Category Archives: michael sutcliffe

Witness: Mucking out the Durban City Hall

http://www.witness.co.za/index.php?showcontent&global[_id]=57858

Mucking out the Durban City Hall

Richard Pithouse

A FORENSIC investigation has concluded that more than R500 million has been misspent from the housing budget in Durban and recommended that charges be brought against top officials, including the city’s manager Mike Sutcliffe.

It’s also emerged that tenders worth more than R80 million have been awarded to the immediate family of the city’s mayor, Obed Mlaba, and that the Mlaba Family Trust was part of an attempt to gain a tender worth R3 billion. There has also been renewed attention to the R40 million in construction tenders awarded to the late John Mchunu, who was the chairperson of the African National Congress in Durban.

And intense public scrutiny has been focused on Durban’s ultra-bling couple, S’bu and Shawn Mpisane, whose fabulous Rolls-Royce and Lamborghini lifestyle seems to be based on incredible profiteering from public funds by way of R200 million in tenders. Houses built by the Mpisanes have been reported to be crumbling months after construction and have previously had to be demolished.

It has been reported that the city built 9?387 low-cost houses last year, but that 6, 007 would have to be rebuilt or rectified. It has also been reported that about 80% of the 27, 000 Reconstruction and Development Programme (RDP) houses inspected by the KwaZulu-Natal Department of Housing since May last year will have to be demolished and rebuilt.

It is abundantly clear that in Durban, and in other parts of the province too, the provision of public housing has a lot more to do with private profit and political patronage than the public good.

For years grass-roots activists have been making consistent, specific and credible claims of endemic corruption in the eThekwini Municipality’s housing programme. When these claims have not been ignored they have been dismissed with sneering contempt or the complainants have been subjected to blatant and often violent intimidation at the hands of the police, politically connected businesspeople or party goons. Protests have been unlawfully banned and attacked by the police, and activists have been arrested on trumped-up charges, assaulted in detention and driven from their homes by party goons acting with clear police sanction.

For almost a decade now, Sutcliffe, a notoriously authoritarian individual and an unrelentingly aggressive spin doctor, has perversely tried to marshal all of the moral and political authority of the struggles against apartheid in support of the predatory cabal that have captured the Durban City Hall. He also likes to tell people that he is a Marxist geographer inspired by the prison writings of the Italian communist Antonio Gramsci.

The popular struggles against apartheid were not for a system that would build houses vastly inferior to those built during apartheid. It’s equally certain that they were not for a system in which the provision of public housing would be captured by political elites for massive private profit.

Marxist geography is premised on an affirmation of the equal right to the city and a critique of the way in which capital structures cities in its own interests. One of its central insights is that when capital drives development, space itself becomes a commodity with the result that poor people are driven out of cities. Marxist geography also stresses the value of popular resistance and opposes the popular struggle for the right to the city against the exclusion consequent to the subordination of society to money.

But at every turn Sutcliffe has backed capital and its smarmy allies in the predatory political elite against people struggling for the right to the city in Durban. Shack dwellers, street traders, fisher folk and residents of the highly polluted areas in south Durban have all had to confront Sutcliffe as the snarling face of a ruthless and at times violent municipal agenda that has consistently put private profits before ordinary people and the public good.

The municipality’s developmental model — the privatisation of public transport and the construction of casinos, a convention centre, a marine park and stadium — is a monumentally stupid repetition of the standard neoliberal urban planning model. This deeply anti-social model is punted by elites around the world precisely because it produces massive public subsidies for private profit at the direct expense of the interests of ordinary people.

In 2003, the municipal bus service in Durban was sold off for R70 million to Remant-Alton, a company chaired by the former ANC provincial treasurer, Diliza Mji, and run by Daniel Jagadasan, who had been convicted of bribing a municipal official. After a number of bailouts, the municipality eventually bought the Remant-Alton bus fleet back for R405 million in 2008.

uShaka Marine World was built at a cost of R700 million. It was supposed to be self-sustaining but has been bailed out by the city at a cost of R450 million.

