First Posted: 5/3/2013
(AP) South Africa is fighting a losing battle against corruption which sucked up nearly 1 billion rand ($111 million) in taxpayers' money last year, according to a new report that contradicts government statements that efforts to stamp out financial misconduct are going well.
"Corruption is rampant," the author of the report, financial forensics expert Peter Allwright, said Friday. "It's out of control ... and the dedicated units that have been created to fight financial misconduct are in essence fighting a losing battle."
South Africa is awash in scandals about misuse of government money and power in one of the latest, taxpayers forked out around 250 million rand (nearly $28 million) on upgrades to President Jacob Zuma's private residence in his home village, including three new houses, a sewerage treatment plant and an underground bunker.
South Africans outraged by the lavish expenditure and disbelieving of their president's claims that he did not know how much it cost or any details of the upgrade have been asking how many homes that money could have built for some of the millions of citizens who live without running water or electricity.
The gulf between the fabulously wealthy and the impoverished is growing ever wider in the country with the continent's largest economy, fueling ever more violent service delivery protests as the African National Congress, which has governed since white minority rule ended in 1994, gears up for elections next year. The ANC is expected to win but its margins of victory get lower at every election where fewer and fewer people vote.
People calling into radio talk shows have been wondering whether corruption is not one of the reasons that Britain announced this week it is ending development aid to South Africa in 2015. British aid this year amounts to $29.5 million slightly more than the government has spent on Zuma's private residence.
In what is seen as an influence-peddling scandal, four security officials including two brigadiers-general were suspended Friday in a political firestorm over why an immigrant Indian family that is friendly with Zuma and a major contributor to his party was allowed to land a chartered jet without proper authorization at the country's main air force military base.
The South African National Defense Force has said it was not informed in what is considered a serious breach of security.
The incident "tells us who we are," The Star newspaper said in an editorial. "If you have money and friends in powerful places, you can do as you wish."
Allwright told The Associated Press that while 88 percent of people tried for financial misconduct are found guilty, only 19 percent are dismissed. Forty-three percent get final written warnings.
"Essentially you have a one-in-five chance of being dismissed and the rest remain in the public service and continue with financial misconduct because there are no real consequences," said Allwright, an attorney with law firm Edward Nathan Sonnenbergs.
Others are able "to get off scot-free" by resigning and getting another government job where they can continue to steal, he said. That was because an insufficient investigative capacity in the public service means nearly two-thirds of cases take more than 90 days to investigate. "You can give 30 days' notice and leave, and the public service office then often abandons the investigation," Allwright said.
"The majority of perpetrators remain in their positions and often continue to commit financial misconduct," his report says. Or, "The situation often results in corrupt officials moving to other institutions thereby avoiding sanctioning and finding a new hunting ground for unlawful behavior."
It says the public service has consistently failed to institute criminal charges against offenders, even though it is required by law.
Only 13 percent of the money lost to corruption is recovered, he said.
In contrast, Zuma said at a rally last weekend celebrating freedom in South Africa that "positive inroads are being made in the fight against corruption." He said 718 people are being investigated for corrupt activities and more than 1 billion rand ($110 million) of suspected stolen funds has been frozen.
Allwright's report says South Africa lost 930 million rand ($103 million) to financial misconduct by workers in national and provincial governments in the fiscal year 2011-2012, up from 346 million rand ($38.5 million) in 2009-2010. South Africa's national budget this year is 1.5 trillion rand ($167 billion).
The amount missing from public coffers is probably much higher because corruption cases are underreported and the figures do not include local governments, Allwright said. Despite government promises to fight corruption and mismanagement, little has changed since a government report on local governments in 2009 warned that in some cases "accountable government and the rule of law had collapsed or were collapsing" because of corruption, profiteering and mismanagement.
The government report found corruption was the biggest factor in failures to provide basic services.
Allwright said it was worrying that "the real extent of the problem is really unknown."
His report says the seriousness of the situation is best conveyed by an estimate provided to Parliament last year by opposition leader the Rev. Kenneth Meshoe of the African Christian Democratic Party. Meshoe said that a staggering 385 billion rand (nearly $43 billion) has been lost at every level of government since 1994.
Allwright's report is based on figures from parliamentary committee reports and the Public Service Commission, which has conceded that cases of corruption are probably underreported.Associated Press