The extent of the corruption taking place at the deeds office in Pretoria is shocking, according to details that have been revealed in a plea bargain agreement between a former law firm employee and the National Prosecuting Authority.

The employee was convicted on 64 counts of corruption for the unlawful payment of a total of R889 500 between March 2009 and July 2010 to two senior deeds office officials to expedite the registration of property transfers for a residential property developer, which was one of the law firm’s biggest clients at the time.

Without attempting to diminish the illegality and wrongfulness of the actions by those involved and implicated in these corrupt activities, it is important to consider the root cause. The unfortunate reality is that inefficient service delivery by one arm of government created the environment in another where corruption could thrive and prosper.

Problems experienced in obtaining rates clearance certificates from the Johannesburg City Council resulting from the implementation of an individual rating system for sectional title schemes led to delays in registering property transfers, which had a negative impact on the cash flow of the developer because payment for residential units sold only became due on registration.

The inefficiency of the Johannesburg City Council therefore created an environment where some deeds office officials could take advantage of the situation by accepting unlawful and corrupt payments to execute these transfers without all the proper documentation.

If the system to obtain rates clearance certificates had worked efficiently, there would not have been any need for the unlawful and corrupt payments.

In dealing with the scourge of corruption, the government should carefully consider the efficiency and level of service it provides because the potential for corruption increases dramatically when there are breakdowns in service delivery.

This applies just as much to when people try to obtain an identity document or passport, a booking for a learner driver’s licence, a gun licence or a low-cost house as it does to the registration of a property transfer.

Defence

Yesterday DA defence spokesman David Maynier released a statement alleging all sorts of problems relating to the implementation of various military programmes. It boiled down to the accusation that the state-owned arms company, Denel, was not keeping its end up.

However, Business Report was sent from pillar to post in trying to entice a response from the defence establishment, including the Defence Department, Armscor and Denel itself. Denel, after some consideration, decided it did not have the mandate to answer the question because it was a sub-contractor to Armscor and the Defence Department. Armscor and the department should respond, it said. The department said Denel should respond.

Maynier had some harsh words for Denel in particular. Entitled “What the Defence Department does not want you to know about defence acquisition”, he noted that it had failed for four years to provide detailed reports on armaments acquisition programmes to Parliament, despite its own policy requiring bi-annual and ad hoc reports be submitted to Parliament on all armaments acquisition programmes.

Documents showed much information had been withheld. “What the documents reveal are decision-making bottlenecks, development failures, significant schedule slips, cost overruns and major failures at Denel.” These had compromised the readiness of the SA National Defence Force, he believed.

In a snapshot of the status of the programmes for last year, it is “revealed” that there was a 12-month delay of “Project Vagrant” (protection of SA Air Force facilities), development failures in Project Assegaai (the A-Darter air-to-air missile) where a missile had been unsuccessfully fired, while Project Drummer II (upgrading of the Oryx helicopters) had been delayed by 27 months. Maynier will report the department to the chairman of the defence and military veterans portfolio committee, Stanley Motimele, and call for them to take questions in an open meeting.

One hopes that doesn’t take 27 months.

NEF

Wilmot James, the DA spokesman on trade and industry, said yesterday that he would request that the chief executive of the National Empowerment Fund (NEF), Philisiwe Mthethwa, be summoned to Parliament to explain the circumstances around the granting of a R34 million loan to Khanyi Dhlomo, one of South Africa’s most successful businesswomen, for Luminance, a luxury boutique in Sandton.

The NEF was capitalised in 2005 by the government to the value of R2.4 billion and is now seeking recapitalisation from the Treasury after running out of funds.

Its aim is to fund black entrepreneurs.

James said: “Providing financing for extravagant businesses that cater for the super wealthy does not appear to be part of the NEF’s mandate.”

Attending the lavish opening party of Luminance were said to be Mthethwa and her husband and Police Minister Nathi Mthethwa, and Gauteng Premier Nomvula Mokonyane.

Thando Mhlambiso, the chairman of the board of trustees of the NEF, said in May a board had adopted a resolution “to temporarily suspend approval of new transactions while the government and the NEF assess and eventually conclude a drive to reposition and to recapitalise the NEF to better meet the growing needs of black entrepreneurs”.

Mthethwa said as a development finance institution that sought to mitigate a range of market failures confronting black entrepreneurs, among which were the lack of access to finance and stiff competition against well-established businesses, the bulk of the NEF’s investments were operating in the economy. The NEF’s business loans and equity investments are repayable over four to seven years.

Edited by Peter DeIonno. With contributions from Roy Cokayne, Donwald Pressly and Wiseman Khuzwayo.