Lottery commissioner Jodi Scholtz promises to right wrongs

The board of the National Lotteries Commission (NLC) has approved a reparation process that will lead to apologies and, in some cases, financial reparation, to former staff who bore the brunt for blowing the whistle on corruption.

The NLC will use a reparation model similar to the one used by the SA Revenue Service (Sars), which apologised and paid reparation to staff who were forced out during the capture and hollowing-out of the organisation during former president Jacob Zuma’s administration.

“We’re doing it because the NLC has wronged communities and we need to say sorry,” the new commissioner, Jodi Scholtz, said in an interview.

“It needs to be lawful and authentic. We need to make amends within the PFMA (Public Finance Management Act). The idea is to say sorry in a way that is meaningful and for everyone. My original proposal was for staff only. But communities have also been affected. They have been hurt. We cannot just say it is business as usual.

With regard to projects that collapsed when grants were looted, she said the NLC had asked the Industrial Development Corporation to provide engineers to investigate abandoned or unfinished projects “to see what could be done to make them useful for the communities where these facilities are situated”.

Since 2022, a clean-up at the NLC has led to the replacement of the entire NLC board and much of the senior executive, including the resignation both of the previous commissioner, Thabang Mampane, and COO Phillemon Letwaba. Several other senior staff are currently on suspension pending disciplinary inquiries.

Scholtz also confirmed that the NLC plans to introduce lifestyle audits and integrity testing for all staff “starting from the top ... me, the executive and the NLC board”.

One idea being considered was to fund reparation awards from money raised from the sale of assets bought with looted lottery funds, Scholtz said.

The Special Tribunal has already issued preservation orders running into hundreds of millions of rand on properties and other assets, involving multiple individuals, companies and non-profit companies.

Zero tolerance

Scholtz has been meeting staff and labour unions as part of an organisation-wide clean-up.

She has also held meetings with former staff who were driven out after they tried to blow the whistle on corruption. Among those she has met with are Sello Qhino and Mzukise Makatse. Both have paid a heavy personal price after being hounded out of the NLC.

She also met communities where tens of millions of rand of public money was spent on facilities that were not needed, and representatives of organisations whose credentials were “borrowed” or hijacked and then used to apply for Lottery funding.

“I found a legacy of good people [at the NLC] who wanted to do the right thing,” Scholtz said. “But they were very disempowered and scared of doing their work. Records and functions were in odd places and there were problems with record management.”

The NLC’s IT systems were in disarray and key documents, including some related to funding, board decisions and legal briefs, were missing.

Independent investigators who probed NLC corruption reported how documents were often not supplied in spite of repeated requests. They concluded that some key documents had been removed, or never existed. In some cases, they found documents had been added to files without following proper protocols.

A “flaw” in the NLC grants system meant that staff meant to monitor projects could not search grant recipients by identity numbers, making it impossible to find and weed out applications for — or recipients of — multiple grants.

So far, close to R200m has been spent on developing a new system in a process that began around 2016 or 2017. But staff say there are multiple problems with it.

The NLC has, from April, begun capturing ID numbers included in grant applications. But the fix is not retrospective and the NLC is now considering whether the best solution would be to rebuild the system from scratch rather than fix what doesn’t work properly, GroundUp has learnt.

Scholtz said following recommendations by former board member Willie Hofmeyr, former head of the National Prosecuting Authority’s Asset Forfeiture Unit (AFU), voice-driven integrity testing would be introduced. The system records and analyses a person’s voice as they replied to questions to detect lies.

A tender for service providers closed on June 10 with plans to introduce integrity testing by the end of July, Scholtz said.

“Integrity testing has been through the courts and the SIU uses it all the time, so it is tried and tested. You are able to get a good sense of key dimensions using the voice box,” she said.

The commission has begun discussions with NLC staff and labour unions about integrity testing and lifestyle audit policies. “This is one of the minister’s priorities,” she says. “We will start with integrity testing and then move to lifestyle audits.”

The integrity testing and lifestyle audits will be overseen by Vincent Jones, the NLC’s new chief audit executive.

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