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Irregularities at Gauteng health ‘one of the earliest examples of state capture’

2018-06-22 16:19

Between 2006 and 2009, the Gauteng department of health notched up R1.2 billion worth of irregular expenditure and, according to the Special Investigations Unit report which has just been made public, former Gauteng Health MEC Brian Hlongwa is at the centre of the looting spree.

The report, which investigated the conduct of the department from January 2006 to May 2010, has revealed that Hlongwa, who is the current ANC Gauteng chief whip, along with 11 other senior officials and 10 private companies were complicit in corrupt and fraudulent dealings, ranging from lavish overseas trips to paying for Hlongwa’s R7.2-million Bryanston house while he held the position of health MEC from 2006 to 2009.

This is not the first time Hlongwa has been accused of corruption however. In 2014 it was reported that Hlongwa had allegedly received kickbacks from two tenders whilst he held the position of MEC at the department. The two companies at the time have now also been named in the report, 3P Consulting and Baoki Consortium, which had multimillion-rand contracts with the department at the time.

The Democratic Alliance’s health shadow minister Jack Bloom, at the time, called for Hlongwa to be declared unfit to hold office. No action was taken against Hlongwa.

Bloom told City Press that even though he was glad that this was finally getting attention, the “corrupt and questionable” dealings that Hlongwa was involved in while he was the health MEC were not new.

“When I started raising questions around how he could afford his house, I was the one who was suspended for five days. This SIU report does not reveal anything new. Action should have been taken against him years ago, but now the question is, what happens now? Are there consequences for him?” Bloom said.

Bloom was suspended in 2009, following queries into how Hlongwa could afford the purchase of his R7.2-million Bryanston home.

“The apology that I refused to make was the recommendation of a report of the privileges and ethics committee arising from statements that I made about Hlongwa’s purchase of a R7.2-million house in Bryanston where Mr Richard Payne, the managing director of 3P Consultants acted as his representative,” Bloom said in November 2009.

He also said that arrest orders were issued and withdrawn, something he aligned to political interference.

“This is one of the earliest examples of state capture. When there was an arrest warrant issued, it was withdrawn which shows me that there definitely was political interference,” Bloom said.

Bloom referred to the anti-corruption task team report which revealed Hlongwa’s corrupt dealings, and said that the 122-page SIU report which had just been released failed to reveal in detail how money was also paid to the ANC.

According to findings in the SIU report, Dr Obakeng Mookeletsi, who was a public servant who worked at the Gauteng department of health as the director of the executive supports programme management, paid money to the ANC from an FNB account called “OS Mookeletsi trading as and ANC Fundraising Account”.

“The SIU found that the money in the account was used to pay for ANC-related venues, T-shirts for supporters, photography services, catering and equipment hire. Amethyst, a member of Baoki Consortium, paid R100 000 into the fundraising account in January 2009,” the report revealed.

The report, which was set in motion by a presidential proclamation in 2010, was only released to former President Jacob Zuma in March 2017 and has now been made public by Section 27. It showed how Hlongwa took the health department on what seems like a free-for-all joy ride to his benefit, while looting public funds.

The report was finally handed over to Section 27, who along with the Treatment Action Campaign and Corruption Watch, had been following up on the long-standing investigation for the last eight years.

At the centre of the findings, private companies and other officials have also been implicated, including 3P Consulting, whose directors are Richard Payne, Kingdom Lolwane and Michelle Tryon. It also included Gupta-linked Regiments Capital, whose directors were Niven Pillay and Calvin Sehlepelo.

The report also found that 3P Consulting paid for a luxurious spa treatment for Hlongwa and his wife.

Some of the damning findings against 3P Consulting from the report include:

• 3P double-invoiced the Gauteng health department for services rendered, which led to a loss of more than R10 million;

• 3P irregularly added a 5% administrative fee to which they were not entitled, in respect of the sub-contractors’ invoices; and

• The Gauteng health department irregularly spent more than R23 million on secondments to the department, following an irregular process.

When asked about the report and the alleged money that the ANC received, ANC Gauteng spokesperson Motalatale Modiba told City Press that a response regarding the report would be given by the ANC soon.

“We have taken note of the report which has now been made public and in due course should be able to give a response,” Modiba said.

Deputy-director of Section 27, Umunyana Rugege, told City Press that there now had to be accountability.

“The SIU found quite serious levels of corruptions, and also found a culture of corruption in the department of health at that time. There has to be systemic changes inside the department of health, by ensuring there’s financial accountability and proper processes in place to ensure that there’s none of this wide-scale looting at the department of health. It’s important for people to see that for justice to be done where there are criminal offences with any government department, those public officials have to be held to account,” Rugege said.

Rugege confirmed that, according to their feedback from the Gauteng directors of public prosecutions, the National Prosecuting Authority would be looking at the report’s findings.

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September 23 2018