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Inside OUTA July 2017

Dear OUTA Members and followers

July was another momentous month for OUTA, following the exposure of OUTA’s “No Room to Hide – A President Caught in the Act” case document, which was presented to Parliament at the end of June. The document has been well received by many as an authentic and meaningful record for Members of Parliament to adopt, for rationale and reason to remove the President during the upcoming motion of no confidence.

Following from this case document, OUTA presented a series of charges against perpetrators over numerous state capture allegations, paving the way for the enforcement authorities to take the necessary action.  Despite the political manipulation of South Africa’s enforcement agencies, who are accused of dragging their feet on these investigations, OUTA’s approach in using its selected avenues to tackle corruption is built on a long-term strategy for maximum effectiveness.

In this month’s newsletter, we feature the various complaints and charges laid which arise from our state capture report.

More charges are planned over the next few weeks. These include a significant case we will file in the first week of August against the Hawks, in support of Prasa’s case to hold them accountable for the lack of acting taken against those implicated in the Swifambo Rail Leasing locomotive tender, from which the brother of the Deputy Finance Minister, Sifiso Buthelezi, directly benefitted.

In our quest to collaborate with other prominent civil society, labour and faith-based organisations, OUTA is part of the “FutureSA” movement that intends to drive a coordinated plan to have President Zuma removed from office and reverse the damage caused by state capture and ineffective governance.

As a result, you will see OUTA’s call to support mass action on 8 August, the day of the vote of no confidence, along with actions required for an era beyond Zuma’s leadership.

Today, as South Africans from all sectors of society, we are faced with a number of choices if our country is to grow and take our rightful place on the international stage of competitiveness, impact and influence. We ought to be a far more prosperous nation and we will never achieve the heights we are capable of unless we hold to account those who abuse their positions of authority. This is essentially the meaning of active citizenry and it is becoming a reality which many are taking on.  In simple terms, it means speaking out and no longer looking away when we detect that something is wrong with the conduct of those in authority, in government or private sectors.

We salute those like ANC MPs Makhosi Khoza and Mondli Gungubele who have publicly spoken out against President Zuma, Khoza calling on him to resign and Gungubele openly saying he will vote against him. This is at great cost, particularly for Khoza who has faced death threats and now disciplinary charges from her party.

We urge South Africans to unite behind the energy that is being forged around a strong message to politicians, expressing our lack of tolerance for corruption and maladministration of our taxes. There is an increasing need for all citizens to drive the message of intolerance for waste and to stand up for our rights, no matter what happens in the motion of no confidence against President Zuma.

We trust that as we highlight the need for politicians to look beyond internal conflicts of single party politics, our role at OUTA will seek to drive a strong moral compass within Parliament and civil society that guides a bigger picture of good governance and nation building that puts the people of South Africa first.

Wayne.

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Why the laying of criminal complaints should never be viewed as a futile exercise.

In today’s South Africa of repeated headlines featuring the brazenly corrupt who defiantly operate with impunity, it’s easy to understand why many people no longer get excited when they hear about “criminal complaints filed” or “charges of corruption, fraud and racketeering laid…” They’ve heard it far more times than they’ve received news of ongoing investigations or successful prosecutions. The wheels of justice appear to be jammed when it comes to holding the corrupt and captured to account for their transgressions, or so it would seem.

Thus the question we are repeatedly asked at OUTA: why do we bother at all with laying these charges with the law enforcement authorities, knowing they will in all likelihood not act on them.

While civil society has a moral and ethical duty to report crimes when discovered, the deeper answer and reasons behind OUTA’s multifaceted actions lies in our aim to ensure the authorities are given no room to ignore the glaring evidence of state capture, which gives rise to massive looting and the compromising of our state institutions that threaten the very existence of our democracy.

In so doing, we demonstrate an overwhelming faith in the future of South Africa. One that refuses to accept that today’s architects and purveyors of state capture will remain in control of the nation’s purse strings in perpetuity. We sincerely believe that in the not too distant future, new leadership will ascend to power and the current lid placed on the enforcement agencies will be lifted. This in turn will enable tomorrow’s wheels of justice to be well oiled as it metes out the corrective action against todays perpetrators of unjust conduct. Deserved incarceration, along with the recovery of stolen goods and funds will surely follow.

