Mthembi-Mahanyele: Briefing on housing anti-corruption task team report

11 Dec 2002 
Speaking notes for a Press Event hosted by Housing Minister Sankie Mthembi-Mahanyele, on the Anti Corruption Task Team

National Director of Public Prosecutions 
Members of the media 
Ladies and gentlemen 

Earlier this year, I appointed a task team to investigate cases of fraud, corruption, maladministration and mismanagement in the administration of the national housing subsidy scheme. 

I said at the time that the aim of the task team was not only to uncover all forms of corruption and malpractice, but also to ensure that the culprits are brought to book. 

I am pleased to be joined today by the National Director of Public Prosecutions, Bulelani Ngcuka, whose unit will be taking over a number of cases that have been identified as requiring further investigation and prosecution. 

The task team is currently completing a comprehensive report on its findings. But I can tell you now that we are looking at fraud and corruption across the country in the housing sphere to the order of about R126 million excluding cases in Gauteng, Mpumalanga, and Western Cape in the past seven years.

That is clearly an absolutely unacceptable state of affairs. That is why all cases will eventually be handed over to the Director of Public Prosecutions. 

Some have already been handled by the South African Police Service because of the urgent nature of the action required on the ground. In some of these cases, arrests have already been made. 

We are sure that more arrests will follow in the not too distant future. I would like in this context to congratulate the MEC for Housing in Gauteng, Paul Mashatile, who yesterday announced a number of arrests resulting from the provinces own investigations. 

By taking this action at national level we as government are sending a clear message to all involved in criminal activities related to housing in South Africa that we will not tolerate corruption, fraud and maladministration. 

We will act decisively against anyone found to have used their office as a public official or to have abused a relationship of trust with a housing authority for unlawful personal gain. 

We will not tolerate abuse by officials who demand or accept bribes or other favours, including sexual favours - yes we have heard of such demands. 

Such people will go to jail. There is no room in the public service for anyone who exploits the challenging housing situation we face for their own advantage. 

To demand bribes or to wrongfully sell or allocate houses is to rob the poorest of the poor in South Africa. That is, in my eyes, inexcusable. 

We will not tolerate it. Let me once again make it very, very clear, so that nobody in the country can claim they did not know the law. 

  • It is illegal for women to be asked to provide sexual favours before they can get a house. 

  • It is a serious offence for individuals not qualifying for a housing subsidy to access the subsidy. 

  • Individuals accessing more than one subsidy and the officials or councillors who assist them will be prosecuted as conspirators to the illegal act. 

  • People should not exchange RDP houses without following the pre-emptive clause requirements.

When we started the forensic investigation about a hundred cases in several provinces were identified as a priority. 

Out of these, 26 were handed over to the task team for urgent investigation. Twenty-two of these cases were prioritised as extremely urgent for immediate investigation. 

Seven of these cases have now been finalised and the reports show that there is prima facie evidence of fraud and corruption. That is why I have asked Mr Ngcuka to step in and drive the investigation and prosecutions forward. 

 

The information collected during the forensic audit shows that about R126 million is involved in cases such as the following: 

  • Claims by contractors for subsidies for houses that were never built; 

  • Cases of developers awarding RDP houses to themselves and claiming the subsidies on the basis that the houses had been allocated to the intended beneficiaries; 

  • Disregarding or failing to follow the necessary procurement procedures, including not following tender procedures and awarding of building contracts to building material suppliers who are not registered with the National Home Builders Registration Council and are therefore not authorised; 

  • Irregular payments and false happy letters; and 

  • Selling of RDP houses to beneficiaries by officials and people pretending to represent government.

These cases involve contractors and developers, officials from provincial and local government structures, including housing development boards, as well as civic leaders. 

This shows us the breadth of the challenge we face, and once again, this is why we are approaching this issue with the full force of the law.

You will find in your press releases a number of examples of corrupt or fraudulent behaviour uncovered by our investigation. This corrupt or fraudulent behaviour has been found in the Eastern Cape, the Northern Cape, the North West, the Free State, KwaZulu-Natal, and Limpopo Province. 

If we include what we heard from Gauteng yesterday, we see that we face a challenge to root out this illegal behaviour. 

But let me make one thing clear today: we will root this out. We will send those to jail who rob the poor of South Africa in this way. We will see to it that our people can rely on the housing authorities for fair and equal treatment.

The fight against corruption, fraud, and maladministration in the housing sector will continue. I plan to make it a priority in my first meeting with the MECs for housing in the new year. 

These practices hurt the most vulnerable in our society, and we as government have a duty to stop them. 

We will use the full force of the law to do so, and we appeal to anyone who gets to know about such practices to inform the authorities so that action can be taken against officials, developers, or others who are engaging in illegal activities. 

Thank you.