Sunday, February 27, 2011

President Zuma stop corruption: Suspend Bheki Cele and lay charges now!

Centre for Law and Social Justice
»President Zuma stop corruption: Suspend Bheki Cele and lay charges now!

Advocate Thuli Madonsela, the Public Protector has said that “General” Bheki Cele’s (SAPS head) conduct in a R500 million rent deal with his friend Roux Shabangu was “improper, unlawful and amounted to maladministration”.

President Jacob Zuma must suspend Cele immediately and ask the Special Investigations Unit to lay charges. This country cannot live with another police chief who shouts loudly about crime and then dabbles in its shady world.

Leadership from the President and Parliament is required immediately NOT tomorrow otherwise we cannot take their words on corruption and crime seriously. The corrupt SAPS rent deal like the arms deal is a test of our Executive and legislature. Will our country have a lawless executive and a toothless Parliament that rubber stamps corruption, or, will we have an open, accountable and ethical government that puts peoples’ needs first?

This case has already involved an attempted cover-up: the unlawful detention of Mzilikazi wa Afrika, the Sunday Times journalist who broke the story.

There can be little doubt that were the Secrecy Bill ever to become law in its current form then the Public Protector’s report would have never seen the light of day.

This post contains Public Protector Advocate Thuli Madonsela’s speech on the corrupt SAPS rent deal at Parliament, the Times report (23 February 2011) and its editorial.

Zackie Achmat

Address by the Public Protector, Adv Thuli Madonsela, during a media briefing on the release of the SAPS lease report held at the Sheraton Hotel in Pretoria on Tuesday, February 22, 2011

Chairperson of the National Press Club, Mr Yusuf Abraham;
Deputy Chairperson of the National Press Club, Mr Jos Charle;
Members of the Press Club and the other media representatives present;
Deputy Public Protector Adv Mamiki Shai
SIU Head, Mr Willie Hofmeyr
PPSA CEO Themba Mthethwa;
The Investigation Team;
Ladies and gentlemen;

I am honored to present to the public, Against the Rules: Report of the Public Protector on an investigation in to allegations of improper conduct by the South African Police Service (SAPS) and the Department of Public Works (DPW) relating to the procurement of a lease agreement for a new SAPS Headquarters in Pretoria. The allegations and report also deal with the legality of the lease in question.

I am further deeply humbled by the media and nation’s interest in this and other matters that my office deals with on a day to day basis in pursuit of its constitutional mandate. My gratitude particularly goes to the Press Club for hosting this event and its ongoing support.

I would also like to express my sincere gratitude to all the parties that have cooperated during this investigation, particularly SAPS, Department of Public Works (DPW), the National Treasury, the Special Investigations Unit (SIU), the complainants, Mr Roux Shabangu and the Investigation Team, among others.

I must also highlight that this report relates to the Pretoria lease only. The investigation relating to the Durban lease in still underway and the public will be kept up to date with developments and later the outcome as time goes on.


In a bid to ensure accountability, good governance and integrity in all state affairs, among other things, the architects of our constitutional democracy saw it befitting that there should be institutions that keep the state in check by scrutinizing its administrative conduct, thereby ensuring that there is no abuse of power and state resources, that services are delivered responsively and that the state is accountable at all times.

My office, the Public Protector, is one of those institutions established by Chapter 9 of the Constitution of the Republic to support and strengthen this constitutional democracy.

To achieve this, I make use of the power and responsibility bestowed upon me by the Constitution and as regulated by national legislation, to investigate any conduct in state affairs that is alleged or suspected to be improper or to result in any impropriety or prejudice; report on that conduct and take appropriate remedial action.

Remarking on the role played by oversight institutions such as my office on good governance and checks and balances during the International Ombudsman Conference in Durban ten years ago, former President, Nelson Mandela eloquently said the following:

“Even the most benevolent of governments are made up of people with all the propensities for human failings. The rule of law as we understand it consists in the set of conventions and arrangements that ensure that it is not left to the whims of individual rulers to decide on what is good for the populace. The administrative conduct of government and authorities are subject to the scrutiny of independent organs. This is an essential element of good governance that we have sought to have built into our new constitutional order.

An essential part of that constitutional architecture is those state institutions supporting democracy. Among those are the Public Protector, the Human Rights Commission, the Auditor General, the Independent Electoral Commission, the Commission of Gender Equality, the Constitutional Court and others.”

