: ‘There are only two months left.’ The kind of cooperation that you had is beginning to diminish now.
“We also have some not-very-good councillors who begin to go to the officials and say: ‘[The administrator] is leaving in two months – we will deal with you once he’s left.’”
