What are the chances that anyone will be seriously prosecuted and spend some time in the slammer? Pretty slim, considering South Africa's standing on Transparency International's Bribery Investigations and Corruption Reports...The Eastern Cape provincial government has cancelled a R3,9 billion fleet management tender linked to the controversial Bosasa group of companies. The tender was awarded to Phakisa Fleet Solutions, which is a subsidiary of Bosasa, under controversial circumstances. Last month Bosasa was exposed for allegedly bribing top prison officials to secure contracts worth more than R1,7billion.
A report by the Special Investigating Unit released in Parliament revealed that one Correctional Services official allegedly accepted a house, cars, an overseas trip for his daughter and rugby season tickets to watch the Blue Bulls in exchange for awarding tenders.
The company, which was repeatedly defended by former Correctional Services minister Ngconde Balfour, received tenders worth close to R2billion for services in IT, security and prison meals, and in some cases it allegedly wrote tender specifications.
Last month Sowetan reported that Auditor-General Terrence Nombembe agreed to investigate the R3,9billion contract given to Phakisa to manage the Eastern Cape province’s 2900 car fleet...........
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Bosasa’s massive tender cancelled - State ‘told losing bidder to stop lawsuit’
Anna Majavu, Sowetan
22 December 2009
THE Eastern Cape provincial government has cancelled a R3,9 billion fleet management tender linked to the controversial Bosasa group of companies.
The tender was awarded to Phakisa Fleet Solutions, which is a subsidiary of Bosasa, under controversial circumstances.
Last month Bosasa was exposed for allegedly bribing top prison officials to secure contracts worth more than R1,7billion.
A report by the Special Investigating Unit released in Parliament revealed that one Correctional Services official allegedly accepted a house, cars, an overseas trip for his daughter and rugby season tickets to watch the Blue Bulls in exchange for awarding tenders.
The company, which was repeatedly defended by former Correctional Services minister Ngconde Balfour, received tenders worth close to R2billion for services in IT, security and prison meals, and in some cases it allegedly wrote tender specifications.
Last month Sowetan reported that Auditor-General Terrence Nombembe agreed to investigate the R3,9billion contract given to Phakisa to manage the Eastern Cape province’s 2900 car fleet.
This after a competing bidder, Makhubu Consortium, threatened to interdict the provincial government after discovering that Phakisa’s R3,9billion bid was about R800million above the limit set by the provincial government.
The Makhubu Consortium bid was much lower at R2,6 billion yet failed to win the contract.
Yesterday three different sources close to the bid confirmed that the Eastern Cape transport department had cancelled Phakisa’s contract last week. But the government was trying to keep the decision secret.
Cope member of the provincial legislature’s transport committee John Korkie confirmed the cancellation.
He said the transport committee had not been officially informed “but we know that government sent a letter to the losing bidder to say they must stop their legal action now that they have cancelled the contract”.
“The contract was cancelled as a way to deal with the Makhubu Consortium’s legal action. As members of parliament, we are still waiting for the Auditor-General to tell us why Phakisa won the contract in the first place,” Korkie said.
Makhubu Consortium’s lawyer, Lionel Egypt of Cliffe Dekker Hofmeyr Attorneys, also confirmed that government had cancelled Phakisa’s contract.
Provincial legislature transport committee chair, Xolile Nqata of the ANC, confirmed that the contract was cancelled.
Source: Sowetan
R1bn tender for sale - Prisons boss paid to rig bidding process
Anna Majavu, Sowetan
18 November 2009
 IN HOT WATER: Suspended Correctional Services’ Chief Financial Officer: Patrick Gillingham |
Suspended Correctional Services chief financial officer Patrick Gillingham lived a life of luxury, expensive cars and overseas trips financed by a company that won multimillion rand contracts from the department.
The Bosasa group of companies – which has earned more than R1 billion in prisons contracts – allegedly bribed Gillingham with R2,1 million worth of cars, rugby tickets, an overseas trip, a new kitchen and house renovations.
The allegations against the company and Gillingham were made public yesterday by Special Investigations Unit head Willie Hofmeyr.
Hofmeyr revealed that Bosasa financed three cars for Gillingham , cars for his son and daughter and sponsored his daughter’s overseas trip.
 After the Party: A Personal and Political Journey Inside the ANC; By Andrew Feinstein |
“The SIU found that Bosasa financed a car for the CFO, another car or a contribution to a car for the CFO, cars for his son and daughter, sponsorship of the daughter’s trip overseas, another contribution to a car for Gillingham, and six Blue Bulls season tickets,” Hofmeyr told Parliament yesterday.
The SIU report is a damning indictment of South Africa’s high commissioner to Botswana, Ngconde Balfour, who was minister of correctional services at the time.
Last year Balfour instructed Vernie Petersen, then director- general, to extend Bosasa’s catering contract without putting it out to tender.
Petersen had refused and also suspended Gillingham.
Shortly after that Balfour did a shady “D-G swap” that saw Petersen going to the sports department, and sports department’s Xoliswa Sibeko moving to Correctional Services.