The Moses Mabhida Stadium cost R3,1 billion and there is no viable plan for it even to be able to cover its running costs. It has been reported that it will cost the city R100 million to cover the losses expected at the stadium, uShaka and the International Convention Centre during this financial year.

In a decent society, a state housing programme exists to provide the best possible housing for as many people as possible. In Durban it is quite clear that the state housing programme has two key functions. Its minor function is to resegregate the city on the basis of class by moving poor people away from centrally located land that has high value on the market to peripheral dumping grounds with very little market value. Its major function is to distribute political patronage by enriching the politically well connected.

Provincial MEC for Local Government Nomusa Dube has said that she is serious about taking on the Herculean task of cleaning the muck out of the Durban City Hall. Whether or not the various investigations will be thorough, impartial and backed up with action remains to be seen. But even if the accountants are willing and able to do their job well, we must remember that what has gone so wrong in Durban is not only a matter for the accountants.

It is not the responsibility of accountants to take full measure of Sutcliffe and Mlaba’s lack of any vision for a just city, of the human cost of all this plunder and the long-term political consequences of the authoritarianism and violence that the state and the party have deployed to defend it.

This is political work that has to be undertaken, freely and safely, by the people who live in this city. If the ANC is not prepared to guarantee this freedom, in practice as well as in principle, then the prospects for any real cleanup of the Durban City Hall will be slim indeed.

Forensic audit of Sutcliffe, Mlaba et al

http://www.citypress.co.za/SouthAfrica/News/KZN-launches-probe-into-city-administration-20110317

KZN launches probe into city administration
2011-03-17 11:50

Paddy Harper

A wide-ranging forensic investigation into the embattled eThekwini Municipality after months of allegations of corruption and maladministration levelled against city manager Mike Sutcliffe, his administrative team and councillors, has been launched by KwaZulu-Natal’s Local Government Ministry.

The probe comes in the wake of a city appointed audit being suppressed by city officials and a damning auditor general’s report nailing Sutcliffe’s team for using emergency funding regulations to pay out more than R500 million in irregular expenditure for sub-standard low cost housing projects around the city.

Local government MEC Nomusa Dube said yesterday the earlier audits had provided prima facie evidence of maladministration and failure to abide by regulations around supply chain management and tender procedures and that her ministry had decided to step in and get to the bottom of the matter.

The new probe, which will be carried out by an experienced company of independent forensic auditors and would dovetail with separate investigations by the Special Investigation Unit (SIU) and other state agencies, would cover:

» Irregular expenditure caused by poor budget controls;

» Failure by city officials to follow supply chain management procedures around key infrastructure and housing projects;

» The failure of city official and councillors – including mayor Obed Mlaba – to disclose their financial interests;

Irregular tender procedures and awards;

» The illegal rental and sale of RDP houses;

» Irregularities in staff appointments and abuse of travel and other allowances;

» Fraudulent practices in the Durban Metropolitan Police; and

» Irregularities in the city’s development and planning department.

Dube said the probe would also take in any other information which came to light from the public and officials and said “serious steps’’ would be taken against any city official or councillor who refused to cooperate.

Earlier probes have been hampered by the refusal of key city officials to both cooperate and hand over documentation to investigators.

Dube said that while the city was “not collapsing’’ it was clear that “something wrong is taking place in the city’’.

She said when the probe was completed the city would be forced to take “decisive action and corrective measures’’.

Criminal charges would be laid against any official or councillor found guilty of corruption, fraud or maladministration, while civil action would be taken to recover city funds paid out illegally.She was unable to provide an exact timeframe for the probe to be completed, saying it would be retrospective and would “go as deep as it needs to go.”

– City Press

http://www.timeslive.co.za/local/article973466.ece/Mayor-and-city-boss-to-be-probed

Mayor and city boss to be probed
Mar 17, 2011 10:11 PM | By NIVASHNI NAIR

Durban mayor Obed Mlaba and city manager Mike Sutcliffe are to be investigated as part of a wider probe into alleged fraud and corruption in the eThekwini Municipality.

