Civil action required to recover Eskom’s Trillian payment
Stephan Hofstatter and Sikonathi Mantshantsha alleged in Business Day that Eskom could have saved R300m had it heeded advice not to pay the allegedly Gupta-linked firm Trillian, because of the irregularity and possible illegality of such payment. (Failure to heed advice cost Eskom R300m, September 1).
When a friend shared the article with me, I opined that civil action should be taken against those involved to recover the money; R300m is an enormous amount of money. With Eskom being an organ of state, its loss is a public loss. Time and again, Eskom is being bailed out with public funds in addition to its frequent demands for electricity price hikes to raise revenue for its critical energy supply operations.
Consider the amount of life-saving equipment that could be bought and maintained for public hospitals for R300m, and the number of lives, particularly of poor people, that could be saved as a result.
Think about how this money could resolve the current cancer treatment crisis in KwaZulu-Natal, where oncological services are reported to have ground to a halt due to a lack of equipment and doctors are resigning in response to this problem, among others.
It occurred to me that the amount allegedly wasted is R50m more than the R250m improperly spent in renovations to President Jacob Zuma’s house in Nkandla, in the name of security. In that case, the outrage over the waste of much-needed public funds and reluctance to make amends galvanised the nation into action under the spontaneous #PayBackTheMoney campaign.
I determined, in my then capacity as public protector, that the president’s failure to arrest the loss of public funds, after being alerted to the situation, was in breach of his duty under section 195 of the Constitution.
The authority for my decision was the Constitutional Court’s decision in Khumalo versus MEC for Education KwaZulu-Natal.
In that case, the court ruled that state functionaries have a duty to arrest any irregularity or impropriety in state affairs as soon as they are aware of it.
In the Trillian payment case, evidence in the public domain points to an early opportunity having existed for Eskom to avoid losing the R300m and, as in the Nkandla matter, failing to heed warnings about the impropriety. In the Nkandla matter, civil and criminal action has been taken against those considered responsible for waste or theft of public funds. This includes getting recipients of ill-gotten funds to pay back the money.
Shouldn’t those who benefited illicitly from the Eskom money also be made to pay back the money?
The criminal prosecution of state functionaries responsible for waste or theft of public funds is prescribed by the Public Finance Management Act. We must be cautious, though, not to persecute the hapless messengers while those who issued improper or corrupt commands are rewarded with the opportunity to keep their loot and continue the rot.
The criminal justice process on the Eskom and other matters referred to as state-capture activities in the State of Capture report of the public protector, is taking an inordinate amount of time.
Curiously though, action against the Trillian and other whistle-blowers is proceeding at the speed of lightning. In the meantime, the recoverability of the monies is diminishing by the day as funds get moved or used while evidence trails become colder. What are we to do to mitigate loss?
RECOVERABILITY OF THE MONIES IS DIMINISHING BY THE DAY AS FUNDS GET MOVED OR USED WHILE EVIDENCE TRAILS BECOME COLDER
The Asset Forfeiture Unit (AFU) was created for civil recovery of illicitly gotten monies and, as such, should act. But what if the AFU doesn’t act? Is it not time for the public to institute civil proceedings to recover these monies? The question applies to all other illicitly siphoned public monies where the relevant accountability machinery within the state seems to have chronic inertia.
Would there be a legal basis for the people approaching the courts to get Trillian and others to pay back the money? It is complicated, but I believe based on the Khumalo precedent that section 195 provides an opportunity for trying.
With recovery of the R300m and other stolen public funds, currently estimated at several billion rand, we could pay for much needed hospital infrastructure. We would also make unprecedented strides towards social justice, particularly regarding extreme poverty and inequality, and thereby contribute to sustainable peace and stability.