Madonsela's report pins Malema down
Expelled ANC Youth League president Julius Malema's world is crumbling fast - he might face another string of criminal charges, involving millions of rand.
Two weeks after his appearance in the Polokwane Magistrate's Court on money-laundering charges - which carry a maximum sentence of 15-years' imprisonment - Malema might soon be charged with the more serious crimes of fraud and corruption.
His troubles with the law are mounting. He already faces a R16-million tax liability and a sheriff of the court is listing his property and assets for possible attachment.
Releasing a damning report in Pretoria yesterday, Public Protector Thuli Madonsela was hard-hitting about Malema's involvement in a lucrative roads and bridges tender, saying he improperly benefited from the Limpopo government contract.
"Our primary question was: Did Malema benefit? We are saying 'yes' - an emphatic yes."
The report is the result of investigations launched in July last year after Madonsela received complaints about the awarding of a multimillion-rand tender to On-Point Engineering, a company from which Malema subsequently resigned as a director.
The investigation was into whether a tender for the construction of roads and bridges - valued at more than R50-million - was unlawfully and improperly awarded to On-Point by the head of the Limpopo government's roads and transport department, Ntau Letebele.
Malema's business partner, Lesiba Gwangwa, is On-Point's chief executive.
"What we present here today is the truth based on sound and irrefutable evidence," Madonsela said.
This evidence is to be handed to the state agencies - including the Hawks - investigating Malema.
The Limpopo department of roads and transport paid R43-million to On-Point and Madonsela found that:
- On-Point paid R2.17-million through R100000-a-month dividends into Malema's Ratanang Family Trust over 17 months;
- The trust also received R200 000 in "unspecified loans";
- Five days after one of the alleged "kickbacks" to the trust was made, R1-million was withdrawn and paid towards the purchase of a farm;
- Amounts of R160000 and R100000 were paid from the trust to "Sandton Property" and "Sandowns Property" respectively; and
- There was evidence that the trust "was probably used as a vehicle for the transfer of funds obtained through an unlawful process".
Madonsela found that Malema used his political position to influence the awarding of the tender that benefited his trust.
Malema yesterday accused Madonsela of finding him "guilty in absentia", according to an SABC radio report.
"You can't find a man guilty in absentia," Malema said at Slovo Park informal settlement, west of Johannesburg.
"He complained he was never interviewed," said Madonsela. "But when I invited him for an interview he never took up the opportunity."
Madonsela' s report was handed to the police yesterday. The Treasury and the SA Revenue Service have been advised to recoup millions from Malema and others.
Madonsela found a series of contraventions of Treasury regulations by the Limpopo government.
"The awarding of the tender to On-Point by the department was unlawful, improper and constituted maladministration," she said.
Madonsela's report - On the Point of Tenders - found that guidelines for the awarding of tenders were ignored and called the way in which they were awarded "mind-boggling".
She said that, despite stark differences between the bid document and On-Point's tax clearance certificate, the company was not disqualified from tendering.
The tax certificate was from a five-month-old shelf company.
"You had companies disqualified because they did not put the right documents in the correct envelopes, yet On-Point - using a tax clearance certificate of a shelf company - somehow mysteriously qualified.
"In effect, On-Point existed only on paper," she said.
Madonsela said none of the "disqualifying red flags" raised the alarm about the possibility of fraudulent activities.
She said central to her investigation was how Malema's trust benefited improperly from the On-Point contract.
She said On-Point's bid for the department's project management unit was deliberately and fraudulently misrepresented.
"The company's profile, composition, experience and functionality were totally misrepresented.
"On-Point claimed to be a well-found company with nine years of experience, complete with management teams, professional staff and a list of 'evidence' showing that it was up to the task."
She, however, said none of this existed.
"There was nothing. No staff. No key management structures and no proof of any work done. The conduct of On-Point as the department's project management unit - which entered into agreements with Mpotseng Infrastructure, Baitseanape Consulting Engineers and HL Matlala and Associates - constituted corruption.
"On-Point developed 'back-to-back' agreements in which it received payments from contractors that the company was meant to manage and supervise.
"The company's shareholders, who include the Ratanang Family Trust, benefited improperly from the tender it was awarded."
Madonsela said there was evidence showing Gwangwa established On-Point specifically for the tender even before it was advertised, that the bid committee consisted of people who should not have been there and bank statements showing that money paid to On-Point was withdrawn five days later and paid to Malema's trust.
"What I can say today is that On-Point should never have been awarded the tender by a long shot," said Madonsela, adding that: "This entire process was unlawful. The agreements led to millions of rand worth of kickbacks."
She said the Treasury had been asked to recover the funds paid to On-Point, and the state attorney was advised to institute legal proceedings against On-Point and its shareholders.