He added:

“It was, to me, never reason for irritation but rather a source of comfort when these bodies were asked to adjudicate on actions of my Government and the Office and judged against. One of the first judgments of our Constitutional Court, for example, found that I, as President, administratively acted in a manner they would not condone. From that judgment my government and I drew reassurance that the ordinary citizens of our country would be protected against abuse, no matter from which quarters it would emanate. Similarly, the Public Protector (Ombudsman) had on more than one occasion been required to adjudicate in such matters.”

These statements sum up the role of institutions such as the Public Protector and the responsibility of the state in helping such institutions live up to their mandate of supporting and strengthening constitutional democracy.

Ladies and gentlemen;

On 2 August 2010, the Public Protector received complaints from Mr Paul Hoffman of the Institute for Accountability in Southern Africa and Mr Pieter Groenewald of the Freedom Front Plus to investigate alleged improper procurement of the lease for office accommodation for the SAPS in the Sanlam Middestad building in the Pretoria CBD. These complaints came as a result of a newspaper article published the day before alleging improper conduct and maladministration by the National Commissioner of the SAPS and the DPW.

At the centre of the complaints was the alleged non-compliance with tender procedures in the procurement of two buildings in Pretoria and Durban for use as accommodation for the SAPS. My office investigated the matter with the assistance of the Special Investigating unit.

Ours was simply to determine: What happened? What should have happened; and whether there was a discrepancy between what happened and what should have happened. We fin ally had to determine if such discrepancy, if any constitution improper conduct, maladmi8nistration, abuse of power or any of the violations envisaged in the Constitution and the Public Protector Act. We also had to take appropriate remedial action as envisaged in section 182(3) of the Constitution. This is how the investigation unfolded.

On 3 August 2010, I requested the National Commissioner of SAPS and the Director-General of DPW not to proceed with the implementation of the lease pending the finalisation of the investigation

On 10 August 2010 both SAPS and DPW wrote back to me undertaking to comply with the request. DPW further advised that parties had been informed that the implementation of the leases in question had been suspended pending the out come of an internal investigation and the investigation of the Public Protector and the SIU.

On 11 and 19 October 2010, the Director-General of DPW informed the National Commissioner of SAPS that the lease agreement between the DPW and Roux Property Fund (RPF) in respect to the Sanlam Middestad building was invalid. This was on the basis of the findings of an internal inquiry and independent legal advise obtained.

On 25 October 2010, I issued a preliminary report on the investigation and informed the National Police Commissioner of the SAPS of my concurrence with the decision of the DPW to commence with an entirely new procurement process. This report was presented to the Executive Authorities and accounting officers of the SAPS and the DPW.

On 31 October 2010, Ms Gwen Mahlangu-Nkabinde replaced Mr Geoff Doidge as the Minister of Public Works.

Shortly after her assumption of duty, Minister Mahlangu-Nkabinde’s office obtained informal advice from the Office of the State Attorney, indicating that the lease was enforceable. This advice was however given subject to a further legal opinion to be obtained from senior counsel at the request of the Minister’s office.

The opinion of senior council dated 22 November 2010, concluded that the contract between the DPW and RPF was unlawful, thereby rendering the lease agreement invalid.

On 22 November 2010, the DPW advised Nedbank, the financiers of RPF, that it was continuing with the lease. This was followed by a public pronouncement by Minister Mahlangu-Nkabinde that the DPW was continuing with the implementation of the lease. On the same day, the Director-general of the DPW was suspended.

Our investigation was conducted over a period of five months. It included interviews with officials from the SAPS including National Commissioner, officials from the DPW and Mr Roux Shabangu of the RPF. Voluminous documentation relating to the procurement was perused and relevant provisions of the Constitution, the PFMA, Treasury Regulations and other procurement prescripts were considered and applied.

Copies of the draft report were distributed to all relevant parties and responses to the draft were submitted and considered for purposes of the final report.

My findings in full are contained in the full report that, I believe, has already been circulated to you. I will quickly zoom into my specific findings in relations to the SAPS and the DPW.

Specific Findings Relating to SAPS

The lease agreements were signed between RPF and the DPW and not by the National Commissioner of the SAPS, as was alleged.

Although the SAPS did not sign the lease agreement, its involvement in the procurement process was improper, as it proceeded beyond the demand management phase and it further failed to implement proper controls, as required by the PFMA and relevant procurement prescripts.

The SAPS failed to comply with section 217 of the Constitution, the relevant provisions of the PFMA, Treasury Regulations and supply chain management rules and policies. This failure amounted to improper conduct and maladministration.

