21 February, 2012 16:43
3 Comments

Evan Pickworth
BusinessLIVE

Frozen fraud assets set to hit a billion rand

The Anti-Corruption Task Team has already frozen half a billion rand in assets, but Willie Hofmeyr, deputy national director of public prosecutions for the National Prosecuting Authority, expects this to increase to a billion rand in "the near future".

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He told the Institute of Auditors' Public Sector Forum on Tuesday that the task team, comprising the Hawks, the NPA and Treasury fraud units, which is over a year old, has undertaken 56 investigations into people who have allegedly made more than five million rand from corruption and 26 of them are in court. Of those, 21 have had assets frozen.

But he said there was still a lack of coherence between the different corruption busting bodies in SA, though the specific and ambitious outcome targets signed by ministers in 2010 was an important step forward and good building blocks were being laid. These included anti-corruption units in the department of Public Service and Administration and via one anti-corruption unit for local government.

The proposed target is for 100 convictions in big cases, but most of these needed to happen in the next few years after a slow start. Despite the slow conviction rate - only four - this target was "energising" corruption busters.

"We foresee a billion rand will be hit in the near future," he said.

In total there are 392 suspects under investigation, including a number of high profile people in government.

Hofmeyr was spectacularly fired as head of the Special Investigations Unit in November last year when President Jacob Zuma replaced him with Willem Heath. Heath was instrumental in the strategy used by Zuma to have corruption charges against him dropped.

"One of the things we need is a more professional public service where it is more independent from the executive." This would entail ministers having less of a role in appointments.

He also proposed a "conditional amnesty" where the party who came forward first, would qualify for amnesty.

"There are no silver bullets, there are no quick answers. We need a holistic approach," he said.

He said a major problem was building capacity in government to investigate corruption, though this capacity was being built by the Special Investigations Unit. The unit has around 600 full-time staff and another 150 from the private sector on secondment at the moment.

Hofmeyr said while the perception of corruption appeared worse, a lot of capacity had been built over the past 15 years and this was one of the reasons why a lot more is being seen about corruption in the newspapers.

He said the challenge was to get more convictions, rather than just bringing over a hundred people to court.

"I believe government is very serious as a lot more resources have been put into fighting corruption than previously," he said. Treasury has doubled the budget of the Special Investigations Unit in the past year.

But he highlighted that a "strategic, institutional challenge" remained.

"We have an interesting trend these days where friends of the accounting officer have a forensic company that wins the tender to do the investigation."

He said that in many departments he had noted that criminal charges that should have, had not been laid - the problem being the decision to lay a charge lay with the accounting officer.

He said criminal prosecutions of those failing to report corruption would send "a strong signal". SA law requires suspicious transactions to be reported to the commercial branch of the Hawks.

"There is a legal obligation on senior officials in government to report," he added.

Hofmeyr said organised crime investigation techniques needed to be harnessed in investigations. "Very often, it is very difficult to trace the bribe. But people do talk a lot on the phone, like which family member should get the money," he said. Another technique was to infiltrate groups.

A "value chain analysis" of corruption is also useful.

He said technology was helping make the corruption busting job better and faster, though a challenge was that many government databases did not "talk to each other". Programmes were therefore being drawn up to improve this, despite it being "a cumbersome process".

The SIU has drawn up 101 tests to determine what is suspicious with the data, like "ghost" users cropping up or passwords being breached. They would also look for spikes in spending and expenditure patterns. Looking for shared telephone numbers and links to family members doing business with government officials could also take place. Spotting companies coming in regularly just on the correct winning tender bids was another important way to identify suspicious transactions.

"The use of data mining and analysis is the one big thing that has shifted the impact," he said.

"Corruption is a very serious problem in our country. It is not going to be an easy war to win. But we all have to do our part," he said. "It will not be a short, easy fight. There will be some casualties along the way," he concluded.

Hofmeyr was a member of parliament for the ANC from 1994 to 1999 and worked as a human rights lawyer in Cape Town prior to that when he was restricted, banned and detained without trial on a number of occasions.



COMMENTS

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Francis Feb 21, 2012

From the 50 billion a year stolen seems this recuperation very little. Will the public get informed about the successfully prosecuted and the amount stolen together with the sanction taken?
I really thank you in anticipation.
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letslisten Feb 22, 2012

The bulk of the corruption money is pocketed by high profile people, who are mostly not investigated as they're regarded as above the law because of their status.
The scourge will only be eliminated once government's power to intervene in the prosecution of criminals is eliminated - but that day might not be soon enough.
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Investor44 Feb 22, 2012

Is Zuma and the ANC really serious about fighting corruption. R30 Billion + is lost every year through negligence and corruption... to date only 5 convistions. The facts say it all.... backdoor re-distribution is approved at the highest levels as a blind eye is turned to corruption - and who sufferes most ? - the poor of course.