16 February 2024
The National Prosecuting Authority, Special Investigating Unit and National Lottery Commission delegations were in Parliament this week. Photo: Raymond Joseph
You could have heard a pin drop as the Special Investigating Unit (SIU) and the prosecuting authorities briefed Members of Parliament on Wednesday on the latest developments in the ongoing investigation into massive fraud and corruption involving Lottery grants.
MPs sat silently as SIU head Andy Mothibi briefed them on the unit’s latest investigations into Lottery grant fraud which, he says, found that money meant for good causes was instead plundered and used to buy luxury homes, farms and cars, including a Landrover bought for the wife of the former National Lottery Commission’s chief operating officer.
The SIU had uncovered a “criminal syndicate” operating inside the NLC involving members of the board and executives that “worked with employees and outside entities and lawyers”, Mothibi said.
Also appearing before the committee was a high-powered National Prosecuting Authority (NPA) team headed up by Rodney de Kock, its head of prosecution services, and a delegation led by Commissioner Jodi Scholtz.
The SIU three-year-long investigation has revealed a web of collusion between lottery officials, former board members, lawyers and non-profit organisations, Mothibi said.
“There is a complex web of criminality that we are unravelling … We found that some NPOs [non-profit organisations] are hijacked without the knowledge of their members. In other cases, members [of these NPOs] are involved.”
It was the first appearance by the NPA before Parliament’s Trade and Industry portfolio committee after MPs had insisted that it appear before them to explain the lack of prosecutions. MPs were surprised to discover that although 26 dockets relating to the NLC were under investigation, only one prosecutor had been assigned to liaise with the Hawks and SAPS on Lottery investigations.
“The NLC cases are receiving priority but there is much work still to do and we recognise that we must bring more resources to the project,” De Kock assured MPs.
The NPA has been under increasing pressure to charge people involved in the plunder and bring them before a court, causing tension between it and the NLC and the SIU, which are both concerned at the lack of prosecutions.
So far, despite investigations into some grants by the Hawks and South African Police Service (SAPS) having begun in 2020, no one has yet been charged for their role in the plunder of lottery funds.
But in Parliament this week the behind-the-scenes disagreements were, at least publicly, absent and the scene in the elegant, high-ceiling committee room M46 of the historic Marks Building was collegial.
De Kock told MPs that while several of the cases under investigation were at a stage where the NPA could decide whether to prosecute, “the bulk” were still under investigation.
This SIU briefing to Parliament followed an earlier one in September last year when Mothibi told Parliament that by then the SIU was investigating dodgy grants involving R1.4-billion. Late last year, the SIU told GroundUp that this now exceeded R2-billion.
One of the problems the NPA faced was that, in many cases, key documents needed to prosecute some cases were deleted from the NLC computer system or had gone missing from Metrofile, a warehouse where copies of documents are archived and stored.
Mashudu Netshikwera, who heads up the SIU team investigating the NLC, said they had discovered a 2018 memo that was distributed to senior officials claiming that the State Security Agency had “instructed the NLC to remove proactive documents from the [NLC’s grants] system and from storage.” But the SIU had managed to retrieve some documents from the NLC Mimecast email system which is used to manage and archive email,” he said.
“At least we have secondary evidence because original documents were destroyed. We will tell the courts that the people who destroyed the documents are the perpetrators”.
The NPA told MPs how “every step of the process” to preserve homes, properties and vehicles and other goods bought using Lottery funding “is challenged”.
Advocate Nkebe Kanyane, newly appointed head of the Asset Forfeiture Unit, told MPs, “Cases first reported in 2020 were now at ‘an advanced stage’ and we are ready to make a decision.”
“We are made to feel that people still in the [NLC] are still involved in crime and may not cooperate or else give us misleading information that impacts our investigation.”
Commissioner Scholtz said, “We have done integrity testing [of NLC staff] and we are currently drawing up a policy for lifestyle audits. We are also implementing consequence management and are in the process of building an integrated system.”
ANC MP Judy Herman, the committee chairperson, said, “This committee is determined that we see the criminals prosecuted.”
This is a dramatic change from how the ANC, under the former chair Duma Nkosi, protected the NLC and frustrated attempts by opposition MPs to hold it to account.
Mothibi briefed MPs on several new investigations nearing conclusion, including:
Mothibi told MPs that the first phase of the SIU investigation, which probed grants valued at nearly R280-million, had been completed. The second phase, valued at R247-million is “90 per cent completed”, and will be finalised by the end of April. The third phase, involving grants of R906-million, would be completed by the end of December. An interim report will be submitted to the Presidency at the end of this month.
However the SIU continued to receive new allegations of fraud and corruption and the investigation may have to be extended to include a fourth phase, Mothibi said.