The conduct of the accounting officer of the SAPS was in breach of those duties and obligations incumbent upon him in terms of section 217 of the Constitution, section 38 of the PFMA and the relevant Treasury Regulations. These provisions require from an accounting officer to ensure that goods and services are procured in accordance with a system that fair, equitable, transparent, competitive and cost effective. This conduct was improper, unlawful and amounted to maladministration.

On the evidence available it could not be found that an improper relationship between the preferred service provider (RPF) and the SAPS motivated the deviation from required tender procedures.

Specific Findings Relating to DPW

The procurement by the DPW of the lease was not in accordance with a system that is cost effective and competitive, as is required by section 217 of the Constitution, the relevant provisions of the PFMA, Treasury Regulations and supply chain management rules and policies. This failure amounted to improper conduct and maladministration.
The conduct of the accounting officer of the DPW was in breach of those duties and obligations incumbent upon him in terms of section 217 of the Constitution, section 38 of the PFMA and the relevant Treasury Regulations. These provisions require from an accounting officer to ensure that goods and services are procured in accordance with a system that fair, equitable, transparent, competitive and cost effective. This conduct was improper, unlawful and amounted to maladministration.

The process that led to the conclusion by the DPW of the lease agreements with RPF was fatally flawed, in various respects, including non-compliance with prescribed procurement procedures such as ensuring a competitive bid process or justifying the deviations in the prescribed manner. This rendered the process unlawful and further constituted improper conduct and maladministration.

The lease agreement should not have been entered into as it did not comply with the validity requirements of the Constitution, applicable legislation and prescripts. The lease agreements entered by the DPW and RPF are therefore invalid.

The decision of the DPW to proceed with the implementation of the lease agreement in the face of considered legal advice from two senior counsel to the contrary, particularly the opinion procured on 22 November 2010 under the leadership of the current Minister of Public Works, was in breach of its fiduciary duties and the requirements of good governance in terms of the PFMA, and amounted to maladministration.

The reckless manner in which the DPW dealt with public funds in this case, particularly:
the failure to subject the lease agreement to judicial review, as advised by senior counsel and by implementing the lease agreement despite further legal advice from separate senior counsel to the contrary; andreneging on the undertaking given to the Public Protector not to implement the lease until the investigation was complete, was improper and fell short of the requirements of good administration.

Remedial action to be taken, as envisaged in section 182(1)(c) of the Constitution, is the following:
The National Treasury should urgently review the purported lease agreement between the DPW and RPF in order to determine if the contract can be terminated forthwith.

The National Treasury must determine whether any irregular or fruitless and wasteful expenditure was incurred by the SAPS and/or the DPW in respect of the procurement process and other matters related thereto and take appropriate action, where applicable.

The Cabinet must at its first meeting convened after the date of publication of this report request an explanation from the Minister of Public Works on:

The reasons for the decision to implement the lease agreement with RPF, despite the DPW being provided with a legal opinion of independent senior counsel, soon after her appointment, advising to the contrary;

The justification for proceeding with the implementation of the disputed lease, prior to the finalisation of the investigation by the Public Protector, and despite senior counsel opinions and the DPW’s previous undertakings to the contrary.
The Secretary of Cabinet must advise the Public Protector of the outcome of the deliberations referred to in paragraph (c) above and the resolutions taken within 10 days from the date of the Cabinet meeting.

The Minister of Public Works with the assistance of the National Treasury should take urgent steps to ensure that the appropriate action is instituted against the relevant DPW officials that acted in contravention of the law, policy and other prescripts in respect of the procurement processes referred to in this report.

The DPW must ensure that appropriate measures are implemented to prevent a reoccurrence of contraventions of the relevant procurement legislation and prescripts.

The Minister of Police should, with the assistance of the National Treasury, take urgent steps to ensure that the appropriate action is instituted against the appropriate SAPS officials that acted in contravention of the law, policy and other prescripts in respect of the procurement processes referred to in this report.

The SAPS must ensure that appropriate measures are implemented to prevent a reoccurrence of contraventions of the relevant procurement legislation and prescripts.

The National Treasury should develop and introduce measures that will prevent a recurrence of a situation where client departments of the DPW infringe on the functional areas of the DPW in respect of the procurement of leased accommodation.

Further to these, the National Treasury, the Ministers of Public Works and Police, the DPW and the SAPS must submit action plans and progress reports to the Public Protector in respect of the implementation of the remedial action referred to above.

What are my expectations from the organs of state involved? I am confident the organs of state in question will deal with my findings and remedial action contained in this report in the spirit of section 181(3) of the Constitution. This is in line with global jurisprudence on the status of the report of an Ombudsman. Indeed the Minister of finance has already endorsed the findings in the Draft Report wholly.

