Former health minister Zweli Mkhize blatantly ignored a cabinet memorandum advising that the Government Communication and Information System (GCIS) roll out the National Health Insurance (NHI) communications strategy to save costs.
Instead Mkhize, who was part of President Cyril Ramaphosa’s cabinet at the time, went out of his way to ensure Digital Vibes, the company linked to his close associates, was awarded a R150m tender from the national department of health.
“It is astonishing that the minister thereafter, contrary to the cabinet memorandum, allowed Digital Vibes to be appointed by the national department of health [NDOH] in respect of the national health insurance [NHI] media campaign. In fact, it can be argued that the minister deliberately ignored a cabinet decision [of which he formed part] in this regard,” read the explosive findings in the Special Investigating Unit (SIU) report released on Wednesday.
Among other things, the SIU found the procurement processes in the NHI and Covid-19 media campaigns were irregular and the subsequent contracts void, leading to the irregular expenditure of about R150m and wasteful expenditure of R72m to R80m was incurred by the NDOH. Allegations pointing fingers at Mkhize were first made public in the Daily Maverick in February.
The SIU found Mkhize went against a cabinet memorandum dated June 13. Furthermore, during the end of February and beginning of March 2020, the GCIS was again tasked by the National Joint Operational and Intelligence Structure (NatJOINTS) to do the Covid-19 awareness campaign.
“Once again, it is inexplicable as to why the minister would have allowed the ‘extension’ of the Digital Vibes service-level agreement [SLA] with the national department of health in respect of the national health insurance media campaign to include the Covid-19 media campaign. It would have been far more cost-effective if the GCIS had rendered the required services.”
Mkhize indicated that “the protracted discussions in this regard had taken place and he was satisfied that costing in this regard had been done”. However, the SIU said it could not find evidence or documentation indicating the existence of such a costing exercise before the decision to outsource all the work.
“Furthermore, the minister indicated that the GCIS could not be approached, as according to him, the GCIS had indicated that all communication-related work should be done by state departments themselves and that the departments should set aside specific budget for this purpose,” said the SIU.
“The fact that two contracts amounting to about R176 million [R141 million in respect of the NHI media campaign and the about R35m quotation that was accepted in respect of the Covid-19 media campaign], were entered into in highly irregular circumstances and in direct conflict with public procurement prescripts, and the NDOH spent about R125-million in respect of the Covid-19 media campaign, in circumstances where a quotation of only about R35 million for these services had been approved, is indicative of a distinct lack of oversight on the part of the minister”
A conflict of interest was also found on the part of Mkhize when his associates, Tahera Mather and Naadhira Mitha, “under the guise of Digital Vibes, were unlawfully and irregularly appointed by the NDOH in respect of the NHI and Covid-19 media campaigns”.
The report also states that Mkhize’s family members, including his son, Dedani Mkhize, his former associates and or family members of such former associates, benefited unduly from the tender. It found Mkhize “failed to declare any such actual or potential conflicts of interest to the presidency”, and Ramaphosa was recommended to take executive action against the former minister.
Mkhize also acted unlawfully by giving instructions in a WhatsApp message on July 15 to then director-general Malebona Precious Matsoso, saying: “Hi DG. Kindly sort out contractual arrangements. Please ask for preliminary NHI implementation plan and draft communication plan by Friday from each individual, as discussed”
The SIU said: “At best this conduct on the part of the minister was improper, and at worst the conduct of the minister was unlawful.”
Though Mkhize indicated to the SIU that the aforementioned WhatsApp message related to the NHI media campaign in general and not to individuals, investigators found: “The only reasonable inference in the circumstances is that the communication of the minister was referring to an envisaged contract with Ms Mather.”
The SIU noted that by that stage Mkhize had referred to the “contractual arrangements” regarding the “preliminary NHI implementation plan and draft communication plan by Friday from each individual” without going through procurement processes. .
“The minister was therefore at that stage already aware of the potential involvement of Ms Mather in the NHI media campaign. It is apparent from the contents of the WhatsApp message that the minister was giving instructions to the DG.”
Matsoso further stated that during this period she received repeated WhatsApp messages from Mkhize “to resolve the contractual issues of the NHI media campaign”. The SIU found Mkhize approved the first budget allocation for the NHI media campaign and “specifically mentioned that the services would be rendered by Digital Vibes”.
On January 20 last year he signed the “request to the minister of health to approve implementation strategy and budget for the NHI communication strategy which will be executed by Digital Vibes for an amount of R46,939,550”.
On June 16, he signed the “request the minister of health to approve implementation strategy and budget from June to November 2020 for NHI communication strategy which will be executed by Digital Vibes for an amount of R85,502,500”.
During that period Digital Vibes was paid R6,720 for repairs at a property belonging to Mkhize. “The required services had been identified by the minister’s wife [May]. The particulars on the two invoices reflected the requester of the services as being one ‘Mkhize’ and a cellular phone number was also indicated in the invoices.”
Mkhize told the SIU he did not request the services and denied knowing the cellphone number on the invoice was his and the account registered in his name. However, investigators found this to be false and that “the indicated cellular number, in eNatis records, is linked to vehicles registered in the name of the minister”.
The SIU also obtained evidence indicating that Digital Vibes, not Mitha, paid for the services. “During the questioning of the minister, he did not indicate whether he had dismissed the messenger or laid criminal charges against him for this alleged theft.”
There is evidence that in May that year Digital Vibes transferred R300,000 (via a company belonging to Mather) to a company belonging to Dedani.
“The minister indicated that his son had [only once this information had become known in the media] informed him that this money was a gift from Mather, who had a close relationship with him [his son]. Obtained evidence also indicates that on May 4, Digital Vibes paid an amount of R160,000 to a Pietermaritzburg car dealership in respect of the purchase of a second-hand motor vehicle [a 2003 Toyota Land Cruiser] for the minister’s son. This motor vehicle was registered in the name of the minister’s son.”
During a press briefing on May 26 Mkhize denied he or his family benefited from the Digital Vibes contract, but the SIU says, “this denial was, objectively speaking, untrue, as the minister’s son and the minister himself [via property belonging to him] had directly benefited from Digital Vibes who in turn had benefited from the NDOH contracts”.
The fact remains that Mkhize’s denial was misleading to the public at large and Ramaphosa, said the SIU.
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