Our case files and laying criminal charges has numerous other benefits and avenues of action that stem from this work, some of which are:-

  • Help to obtain mandamus rulings (a court order to force the authorities to do their jobs).
  • They enable the possibility of Anton Piller search warrants (private search and seizure orders).
  • Then there is the private asset freezing orders locally and abroad (Mareva injunctions)
  • Certifications for private prosecutions are also a possibility from our persistent actions.
  • Statutory reporting of suspected crimes can also be registered in foreign territories since most corruption, tax evasion and money laundering crimes are considered extra-territorial in execution. This means that other countries’ law enforcement agencies may well be able to act when our own choose not to.
  • From our charges, cases are raised against the legal practitioners, accountants and auditors who may have aided and abetted these crimes, both locally and overseas.
  • Our cases also assist oversight bodies such as CIPC, the SA Institute for Chartered Accountants and others to bar perpetrators from future director appointments or practicing as chartered accountants and auditors.

The cases that OUTA and others are filing today, will not fade or die. Once registered, they are on record and in the system. The current regime may wish to ignore, divert and interfere with the wheels of justice today, but the tide will eventually turn. It always does. Bad guys never win in the long run when the tide turns the rule of law will come into play. And when it does, civil society does not want to find itself frantically bringing dozens of cases against the captured and corrupt leadership previously in power – a few months or years from now. Under such circumstances the guilty parties would no doubt claim to be victims of a witch-hunt.

Furthermore, laying multiple complaints many months or years after the event tends to result in sloppy and incomplete work, beset with problems of whistleblowers and witnesses who have moved on and pertinent information or records lost in the passage of time. In any event, where we find situations deemed fit to invoke private actions as listed earlier, and registering cases in other countries, in most instances we would be required to demonstrate that we had done the minimum required of notifying our own law enforcement agencies and afforded them the opportunity to do what was expected of them.

It is extremely unfortunate that South Africa will be paying for state capture looting for years and generations to come. The arms deal loans, signed in 1999, will be finally paid off only in 2020. Deals being signed now within state-owned entities like Eskom and Prasa will haunt us for decades.

Doing nothing to halt the looting and state plunder is not an option.

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OUTA on Planet Haaibo: listen online to OUTA’s Julius Kleynhans

Julius Kleynhans, OUTA Portfolio Director for Water and Sanitation, talks to Ice from Planet Haaibo on Radio 2000. It’s a quick catch-up on OUTA’s actions against ministers Mosebenzi Zwane and Faith Muthambi, the “Where’s Shaun?” debate, what’s going on with the Lesotho Highlands Water Project that Gauteng relies on for water, and how OUTA operates.

Listen to the interview here:  https://iono.fm/e/456505

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Opposing state capture

OUTA’s opposition to state capture has involved compiling detailed affidavits against key ministers and officials, laying charges, networking with others opposing state capture, and helping Parliament’s first investigation to touch on this.

The vote

On 8 August 400 MPs will let President Jacob Zuma know whether or not they want to keep him as president.

It’s not the first such vote of no confidence brought against Zuma but it’s the most significant, coming against a background of months of detailed exposes of the extent of state capture by the corrupt and powerful, led by Zuma’s close friends and by officials he appointed.

Over the last month, the Organisation Undoing Tax Abuse (OUTA) has focused on searching through the evidence of state capture, compiling it into cases and filing cases against officials. And as a direct result of that work, OUTA has joined the calls for Zuma to be removed from office on 8 August.

OUTA urges members and supporters to join the Cape Town marches to Parliament and protests outside Parliament on the day of the vote, adding your voice to those calls.

For those who want an update on the law regarding protests and marches: gatherings of 16 people or more must have given notice in advance to the local authorities, while gatherings of 15 people or less do not need to do this. The Right to Know has a useful online booklet on protesting.

The charges

OUTA has been investigating and documenting state capture.

Those documents are being used to file charges.

On 28 June, OUTA published a report on state capture – No room to hide: A President caught in the act – and handed copies to Parliament, the Chief Whips of all political parties represented in Parliament, the National Prosecuting Authority and the Hawks. A full copy, including annexures, was published on OUTA’s website. That report is essentially a legal case file which compiles information which has been publicly available plus crucial additional information from the Gupta emails and turned it into a file as a basis for prosecution.

This report has been provided to all MPs, so they have a clear understanding of why Zuma should be removed from office.

For those struggling to read OUTA’s full report on state capture – the main report is 175 pages and the annexures another 923 pages – there is a summary available on OUTA’s website.