KwaZulu-Natal co-operative governance MEC Nomusa Dube said yesterday: “There is something wrong in this municipality and we believe that we need to investigate.

“We have been monitoring the latest developments in the municipality with keen interest and utmost concern.”

The ANC called on Dube to order a forensic investigation after the auditor-general found that the city had irregularly spent R535-million and the Ngubane audit implicated Sutcliffe and three officials in irregular housing contracts of R3.5-billion over the past 10 years.

Mlaba allegedly had shares in a company that nearly landed a R3-billion tender to convert the city’s waste to energy.

Dube said yesterday the investigation would cover:

*Irregular expenditure resulting from inadequate controls over the budget and payment processes;

*Non-disclosure of interests by councillors and officials;

*Irregularities in the awarding of contracts, payments and performance management of telecommunications;

*The alleged illegal rental and sale of RDP houses;

*Irregularities in travel and overtime allowances and appointment of staff; and

*Alleged fraudulent practices in the metro police.

The outcome of the investigation would compel the municipality to take decisive action and corrective measures and would lead to criminal and civil prosecutions if unlawful activities were unearthed, Dube said.

The forensic probe would begin immediately.

http://www.sowetanlive.co.za/news/2011/03/18/leave-no-stone-unturned

‘Leave no stone unturned’
18 Mar 2011 | Mhlaba Memela

KWAZULU-Natal MEC for cooperative governance and traditional affairs Nomusa Dube has appointed a forensic auditing firm to probe fraud, corruption and maladministration allegations in the eThekwini metro

Manase and Associates will lead an investigation into the affairs of the ANC-led municipality. This latest investigation will supersede all previous probes that were conducted into the affairs of the municipality.

The audit firm is tasked with unearthing any irregularities and maladministration concerning the awarding of tenders.

The municipality has hogged the headlines in the past few months following auditor-general Terrence Nombembe’s report indicating that R532million had been spent irregularly by the council.

Recently it also surfaced that mayor Obed Mlaba is part of a company that nearly landed a R3billion deal with the city to convert waste to energy.

The MEC said she had received representations and reports concerning allegations of maladministration, fraud and corruption.

“The documents include reports on an investigation requested by the accounting officer of the municipality undertaken by Ngubane and Company, the management letter of the auditor-general and an internal audit report,” Dube said.

She said it would appear from the findings of these reports that there is prima facie evidence of maladministration and a failure to comply with procedures and legislation.

“There is currently no evidence of any fraud and corruption,” Dube said. “The scope of these reports was, however, limited and it appeared to be additional areas of concern and further allegations, which have not been investigated.”

The forensic firm’s scope of investigation comprises allegations of illegal rentals and sale of RDP houses, non-disclosure of interests by councillors and officials, irregularities in the supply chain management in the awarding of tenders, payments and performance management in respect of telecommunications, human resource irregularities when recruiting, selecting and appointing staff.

Other allegations are the abuse of travel claims, overtime, allowances, development and planning offices, and non-compliance with street traders’ by-laws.

Dube said any other consequential matters that may arise will form part of the investigation.

“The eThekwini municipality still has a healthy balance,” she said.

Cosatu applauded Dube’s decision to institute a comprehensive forensic investigation into the affairs of the eThekwini municipality.

Secretary Zet Luzipho said the move is long overdue and appealed to Dube to “leave no stone unturned”.

http://www.iol.co.za/news/south-africa/kwazulu-natal/firm-to-probe-ethekwini-1.1043484

Firm to probe eThekwini

March 17 2011 at 09:38pm

A forensic auditing firm has been appointed to probe fraud, corruption and maladministration allegations in the eThekwini municipality, KwaZulu-Natal’s co-operative governance MEC said on Thursday.

“There is something wrong in the municipality and we believe there is a need to investigate,” Nomusa Dube told reporters in Durban.

