Dirty hands are washing each other

THIS week the Special Investigating Unit told Parliament it had identified more than R1.4billion in fraudulent grants made by the National Lotteries Commission.

The reaction was depressing. The great South African public yawned. Legalbrief Today, the sector’s authoritative daily round-up of key legal issues covered by the media, placed the SIU revelations at No 14.

Admittedly, South Africans have a lot on their plates at the moment. A dire economy, growing unemployment, a tsunami of water and power outages, and a remorseless increase in violent crime. All happening under an ineffectual president who jumps at his shadow.

At times, South Africa feels like a scrambled jigsaw puzzle. One is so overwhelmed by distracting detail that the brain cannot comprehend the full picture, only realising later it was glaringly obvious.

The money stolen from the NLC is a drop in the ocean compared with the R1.4 trillion the ANC government concedes was looted under its previous president. But corruption is not just about rand amounts – it’s also about scale and pervasiveness.

In South Africa, many of the formal actors – public service, mainstream media, judicial institutions, organised business – are often too depleted, discouraged or intimidated to play their roles. The kind of corruption that has hit this country has thrived because of the complicity, tacit and overt, of many, including the guardians of good governance in the accounting, legal and banking professions.

The SIU investigation covers only six years, from 2015 to 2021. The R1.4bn involves about three dozen grants, but the NLC dispenses more than R1.1bn every year, to about 3 600 charities and not-for-profits.

As the DA’s spokesperson of trade and industry Mat Cuthbert told me in an interview: “We will never know the full scale of the looting at the NLC. Take that R1.4bn and double it or triple it.”

Corruption is deeply and perhaps inextricably embedded in government and corporate structures. They are two hands washing one another.

The government peddles the fiction that state corruption is a regrettable anomaly, a feature mostly of the nine years, 2009 to 2018, that Jacob Zuma was president. The reality is that at least from 1999, under former president Thabo Mbeki, the ANC was complicit at the highest levels in corruption. That continues to this day.

Many of the corporate world’s most historically august institutions – Bain & Co, Deloitte and KPMG are obvious examples – not only participated in, enabled or ignored state looting, but have long been doing the same in the private sector. Think Tongaat Hulett (at least R3.5bn fraud at board level) and Steinhoff (the evaporation of about R180bn of inflated assets).

The looting was not recently discovered. From 2017, two feisty journalists – Ray Joseph of GroundUp and Anton van Zyl of the Limpopo Mirror – wrote at least 90 substantive articles detailing the criminality and mismanagement at the NLC.

They were ignored by the NLC board and jeered by ANC politicians. Their lives were threatened. They were smeared on social media and investigated by the State Security Agency.

GroundUp and the Mirror, small operations with few financial resources, were harried with cripplingly expensive court actions, some by grant recipients and others paid for out of NLC coffers, designed to stall their revelations.

Those charged in law with oversight functions were useless, either ignorant or comatose.

The Auditor-General gave the NLC five successive clean audits because, as it explained when challenged by Joseph and Van Zyl, the state audit never involved examining whether the grants were going to legitimate entities.

Doris Dondur, who sits on various Professional Provident Society boards, was one of the NLC’s “independent” non-executive directors from 2017. As a chartered accountant – and head of the NLC audit and risk committee, as well as of its regulatory compliance and legal committee – she carried a particularly heavy ethical responsibility. But if Dondur had any concerns, they clearly weren’t effectively articulated. She joins a long line of South African CAs who are a disgrace to their profession.

The sums involved were massive: at one stage, more than R6m was spent on a Rolls-Royce for the NLC chairperson. In 2017, the NLC fraudulently paid out two lump sums, R20m and R11m, to fraudulent entities. In 2018, it was R13m and R7m. Most of the money, ostensibly earmarked for projects involving the elderly and orphans, allegedly went to buying houses for at least two board members.

The NLC chairperson, “Professor” Alfred Nevhutanda – whose honorific appears to come from a diploma mill – has since been served with an assets preservation order on a property registered in his name.

In 2019, another R16m was paid by the NLC for farming operations in the Free State. It went to buy furniture and appliances for an unnamed NLC board member.

This week, the new NLC chair, Professor Barney Pityana, was “non-committal” when asked at a media briefing whether the SIU probe included Transport Minister Fikile Mbalula; Sports, Arts and Culture Minister Nathi Mthethwa; Basic Education Minister Angie Motshekga; and NPOs linked to them.

Joseph tells me he agrees with Cuthbert that the full scale of the NLC scandal will never be known.

“It’s like journeying in an unknown land with no map,” he says. “You have no idea of its size or where the cities are.”