Trojan Horses, Corporate Raiders, and Now State Capture

partnerships ngos corruption finance scams
Wednesday, 23 October, 2013 - 14:16

In this article, the author takes a closer look at corruption in the NGO sector and what NGOs should look out for to avoid being scammed

Beware of Greeks bearing gifts!  Beware of city slickers from Gauteng offering joint ventures in deep rural settings!  Beware government imposters running pseudo non-governmental organisations (NGOs)!
 
In her latest newsletter, Helen Zille, the Democratic Alliance leader states, “The ANC [African National Congress] has now resorted to starting NGOs that receive state funds to drive the ANC’s agenda.  Why else did Agriculture Minister, Tina Joemat-Pettersson’s department transfer R2 million to an organisation led by Nosey Pieterse, an ANC cadre, shortly before it fuelled the violent strike on Western Cape farms last year?”
 
This rang some bells with me, after a bruising year of bullying by two other NGOs, one from Johannesburg the other from Pretoria.
 
Zille goes on: “And why else did Jacob Zuma’s cousin, Deebo Mzobe, start an NGO called the Masibambisane Rural Development Initiative that was reportedly pledged R900 million from various government departments to distribute food parcels in the run-up to the 2014 election?  (The plan has since apparently been put on hold)”
 
In a Sunday Times article on 12 September 2013, Mark Heywood, executive director for SECTION27 writes, “The intimidation of social-justice activists is not unheard of in the new South Africa. The problem is that its incidence seem to be growing.  In our experience, teachers and health workers who have provided evidence of corruption or mismanagement - even textbook shortages - have been threatened with dismissal or demotion, something that led us (the public-interest law centre SECTION27) to file a complaint with the Public Protector in 2012.”
 
Beware of Greeks bearing gifts!  
 
We were approached in February 2012 to form a joint venture with an out-of-province NGO. They wanted to bid on a tender related to government’s Community Work Programme. They were well informed about it, we realised later they were too well informed. We now suspect that our joint venture won the bid because of insider trading. Put another way, because they never had any intention of operating a joint venture, it was just their ticket - as erstwhile civil servants - to win the bid and then hit the ejector-seat button to dump our NGO. The bid rules stipulated that only an Mpumalanga-based NGO could bid, with a minimum threshold of R3 million per annum turnover. They did not qualify on either account. They were simply looking for ‘a tame NGO’ to put on a leash.
 
Beware of city slickers from Gauteng offering joint ventures in deep rural settings!
 
From our bitter experience, here are four warning signals to watch out for:

  • Fat-cat salaries that are out of line with NGO norms in the province. There is a South African Revenue Service (SARS) prerequisite that stipulates such alignment. Otherwise, the organisation’s tax exemption status could be withdrawn;
  • A joint venture formed only for the purposes of bidding on a tender is legally in no-man’s land. It is only a figment of your imagination. It is not registered anywhere, it is not an entity, so it cannot open a bank account or get its own tax number. One organisation or the other must take on the Finance and there goes the joint control and any hope of the joint benefits that the Law requires of any joint venture. The city slickers know this and try to play you for the fool by saying you must sue the joint venture for damages, not them;
  • Name-dropping in Waterkloof-esque fashion. They are buddies with the Minister. One of their Board members is a struggle hero with a high-level job in government. The chief executive officer travels on a diplomatic passport. Their intimidation tactics are clever - for example, they tell your local staff that they have been offered an important post in government after the successful completion of the project tendered;
  • They have a Stalinist appetite for information that can be used against you. They will read your hand-held whenever you are not looking. They have ‘moles’ planted somewhere between the printer and the desk because lots of people get to see even the most confidential documents. Your external hard drives and even laptops will disappear in apparent break-ins, only for you to perceive later that they curiously possess data from those devices.

Beware government imposters running pseudo-NGOs!
 
If you were wondering what Zille was smoking before she wrote the newsletter quoted above, let me assure you that State capture is alive and well and living in Mpumalanga.
 
Home of the January murders, where we are still waiting for explanations and convictions regarding 17 people shot (14 of them killed) between 1998 and 2011, every January.  All of them whistle blowers, we concur with Heywood as well.  Asking impertinent questions is a very dangerous business. Yes. They dismiss and demote, leaving a joint venture run by only one NGO, then when you legally terminate the joint venture because it is not one in terms of Law, they trundle on, as if they were still a joint venture.
 
The only explanation for this happening is government complicity. Desmond Tutu Centre for Leadership (C4L) has reported this to the Public Protector. Not to mention repeated incidents of fraud to law enforcement. They simply operate an illegal Provincial Implementing Agent (PIA) using illegal methods under government’s protection.
 
On 2 June 2013, City Press, quoted ANC secretary-general, Gwede Mantashe, on corruption in the ANC: "When a tender is issued, you find there is already a structure of collaboration..." 
 
The same article quotes him as saying that: "They do not know the difference between a salary and what should be used to serve our people"…"Commitment we had to fight apartheid has been replaced with greed."

Greed makes them clever, though. What they cannot get away with in government, they know that they can pull off in an NGO setting. Because on the whole, civil society is not regulated as rigorously as the public sector. So what do they do? 
 
Trojan horse, corporate raiding and now State Capture.

   - Chuck Stephens, Chief Executive Officer at the Desmond Tutu Centre for Leadership.

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