Sunday Times STLive By NASHIRA DAVIDS and PHILANI NOMBEMBE, 2010-08-08

Hawks swoop on dossier alleging millions in graft

Zille claims widespread irregular payments under ANC premier Rasool

Police are investigating a dossier which could lift the lid on an alleged corruption scandal in the Western Cape provincial government while Ebrahim Rasool, South Africa's new ambassador to the US, was premier.

The probe is based on files handed to the Hawks by Western Cape premier Helen Zille this week.

Rasool is now ambassador to the US in Washington.

Irregular payments running into tens of millions or rands were allegedly funnelled through provincial government departments to consultants for work done. Some of the money was paid to individuals, including a former Cape Argus reporter, Ashley Smith.

Provincial public works and transport MEC Robin Carlisle said: "I estimate that R100-million became hot money. In other words, money that went where it was not supposed to."

Some of the money was paid to Smith - which he admitted receiving in an affidavit to the National Prosecuting Authority in June - to write favourable stories about Rasool while he was premier.

Zille has also called for the SA Revenue Service to conduct lifestyle audits on several people who served under Rasool.

Investigations conducted by the province and the Auditor-General have uncovered questionable tenders awarded to communications companies, including BrandTalk and Hip Hop Media Lounge.

Last week the Auditor-General handed a report to the provincial legislature, revealing that the companies were contracted by the Western Cape Department of Public Works and Transport without a competitive bidding process.

Hip Hop and BrandTalk were not the only companies singled out; various companies were paid for work not completed or paid more than agreed fees.

The Auditor-General's report recommends disciplinary steps and legal action to recover misspent funds.

A 2009 provincial treasury report found the department had incurred "irregular expenditure" and asked for an investigation. Whistle-blowers had been ignored after raising concerns, it added.

Marius Fransman, one of Rasool's closest allies, was the MEC for the department at the time.

Details have emerged which suggest the alleged corruption could extend to other provincial government departments. Zille said on Friday that the departments of community safety, environmental affairs and development planning and cultural affairs and sport also had contracts with Hip Hop.

"According to the available information, only the department of transport and public works concluded a contract with BrandTalk. The combined value of all these contracts amounted to approximately R80-million," she said.

Zille asked the provincial forensic unit to investigate all contracts concluded with "communication consultants" during Rasool's tenure.

Carlisle said his department had paid Hip Hop and BrandTalk almost R30-million between 2006 and 2008.

"My understanding is that the department of the premier spent between R35-million and R40-million on just these two companies," he said.

In an interview on 567 Cape Talk radio on the eve of his departure for the US last week, Rasool denied any wrongdoing.

"I challenge anyone with evidence to lay a criminal charge or they should shut up," he said.

But ANC secretary-general Gwede Mantashe acknowledged this week that Rasool had been removed as premier because of the allegation that he paid reporters to write more favourably about him than ANC arch-rival Mcebisi Skwatsha.