Suspended
Sibeko was suspended in July this year for allegedly renting a house for R35000 a month, instead of staying in an official residence .
Nandi Mareka, the acting CFO who replaced Gillingham, was also suspended, leading many to conclude that the department was rotten to the core.
Petersen suspended Gillingham last September after the SIU allegedly informed him about the allegations against the CFO.
 Transparency International World Corruption Index Map: Global Corruption Report 2009: Corruption and the Private Sector (PDF:2009) |
For the past 14 months Gillingham has been sitting at home on full salary.
Bosasa also financed the development of a house for the CFO for more than R1million as well as renovating his kitchen for about R180000, Hofmeyr revealed.
“The company also contributed about R180000 towards a retirement home for the CFO,” he said.
“We found three amounts totalling about R48000 to the CFO’s credit card and we are satisfied that these payments came from the company.”
In exchange for the alleged bribes, Gillingham allegedly rigged four tenders to advantage Bosasa.
The alleged tender rigging included having no proper financial planning, no feasibility studies and Bosasa itself participating in the drawing up of the tenders that it later won.
In one case, Bosasa allegedly registered a company just seven days before the closing of the bids and won the contract – despite the requirements that the winning bidder should have at least five years experience.
In one contract, Bosasa was paid 90 percent of the total contract price just to deliver “raw materials”.
The former CFO’s actions meant that the government might face civil claims from companies that lost out on the tender process, Hofmeyr said.
Bosasa also allegedly made payments in 2005 and 2006 to the former Correctional Services director- general Linda Mti, now head of security for the 2010 World Cup.
Source: Sowetan
Transparency International & the Fight Against Corruption
 Enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (PDF) |
Transparency International is the global civil society organisation leading the fight against corruption. Through more than 90 chapters worldwide and an international secretariat in Berlin, Germany, TI raises awareness of the damaging effects of corruption and works with partners in government, business and civil society to develop and implement effective measures to tackle it.
Political Corruption
Political corruption affects us all. We elect politicians and political parties expecting them to act in the public interest. By electing them we give them access to public resources and the power to take decisions that impact on our lives. Given this privileged position, immense damage can be inflicted by politicians or parties acting out of greed, or in the service of those who bankroll their ascent to power. It is not surprising that people the world over are demanding absolute probity of their political leaders: citizens in three out of four countries polled by TI and Gallup International in 2003 and in 2004 singled out political parties as the institution they perceived as most corrupt.
Public Contracting Corruption
Public contracting is one way in which public policy is implemented, and it is an enormous and lucrative area of business. Think of pharmaceutical companies vying to supply a government vaccination programme, the privatisation of a government-owned telecommunications company, or the awarding of contracts to reconstruct destroyed infrastructure in Iraq. Most of these contracts are meant to buy or produce goods or services that should benefit citizens directly, like the construction of a road or a sewage system. Others should benefit citizens indirectly, by contributing to a more efficient or effective delivery of a specific service or good, and prudently investing or increasing public funds. The key question is whether genuine efforts to serve the public interest motivate the contracting decisions being made.
In most countries, contracting activities are performed by all levels of government, from municipalities and towns, to provinces and national or federal governments. While federal or national level contracting can be bigger in terms of value per contract, local government contracting is also significant in terms of the number of processes and their impact.
Enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
South Africa
Political influence over enforcement: A case involving domestic bribery by a foreign company was withdrawn in April 2009 on the recommendation of the Acting National Director of Public Prosecution. He considered that the prosecution of the case was an abuse of process. The accused public official in the case is current President Zuma.
Complaint procedures: Though there is no specific hotline for foreign bribery complaints, various government departments have hotlines and reporting procedures to report corruption in general, including the National Anti-Corruption hotline. However, it is unclear how aware the public is of this option and thus the most-used channel to report corruption is the South African Police Service (SAPS).
Other enforcement issues: Media reports indicated that the British Serious Fraud Office (SFO) complained about the difficulty they had with the South African Department of Justice with respect to their request for assistance in the BAE investigation. According to the reports, the Department of Justice took months to respond to a request for MLA. Even after the story was reported in the media, the Department of Justice passed the request to the SAPS rather than deal with the request as mandated by legislation. The MLA was eventually granted.
Recent developments: The Directorate for Special Operations (Scorpions) was dissolved in 2008/2009 and the impact remains to be seen. This was the body responsible for investigating and prosecuting serious criminal and unlawful conduct, including foreign bribery, and its dissolution may have an effect on the prosecution of foreign bribery. Additionally, on 9 May 2009, South Africa witnessed the inauguration of Zuma as president. Zuma and his ruling party, the African National Congress, have listed the fight against corruption as one of their priorities. South Africans are anxious to see if this ANC Resolution is fulfilled.
» » » » [OECD Bribery PDF:2009]
Global Corruption Report 2009: Corruption and the Private Sector
» » » » [Global Corruption PDF:2009]
Sources: Transparency International: OECD Bribery PDF:2009 :: Global Corruption PDF:2009
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