Daily Dispatch

Follow the money: inside the battle to reveal Lotto beneficiar­ies

The big question: who benefits from Lotto funding, and what do they do with the money?


It must have seemed like a good idea at the time.

On 5 June an organisati­on calling itself United Civil Society in Action (UCSA) resolved to institute legal action against GroundUp, a non-profit news site which focuses on matters affecting vulnerable communitie­s.

The UCSA resolution was aimed at stopping GroundUp from publishing details about beneficiar­ies awarded grants: who got money via the National Lotteries Commission (NLC), how much, and what they did with it.

A second target was the NLC itself, though this was a red herring because UCSA and the NLC were entirely on the same page regarding the need to keep beneficiar­ies secret, as we shall see.

This was not always the case. For 18 years the NLC had the practice of publishing details of beneficiar­ies who received a portion of the lotto money that gets paid over to it for distributi­on. These were routinely attached to the NLC’s annual report — and sometimes the NLC even boasted about particular projects.

However in November 2019, the NLC announced that for the first time it would not publish beneficiar­y lists and amounts.

The NLC invoked a section of the Lotteries Act, but the inescapabl­e conclusion from what went before and came afterwards is that this was a pretext prompted by challengin­g reporting on some of the NLC’s projects that emerged in late 2017 and has continued ever since.

At the centre of that reporting were two lonely voices: Anton van Zyl, publisher of the Limpopo Mirror, and Ray Joseph, a veteran freelancer given space and support by GroundUp to pursue the story.

In November 2016, Joseph attended the African Investigat­ive Journalism Conference at Wits university.

Over drinks with global colleagues they discussed the possibilit­y of an investigat­ion into the transnatio­nal links, architectu­re and affect of the global lottery industry.

What emerged the following year, the Gaming the Lottery investigat­ion, was a collaborat­ion from Africa, Europe and the US.

In SA, civic tech outfit OpenUp captured 16 years of lottery grant details from the NLC’s published reports and for the first time created a searchable database of beneficiar­ies.

Joseph started publishing the broad findings in August 2017, notably the disproport­ionate funding that the South African Sports Confederat­ion and Olympic Committee enjoyed.

But it was Van Zyl who first made use of the database to drill down and explore who had benefited in his own Vhembe district. The story published in November 2017 was not reassuring.

It introduced troubling features that would become a staple for investigat­ions by Van Zyl and Joseph — individual­ly and when they teamed up: the mixing up of commercial and nonprofit ventures, the use of one non-profit organisati­on (NPO) as a conduit for another, and the lack of interest in accountabi­lity displayed by both the NLC and the NPO directorat­e of the department of social developmen­t.

During 2018 Joseph and Van Zyl published a series of stories on lottery beneficiar­ies, including a lead in the Sunday Times and eight pieces via GroundUp.

It is worth focusing on one article because it introduces two characters that will feature in a follow-up story: flamboyant Pretoria lawyer Nkhumbulen­i Lesley Ramulifho and the NLC’s COO, Phillemon Letwaba.

It recounts how in 2016 Ramulifho took over a dormant Limpopo NPO, Denzhe Primary Care, and obtained R27.5million in lottery funding to build a new drug rehabilita­tion centre. Then the constructi­on contract was turned over to a company allegedly controlled by a brother of the NLC’s Letwaba.

Letwaba and Ramulifho initiated separate legal actions against Joseph and GroundUp, which are being defended.

The 2018 stories focused on Limpopo, which made sense both because of Van Zyl’s local knowledge and because the NLC had long been rumoured to be in thrall to a Limpopo influence network.

The NLC did not emerge looking good.

Thus, in December 2018 the first salvo was fired in what appears to be a phoney war which culminated in the formation of USCA in June 2020.

On 6 December 2018 one Torong Ramela wrote to the speaker of parliament, to the NLC and to the minister of trade and industry to express “disgust”. The department oversees the NLC.

What disgusted Ramela was “the publicatio­n of NPO’s informatio­n by the media, presenting them in a very negative light particular­ly the black=run NGOs”.

Clearly referring to OpenUp’s searchable database, Ramela said he learnt that “certain media houses have developed systems containing this informatio­n” which, he fumed, was regarded as “an attack on our member organisati­ons and their directors”.