My confidence in the state’s ability and commitment to do the right thing is further bolstered by President’s J G Zuma’s remarks during the state of the nation address where he stated.

“We have a well-established institutions that support democracy and protect the rights of citizens, such as the Office of the Public Protector, the South African Human Rights Commission, the Office of the Auditor General, the Commission on the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities and the Gender Commission”

Thank you.

Adv TN Madonsela
Public Protector of the Republic of South Africa

R500m SAPS HQ lease deal unlawful

National police commissioner Bheki Cele and Public Works Minister Gwen Mahlangu-Nkabinde have fared the worst in the Public Protector ‘s damning report on the R500-million police HQ lease deal.

A five-month investigation by advocate Thuli Madonsela’s office details shocking findings about the conduct of South Africa’s top cop, and how his “improper and unlawful” conduct was central to the signing of the lease.

Flanked by Special Investigating Unit head Willie Hofmeyr, Madonsela revealed how Cele authorised funding for leasing the Middestad building in central Pretoria from property mogul Roux Shabangu.

The Middestad building he wanted to lease as his new police headquarters is next door to the current headquarters.

“The conduct of the accounting officer [Cele] … in respect of the procurement of the lease was improper and unlawful,” wrote Madonsela in her 91-page report.

Madonsela’s findings vindicate the Sunday Times reports that exposed Cele’s involvement in the deal. She praised the newspaper’s “courage” for exposing the deal.

Cele has repeatedly denied any wrongdoing, claiming that he merely signed the SA Police Service needs analysis. Yesterday, he released a statement saying that he was “vindicated” by the report.

But Madonsela found that:

Lease negotiations between the Department of Public Works and Shabangu were already at an advanced stage when the police gave their needs analysis to the department;
The police first identified the building and then adjusted the needs analysis to correspond to, or “retrofit”, the specifications of Middestad, which Shabangu had not yet bought;
The leasing of Middestad was not budgeted for in the police leasing or capital works budget;
The lease was not cost-effective;
Public Works failed to record its reasons for deviating from the prescribed tendering processes; and
The terms of the lease between Public Works and Shabangu were not approved by the Special National Bid Adjudication Committee, which they should have been.
Said the report: “The conduct of the accounting officers of the Department of Public Works and of the SAPS [Cele] . was improper and unlawful.

“It was evident throughout the investigation that a number of the officials interviewed expressed their reservations with the process followed by the SAPS to procure the lease. However, they were reluctant to raise their concerns with their superiors due to the culture of the SAPS in terms of which instructions are followed and not questioned,” the report said.

Former deputy national police commissioner Hamilton Hlela said in his interview with Madonsela that he was “unwilling to question the decisions and instructions of the national commissioner [Cele]“.

In his statement, Cele said: “The Public Protector not only stops at finding that General Cele did not sign the lease for Middestad Sanlam Centre, she goes further and vindicates General Cele’s widely disregarded protestations that businessman Roux Shabangu, the owner of Middestad Sanlam Centre, was a stranger to him up until their meeting in June 2010, when Middestad Sanlam Centre had already been selected by the Department of Public Works as the building that the SAPS were going to move into.

“General Cele will now be consulting his lawyers to explore what avenues are available to him as he seeks redress over these allegations that have caused him and his family so much pain and suffering over the past five months or so.”

In her report, Madonsela said that Mahlangu-Nkabinde ignored the opinion of two senior advocates and sealed the deal with Shabangu on November 22, the day that senior advocate Pat Ellis told Mahlangu-Nkabinde that the lease was unlawful.

Mahlangu-Nkabinde disregarded an undertaking made by her predecessor, Geoff Doidge, who had told the police that he would not finalise the lease pending the outcome of Madonsela’s investigation.

An internal Public Works inquiry in October, ordered by Doidge , also found the deal to be “invalid”.

But President Jacob Zuma fired Doidge in his cabinet reshuffle in early November. Shortly after she took office, Mahlangu-Nkabinde’s staff told Nedbank, Shabangu’s financier, that the department would honour the lease and the bank should release funds to Shabangu. Mahlangu-Nkabinde announced in December that the deal would go ahead.

Mahlangu-Nkabinde suspended her director-general, Siviwe Dongwana, on December 8 – the day he was due to be interviewed by Madonsela for her report.

Describing Public Works’ involvement in the deal as “reckless”, Madonsela said Mahlangu-Nkabinde must explain her decisions to the cabinet.

Madonsela said further investigations will determine whether anyone will be criminally charged or will have to reimburse the state.

Finance Minister Pravin Gordhan, commenting on a draft of the Madonsela report, had harsher words: “The National Treasury supports the further review of the lease agreement as a matter of urgency. This may include, if necessary, the initiation of criminal prosecution.”

The million-dollar question, Madonsela said, was: “How did Shabangu get involved with [the police]? His own evidence was not very helpful.”

She said the findings of a subsequent investigation into another lease deal between the police and Shabangu, for a building in Durban, to be released in a month, would determine whether any of those involved would be criminally charged.

Opposition parties yesterday again called for Cele’s head – and that of Mahlangu-Nkabinde.

Freedom Front Plus’s Pieter Groenewald – who, along with Paul Hoffman, the director of the Institute for Accountability in Southern Africa, lodged complaints against Cele with Madonsela – yesterday called on Zuma to act swiftly.

“If President Zuma is serious about his comments that corruption should be eradicated, he should fire both [Cele] and the minister because he appointed both. If he does not do it, he makes a mockery of clean administration and promotes corruption,” Groenewald said.

“More questions are arising about the firing of the former minister of public works, Geoff Doidge, who stopped the process to wait for the report of the Pubic Protector. The Freedom Front Plus will, after carefully studying the report, decide whether criminal charges will be laid.”

Hoffman said Cele should “be redeployed in politics, which is where he belongs”.

He said the Treasury should have no difficulty in cancelling the lease because regulations were clearly violated.

Hoffman criticised Mahlangu-Nkabinde’s failure to heed the advice of her advocates.

Shabangu said his lease agreement with the police was still valid.


On August 1 last year, the Sunday Times exposed details of how Police Commissioner Bheki Cele ignored tender procedures when he signed a “dodgy” R500-million lease with billionaire businessman Roux Shabangu for a new police headquarters in Pretoria.

Three days later, Cele denied signing a lease agreement, and claimed he only signed a “needs assessment”. At a press conference, he also labelled Sunday Times reporter Mzilikazi wa Afrika, who broke the story, a “dodgy journalist”.

On August 7, the Sunday Times quoted the Public Protector confirming its “biggest probe ever” into the lease after a complaint was laid by the Institute for Accountability in Southern Africa and the Freedom Front Plus.

On September 5, three police generals, who said they were forced to resign from the force over the lease agreement, told the Sunday Times that Cele “lied” to parliament when he said his role ended with just identifying the police’s accommodation needs. They said Cele led the drive to relocate the police headquarters.

On October 19, following an internal inquiry and independent legal advice, the Department of Public Works informed Cele that the lease agreement with Shabangu was invalid.

On November 22, new Public Works Minister Gwen Mhlangu-Nkabinde advised Nedbank, Shabangu’s financier, that the she would honour the deal.

Yesterday, Public Protector Thuli Madonsela announced that the deal was unlawful.

Madonsela report: Will Zuma have guts to do the right thing?
The Editor, The Times Newspaper

The Times Editorial: Public Protector Thuli Madonsela has finally released her report on the leasefor the police’s Pretoria headquarters.

And she has confirmed what many suspected – that there was something untoward in the way in which the new headquarters building was acquired.

At the release of her report yesterday, Madonsela implicated just about every department involved in the deal, particularly Public Works and the police, both of which she found guilty of “improper conduct and maladministration” and of flouting the Treasury regulations that govern procurement.

As she sat before the media, Madonsela offered us a moment of integrity, honesty and courage – at potentially great cost to her office and herself.

Her report is clear in its condemnation of the misuse of state authority and of the subversion of procurement processes.

But her strongest criticism was reserved for Public Works Minister Gwen Mahlangu-Nkabinde, who signed the lease for the Pretoria offices with Roux Property Fund against the advice of senior legal counsel.

Madonsela described the way in which the department dealt with public funds as “reckless”.

Her report has vindicated the media houses, particularly our sister publication, the Sunday Times, which exposed the headquarters deal last year.

But it is what follows Madonsela’s revelations that is of vital importance. President Jacob Zuma’s response to her damning findings will be a watershed moment in his term in office. His response to the exposing of Cele and Mahlangu-Nkabinde must be public and swift. This is no time for an “elegant” solution.

Abstaining from a very public response will give credence to what many critics have said – that the president merely pays lip service to good governance, fighting corruption and accountability. And his silence would negate the very courageous work done by Madonsela.


Previous Writing Rights article: Corruption and the ANC
.This entry was posted on February 24, 2011, 10:47 am and is filed under Active Citizenship, Corporate lawlessness, Corruption, Law and Constitutionalism, Political parties, Social Justice Coalition, South African politics. You can follow any responses to this entry through RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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