MPs attack new lottery board

The National Lotteries Commission is under attack from what appears to be a well-co-ordinated “fightback” campaign to force the minister responsible for the lottery to dissolve the commission’s board and dismiss the commissioner.

The pressure was ramped up when some MPs — with the ANC and EFF taking the lead — launched a withering attack on the National Lotteries Commission in parliament.

The commission was in parliament on September 18 to report on its performance to the trade, industry & competition portfolio committee. Instead, the report took a back seat and the commission’s delegation, comprising board chair Barney Pityana, commissioner Jodi Scholtz and other senior executives, faced a grilling by MPs.

Many of the MPs’ questions appeared to be based on media reports and allegations contained in two letters to trade, industry & competition minister Parks Tau. The first anonymous letter claimed to be from National Lotteries Commission staff and the second was from a self-proclaimed activist linked to some members of the commission’s former board and executive.

The letters and media reports appear to be part of a co-ordinated campaign pushing for the dismissal of Scholtz, who was appointed early in 2023, and the dissolution of the commission’s board led by Pityana.

An National Lotteries Commission source described what was happening as a “fightback” while a second source said it was an attempt to capture the commission.

Under Scholtz and Pityana, the commission has begun rebuilding an organisation that was hollowed out by corruption. It has worked closely with the Special Investigating Unit (SIU), which has been investigating corruption involving lottery grant corruption since 2020.

Only minutes into last week’s portfolio committee meeting began, it became clear that the knives were out for the commission.

Pityana had barely begun with his report on the progress the commission has made in curbing corruption and restoring the organisation’s battered reputation when he was halted and told that there was limited time available for the meeting — and, anyway, MPs had copies of the report.

One of the letters sent to Tau was from Tebogo Sithathu — described by investigative reporters amaBhungane as a professional sock puppet — in his capacity as chairperson of the United Civil Society in Action (UCSA). Sithathu is being investigated by the SIU in connection with a R9.7m grant to his now-defunct Gospel Music Association of SA.

An anonymous email, supposedly from unnamed National Lotteries Commission staff, was also sent to Tau and copied to members of the committee and senior trade, industry & competition department staff. It made serious allegations of corruption, nepotism, conflicts of interest and discrimination against staff without offering evidence.

Another letter to Tau was from Desmond Msumi of the Mageza Heritage Foundation complaining that the foundation was yet to be paid a R1.23m grant allocated for the 2023 SA Traditional Music Awards staged in Durban last year.

GroundUp has reliably learnt that the SIU, which is investigating the grant, had asked the National Lotteries Commission to withhold payment until its investigation is completed. Before this grant, Mageza had received about R16m in lottery funding between 2018/19 and 2021/22.

The chair of the committee, ANC MP Mzwandile Masina, has also written to the minister calling for the board to be dissolved and for Scholtz to be removed, according to a source who has seen the letter.

In the meeting Masina told the National Lotteries Commission delegation: “It seems that while we were watching Zondo, others were implementing another state capture. How was the commissioner appointed? Was there a proper process followed? Members [MPs on the committee] are raising very pertinent points.” He offered no evidence to back up his suggestions of impropriety.

Former ANC cabinet minister and portfolio committee member Malusi Gigaba supported Masina’s stance on the National Lotteries Commission. Without evidence, he questioned the independence of the commission’s board and the appointment of Scholtz. (Gigaba himself has been implicated in numerous corruption scandals).

Among the allegations against the commission is that several of its senior staff and board members had previously worked for the department of trade, industry & competition or the SA Bureau of Standards, both of which fall under the department. EFF MP Mbuyiseni Ndlozi complained that there was “too much recycling of people ... people are in circulation in the space. Perhaps you [the National Lotteries Commission] need a new board.

“If you want to do things new then you need a new board.”

Pityana said in his report: “We want to say that we are resetting the grant-making mechanism of the National Lotteries Commission such that we can be confronted less with criminal abuses ... to improve the way in which the resources can be utilised to support worthy good causes.

“It is against that background that we wish to frame the flurry of activity in recent weeks about the National Lotteries Commission. Some of it no doubt is self-serving and should be taken with a pinch of salt, but there are others that deserve further investigation.”

Pityana said there was no reason to suspect corruption at the National Lotteries Commission was continuing in the way it used to.

said.

Vincent Jones, the National Lotteries Commission’s chief audit executive, said that 44 investigations had been completed this year and 14 complaints had been lodged with the police as a result. The commission had also completed 14 lifestyle audits of its top management and 40 more were about to begin.

Wrapping up the fiery two-hour long meeting, Masina said he would write to Tau to ask him to dissolve the National Lotteries Commission board. “We hold the view that the board members and executive are not objective,” he said.

“This is wrong, it is not ethical and cannot be done on our watch,” he said, again without evidence. (Masina was a fervent supporter of former president Jacob Zuma. amaBhungane exposed his questionable involvement in a vehicle collision with a state vehicle in which a cover-up appeared to have taken place.)

“I will write to the minister to dissolve the board. If he does not accede we will call him [to appear before the committee] to explain,” he said.

Trade & industry ministerial spokesperson Yamkela Fanisi said on behalf of Tau: “We have given the National Lotteries Commission board time to report to us on their work and the state of the entity. This will include the process they are engaged in on finding a new lottery licensee.

“We want to put it on record that we are committed to stabilising governance and administration at the department of trade, industry & competition and its listed entities, the National Lotteries Commission included,” he said.

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