Thursday, 28 October, 2021
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Keep a particularly hot spot in Hell for health tenderpreneurs

State looting has been disastrous for South Africa in many ways, both practical and philosophical, writes William Saunderson-Meyer in the Jaundiced Eye column. But there should be a particularly hot spot in Hell for those who plunder the funds meant to address the plight of the diseased and dying.

The problem, though, is that the scale of corruption in South Africa is so vast that it has become meaningless to most of us. In its daily manifestations — unless the numbers are astronomical — corruption has lost much of its capacity to shock and anger. That's politically dangerous, since a public sullenly resigned to being systematically fleeced suits very well a criminal enterprise masquerading as a national government.

President Cyril Ramaphosa has said several times that state looting during the lost decade of the Jacob Zuma presidency was in the order of a trillion rand. There’s never been any explanation of how he arrived at that estimate, but it’s a figure that trips prettily off a silver-tipped tongue.

And it expediently side-steps the large-scale state corruption that preceded Zuma and was tacitly sanctioned by the African National Congress. The impunity culture within government started when President Thabo Mbeki and his cabinet turned a blind eye to a number of their comrades trousering around billion rands of bribes and kickbacks in the 1999 arms procurement scandal. Okay, a billion is not a trillion, but hey, one has to start somewhere.

It’s a statement also calculated to reassure us that under Ramaphosa, corruption had ended. When launching the Covid emergency relief funds last year — starting with a few billion from South Africa's super-wealthy and followed by a further R81bn from the International Monetary Fund — Ramaphosa was unequivocal. Every cent would be accounted for, he pledged.
That's not how it worked out. While there have been no allegations of malfeasance at the private-sector run Solidarity Fund, Covid in the state sector has been one long Christmas, with lots of goodies being scored.

In July last year, the Special Investigation Unit (SIU) had under scrutiny R2bn of the government’s R5bn emergency Covid spending, primarily on personal protective equipment (PPE) for health workers. By September last year, that had more than doubled, with R5bn of the R10.4bn state spend suspected to be fraudulent.

This week, the SIU briefed the parliamentary justice oversight committee that the Covid relief spending under criminal investigation had risen further, to R14.2bn out of a Treasury spend (for the period April-November 2020) of R30.7bn. About 6% of some 2,500 dubious tenders remained to be investigated but progress was slowed by new cases surfacing daily.

Again, while the absolute numbers don't compare with Zuma era looting, the SIU statistics are nevertheless horrific. They show that the looting-to-expenditure ratio for the Ramaphosa administration, despite all the president’s fine assurances, has been relatively consistent over the past year. Out of every R2 spent by this "clean” government on PPE, around R1 — that we know of — has been stolen.

We should then further factor in the padding of prices, which is rife in tenders that are surreptitiously awarded to buddies but are otherwise technically legitimate. Also consider that the scale of criminality is underestimated, since only a fraction of the hundreds of thousands of contracts entered into by the government is ever audited.

Add that all up, and my thumbsuck of a looting-to-expenditure ratio starts looking rather conservative. It’s not inconceivable that two out of three rands of government expenditure goes not the benefit of the South African public, but is pocketed by crooks and con artists. None of this could happen without the active participation or silent connivance of public sector workers and the ministers who are supposed to oversee them.

Arguably as worrying as the scale of the criminality, is the level of impudence. These are not people who fear the police and the courts. Despite Honest Cyril’s professed shock and horror at Covid corruption, no one has yet been jailed or prosecuted, to the best of my knowledge.

Let's take an embarrassing example from Ramaphosa inner circle, the presidential spokesperson, Khusela Diko. Her husband scored a corrupt R125m Covid contract, which when it became public led to Diko being put on “special leave” for six months and then suspended.

She is reportedly still earning a R1.3m salary and benefits. She has also stated very clearly that, contrary to ANC instructions, she has absolutely no intention of resigning from her leadership positions in the party. Provocatively, she still styles herself “Spokesperson to the President” on social media.

The ANC's distinct lack of appetite for criminally prosecuting public sector looters inevitably impacts law enforcement. The SIU emphasis has not been on gaining convictions but rather to recover stolen funds. The SIU told Parliament that its Special Tribunal is currently busy with 15 PPE cases that should recoup R365m.

Admittedly, there are some good, pragmatic reasons for the SIU approach. The seizure of ill-gotten gains through administrative mechanisms like asset forfeiture is considerably easier and faster than the painstaking and costly process of building a multitude of watertight criminal cases against relatively small-time offenders.

SIU chief legal counsel Jerome Wells told Parliament that the number of cases finalised by the Special Tribunal was significantly higher than achieved in the High Court and that the cases were dealt with more expeditiously. In 69 PPE cases, worth just over R7bn, the Special Tribunal simply cancelled the contracts.

The snag to the SIU approach, however, is that it means that state looting may be seen as a gamble still worth taking. Elsewhere in government than the now scrutinised Covid tenders, detection levels are low; there is virtually no chance of criminal sanctions, and there's only a minuscule chance of forfeiture.

That's a situation aggravated by the SIU being short of both key personnel and budget. As well as again begging the parliamentarians to increase its budget, the SIU told the portfolio committee that it is owed R531m by all three tiers of government as well as state entities, for investigations conducted on their behalf for which they have not paid.

Last year, pressure by the Opposition and civil society for the first time forced the Treasury to make public hundreds of pages that detailed the emergency Covid tenders. What strikes one reading these, is how amateurish and blatant the thieving is. Tenders were merrily dished out to hastily set-up suppliers with zero track records.

It was a free-for-all. Sports shops were flogging surgical gloves to the government at R500 a pair. Hairdressing salons were supplying ethanol-laced soapy water for the price of French champagne.

That the looting could be so unconstrained, so free of oversight, points yet again to a deeply compromised public service. According to SIU head, Advocate Andy Mothibi, this is particularly true of the health sector. Last year he told a conference that “there is corruption in the National Health Laboratory Service, there is corruption within the Health Professions Council with the registration of doctors. There is corruption within the health sector product authority…”

The whole sector, Mothibi said, acted with a degree of impunity. “[People are] just really expecting that nothing will happen to them.”
In response to political pressure, the Ramaphosa administration has made much show of addressing the theft of Covid emergency funds. Until offenders are shamed, shunned and jailed, it will have little lasting effect.

Despite the temptation of ennui, we should remain angry.

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