COVID-19 corruption: Govt closes in on perpetrators

Corruption related to COVID-19 is putting the lives of citizens at risk and government is acting against it

Government says there should be no scope for corruption in the use of resources meant to overcome the coronavirus (COVID-19) pandemic.

President Cyril Ramaphosa announced that government has established a collaborative and coordinating centre to strengthen the collective efforts among law-enforcement agencies to prevent, detect, investigate and prosecute COVID-19-related corruption.

“This centre brings together nine state institutions, including the Financial Intelligence Centre (FIC), the Independent Police Investigative Directorate, the National Prosecuting Authority (NPA), the Hawks, Crime Intelligence and the SAPS Detective Service, the South African Revenue Service, the Special Investigating Unit

(SIU) and the State Security Agency,” said the President.

This centre is investigating allegations of corruption in areas such as the distribution of food parcels, social relief grants, the procurement of personal protective equipment (PPE) and other medical supplies, and the Unemployment Insurance Fund (UIF) special COVID-19 scheme.

“At least 36 cases are currently at various stages of investigation and prosecution,” said the President.

“We are determined that every instance of alleged corruption must be thoroughly investigated, that those

responsible for wrongdoing should be prosecuted and that all monies stolen or overpriced are recovered.”

The President has also signed a proclamation authorising the SIU to investigate any unlawful or improper conduct in any state institution in the procurement of any goods, works and services during or related to the national state of disaster.

This empowers the SIU to probe any allegations relating to the misuse of COVID-19 funds across all spheres of the state.

“If the SIU finds evidence that a criminal offence has been committed, it is obliged to refer such evidence to the prosecuting authority. It is also empowered to institute civil proceedings for the recovery of any damages or losses incurred by the state.

“To ensure that action is taken speedily, I will be getting interim reports on investigations every six weeks,” said President Ramaphosa.

According to the SIU spokesperson, Kaizer Kganyago, the new centre is a project of the AntiCorruption Task Team (ACTT), which is a central body mandated to give effect to the government anti-corruption agenda.

All nine institutions that are part of the new centre are also part of the ACTT and work together as individual pieces of a puzzle.

For instance, he said if the SIU is investigating a case and in the process, finds what appears to be a criminal act, the NPA and the Hawks will be asked to investigate and if warranted, arrests will be made and criminal proceedings instituted.

“If we ever need bank records for an investigation that we are busy with, we ask for documents from the FIC because they have access and are mandated to make such documents accessible to us,” he added.

In April, the President announced a historic R500 billion social relief and economic support package to direct resources towards South Africa's COVID-19 response and assist businesses, workers and households.

The resources for this package come from the reprioritisation of funds within the budget and through the mobilisation of loans from funders, including multilateral development banks. Approvals for funding were received from the African Development Bank, the New Development Bank and the International Monetary Fund.

The package redirects resources to fund the health response to the coronavirus, including additional expenditure on PPE, community screening, increased testing capacity, additional beds in field hospitals, ventilators, medicine and staffing.

It also provides direct support to households and individuals for the relief of hunger and social distress. Over four million people have now received the special COVID-19 grant, which assists those who are unemployed and do not receive other forms of support.

The package also provides assistance to companies in distress and seeks to protect jobs by supporting workers' wages.

For the months of April, May and June, the UIF special COVID-19 benefit has paid out R34 billion, helping over 7.5 million workers and preventing retrenchments in a number of companies. The scheme was subsequently extended for another six weeks, to 15 August 2020.

Government has also been providing assistance in the form of loans, grants and debt restructuring to small businesses, spaza shop owners and other informal businesses. Special assistance has also been provided to businesses

in the tourism, sports and creative industries.

Reflecting on government's efforts to support businesses and people impacted by COVID-19, the President voiced concern over instances where funds are stolen and misused, where goods are overpriced and where food parcels are diverted from needy households. All of these translate to corruption and mismanagement of public funds, he added.

These include allegations about fraudulent UIF claims, overpricing of goods and services, violation of emergency procurement regulations, collusion between officials and service providers, abuse of food parcel distribution and the creation of fake nonprofit organisations to access relief funding.

With the fight against the COVID-19 pandemic already stretching the country's capabilities and resources to their limit, corruption further puts the lives of citizens at risk, said the President.

It is for this reason that government has put several preventative measures in place to eliminate corruption.

“We are therefore determined that there should be no theft, no wastage and no mismanagement of public funds.The consequences for those who break the law or bypass regulations will be severe,” said President Ramaphosa.

He added that all the funds that have been committed to the pandemic must reach their intended recipients and must be put to proper use.

“We will take steps to recover all funds that have been stolen or where goods have been overpriced. The success of our fight against corruption depends on the involvement of all citizens and all parts of society.”

Some of the initiatives to stymy corruption include National Treasury issuing regulations to ensure that emergency procurement of supplies and services meet the constitutional requirements of fairness, transparency, competitiveness and cost effectiveness.

Regulations have been put in place to prohibit unjustified price hikes and ensure the availability of essential goods.

Since the declaration of the national state of disaster, the Competition Commission has investigated over 800 complaints of excessive pricing. It has prosecuted or reached settlements with 28 companies, imposing penalties and fines of over R16 million.

According to Competition Commission Spokesperson Siyabulela Makunga, the commission was established in terms of the Competi

tion Act to, among other things,investigate and prosecute complaints relating to cartels and other anti-competitive conduct, including excessive pricing.

“The commission's execution of its mandate is guided by its sector prioritisation framework, in terms of which certain key strategic sectors of the economy have been identified as priority sectors for pro-active enforcement, such as the food, agro-processing and healthcare sectors and intermediate industrial inputs,” said Makunga.

The Auditor-General has also adopted special measures to safeguard funds committed to the fight against COVID-19.

Special audits have been undertaken to detect and prevent misuse of these funds and to identify risks in the system.

Speaking about progress of investigations, Kganyago said the SIU was already probing certain cases before the President signed the proclamation.

“When we started getting allegations from different areas about COVID-19-related irregularities, we thought it would make sense to have one proclamation that would put all allegations related to COVID-19 under one umbrella.”

He explained that ordinarily, proclamations are done per allegation. “However, because these ones are related to one thing [COVID-19], we started asking for a proclamation that covers all of them.”

Kganyago says provincial heads of the SIU are investigating all allegations related to COVID-19 and employees of the

SIU have been seconded to specific departments that are affected and under investigation.

President Ramaphosa recently appointed a Committee of Ministers which has been tasked with compiling a comprehensive report of the details of all tenders and contracts awarded by national departments, provincial governments and other public entities as part of the response to the coronavirus pandemic.These details will then be made public to promote greater accountability and transparency.

The committee is chaired by the Minister of Justice and Correctional Services Ronald Lamola and also comprises the Minister in The Presidency, the Minister of Finance, the Minister of Police, the Minister for Public Service and Administration and the Minister of Cooperative Governance and Traditional Affairs

To assist the committee in its assessment of COVID-19-related procurement, President Ramaphosa has requested all ministers and premiers to provide information on the names of companies and details of tenders and contracts that have been awarded by national departments, provincial governments and public entities during the national state of disaster.

You can contribute to the fight against corruption by contacting the Competition Commission

through: