Defence department would be R2.5bn richer if it sorted out its fraud cases

The department of defence (DoD) would have had more than R2.5bn to spend on the upkeep of its dilapidated equipment if monies from outstanding court cases and investigations into fraud and fruitless expenditure had been recovered.

Some of the outstanding cases which were reviewed before the joint standing committee on defence this past week date back to 2008, but have still not been concluded.

The cases the department highlighted only involve amounts of more than R100,000, with the most recent being that of corruption in the procurement of Covid-19 personal protection equipment (PPE) worth R400m.

The review last week came after the DoD was supposed to hand in the findings of the ministerial committee to investigate the irregular procurement of Heberon Interferon, a Cuban drug the DoD allegedly imported even though it was not approved by the South African Health Products Regulatory Authority (Sahpra).

When secretary of defence Sonto Kudjoe could not provide the final report due to yet more outstanding documents, Thandi Modise, in her first appearance as newly appointed minister of defence, cracked the whip.

“The committee will have the report within three weeks. There is no way heads are not going to roll,” she said.

Investigations into the contentious contract worth R214m have been dragging on for more than a year, with the Cuban government now getting antsy about the outstanding R180m the DoD owes it.

Kudjoe blamed the military side of the department for not cooperating with her secretariat, which prompted committee chair Cyril Xaba to say: “SecDef, you are not a conveyor belt, you are the department’s accounting officer.”

The update on progress or, rather, lack thereof on outstanding cases of fruitless expenditure followed. The lack of accountability is the reason the DoD was sighted by the auditor-general last year and in previous years. It is also one of the reasons the defence budget has been cut by R5bn in the medium-term expenditure framework.

A case of fraud in a tender to supply ration packs for the SANDF during its Covid-19 deployment last year has also not been concluded. The tender of R64m came to light after food packs had stickers pasted over their expiry dates. Because of this the SANDF has not been able to award a new tender.

In the navy, four cases worth R92m are listed, where maintenance was paid for but never done. Frigate engines were not tested in the process, resulting in the SAS Spioenkop remaining unseaworthy for the past three years. None of the frigates purchased in the arms scandal are now fully serviceable.

A case of fraud in a tender to supply ration packs for the SA National Defence Force (SANDF) during its Covid-19 deployment last year has also not been concluded. The tender of R64m came to light after food packs had stickers pasted over their expiry dates. Because of this the SANDF has not been able to award a new tender.

This, in turn, was one of the reasons the soldiers recently deployed to KwaZulu-Natal ran out of food, as there was no bulk stock of ration packs available.

One of the “oldest” cases, valued at R10m, which has not even gone to trial in the Commercial Crime Court in Pretoria, involves fraudulent invoices for the upgrading of combat tractors in the army. According to the DoD, witness statements are still being obtained some 13 years later. Former SANDF chief Gen Solly Shoke previously listed maintenance fraud by civilian companies as the reason Cuban mechanics have been brought in to repair the vehicles.

According to the progress report, only 14 convictions have been obtained in outstanding cases for 2021. Two soldiers were dismissed, but in most instances they were only fined R1,500 and R6,000. One case had to be scrapped as the accused died.

The R400m fraud case is still being investigated by the inspector-general of the SANDF and no accused has been brought before court.

Paperwork is still outstanding in a case of tender fraud worth R1bn at the SA Military Health Services Central Procurement Centre, where only one company was invited to bid and subsequently awarded the tender.

The committee has, on numerous occasions, expressed frustration about the lack of consequence management within the DoD, as “there seems to simply be repeat findings from previous years” rather than action.

The still outstanding report on the Cuban drugs was supposed to lead by example by bringing the guilty to book. Modise also remarked that the DoD is supposed to lead by example.

The DA’s Kobus Marais noted that the sorry state of outstanding cases and the lack of repercussions for the culprits “rather indicates ill discipline and gatekeeping to protect fellow soldiers, hoping the cases will be swept under the carpet”.

Kudjoe is, in the meantime, also reportedly being investigated by the Hawks on allegations of corruption involving R112m dating back to her term as director-general of the State Security Agency (SSA) in 2014/16. As secretary of defence, she holds the purse strings of the DoD.