Arising from that report, OUTA has compiled affidavits against various people involved in state capture and filed charges.

On 13 July, OUTA formally asked the Registrar of Banks and the Financial Intelligence Centre to investigate the Bank of Baroda and the State Bank of India for their suspicious support for the Guptas, through unrealistically large bonds on their properties. On 25 July, the Registrar of Banks wrote to OUTA, acknowledging receipt of the request to investigate, noting the content in it and promising it “will be dealt with accordingly” without detailing how; the same day, the Guptas reportedly told their employees that the Bank of Baroda had given them a month’s notice that it was dumping their accounts.

On 17 July, OUTA laid charges of treason and corruption against Minister of Public Service and Administration Faith Muthambi who, when she was Minister of Communication, passed on confidential Cabinet documents on broadcasting policy to the Guptas and asked them to intervene with the President to increase her powers. Muthambi, through her disastrous and illegal appointment of Hlaudi Motsoeneng as the SABC’s Chief Operating Officer, cost the SABC hundreds of millions of rand and plunged it into massive debt.

On 24 July, OUTA laid charges of treason, corruption, extortion, fraud and theft against Minister of Mineral Resources Mosebenzi Zwane. He cost South Africa about R2 billion, through the loss of two mine rehabilitation funds to the Guptas and a failed dairy project which benefited the Guptas. He also helped the Guptas’ wedding guests land at Waterkloof Air Force Base.

On 28 July, OUTA laid charges of treason, corruption, extortion and fraud against the Director General of Public Enterprises Richard Seleke, who abused his position on the Transnet board to help the Guptas in the secret deal that resulted in their Tequesta company getting R5.2 billion out of Transnet’s locomotives deal with China South Rail.

The networking

OUTA is working with other organisations which are opposing state capture.

On 18 July, OUTA was part of the Conference for the Future of South Africa along with other civil society organisations, where organisations reaffirmed their commitment to working to end state capture. This conference was addressed by prominent people who have spoken out against state capture, including ANC MP Makhosi Khoza, who has faced death threats and disciplinary action from her party over her outspokenness, and Reverend Frank Chikane of the South African Council of Churches.

If you missed the conference, videos of some of the speakers can be found at the end of this article.

Chikane warned the conference that those involved in state capture were planning to corrupt the 2019 elections, to retain power. He called those involved in state capture brazen and shameless. “we must send a clear message that the game is over and they are not going to achieve what they planned to achieve in this country. And there is no amount of ducking and diving or defending the indefensible that will make the challenge go away,” said Chikane.

Khosa spoke out strongly against the state capture collective and Zuma’s inadequacy as a leader.

“In case I do not make it on 8 August 2017, Mr President, you know, as the President, you are haunting this South African nation. Please, Mr President step down and respect those who elected you,” said Khoza. “Step aside and let moral and ethical leaders lead this country to a prosperous path.”

The help in other investigations

OUTA is also helping in Parliament’s investigation into Eskom.

This is the first parliamentary investigation which will touch on state capture.

On 25 July, OUTA’s team briefed Parliament’s Portfolio Committee on Public Enterprises on OUTA’s state capture report and on Eskom. The South African Council of Churches and the Public Affairs Research Institute also briefed the committee; both have produced reports on state capture.

During this briefing, OUTA’s team told the committee that Kim Davids, the PA to Minister of Public Enerprises Lynne Brown, had also received a free stay in Dubai courtesy of the Guptas. Davids subsequently told journalists she had made the trip but claimed she’d paid for it herself; she failed to explain the documents which proved that the Guptas paid for it.

OUTA’s team also pointed to the problems in Eskom’s integrated annual report, released during July, which received a qualified report from auditors due to irregular expenditure of R3 billion, which Eskom had glossed over in the report presentation. This was classified as irregular because the auditors couldn’t find paperwork for it; OUTA told the committee this meant someone had been able to override the SAP system or made payments outside the system.

OUTA also told the committee that the load shedding of 2008 and 2014 was self-inflicted by Eskom and was part of corrupt practices.

OUTA is continuing to assist in the portfolio committee’s investigation.

The eNCA recording of the hearing is online here.