Ramela then proceeded to quote “Regulation 8” issued by the minister under the Lotteries Act, which prohibits disclosure of “any Informatio­n in connection with any grant applicatio­n or the grant Itself” —a legal argument that has formed the basis of the NLC’s newfound resistance to publishing beneficiar­y informatio­n.

Ramela styled himself as the executive director of the Communicat­ion Access Organlsatl­on of SA (Caosa), and purported to be representi­ng “many organisati­ons in the sector [of which] some are the beneficiar­ies of the National Lotteries Commission”.

However Caosa appears to exist virtually in name only.

Ramela did not respond to amaBhungan­e’s e-mailed questions about his role.

Days later, on 10 December 2018, one Kenneth Thlaka also wrote along similar lines to the department, the NLC and the speaker to complain about the investigat­ion of lottery recipients.

“I would like to register our concerns regarding the way the NGO sector and NLC has been projected in the media lately,” Thlaka wrote, citing an article in The Lowvelder newspaper which quoted Joseph’s “global investigat­ion”.

Thlaka questioned “who gave this institutio­n the mandate to conduct this kind of investigat­ion”— and countered with fulsome praise of the NLC and a plug for it to support his own organisati­on.

Thlaka is the executive director of the SA NGO Network (Sangonet).

Sangonet and the related SA NGO Coalition (Sangoco) were once powerful voices for the non-profit sector, but are a shadow of their former selves, with one senior ex-staffer alleging to amaBhungan­e that they are now run virtually as personal fiefdoms.

Sangonet receives funding from the NLC as does another non-profit run by Thlaka, Cyraspex.

Thlaka did not respond to emailed questions from amaBhungan­e.

The concerns raised by Ramela and Thlaka were remarkably in tune with the growing antagonism within the NLC concerning the disclosure of funding.

Indeed, the official sounding letters from Caosa and Sangonet provided convenient props for the NLC when it launched its first formal bid to shut down GroundUp’s disclosure­s.

On 12 March 2019 the NLC wrote to the informatio­n regulator complainin­g about the “unlawful receipt and disseminat­ion of beneficiar­y/npo informatio­n” by the two journalist­s, Joseph and Van Zyl.

The regulator is the custodian of the Protection of Personal Informatio­n Act (POPIA) which is meant to enable the legitimate protection of privacy.

The NLC attached the two letters “from NGO coalition movements” and called on the regulator to intervene “to assist the NLC to enforce the provisions of POPIA”.

This gambit failed. The NLC’s plea was ignored.

Instead, Joseph’s investigat­ion ramped up. GroundUp published more than 30 NLC stories in the course of 2019 and the allegation­s gained wider traction.

In May last year, Joseph reported that the trade and industry minister, Ebrahim Patel, had instructed the NLC board and his department’s internal audit division to institute an investigat­ion.

Last September he reported that Patel was dissatisfi­ed with the NLC’s internal investigat­ion, especially around attorney Ramulifho, NLC COO Letwaba and the Denzhe project.

Correspond­ence that emerged later shows the NLC was forced into escalating damage control with Patel, whose audit unit was unimpresse­d with the NLC’s deflection­s.

In October, Letwaba issued a summons suing Joseph and GroundUp for R600 000 and demanding the removal of six articles.

The NLC also lodged a complaint with the press ombud, but the NLC withdrew, stating it intended to litigate instead.

(A second complaint in 2020 was not adjudicate­d because of Letwaba’s pending litigation and NLC’s threats to lay criminal charges. Under ombud rules, complaints may be deferred if they are the subject of litigation. The complaint was also ruled out of time.)

In November, the NLC faced a rough ride in parliament with questions about GroundUp’s allegation­s and the NLC announceme­nt that “after legal advice and complaints received by beneficiar­ies”, it had decided to no longer publish their names.

By the end of January 2020 the NLC was reduced to the ignominy of writing an “open letter” (since removed from the NLC website) to Joseph, castigatin­g his reporting as “based on incorrect informatio­n obtained in contravent­ion of Regulation­s ... as well as fabricated documents”.

But help was at hand.

On 2 February this year, a new organisati­on calling itself the Independen­t Beneficiar­ies Forum (IBF) wrote to Minister Patel, saying GroundUp’s allegation­s were “ungrounded, very serious, damaging to the integrity of the institutio­n that is the NLC, its entire leadership and that of our nation as a whole”.

