De Lille & Co implicated in reports
One recommends criminal charges against Cape Town’s mayor, an MEC and other city officials have been named
The wide-reaching independent investigation by law firm Bowman Gilfillan may possibly be Patricia de Lille’s last hurrah as Cape Town’s mayor. The report not only implicates De Lille in potential corruption, it also extends to some of those who are thought to be close to her, suggesting they received undue benefits and manipulated city processes, casting doubt on a municipality lauded for its clean governance.
But already her supporters in the city council are fighting back.
De Lille has relied on them to help her survive. They have seen her through the numerous motions of no confidence that her colleagues in the Democratic Alliance caucus have tabled against her.
On Thursday, in an unprecedented move, five councillors in the DA caucus resigned from the city council. Shaun August, the chief whip and one of De Lille’s fiercest defenders, was the first to resign. None of the five are implicated in the report.
But Brett Herron, the mayoral committee member for transport and urban development and one of De Lille’s strongest allies, may be in trouble if the 1 998-page report is adopted by the city council.
The report, authorised by the council, recommends disciplinary action against Herron, because he “accepted hospitality” from a Chinese electric bus manufacturing firm and failed to declare it. It also recommends that the City of Cape Town establish a special committee to “determine the extent of Herron’s involvement” in the Chinese procurement deal and whether it violated the Municipal Finance Management Act.
Herron, who has become widely popular for focusing attention on social housing in the inner city, has denied any wrongdoing.
All council members are prohibited from speaking about the report because it is confidential. Herron said: “I will request permission from the speaker to respond to what is already in the media. It is only fair that I be permitted to respond.
“I have handed a copy of the report to my lawyers and they will take the appropriate action on my behalf.”
He is accused of receiving benefits from Chinese electric bus manufacturer BYD — for one night in a hotel in Changsha, China, and a return trip from Shenzhen to Changsha on a high-speed train, in August 2015.
Herron denied knowing BYD sponsored his accommodation and train trip, but emails from his assistant to the company while the trip was being planned show his office knew, says the report.
James Groep, a manager in the city’s fleet and asset management department, and Melissa Whitehead, the transport commissioner who has since been suspended, were also part of the delegation to Changsha.
The City of Cape Town paid for business-class tickets for Whitehead and Herron to fly to Shenzhen, where they were to meet BYD on a “exploratory” trip to investigate the company and the electric buses it offers.
But they failed to declare to the city that BYD had paid for some of their expenses in Changsha. Whitehead said the company had covered the bill because it had made a last-minute change for the delegation to visit Changsha. She also denied receiving any benefits, because the hotel was apparently of a low standard.
“Staying in the hotel in Changsha was roughly the equivalent of spending the night in the Formula 1 in Springs — I did not regard this as a benefit — for obvious reasons,” Whitehead told Bowman Gilfillan.
A year later, BYD was awarded a R286-million tender, which Bowman determined was irregular. The law firm found that BYD had received preferential treatment and the specifications of the tender may have been manipulated.
The report has recommended that the city council open a case with the police because there is “sufficient evidence” to “sustain a reasonable suspicion” that the Prevention and Combating of Corrupt Activities Act may have been violated.
Herron has denied being involved in the procurement process, but the report suggests that his conduct as a councillor and his participation in the trip may have contributed to maladministration.
De Lille has been left largely unscathed in the BYD scandal, which takes up the brunt of the Bowman investigation. But she could face criminal charges for something else.
The report doesn’t explicitly recommend that council seek criminal charges against De Lille, but it suggests it “sanction” her and refers to relevant law, particularly the Municipal Systems Act. The report found that she prevented Achmat Ebrahim, then the city manager, from reporting to council the irregular expenditure of R43-million, allegedly caused by Whitehead for the payment to Volvo for 29 bus chassis. According to the report, De Lille also stopped him from bringing an internal forensic investigative report into the payment to council.
Whitehead and Ebrahim could face criminal charges for their roles.
But this may be complicated by the presence of a second Bowman Gilfillan report of 34 pages, which focuses specifically on misconduct allegations against De Lille.
This report, also commissioned by the council and prepared by Bowman’s Cape Town office, exonerates De Lille, saying the onus was on Ebrahim to have reported the irregularities to council. It is this report that De Lille’s supporters may still rally behind to fight for her innocence.
De Lille has asked Bowman to explain why it produced two reports with two different recommendations.
If the council does adopt the larger report implicating Whitehead, then De Lille will face questions — the DA has accused De Lille of protecting Whitehead. De Lille may have wanted to keep Ebrahim close, as previous evidence reported by the Mail & Guardian showed that she sought to exert undue influence for his reappointment as city manager at the end of his term in 2016.
Ebrahim resigned because of the Volvo deal in January 2018.
But the fallout has also seen other aspects of the city fall apart.
The Foreshore Freeway Precinct project has come to halt, and the ambitious development of an unfinished freeway (the development was stopped in the 1970s) in the city shows no sign of continuing.
The preliminary Bowman report into misconduct in the city and a report by consulting company Moore Stephens had laid bare some of the irregularities in the project, which was also meant to incorporate social housing. In the foreword to the project prospectus, Herron wrote that something needed to be done on the Foreshore and “this ‘something’ must contribute to the rich urban fabric that is Cape Town … and at the same time both help address the social issues facing our city”.
What Bowman and Moore Stephens say is that Whitehead may have had favoured bidders for tenders and may have discussed potential bidders with De Lille, Herron and deputy mayor Ian Neilson.
The bigger Bowman report says Whitehead did have conflicts of interests in the project.
The tender for the project was withdrawn earlier this year.
De Lille has denied any wrongdoing and has called the investigation as a “smear campaign” against her.
If council adopts the bigger report, however, De Lille, Herron, Whitehead and other city officials could face criminal charges.