Explosive new report accuses De Lille administration of financial irregularities

22 October 2018 - 07:43 By Aron Hyman
Patricia de Lille
Patricia de Lille
Image: World Economic Forum / Greg Beadle/Government of SA via Flickr

Cape Town councillors will be asked to decide on Thursday whether to report mayor Patricia de Lille to the police‚ after a forensic investigation said criminal charges should be considered against her and several other officials.

A 2‚000-page report by law firm Bowman Gilfillan‚ made available to councillors electronically on Saturday‚ claims De Lille and former city manager Achmat Ebrahim broke the law when they failed to tell the council about irregular payments in 2015.

The report also recommended that council is obligated to report suspected acts of corruption relating to a tender for electric buses and that the city take disciplinary procedures against mayoral committee member for transport and urban development Brett Herron and suspended transport and urban development authority commissioner Melissa Whitehead for their alleged misconduct in the tender process.

Asked to comment on the report‚ Herron said: “I will not be drawn to comment on a report which is confidential. As you know I am prohibited by council rules from doing so. I will comment fully when the report is made public.”

De Lille responded to a request for comment saying: "I will release a statement after I have studied the report and consulted my lawyers."

Thursday’s council decision will be made just six days before De Lille steps down as mayor. She agreed to relinquish the post in August‚ after more than a year of turmoil in the Democratic Alliance (DA) over the party's allegations against her‚ and will be replaced on November 1 by Dan Plato.

The council sitting also comes a year after Craig Kesson‚ the executive director in De Lille’s office‚ filed an affidavit in which he made a series of allegations about the mayor. Many of his claims were probed during Bowman Gilfillan’s investigation.

Kesson’s affidavit followed revelations by the Sunday Times about alleged wrongdoing in the Foreshore Freeway Project and the procurement of electric buses from Chinese bus manufacturing giant BYD.

Bowman Gilfillan’s report says De Lille and Ebrahim - who resigned in January after being told he faced disciplinary charges and suspension - failed to report a forensic investigation into irregular payments for Volvo bus chassis.

It recommends that the council consider “appropriate sanction” against De Lille after she interfered with Ebrahim’s duties to report the Volvo matter to councillors.

In doing so‚ it recommends that the council should consider section 119 of the Municipal Systems Act‚ which reads: “A councillor who attempts to influence the municipal manager... not to enforce an obligation in terms of this act‚ any other applicable legislation or any by-law or decision of the municipality‚ is guilty of an offence and on conviction liable to a fine or to imprisonment for a period not exceeding two years.”

This is Bowman Gilfillan’s second report into Cape Town’s transport and urban development authority‚ which was previously called Transport for Cape Town. Its first was commissioned by the council on November 21 2017‚ after Kesson filed his affidavit.

When the city council considered the report on January 5‚ it ordered disciplinary action be taken against Ebrahim and transport commissioner Melissa Whitehead‚ who were given seven days to provide reasons why they should not be suspended.

Ebrahim resigned on January 12 and left immediately‚ claiming his innocence‚ while Whitehead was suspended pending a disciplinary hearing. Her suspension remains in effect.

The council also accepted a recommendation that Bowman Gilfillan carry out a further investigation into an alleged cover-up of Whitehead’s purported wrongdoing by De Lille.

The law firm requested several extensions of its deadline for delivering the report and finally handed it to speaker Dirk Smit on Monday October 15.

All the individuals against whom allegations were made were given a chance to respond before the investigators came to their conclusion. The lengthy report reflects their responses.

Citing the Prevention and Combating of Corrupt Activities Act‚ the report recommends that suspected fraud and corruption in tender proceedings relating to BYD electric buses be reported to the police.

This part of the investigation followed allegations against Whitehead levelled by ANC councillor Bheki Hadebe‚ who claimed the commissioner was involved in unfairly advantaging the Chinese company to secure a tender for electric MyCiTi buses.

Hadebe told the transport and urban development committee that council officials met BYD representatives in China and in Whitehead’s boardroom before the tender was advertised. He also claimed the company wrote the specifications for the tender.

Council documents in the possession of TimesLIVE show that on August 24 2015‚ council contract management chief Sidney Pretorius wrote to John Martheze‚ manager of operations integration in Whitehead’s department‚ saying: “We are in the process of facilitating procurement of electric buses from BYD.”

The agenda for a visit to Cape Town the following month by BYD executives AD Huang and Brian Li included the entries “finalise and conclude business agreement” and “confirmation of roll-out times”. But the deadline for tenders - five companies submitted bids - was only in early 2016.

BYD was awarded the R286-million contract in August 2016.

Eleven buses in a R128m pilot project have since been assembled‚ but cannot be delivered until the investigation of the tender is complete.

Bowman Gilfillan also says BYD may have created fraudulent broad-based black economic empowerment documents to comply with the city’s tender requirements.

Kesson criticised Whitehead for her role on the original evaluation committee for the Foreshore Freeway Project.

This R8.3bn project to revitalise the Foreshore and resolve the problem of the city centre’s unfinished freeways was scrapped in July by new city manager Lungelo Mbandazayo‚ who said his decision followed several appeals and objections to the decision in February to name Mitchell du Plessis Associates the preferred bidder.

“Having received legal advice‚ the city concluded that a lack of sufficient clarity in the request for proposals documentation rendered the evaluation criteria vague‚” said Mbandazayo.

“Procurement processes must be compliant with the rule of law. There must be no doubt about the integrity of these processes and as such I have decided to cancel the request for proposals.”

Bowman Gilfillan’s first report exonerated Kesson‚ and the council accepted a recommendation that no disciplinary action should be taken against him.

In another allegation‚ Kesson said the mayor had asked a top manager in her office to bury a report on allegations that R43-million in MyCiTi bus fares had been “misappropriated”.

At the time‚ De Lille said she would seek legal advice about Kesson's allegations. In a series of tweets after the January 5 council meeting‚ she seized on what she said were errors in the first Bowman Gilfillan report that meant its findings‚ conclusions and recommendations were “highly prejudicial”.

She said she had been given an advance copy of the report and had requested corrections‚ but the lawyers had refused to comply.

“I feel that I have been unfairly and unnecessarily defamed and embarrassed by this report and believe Bowman Gilfillan’s refusal to correct a false finding‚ or to even consider that they may have made an error‚ to be unreasonable‚” said De Lille.

“The report cannot stand as it is. It must be corrected.”

This is a developing story.

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