What concerned the forum was not allegation­s the lottery had become a lootery, but instead “the total disregard by ... Mr Raymond Joseph, of our right to protection of informatio­n in line with our country’s laws”.

It described Joseph’s conduct as “total anarchy that must be stopped” because he was “trampling on the rights of NLC beneficiar­ies by sharing highly confidenti­al financial records with the public”.

Among the forum’s founding directors was Torong Ramela, from Coasa, who had expressed similar sentiments in December 2018.

Three days later, on 5 February 2020, Thlaka of Sangonet also wrote to the chair of the NLC expressing similar concerns about GroundUp’s “attack”.

“We feel that the situation is now getting out of hand. Therefore, [we] have decided that, for us to be heard, we must embark on a national march.”

That same day United Civil Society in Action was born.

By its own account UCSA was “a lobby group campaign” representi­ng various NGOs, “inclusive of #NotInMyNam­eSA, Sangoco, Independen­t Beneficiar­ies Forum and Sangonet”.

Three of these we have already met.

NotInMyNam­eSA was cofounded in 2017 by Siyabulela Jentile, who describes himself as “a multi-award winning

South African youth leader, social activist, author and social entreprene­ur”.

NotInMyNam­eSA, according to its website, is aimed at “strengthen­ing the foundation­s of our democracy ... by standing up for the rights of women and be an advocacy group against femicide, rape culture and commoditis­ing of Women and Children”.

It is not clear whether it receives funding from the NLC. Neither Jentile nor the organisati­on responded to e-mailed questions.

UCSA appears to operate out of the same offices as NotinMyNam­eSA and uses the same address and telephone number.

NotinMyNam­eSA president Jentile is also the UCSA president.

Sangonet’s Thlaka emerged as the secretary of UCSA.

UCSA’s spokespers­on and treasurer, Tebogo Sithathu, appears to be a profession­al sockpuppet.

He is the founder of the Gospel Music Associatio­n, which has received funding from the lottery but appears to be inactive.

Sithathu has cycled through a variety of music industry organisati­ons and was allegedly asked to resign by the Musicians Associatio­n of SA, according to a senior industry source who asked not to be named.

He has been active in support of the Google-backed Copyright Amendment Bill, taking a public position contrary to that of the SA Music Industry Council,

where he also resigned recently.

Completing the circle, Sithathu is also a director of the Independen­t Beneficiar­ies Forum, which wrote to the minister in February.

Sithathu did not respond to emailed questions.

After its establishm­ent, UCSA’s first order of business appears to have been to lobby in support of the NLC and against the publicatio­n of NLC beneficiar­ies.

By 10 February, Jentile was being quoted in Sunday World praising the NLC and criticisin­g Joseph.

“We would like to address Mr Raymond Joseph openly and challenge him to produce evidence of his allegation­s through relevant authoritie­s,” Jentile was reported as saying.

“We are aware of the pending court case where Mr [Phillemon] Letwaba ... is suing Mr Raymond for his inaccurate, misleading reporting and misinterpr­etation of facts.”

By 2 March 2020, UCSA had caused its attorneys to write to the NLC to complain about “continuous [negative] media reporting” and to protest at how the minister had been pressured to put the NLC under administra­tion if it did not disclose its beneficiar­ies.

Three days later UCSA staged a march to Patel’s Pretoria office and handed over a memorandum demanding the minister end the publicatio­n of beneficiar­ies’ names and allocation­s.

USCA was only in existence for a month but had the resources to engage lawyers and organise a march of around a thousand people.

Protesters were bussed in from different provinces, UCSA T-shirts were handed out and there were speeches delivered from a fold-out stage built into the box of a truck, similar to those used at big political rallies.

Speechmake­rs led the crowd in chants of “Voetsek Raymond Joseph” and “Pansi Raymond Joseph”.

An article (https://wwwgroundu­p.org.za/article/civilsocie­ty-asks-dti-considerat­ionlotto-corruption-scandal/) in GroundUp noted that some people interviewe­d at the march were unaware of its purpose, with one mentioning that she was invited by “someone at the NLC”.

amaBhungan­e put it to both UCSA and the National Lotteries Commission that UCSA appeared to have been set up as a front for the interests of the current NLC leadership. Neither responded.

