JOHANNESBURG - Former Free State premier Ace Magashule committed fraud and money laundering by distributing kickbacks from the asbestos eradication project using a service provider to do so, the state capture commission of inquiry heard on Wednesday.
Giving testimony on the second day, former Free State MEC for economic development Mxolisi Dukwana told the inquiry that Magashule directed the late Ignatius 'Igo" Mpambani to make various payments to various individuals.
Dukwana alleged that Magashule instructed his then-personal assistant Moroadi Cholota and an official in his office, Ipeleng Morake to request payments from Mpambani through emails.
Mpambani was in a business venture with a businessman named Edwin Sodi and scored the R255 million contract to audit and assess pre-1994 housing units with asbestos roofs in the Free State. The project was never put on tender, said Dukwana, and the business partners wrote a proposal to the Free State government to undertake the auditing of asbestos roofs to the tune of R255 million.
Two companies, Blackhead Consulting and Mpambani's company, Diamond Hill Trading netted R255 million paid in batches by the Free State government between 2014 and 2016, Dukwana said.
Dukwana read the emails retrieved from the Free State government detailing payment requests and proof of such payments sent.
The requests to Mpambani included one for over US$24,000 for suspended South African Revenue Service (Sars) head of legal services Refiloe Mokoena's daughter who was studying overseas.
Mokoena wrote to Magashule in 2015, requesting him to settle her daughter's university fees, said Dukwana.
"This person, Miss Mokoena, had a stint as an acting judge in the Free State and in Gauteng before she ended [up] at Sars. She is under suspension currently at Sars. It is clear this was directed to the premier. One would assume they met previously and she was following up through this letter judging by the manner in which it was written. She is even thanking the premier in advance," Dukwana said.
Sars suspended Mokoena last year for alleged involvement in illegal VAT refunds claimed by Gupta family companies totalling R420 million, which Sars paid to third parties in contravention of the VAT Act.
Evidence leader Phillip Mokoena asked Dukwana: "Do you know why such request would be made to the premier?"
Dukwana replied: "I have no idea but I think you will see when we deal with Free State scholarships and bursaries later that there is a bursary programme for children who cannot afford fees but qualify for bursaries. I do not understand why this one would go to Igo, a service provider."
Another request from Cholota to Mpambani in May 2015 asked for R500,000, of which R30,000 would be paid to "an [student representative council] SRC president in Cuba".
On January 2016, Cholota asked for R250,000 to settle an invoice from a travel agency.
"You have worked in government before, is it a normal process to ask for such payments?," commission chair Deputy Chief Justice Raymond Zondo asked Dukwana.
Dukwana replied: "This is very strange chairperson. Under normal circumstances, leaders would avoid such incidents such as asking service providers for payment from happening. As I stated before, a system of undermining governance was developed in the Free State...abnormal things happened. People became a law unto themselves and did wrong things with impunity."
"These payments requested by the premier...this is ridiculous. I do not think the one for the travel agency was for the premier's travels. I think it was facilitated for someone. Why would a premier's office get involved with facilitating such?" he asked.
He said Cholota and Morake followed Magashule's instructions, who was a "blesser" and had boasted that he never puts down his signature in case he could be implicated.
"Magashule was simply a blesser to many as seen through payments advanced by Mpambane from state coffers at the behest of the premier. Igo paid sums of monies for some students studying at various universities here and abroad even though the provincial government has a bursary fund. This was done to the expense of public funds that were acquired fraudulently," said Dukwana.
"What is very interesting is the question: why would the request come from [the] highest office in the province? If you respect the law, you protect the office from these kinds of things...this is undermining and abusing the office. An inference can be drawn that the asbestos audit was actually an asbestos heist...This was not only abuse of power but [the] commitment of fraud and money laundering by Magashule."
In the end, the service providers were paid the total R255 million even though no asbestos roof was eradicated.
Dukwana said the audit and assessment could have been done by local councillors for free, adding that Magashule should be in jail for alleged corruption.
"With the information we presented today, I submit that the involvement of Magashule in this scheme makes him an unfit person to hold office, even that of secretary-general of the ANC. This was a well-oiled scheme. Magashule's suitable place is a jail cell. If our law enforcement were effective, him and others who did this should have been sentenced to prison. The office of the auditor-general in the Free State would be a great resource of information for the commission," Dukwana said.
"No eradication of asbestos was done yet R255 million is gone. I invite the commission to investigate and subpoena [the] provincial head of housing Mr Tim Thabo Mokgesi, the CFO, the head of supply chain and the housing MEC at the time. Miss Mokoena, Miss Cholota and Miss Morake should be no exceptions. The head of treasury at the time has some explaining to do also."