OUTA's Domonique Msibi

Chester Missing

Dr. Makhosi Khoza

Popo Molefe

Municipalities sneak in illegal electricity price increases

Your electricity bill: 13 municipalities blocked, but 23 now charge an extra hike

Eskom-tariff-hike

The National Energy Regulator (NERSA) has approved higher-than-standard electricity tariffs in 23 municipalities – and at least 20 may be illegal as they did not include public participation.

Municipal electricity prices went up from 1 July when the new financial year started. The national guideline increase is 1.88%, and the municipalities which wanted to charge more had to get permission for NERSA for this.

NERSA has now published all the approved tariffs.

NERSA held a public hearing in May for 24 municipalities which applied for permission to charge more than the nationally set increase of 1.88%.

Of those, 13 were refused, 10 were granted and no outcome was provided for one.

Another 20 municipalities or entities were granted higher-than-standard increases. These applications were not part of the May public hearing and no public hearing appears to have been held, which indicates that these hikes are not legal.

The Organisation Undoing Tax Abuse (OUTA) opposed all the applications and OUTA’s Portfolio Director for Energy, Ted Blom, attended NERSA’s public hearing where he argued that all the increases were illegal because the municipalities failed to provide the legally required detailed information to back up their applications.

By the time NERSA published the approved tariffs, the new financial year had already started so those decisions were probably all implemented with consumers knowing.

NERSA has not published the reasons for the decisions, only the approved tariffs. The percentage increase is an overall increase in the tariffs, so some tariffs within a municipality may go up less than this and others more.

These are the increases approved for the 24 applicants invited to the May public hearing:

Abaqulusi, KwaZulu-Natal (6.4% requested, 6.1% approved)

Breede Valley, Western Cape (3.98% requested and approved)

Cape Agulhas, Western Cape (7.68% requested and approved)

City of Cape Town, Western Cape (3.34% requested and approved)

City of Joburg (City Power), Gauteng (2.28% requested and approved)

Dikgatlong, Northern Cape (7% requested, 1.88% approved)

Karoo Hoogland, Northern Cape (6.4% requested, 1.88% approved)

Lekwa, Mpumalanga (8.5% requested, 1.88% approved)

Magareng, Northern Cape (9% requested, 1.88% approved)

Mantsopa, Free State (6.33% requested, 1.88% approved)

Matzikama, Western Cape (3.11% requested and approved)

Msukaligwa, Mpumalanga (10% requested, 1.88% approved)

Msunduzi , KZN (5% requested, 1.88% approved)

Oudtshoorn, Western Cape (2% requested, 3.88% approved)

Phumelela, Free State (10% requested, 1.88% approved)

Rand West, Gauteng (2% requested and approved)

Renosterberg, Northern Cape (6.4% requested, no details of what was approved)

Stellenbosch, Western Cape (2.22% requested and approved)

Thaba Chweu, Mpumalanga (12% requested, 1.88% approved)

Thembelihle, Northern Cape (8% requested, 1.88% approved)

Tswaing, North West (6% requested, 1.88% approved)

Inkosi Langalibalele (formerly Umtshezi), KZN (6.2% requested, 1.88% approved)

Umvoti, KZN (6.4% requested, 1.88% approved)

UPhongolo, KZN (5% requested and approved)

Another 20 municipalities with increases above the national standard of 1.88%:

Midvaal, Gauteng 5%

Westonaria, Gauteng 2%

Govan Mbeki, Mpumalanga 1.92%

Mbombela, Mpumalanga 2.12%

Nkomazi, Mpumalanga 2.07%

Umjindi, Mpumalanga 2.2%

Ga-Segonyana, Northern Cape 2.34%

Kareeberg, Northern Cape 2.51%

Blouberg, Limpopo 5.5%

Elias Motsoaledi, Limpopo 2.65%

Greater Tzaneen, Limpopo 2.01%

Mookgophong, Limpopo 2%

Polokwane, Limpopo 4%

Maquassi Hills, North West 2.47%

Rustenburg, North West 4.9%

Ithala, KZN 4.81%

Vleesbaai Dienste / Services, Western Cape 7.97%

King Sabata Dalindyebo, Eastern Cape 4%

Kouga, Eastern Cape 2.05%

Sakhisizwe, Eastern Cape 3.2%

All the approved municipal tariffs are on NERSA’s website www.nersa.org.za under electricity > Pricing and Tariffs > Tariffs > Local Authorities.

