Billing scandal: DA uncovers massive organised crime syndicate in Emfuleni

16 March 2016

The Emfuleni Local Municipality (ELM) has been in serious financial trouble for a number of years.

The DA has continuously called for the ELM to be placed under administration so that the municipality’s financial crisis can be addressed and service delivery, including the upgrading and maintenance of infrastructure, can resume. 

However, former MEC of Cooperative Governance and Traditional Affairs, Jacob Mamabolo, has chosen to ignore the DA’s calls and instead the Sedibeng and Emfuleni Executive was reshuffled in October last year, in an attempt to fix these failing municipalities.

It therefore comes as no surprise that the DA has now uncovered massive organized crime within the ELM regarding the billing of electricity and water.

According to the DA’s investigation and sources familiar with the matter, at least four syndicates are involved in the bribery of municipal officials to divert payments to account-holders who then pay them. They use the following modus operandi:

1. Municipal employees are approached by residents who wish to have their arrears “taken care of”;

2. The municipal official then agree to do so if the residents pay said official an agreed upon amount;

3. The municipal official then choose a victim based on payments they have made years before reflecting an amount close to amount owed by the residents in arrears;

4. The municipal official then reverse the chosen amount from the victims account and applies this amount to the account that is in arrears and it appears as if the account has been paid;

5. On the victim’s side, the reversal does not show as a payment reversal but instead reflects as additional municipal charges in the form of additional electricity / water / sewerage or rates; and

6. On the system it is reflected on the victim’s account as a “long outstanding” account on which the municipality then raise interest.

The DA is in possession of visual evidence of the modus operandi in the form of a video-clip.  We also have every reason to believe that the financial scope of this operation might be worth millions as we have been informed that our primary complainant has suffered losses of more than R1 million alone.

During our investigation we have engaged with major stakeholders who have revealed that arrests are imminent and that the scope of the syndicate activity is possibly country wide.

It is clear that the ELM administration – under the stewardship of the Municipal Manager Sam Shabalala – has denigrated into an administration that is inept, inefficient and corrupt.

The current actions by the ELM administration provide further evidence of a municipality that has long relegated its responsibility to its residents to an afterthought.

The ANC’s failure to put the ELM under administration has resulted in the municipality being deeply entrenched in a web of corruption.

As a result, not only is individual accounts holders being negatively affected, but this vast network of corruption also puts further strain on the poor who already suffer immensely as the municipality denies quality service delivery to its residents.

Therefore the DA will be writing to Gauteng Provincial Police Commissioner, Lt. General DS de Lange, and Head of the HAWKS Mthandazo Ntlemeza requesting an urgent in-depth investigation into this matter, and will be writing to Premier David Makhura to urgently address this matter with the new Cooperative Governance MEC, Paul Mashatile.

The Premier under his flagship “Ntirhisano” project has committed himself to a pro-active and responsive provincial government that would address service delivery issues and weed out corruption.

Rooting out corruption in the public service is a key priority of the DA and where we govern, our institutions are run by robust transparent processes that ensures accountability and efficient service delivery.

The residents of ELM have been robbed of numerous opportunities to better their lives and change their circumstances.

Statement issued by John Moodey MPL, DA Gauteng Provincial Leader, 16 March 2016