Former Western Cape premier Ebrahim Rasool’s department paid communications firm Hip Hop Media R3 million for communications work in 2007 without sourcing quotations or having the necessary service level agreement in place, it has been revealed.
Rasool is now the SA ambassador to the US.
A report by the provincial Forensic Investigative Unit (FIU), which has been handed to Auditor-General Terence Nombembe as part of the Department of the Premier’s 2011/12 annual report, also deemed the entire R22.8m communications contract (which included the R3m) granted to Hip Hop at the time as irregular.
The contract awarded to Hip Hop Media in November 2007 was for “communications services” to the Department of the Premier.
Premier Helen Zille’s spokesman, Zak Mbhele, said the forensic investigation – concluded in August – had deemed the R22.8m contract irregular because of a conflict of interest that was not declared at the bid evaluation stage.
He said a member of the bid evaluation committee, who could not be named because an internal disciplinary process was pending, had not declared his interest with Hip Hop.
“Both the forensic investigative unit as well as legal services found the expenditure to be irregular,” said Mbhele. “Most of the officials that were involved with the tender and contract management are still in the employ of the Western Cape government and, where alleged misconduct was apparent, the necessary disciplinary processes have already been instituted. These processes are at various stages at the moment.”
Mbhele said that of the R22.8m, R1.9m was “fruitless and wasteful” expenditure.
“This amount will be investigated further and the necessary recoveries of money will be effected should it be found that officials were grossly negligent.
“There were four categories of fruitless and wasteful expenditure: contingency fees, management fees, administrative fees and incorrect rates charged. These fees were never contemplated by the contractual arrangements between the department and Hip Hop Media.”
Mbhele said the FIU had also found 14 invoices totalling R3m that were not supported by quotations.
“Despite the Hip Hop contract being a multimillion-rand undertaking, it was also found that no service level agreement was in place to ensure proper governance,” he said.
“The matter was reported in our annual financial statements on May 31, 2012. The auditor-general will audit the statements and assess the evidence that supports the reported figures.”
In September, the provincial government was advised to take disciplinary action against 23 of its employees in connection with tenders awarded to two city communications companies – Hip Hop and Brand Talk – during Rasool’s tenure.
Provincial government communications contracts came under the spotlight when it emerged after Zille took over as premier in 2009 that R80m had been paid to three companies over four years.
Since the DA took over the provincial government, numerous investigations have been conducted into a variety of contracts with several public relations and events companies.
The investigation into the media contracts revealed that Cape Argus journalist Ashley Smith had been paid to write stories favourable to Rasool, creating the so-called “brown envelope” scandal.
Smith in turn alleged that one of his colleagues had also received money.
Smith, his former fiancée, Joy van der Heyde, and former Cape Argus political editor Joseph Aranes had links with Hip Hop Media.
Rasool and his ANC colleagues have all denied irregularities in awarding the contracts as well as the illegal payments made to journalists.
Smith submitted his affidavit to the National Prosecuting Authority (NPA) in July 2010. In exchange, he requested indemnity against any possible criminal charges.
His admission came five years after the allegations were first made to the Cape Argus by members of the Western Cape ANC – specifically that two Cape Argus staffers were secretly being paid to write news articles favourable to Rasool.
An internal disciplinary hearing hauled Smith up on charges, but he resigned before the newspaper’s investigation was complete. On the available evidence, Aranes was stripped of his political editor position when the allegations first surfaced in 2005. He resigned in 2009.
In 2010 the provincial government handed a forensic report to the Hawks and its own FIU continued to probe the contracts.
On Wednesday, Hawks spokesman Mcintosh Polela said the case was with the prosecutors and that investigators were sourcing affidavits from two key witnesses.
“The case is ongoing. We are sourcing these affidavits on a technical matter from two witnesses before going ahead,” he said.
He refused to name the witnesses.
Three provincial departments were involved: the departments of Community Safety, the Premier and Transport and Public Works, which had dealt with Hip Hop Media and Brand Talk.
ANC provincial chairman Marius Fransman, who Smith implicated as being involved in making payments to journalists as part of the “brown envelope” scandal, slammed the DA at the time, saying it had “manipulated” and “pressured” officials in the Western Cape government to make damaging comments on the former ANC-led administration.
Fransman claimed the DA was using dirty tricks to pin the ANC leaders and others to allegations of corruption and fraud dating to when Rasool was premier of the Western Cape.
“The DA has gone off to try and manipulate officials. They pressurised officials to speak badly about the former administration. That’s illegal. We know of some officials who they put pressure on to speak badly,” said Fransman, who is also the deputy minister of international relations and co-operation.
Fransman is currently out of the country.
In response to the forensic report, ANC provincial secretary Songezo Mjongile told the Cape Argus on Wednesday: “If those officials are still there, they must tell the authorities why the correct processes were not followed.
“That was a previous administration, I cannot answer for ex-premiers. But the DA know what to do, why don’t they lay charges with the police? Whoever signed off that tender must be held accountable.”
In September, Fransman told the Cape Argus that the forensic audit which had thus far implicated 23 officials was a political witch-hunt.
“It’s a deflective process, to take attention from what’s going on in the DA. It’s wrong to use state processes to go after individuals. The law must take its course and we will abide by that,” Fransman said.
Hip Hop’s former head, Zain Orrie, did not respond to voicemails left on his cellphone or to SMSes. Rasool has not responded to e-mails sent to him.