DA postpones Limpopo elective congress over 'abuse of party funds'

The DA has postponed its Limpopo elective congress, due to be held this weekend, after revelations that the party had failed to act on allegations of abusing party funds levelled against provincial chairperson Jacques Smalle.

Smalle, who is seeking re-election as provincial chairperson, is facing serious allegations of possible tax fraud after an investigation by the DA Federal Legal Commission (FLC).

The Sunday Times reported a fortnight ago that an investigation by the FLC revealed Smalle had avoided paying tax on his travel allowances by arranging for his stipend to be paid into the bank account of one of his office aides.

The newspaper reported the party had, for two years, failed to act on the FLC recommendation that disciplinary action be taken against Smalle and that the finances of the DA provincial office be placed under administration.

Although the DA did not confirm this as the reason for the postponement, party spokesperson Siviwe Gwarube said the decision was as a result of “information that emerged over the past few weeks which has implications for the holding of a free and fair elective congress”.

“In the interest of the integrity of our systems, the DA federal executive, acting on the advice of the presiding officers of the Limpopo congress, resolved to cancel the congress until the information that has emerged and the allegations levelled are adequately investigated by the FLC,” Gwarube said.

The allegations faced by Smalle, who has been Limpopo party leader since 2012, have been kept under wraps for almost two years.

The investigation by the FLC, which makes adverse findings against him, was concluded in 2019 and recommended that action be taken against him but the party failed to do so.

The report became public two weeks ago when it was leaked to the Sunday Times.

The FLC found Smalle had violated party policies and rules on financial management by having his travel allowances paid into the bank account of one of his aides and not his own, thereby avoiding paying tax on his stipends.

The report said this amounted to abuse of party funds and there was a prima facie case of possible tax fraud against Smalle.

It found Smalle had not wanted his allowances, amounting to R109,000 between April 2018 and April 2019, to be paid into his own bank account. He had asked one of his office assistants to open a bank account in the assistant's name, which Smalle used as a channel to receive the allowances, and he had kept the bank card at all times.

The investigation found Smalle had done this so his income did not seem "inflated" as he was going through a divorce at the time.

"The concern is not so much the use of the third-party bank account, but rather the intent and reasoning behind requesting such an account to be opened. In addition to this, stipends of any nature that relate to travel and subsistence must be paid via payroll as it is additional income from work responsibilities, and if sufficient records are kept for expenses then submitting a tax return would not be of concern," the report said.

Gwarube said the party had appointed an administrator until the congress is convened at a later stage to elect new leaders as Smalle's mandate as an elected leader was due to expire this coming weekend.

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