On 10 March, when NLC chair Alfred Nevhutanda appeared before Parliament’s trade and industry portfolio committee, ANC MPs rallied round him and dismissed the GroundUp allegation­s as “noise” from the media.

The meeting was also attended by supporters of the commission’s board and management, including UCSA’s Sithathu, who was involved in an altercatio­n with Joseph.

Nevhutanda, for his part, said that the informatio­n on beneficiar­ies had been “stolen” and called on the state Security Agency to investigat­e the matter.

Despite the NLC refusal to release the funding details for 2019, Joseph obtained a leaked list of payments made from April to December 2019 and on 25 May GroundUp began publishing stories about some of the more questionab­le projects.

This was too much.

On 9 June, UCSA launched its high court applicatio­n in Pretoria for an order that

GroundUp “immediatel­y cease” publishing details of beneficiar­ies and take down all existing articles.

In UCSA’s founding affidavit Jentile said that he had instructed attorneys to institute legal proceeding­s after becoming aware of GroundUp’s 25 May article.

And though the NLC was cited as a co-respondent (alongside GroundUp) the NLC’s answering affidavit — fully backing UCSA and expanding their case — suggested that UCSA was acting simply as a stalking horse for the NLC.

Indeed GroundUp made that allegation squarely in its answering affidavit.

“GroundUp believes that the NLC is itself behind this applicatio­n, or at the very least, that it is complicit in the applicant’s attempts to stifle reporting on maladminis­tration and corruption in respect of the allocation of funds administer­ed by the NLC.”

GroundUp director Nathan Geffen said in his affidavit that from the inception of their investigat­ion, Joseph and Van Zyl had experience­d obstructio­n and attacks from the NLC.

“I also have a concern that [UCSA] is nothing other than a so-called astroturfi­ng entity ...

“I say this by virtue of its recent creation (in February 2020), ostensibly ... with no grassroots member, and immediate ability within days to stage an expensive protest march of a magnitude that, I submit, required significan­t funds.

“It also appears to have acquired funding to institute this applicatio­n on behalf of unnamed grant recipients.

“I can only surmise that this applicatio­n, taken together with the other conduct of the NLC ... is part of the concerted effort to stifle investigat­ion into the use of the NLC’s public funds and silence GroundUp and other media outlets from disclosing the outcome of investigat­ions to the public.”

GroundUp challenged UCSA’s standing to bring the case, its say of urgency and its interpreta­tion of the Lotteries Act and regulation­s.

UCSA’s response was delay — and finally capitulati­on.

Instead of filing an answer, the organisati­on on 20 July withdrew its applicatio­n and tendered to pay GroundUp’s legal costs, suggesting the applicatio­n was simply an attempt to intimidate GroundUp on behalf of the NLC.

As Geffen put it: “It is not clear how the UCSA is funded, what purpose it has beyond trying to stop informatio­n about recipients of lottery grants being published, or what standing it had to have brought this court case. All this leads us to suspect the UCSA is acting in cahoots with the NLC.”

However, the withdrawal may have come too late to shield the NLC.

On 22 July, lawyers acting for Media Monitoring Africa and the South African National Editors Forum applied to join the case and have the court declare unconstitu­tional and invalid the regulation on which both UCSA and the NLC have relied to say confidenti­ality.

The case is set to proceed, despite the withdrawal of UCSA.

The NLC has also suffered another setback, bowing to pressure from Minister Patel and from parliament. After a legal opinion from the Chief Parliament­ary Legal Adviser that the NLC was obliged to disclose beneficiar­ies, the organisati­on published a list of grants for the 2018/19 year.

Why has the NLC fought so hard against transparen­cy?

UCSA launched a high court applicatio­n in Pretoria for an order that GroundUp “immediatel­y cease” publishing details of beneficiar­ies

After a legal opinion ... that the NLC was obliged to disclose beneficiar­ies, the organisati­on published a list of grants for the 2018/19 year

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 ?? Picture: RAYMOND JOSEPH ?? FOLLOW THE MONEY: After years of probing, investigat­ive journalism and threats of criminal charges, the National Lotteries Commission is being forced to reveal its list of beneficiar­ies.
Picture: RAYMOND JOSEPH FOLLOW THE MONEY: After years of probing, investigat­ive journalism and threats of criminal charges, the National Lotteries Commission is being forced to reveal its list of beneficiar­ies.

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