Smoke and mirrors: Lindiwe Sisulu scrambles for cover – Emma Powell

DA MP deeply concerned by the gravity of allegations made against minister

Smoke and Mirrors: Sisulu scrambles for cover

13 May 2020

The DA is deeply concerned by the gravity of allegations made, and believe it critical that the media understand the alternative side of the story being peddled by #AnitCorruptionSisulu.

The Minister of Water and Sanitation and Human Settlement, Lindiwe Sisulu's press conference today was a deliberate attempt by her spin doctors to obscure serious, criminal claims faced by the Minster with specific reference to alleged tender meddling at Amatola and Lepelle Water Boards.

The Minister’s announcement that she has personally appointed Adv Terry Motau and other investigators to look into maladministration and corruption within the Department and the two Boards is not only a smoke and mirrors diversion, it is a gross conflict of interest.

It is important to note that Adv Motau was previously hired in 2016 by Sisulu’s predecessor, Bosasa Braai Pack Nomvula Mokonyane to lead a similar investigation into many of the same cases the Minster spoke of today. Mokonyane committed to make the findings of that "review" public once it was concluded. Years later, many of those investigations are still with law enforcement agencies.

Sisulu further noted that Adv Motau will also oversee an investigation into Amatola and Lepelle Northern Water Boards. This despite this Minister having already directly appointed two alternative investigating firms to look into the Boards' activities. It is outrageous that the same politician embroiled in claims of tender meddling, feels it fit to directly appoint the firms responsible for the investigation. The DA will release a separate statement regarding these firms by the end of the week.

Importantly, the DA has now taken a decision to make public information regarding the situation at Amatola and Lepelle Northern Water Boards, and how claims by both CEOs directly implicate the Minister in potentially serious allegations of procurement meddling.

Our information is as follows:

On 3 May, the Democratic Alliance  (DA) reported on Water and Sanitation and Human Settlements Minister, Lindiwe Sisulu’s decision to end the term of office of the current interim Amatola Water Board, and to appoint legal administrators to manage the Board’s affairs. The Minister noted that decisions taken by the Board would remain in force – including an investigation into the CEO, VuyoZitumane.

In following statements, the Minister noted that similar investigations were being conducted at Lepelle Northern Water Board in Limpopo and that the Board’s CEO, Phineas Legodi, had also been placed on precautionary leave – despite MrLegodi observing that he had not received such an official notice.

At the time of reporting, the DA confirmed that one of CEOs had laid criminal charges against the Minister's Office in relation to undue interference that had allegedly been exerted on their Board’s procurement processes.

The DA can now confirm that both CEO’s have laid criminal charges against Ministerial advisor, MphumziMdekazi, potentially acting on behalf or at the behest of the Minister or senior officials. The CEO’s have further both served legal notices on the Minister herself.

The CEOs respective supporting affidavits given to law enforcement agencies were drafted in terms of the Prevention and Combating of Corrupt Activities Act 12 of 2004 and both note the same serious allegations of political interference by the Ministerial advisor, MphumziMdekazi, acting on the Ministry’s behalf. This advisor is well known to the media as Sisulu’s "bully-boy".

The respective CEOs are both of the view that they are being targeted because they have acted to prevent attempts by the Ministry to appoint a politically-connected company specialising in sand water abstraction, known as Empowering Water Solutions (EWS), to carry out drought relief programmes. It is further alleged by sources external to just the CEOs, that the Ministerial advisors' modus operandi in procurement meddling may relate to attempts to recoup debt owed by Sisulu’s failed Deputy-Presidency Campaign via the Department of Water and Sanitation.

Further, the allegations detailed in both CEOs' affidavits are strikingly similar:

At Lepelle Northern Water, CEO Phineas Legodi was first introduced to the Director of EWS, Adv. Bomela, by Mdekazi following a MINMEC meeting in August 2019. The intention of the meeting arranged by Mdekazi was allegedly to provide EWS with an opportunity to punt their technology to the CEO as a potential solution to the on-going drought. In response, Legodi indicated that he would invite EWS, along with owners of other alternative technologies, to make a presentation to the Water Research Commission.

Correspondence from the Minister’s office was subsequently sent to the Lepelle Acting Chairperson, Mr NH Matsepe, on 20 September 2019, instructing the Board to conduct a sand water abstraction trial using EWS as the preferred service provider (Annexure 1). Legodi subsequently complied, requesting trial funding and permission directly from Treasury. On 10 October 2019, Treasury granted authority to deviate from normal procurement processes for the purposes of the trial plant, given the proprietary technology offered by EWS (Annexure 2).

On 28 October 2019, before this trial could be implemented, the Minister directed a second letter to Matsepe, noting that she had directly instructed EWS to implement emergency procedures to provide water to certain villages in Limpopo in terms of section 73(1) of the Water Services Act. The Minister noted she had further requested the Chief Procurement Officer (CPO) to grant authority for the said company (EWS) to test its capacity and be granted authority to proceed to provide water to the entity (Annexure 3 and Annexure 4 here).

According to Legodi, he was openly resistant to the idea, stating the Board's weak financial position.

