The Hawks are investigating eThekwini mayor Zandile Gumede
for actively facilitating money laundering, fraud and corruption, allegedly to
pay back cronies who helped her political ambitions.
A hard-hitting forensic report on which the case is based
states that Gumede summoned a municipal official to her home to demand that a
R25m tender go to handpicked companies.
Those companies, the report states, may have belonged “to
councillors and political figures that had supported Gumede in her political
endeavours and that councillor Gumede owed them a token of gratitude in the
form of contracts from eThekwini”.
The investigation, which the Hawks launched last month, is
based on information contained in the report, by Integrity Forensic Solutions,
into claims that contracts dished out for the hiring and cleaning of chemical
toilets in August last year were riddled with corruption.
Hawks spokesperson Hangwani Mulaudzi confirmed the
investigation, but declined to name the two councillors under investigation.
But they are named in the forensic report as Gumede and
Mondli Mthembu, a councillor who chairs the human settlements committee in
council. They and three officials allegedly orchestrated a corruption and
money-laundering “scam”, which saw eThekwini pay R25m to hire about
800 chemical toilets for six months. Before this, the city had paid about R3m
to hire toilets for three years.
This is one of the cases that led to this week’s dramatic
withdrawal by Auditor-General Kimi Makwetu of his staff from the eThekwini
municipality, because they had received death threats.
“They were told to stop requesting documents from the
city’s integrity and investigations unit and the supply chain departments,”
a senior city official told City Press this week. “They were threatened
with death. Some of them said they received anonymous calls from people telling
them that they know where they stay and where their kids go to school.”
City Press further understands that the Integrity Forensic
Solutions report – which was leaked by opposition parties in the eThekwini
council – was requested by the Auditor-General’s staff, and that municipal
officials had refused to hand it over.
The dossier also implicates three officials: the deputy head
of the metro’s water and sanitation unit, Sibusiso Vilane; the department’s
superintendent, Nkosinathi Zuma; and senior manager Vusumuzi Mkhwanazi.
The dossier also found that:
- The human settlements unit spent about R3m in providing poor
residents with chemical toilets between 2014 and 2017. And, when the water and
sanitation department took over in August, its budget ballooned to R15m. By the
end of February, the unit had spent R25m hiring about 800 toilets;
- Bidvest and Sanitech, whose contracts were cancelled in June
last year, charged the metro R1 248 and R780 respectively for supplying and
cleaning a toilet a month. But the nine companies appointed to supply the
toilets in August charged the metro R4 500 for the first month and R3 840 for
the subsequent five months;
- The nine companies couldn’t supply the toilets at all and
ended up subcontracting Bidvest and Sanitech to do it anyway, at a cost of R1
200 per toilet, per month;
- Zuma instructed at least one of the nine companies,
eThekwini Construction, to pay R1 500 per toilet per month to all the service
providers on Mthembu’s list. This amounted to between R450 000 and R500 000 a
month and “constituted money laundering”, the report found; and
- The Delangokubona Business Forum and MK NUZ (Umkhonto
weSizwe’s Umlazi branch) allegedly extorted R85 000 a month from the owner of
one of the chemical toilet supply companies, threatening to burn his toilets if
he didn’t cooperate.
Gumede’s spokesperson, Mthunzi Gumede, said: “The mayor
takes these allegations very seriously, but she is concerned that nobody has
presented such a report to her and that when investigations were conducted, she
was never approached. She will seek legal guidance and has vowed to continue
“She has approached the city manager to look into the
matter and act decisively. The mayor and councillor Mthembu have never
participated in tender processes. This is just clear propaganda by those
working with the opposition to collapse the municipality.”
The false emergency
In February last year, eThekwini’s human settlements
department told the city’s water and sanitation unit that it could no longer
afford to pay Bidvest and Sanitech to supply chemical toilets. The department
went on to say that it would cancel the contracts by the end of June, and that
the water and sanitation unit would have to take over the responsibility. But
by August, water and sanitation hadn’t started supplying toilets, and
impoverished residents had no sanitation.
Vilane then wrote to city manager Sipho Nzuza on August 18,
requesting permission to bypass procurement rules, claiming it was an
emergency, which Treasury allows.
“Vilane was aware of the requests from human
settlements for a number of months [and] cannot claim that when he compiled the
memo, the need to procure the chemical toilets was an emergency,” the
report found. It also found that Vilane lied to the city manager.
Zuma later told investigators that the city started
supplying toilets on August 9, nine days before Vilane compiled his memo. The
report states that Mkhwanazi handed him a list of suppliers, instructing him to
ask the companies to start delivering the chemical toilets immediately. “Zuma
stated that he was in meetings with Vilane and Mkhwanazi from August 9 onwards,
wherein the duo gave him instructions as to what the service providers should
be charged, which service providers should be awarded, and which areas to
supply and deliver the toilets,” the report found.
Zuma also told investigators that the following month,
Zandile Gumede summoned him to her home in up-market Sunningdale and “questioned
him as to why it was that the list of suppliers that had been given to Vilane
and Mkhwanazi by councillor Mthembu had not been awarded the contract”.
Zuma stated that the mayor ordered him to see to it that
Mthembu’s instructions were followed.
After meeting Gumede, Zuma said it dawned on him that Vilane
and Mkhwanazi hadn’t chosen the companies Mthembu wanted. Mthembu then called
the three officials to a meeting, where he rebuked them for not appointing the
companies he wanted.
“Mthembu insisted that these service providers be given
work to supply the toilets since they were councillors and political figures
that had supported councillor Gumede in her political endeavours, and that
councillor Gumede owed them a token of gratitude in the form of contracts from
eThekwini,” the report states.
“The submissions of Mthembu, and the fact that Gumede
summoned Zuma to her house to reinforce the instruction of Mthembu, gives
probative weight to the allegation that Gumede was using the power of her
office to secure the award of contracts for persons on the list provided by
councillor Mthembu to Vilane and Mkhwanazi,” said the dossier.
Zuma said he and the other two officials then “devised
a plan to have the service providers put up by councillor Mthembu benefit from
the supply of chemical toilets”.
This involved instructing one of the companies, eThekwini
Construction, to pay R1 500 per toilet per month to all the nine companies on
Mthembu’s list, and they “were being paid between R450 000 and R500 000
per month … for six months”.
Zuma told investigators that the companies Mthembu suggested
rendered no services to the metro at all because they had no capacity to do so.
The company had little trouble passing on R1 500 per toilet
per month to the suppliers “which Gumede and Mthembu wished to ingratiate”,
the report concludes.
eThekwini Construction could not be reached for comment.
Alvin Naicker, a member of a company called Matt Hayden’s –
one of the service providers appointed to supply the toilets – told
investigators he was approached by members of the Delangokubona Business Forum
and MK NUZ, who demanded he pay them R45 000 and R40 000 a month, respectively,
for the life of the contract.
Naicker, who could not be reached for comment, told
investigators “he was threatened by these representatives [who said] that
they will destroy the toilets he was hiring from Sanitech if he did not pay
them” – and he did so.
Delangokubona is a Durban-based mafia-style business outfit,
notorious for invading construction projects and demanding a stake in them.
Mthunzi Gumede did not respond to a detailed set of
questions about the allegations against Zuma, Vilane and Mkhwanazi.