Hawks investigating fraud and corruption in the Department of Defence involving R170 million

9140

The Directorate for Priority Crime Investigation (the Hawks) are investigating four cases of fraud and corruption in the Department of Defence (DoD) involving almost R170 million.

Hawks boss Lieutenant-General Godfrey Lebeya gave an update on these active cases to the Portfolio Committee on Defence and Military Veterans on 31 May.

In a presentation to the committee, the Hawks revealed that in April this year, a case was reported involving the procurement of machines to fix potholes. “It is alleged that Department of Defence and Military Veterans awarded a tender to a service provider. The purpose of the tender was to train nine hundred people on how to repair potholes in all the provinces as well as the procurement of the machines to fix potholes The proper supply chain processes were not followed during the awarding of the tender,” the Hawks stated, adding that the loss involved amounts to R57 million.

It was reported that the Department of Military Veterans in 2021 purchased 90 rammers (a type of compactor) worth R40 million for the project – 10 for each province. “Most of them apparently disappeared mysteriously from a store in Roodepoort and cannot be traced,” City Press reported in April. Another R12.5 million was apparently paid into the personal account of the CEO of KT Squared, the company contracted to do the job. Three suspects are currently being investigated, according to the Hawks.

Another fraud and corruption case involves the procurement of personal protective equipment (PPE) for the Department of Defence. This involves a loss of R44 million. Seventeen members of the South African National Defence Force (SANDF), four company directors and eight companies are under investigation.

The fraud and corruption first came to light in 2020 at the beginning of the Covid-19 pandemic, but was referred to the Hawks in 2022. The Department of Defence charged its members but according to the Defence Act they could not charge the civilians and companies involved (the companies allegedly paid kickbacks to DoD officials). The investigation is ongoing.

In 2021, the Hawks began investigating a case involving fraud, theft and contravention of the Public Finance Management Act (PFMA) following a complaint about maladministration within the Department of Military Veterans offices in Pretoria. “These allegations eventually led to the suspension of five suspects: when accepting tenders they disregarded the policies that are put in place by DoD governing the procurement processes and the awarding of the tenders.”

This resulted in service providers being awarded tenders for a sewing project and a furniture making project, “but the money was deposited into the closed Corporate Account that belongs to the individuals. No valid Service Level Agreement or contract was signed between the Department of Military Veterans irrespective of the full compliance with what was expected to be done in terms of giving training to the Military Veterans and their beneficiaries.”

The Hawks also found that there were no advertisements nor invitations of the bidders to all the tenders that were awarded and the tenders were awarded to favoured friends. Five suspects and five companies are involved in the case, with involves the loss of R37.4 million. The investigation is ongoing.

The fourth and final case being investigated by the Hawks involves R29 million and three companies charged with fraud, corruption and theft. As stated in the Hawks’ presentation, “the complainant in this case became aware of irregularities regarding the procurement on skills developments at the office of the Military Veterans Department.” It is alleged that a company provided three-day security courses at a cost of R4 million although the service provider was not registered with the Private Security Industry Regulatory Authority (PSIRA).

Another company was awarded a machinery purchase contract by National Treasury to the value of R25 million, but proper processes were not followed. A third company was appointed as a new service provider but correct processes in appointing them were not followed.