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R1m ‘bribe’ paid to MEC by NGO contracted to build toilets

2019-03-05 00:05

Report details how Limpopo education MEC allegedly asked for and received cash from trust

Limpopo Education MEC Ishmael Kgetjepe was allegedly paid more than R1 million by a nongovernmental organisation (NGO) contracted by government to build toilets at rural schools.

The money, which Kgetjepe allegedly requested by phone or “in person”, is included in a confidential report compiled by independent auditors Nexia SAB&T, which The Mvula Trust, a nonprofit organisation focusing on water and sanitation development, hired to audit its books for the 2017/18 financial year.

The Mvula Trust won a multimillion-rand tender from the national department of basic education in 2012/13 as part of the Accelerated Schools Infrastructure Development Initiative (Asidi) to build toilets at schools in Limpopo, the Eastern Cape and Mpumalanga.

Limpopo and the Eastern Cape, two of the country’s poorest provinces, have a severe lack of safe toilets at rural schools.

In 2017 alone, the trust received about R650 million from the department of basic education, according to its chief executive Silas Mbedzi, to build blocks of toilets that cost between R40 000 and R60 000.

The auditor’s report, which City Press obtained, states that the managers of the trust told auditors that Kgetjepe asked for the money for “his constituency work and various political work at branch level”.

It further states that he was subsequently paid R1 050 000 in eight tranches of between R100 000 and R150 000 between September 2017 and June last year.

The money that was allegedly paid to Kgetjepe could have been used to supply proper toilets to at least 17 schools.

Limpopo education department spokesperson Sam Makondo denied that Kgetjepe received any money from the trust.

However, the auditors said the payments appeared to violate the Financial Intelligence Centre Act, and apparently “served no business or lawful purpose”.

The trust’s auditors, the report found, told their board that the transactions would be reported as a “reportable irregularity” to the Independent Regulatory Board for Auditors.

The report states that the trust’s managers told the auditors that Kgetjepe phoned them and asked them for money, and sometimes he would ask for money “in person”.

It also said the trust’s management “noted” the auditors’ assertions that the payments constituted expenses that had nothing to do with the trust.

However, the report found, the trust’s management believed that if they had refused Kgetjepe’s requests, it would have the “potential to directly or indirectly affect our business relationship with his department since he is the political head”.

MEC Ishmael Kgatjepe Picture: Rosetta Msimango

The trust’s management also told the auditors that politicians had influence regarding decisions made in departments they were appointed to oversee.

Shockingly, the report found that the trust’s bosses said they were prepared to continue making payments of this nature, but would keep receipts in future.

“In light of the above, we commit to keep proper records and supporting documents of these requests to ensure that all expenses are duly accounted for. We have already engaged the MEC accordingly in relation to the corrective measures the organisation will effect to avoid recurrences,” the report found.

Mbedzi confirmed that payments were made to Kgetjepe because he had asked for the money for political activities in his ANC branch – as was detailed in the auditor’s report.

However, he denied that this was a bribe.

“We did not pay R1 million to do work in Limpopo because that’s not how we conduct our business. We have been doing work for the national department of basic education related to Asidi in Limpopo, the Eastern Cape and Mpumalanga, which started in the 2012/13 financial year and is ending in the 2018/19 financial year. Hence there is no need to ‘bribe’ the MEC as he has no influence whatsoever in the adjudication of bids since they are done by supply chain committees in various government departments,” Mbedzi said.

He also denied any conflict of interest.

Mbedzi said every business did the same thing to market itself, including donating to political parties at gala dinners. He said they were recently invited to do so at ANC gala dinners in the Eastern Cape and Limpopo.

“All political parties invite businesses from time to time to their fundraising gala dinners and ask an organisation to buy a table. We are not the only organisation in South Africa that attends gala dinners for fundraising.”

Two sources close to the department said the trust was engaging in business illegally.

“Corruption has become the norm when it comes to getting an appointment or tender award from government, whether the amount involved is big or small. Unless everyone stands up and reports it, it will never be eradicated,” said one.

The other said the auditors had reported this to the authorities.

Read: Broken promises, broken dreams 

“Their subsequent report was submitted to the trust’s board together with a response from the chief executive. So a number of people were made aware of the situation, but did not condone it, particularly given the amount involved,” one source said.

“The Mvula Trust was once a wonderful institution.”

Corruption Watch executive director David Lewis said it was “absolutely wrong” for an NGO to bribe politicians instead of contribute towards the wellbeing of communities.

“This could be construed by members of the public and law enforcement authorities as a bribe,” he said.

He said it was also “unethical and inappropriate” for the trust to donate to a political party.

“They should not be attending gala dinners either,” he said.

Makondo denied that Kgetjepe had asked for money from the trust, and said the MEC was appointed to his position in 2015 – after the trust was appointed to work in the province.

“The Mvula Trust started doing work in 2012/13 and, as such, there is no way the MEC could have asked for a bribe or influenced the awarding of such work while he was not in the department,” Makondo said.

Nexia SAB&T chief executive Bashier Adam declined to comment, saying they were required by their code of conduct not to disclose any confidential information about their clients.

“I can, however, confirm that our audit report was signed and issued on December 7 2018,” Adam said.

HOW THE MEC WAS ALLEGEDLY PAID

The auditor’s report details the following payments made from the trust’s account:

  • R150 000 on September 28 2017
  • R150 000 on October 23 2017
  • R150 000 on November 1 2017
  • R100 000 on December 4 2017
  • R100 000 on December 15 2017
  • R150 000 on May 23 2018
  • R150 000 on June 6 2018
  • R100 000 on June 27 2018


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October 20 2019