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Hurry up and sign this petition on public participation in law-making

Have you signed yet? Do you really want to work on policy during year-end holidays?

petition to parliament

More than 11 000 OUTA supporters have already joined the campaign to stop sneaky holiday season policymaking. You have until 14 August to join us.

In July, OUTA launched a petition to Parliament aimed at amending the National Assembly rules on public participation. These rules details the law-making process.

OUTA wants those rules to be changed to prohibit lawmakers from running the legally required public participation period from 15 December to 15 January.

This is because that period has been used to sneak controversial policy or legislation through the system with as little public participation as possible.

“Perhaps the most important example of this is the New Energy Efficiency Gazette (Notice 948 of 2016) (“NEES”). The NEES was published at 23h00 on Friday the 23rd of December 2016 and the public was given thirty days to comment. The public were given a further thirty days to comment after OUTA, and other parties, raised their concern with the Minister of Energy,” says OUTA’s letter which will go to Parliament with the petition.

The nuclear deal – which the courts subsequently overturned and sent back to start again – used that holiday time for public participation.

OUTA plans to send the petition on 15 August, so if you want to sign it, go online and do it now.

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Lesotho Highlands Water Project: this is Gauteng’s water

ICYMI: Keeping Gauteng’s cross-border water from Lesotho flowing

If you care about having enough water in your taps in Gauteng in a few years, pour yourself a glass of water and read OUTA’s report on the Lesotho Highlands Water Project.

This project involving two countries is a scary reminder that when national departments don’t do their jobs properly, a lot can go wrong further down the line.

This report – The status quo of the Lesotho Highlands Water Project Phase II by Helgard Muller and Julius Kleynhans –  outlines the delays in the project.

Minister of Water and Sanitation, Nomvula Mokonyane, has jeopardised the water security for Gauteng by delaying the development of the LHWP II for more than two years, costing South African taxpayers about R2 billion more, while she tried to ensure that her preferred service providers got their cuts of this R25 billion project.

The Minister has denied that anything is wrong but there’s no clear explanation of how this project is going to get back on track.

OUTA has served the Minister with a legal letter of demand, asking for clarity on aspects of the project and some assurances. Apart from public denials of any problems, there hasn’t been a response yet.

This is another massive infrastructure project which is running hugely behind schedule and over budget, with no clear explanations.

This report also highlights the danger of the Minister being both the custodian and regulator of water resources.

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Waiting for the e-tolls court case

SANRAL vs OUTA & Thandanani Truckers over R400 000 e-toll bill: a slow ride

The first full case on e-tolls which will see OUTA squaring up against SANRAL is slowly heading for court.

The case is the legal action by SANRAL against Thandanani Truckers and Hauliers for unpaid e-toll fees of R402 841.62 run up on the Gauteng freeways from January 2014 to August 2015.

This is regarded as the test case for the legitimacy of e-tolling. It’s not on the urgent roll so it’s quite a slow process.

OUTA filed papers in defence of Thandanani in early May, with a comprehensive outline of OUTA’s argument in the case.

OUTA is now also considering a challenge to the SANRAL Act itself: this is the law which set up SANRAL and governs its actions. Essentially, OUTA wants to challenge the unlawfulness of the e-tolling system before this case even gets as far as discussing the merits of an individual company’s failure to pay those e-tolls.

OUTA’s defence on this includes that SANRAL, the Department of Transport and the Department of Environmental Affairs didn’t comply with the legal requirements on public consultation, environmental approvals, alternative routes, alternative funding for the roads, the requirements for delivering the e-toll fee invoices and VAT.

SANRAL disputes this and, although the state-owned entity hasn’t yet filed a formal response to OUTA, it has called OUTA’s case vague and embarrassing.

OUTA believes it has a strong case against the e-tolls and the way SANRAL has implemented this system so, to make it clearer, on 28 July OUTA filed notice of intention to amend its plea.

SANRAL now has until close of business on 14 August to file any objections to this. If no objection is filed, OUTA’s amended papers will be delivered to court the next day. SANRAL will then have another 15 working days to file a response.

If SANRAL objects, then the matter may go to an interlocutory application, which is effectively an application within the main action, to decide whether OUTA is allowed to update its plea document.

Once that is done, the pleadings are closed and the first phase of the litigation is finished.

Normally, the next phase is preparation for trial. This involves discovery of evidence by both sides (when each side discloses the evidence which it intends using in the case). Then a court date is set.

However if OUTA challenges the SANRAL law, this will take place before the trial.

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