On 15 November 2019, Minister Sisulu subsequently appointed an investigative firm known as ORCA to investigate the affairs and financial position of the Lepelle Northern Water Board. (Annexure 5).

On 6 April 2020, the investigation was extended to specifically target CEO Legodi, by extending the terms of reference of the firm to conduct a lifestyle audit into the CEO, COO, CFO, Legal Counsel, Operations Managers, and the CEO’s PA (Annexure 6).

On 30 April 2020, Legodi took the decision to depose an affidavit, detailing his full concerns regarding Ministerial interference in the Board’s procurement process for potentially nefarious political ends.

On 7 May 2020, Legodi was informed via a public media statement issued by the Ministry, that he had been placed on suspension (Annexure 7). Legodi has now served the Minister with legal papers as well as having laid criminal charges.

Similar events are alleged to have taken place in the Eastern Cape at Amatola Water Board.

In an affidavit, deposed to on 23 April by Amatola CEO, VuyoZitumane, it is alleged that Sisulu’s Advisor, MphumziMdekazi attempted to interfere in the Board’s procurement processes with a view to securing a contract for sand water abstraction, provided by the same company referred to above - EWS.

Zitumane first met Mdekazi on 12 August 2019 at a meeting during which the Amatola Board submitted a report on irregular expenditure incurred by the previous Board. Mdekazi later telephoned Zitumane, requesting a private meeting at 19h30 that evening.

During this meeting, Mdekazi is alleged to have spoken about projects that Amatola Water could get involved in and his access to National Treasury which may assist in financing such projects. Zitumane noted the struggling financial position of Amatola, informing Mdekazi that she was exploring the Budget Facility Infrastructure Fund to finance Amatola’s mega projects, of which Mdekazi asked for further details.

At this meeting, Mdekazi is said to have made a number of overtly political statements, including having indicated that the Eastern Cape must support the Minister as the next presidential candidate in 2022, as he "failed the last time" (prior to the 2017 ANC Elective Conference) and such a campaign has put him into serious debt. In later conversations, Mdekazi puts this figure at R35 million.

Mdekazi then introduced Zitumane to a Chief Procurement Officer (CPO) at Treasury the following day, indicating to the CPO that Amatola needed budget for projects. The CPO was evasive but indicated he would try. Nothing came of these discussions as both parties – Zitumane and the CPO - seemed reticent to engage substantively.

Ultimately, in October 2019, after a number of discussions initiated by Mdekazi regarding sand water abstraction technology as a potential solution to the drought, the Amatola Water Board, via the Water Research Commission (WRC) undertook to pilot a low-cost research trial of EWS’s technology.

During the same month, the Ministry requested the Amatola Water Board to provide them with a list of areas that the Board would need financial assistance in, regarding the testing and roll-out of sand water abstraction.

In November 2019, EWS is alleged to have sent a report directly to Amatola, indicating that the Minister had commissioned the company to test their technology at various sites. Zitumane is said to have referred the report to the respective municipalities, as the relevant institutions with the budget to roll out the projects. (Essentially, Zitumane was kicking for touch in the hopes of ridding herself and her Board of the task).

A R230 million budget was subsequently allocated directly to Amatola.

Deputy Chairperson, Rev. Nkosinathi Geja, later requested that the Board be furnished by Zitumane with all specifications before any tenders were advertised. This was refused and a procurement plan was provided instead.

Zitumane alleges that Mdekazi had boasted of having recommended a “solid chairperson” during the Board’s appointment process – in the form of a one Reverend Geja, who ultimately became the Deputy Chairperson when the new board was appointed in February.

During the same month, whilst on sick leave, Zitumane received reports from her colleagues that the Minister was allegedly unhappy about the procurement plan not having allocated 60% of R230 million funding to “sand abstraction”.

It is interesting to note that less than 6 months ago, the Minster and the Department would entrust R230 million to Amatola, whose affairs and financial position now call for two consecutive investigations.

In March, the Minister's office wrote to Zitumane requesting clarity on whether or notAmatola had indeed received the allocated drought relief funding, and how it had been used.

According to Zitumane, the horse had bolted by this stage and she had become the subject of a Ministerial investigation for failing to submit to deliberate manipulation. On 23 April, Zitumane was suspended by the new Board Chairperson (Annexure 8). Zitumane deposed to an affidavit on the same day. The Amatola Board was subsequently collapsed by the Minster.

On 11 May, the Minister replaced the acting Chief Executive appointed to act on Zitumane’s behalf, with yet another acting Chief Executive – the 2nd’s shuffle in less than two weeks (Annexure 9).

Further, the term of the interim Lepelle Norther Water board expired at the end April 2020. The CEO has not received any further information in writing as to whether the term of this interim-board has been extended.

This is the situation at many DWS and DHS boards entities, where the decks have been stacked with "acting" officials who lack the permanent authority to act decisively against political meddling and instruction.

The DA is deeply concerned by the gravity of allegations made, and believe it critical that the media understand the alternative side of the story being peddled by #AnitCorruptionSisulu.

The above information will form part of the full set of documents given to the Public Protector and SCOPA in relation to the DA’s request for a full enquiry.

Issued by Emma PowellDeputy Shadow Minister Water and Sanitation and Human Settlements, 13 May 2020