Report details deceit under Brian Hlongwa’s watch as Gauteng health MEC
3P Consulting staff were seconded to key roles within the department, including the appointment of one as acting chief financial officer, where he approved payments to 3P, Corruption Watch’s David Lewis says
A Special Investigating Unit (SIU) report into corruption in the Gauteng health department has uncovered evidence of how a small firm called 3P Consulting provided kickbacks, overseas trips and other benefits to top politicians and officials in order to secure lucrative contracts for its directors, friends and family.
The report details alleged financial misconduct and corruption that cost the department more than R1.2bn between 2006 and 2010, when the ANC’s chief whip in the Gauteng legislature, Brian Hlongwa, was then MEC for health.
The report was made public on Thursday by health activist organisations Section 27, The Treatment Action Campaign (TAC) and Corruption Watch, after they obtained it from the Presidency through a Promotion of Access to Information Act (PAIA) request. The investigation was commissioned by then president Jacob Zuma in 2010, and the SIU submitted its report to him in March 2017.
While many of the report’s most serious allegations have already been documented in the media, it highlights the central role played by 3P Consulting and its entities, which are named in five of the 10 matters investigated by the SIU, as well as its links with Hlongwa.
The report says Hlongwa met 3P Consulting director Richard Payne in about 2000, when he was Johannesburg city council councillor. Hlongwa became health MEC in 2006 and served in this capacity until March 2009. The conduct of several of the directors of the network of companies clustered around 3P Consulting has been referred to the criminal justice system by the SIU.
TAC general secretary Anele Yawa said the current financial crisis facing the Gauteng health department had its roots in Hlongwa’s tenure. "Patients’ needs are growing yet critical posts are being frozen, community health workers are unpaid, billions of rand are owed to critical institutions like the National Health Laboratory Service, threatening their viability. And despite all this, several implicated officials remain in high office. This sends the message crime does pay," he said.
"This is a textbook example of state capture in practice," said Corruption Watch executive director David Lewis. "Perhaps the most egregious conduct reported was the secondment of 20 3P Consulting staff members to key decision-making roles within the Gauteng health department, including the appointment of one of the secondees as acting chief financial officer. His duties included approving payments to 3P Consulting and serving as a voting member of the departmental acquisition council," Lewis said.
The SIU found evidence that the Gauteng health department awarded a R779,000 contract to 3P Consulting to compile the 2007-08 budget, despite department officials indicating they had the expertise to do so themselves. 3P Consulting was eventually paid almost twice this amount, for work it did not do, says the report. The job was, in fact, done by the department’s budget director and then handed to 3P, which submitted it as its own, the SIU report says.
The report shows the vast opportunities for corruption in provincial health departments due to the scale of the procurement they engage in, and highlights the need for proper financial controls, said Section 27 deputy director Umunyana Rugege.
The SIU report details kickbacks allegedly received by key public officials, including Hlongwa, who it says was given R2.6m for the deposit on a R7.2m house in Bryanston by 3P Consulting and by Regiments Health Care director Niven Pillay. Regiments Health Care was a subcontractor of 3P Consulting. A preservation order was obtained against the property, which is currently being opposed.
The SIU found evidence of various trips that were paid for by 3P Consulting for Hlongwa, his former special advisor Abdul Rahman, and other top officials. It also found evidence of a family vacation to the UK for the former director of ICT Ms Mosupi, paid for by the director of Life Channel Africa Phil Austin: this company was sourced by 3P Consulting to provide television services to Gauteng hospitals.
The criminal matters identified in the SIU report have been referred to the South Gauteng director of public prosecutions for further investigation. TAC, Section 27 and Corruption Watch said they would engage with the Gauteng government and the Presidency to ensure that the recommendations contained in the SIU report were implemented.
These recommendations relate to the shortcomings the SIU identified in the department’s processes during its investigation. For example, it says seconded staff should be barred from any decision-making process involving the firm they were seconded from.
The three organisations called on the ANC to remove Hlongwa from the Gauteng legislature and refer the SIU’s findings against him to the ANC integrity committee.
Gauteng health MEC Gwen Ramokgopa declined to comment, saying she had not seen the report.
Presidential spokesperson Khusela Diko and ANC spokesperson Pule Mabe had not responded to Business Day’s request for comment at the time of writing. Attempts to reach Brian Hlongwa were unsuccessful.
Read the full SIU report here