The allegations relate to the awarding of tenders.

Auditor General Terrence Nombembe’s 2009/10 report indicated R532-million had been spent irregularly in the municipality, which runs the city of Durban.

The Mercury newspaper recently reported that mayor Obed Mlaba was part of a company that nearly landed a R3-billion deal with the city to convert waste to energy.

Dube said she had received representation and reports on claims of corruption, fraud and maladministration. Documents she received included a report following a probe by accountants Ngubane & Co, an eThekwini municipality internal report and the AG’s report.

“It would appear from the findings of these reports that there is prima facie evidence of maladministration and failure to comply with procedures and legislative provisions.

“In view of the seriousness of the allegations, we have deemed it appropriate to institute a forensic investigation.”

Dube however said the municipality would not be put under administration because it was not falling apart. “The municipality is not collapsing. It’s finances are okay.”

She invited whistle blowers to help the department get to the bottom of the problems. Dube said auditing firm Manase and Associates had been appointed to conduct the investigation, which would cover:

– Irregular expenditure resulting from inadequate budgetary controls, controls over payment processes and weak checks and balances.

– Non compliance with supply chain management policies for infrastructure and housing projects.

– Non disclosure of interests by councillors and officials.

– Irregularities in the awarding of contracts, payments and performance management of telecommunications.

– The illegal rental and sale of RDP houses.

– Abuse of overtime and travel allowances.

– Alleged fraudulent practices at the Durban metro police.- Sapa

M&G: eThekwini manager under fire

http://mg.co.za/article/2011-03-11-ethekwini-manager-under-fire/

eThekwini manager under fire

NIREN TOLSI – Mar 11 2011 00:00

The Hawks priority crime unit has “made inquiries” about eThekwini manager Mike Sutcliffe’s alleged failure to cooperate with a forensic audit of massive housing irregularities in Durban.

The audit is being conducted by Willie Hofmeyr’s Special Investigating Unit (SIU). The Sunday Times reported at the weekend that the arrest of senior eThekwini officials was imminent. However, Hawks spokesperson McIntosh Polela denied that the unit was investigating Sutcliffe, the deputy municipal manager for procurement and infrastructure, Derek Naidoo, or the housing head, Cogi Pather, and added that no warrants of arrest had been issued.

But Polela said Sutcliffe had written to the unit this week to “clear the air” and said that he “is willing to co-operate with us in any investigation” the Hawks are conducting.

But another well-placed Hawks source said that the eThekwini manager “apparently didn’t want to be a part of that investigation”. This week the SIU confirmed that although it is not currently involved in any investigation into irregular spending by eThekwini it has been mandated to investigate “suspect housing contracts” in the city.

The unit said it is investigating the “‘top 20 most dubious [housing] projects around the country” and action taken will include 10-year restrictions on companies doing work for the government, the “recovery of monies paid out to them as a result of their criminal activity” and prosecution where necessary.

The KwaZulu-Natal housing department confirmed that 13 SIU investigations are under way in the province, but could not say whether the municipality is under scrutiny.

At issue are council housing tenders that allegedly ignored supply chain management regulations. These were highlighted in the auditor general’s annual report and an independent report by auditing firm Ngubane and Company commissioned by the city’s audit and risk committee.

‘Irregular expenditure’

The auditor general found the municipality guilty of irregular expenditure totalling R532-million in the past financial year, most of it relating to housing projects. Ngubane and Company found that tenders for the refurbishment of the municipality’s rental stock in the Chatsworth areas of Westcliffe, Crossmoor and Bayview dating back to 2008 flouted proper supply chain management procedures.

The three companies that won the multimillion-rand tenders were Doctor Khumalo Construction, RGZ Project and Uhlanga Trading Enterprise. Also implicated in the report is Vaughn Charles and Associates (VCA), which was found to be “conflicted… having been involved in the procurement process from the specification stage right through to the evaluation and certification of payments to the service providers”.

The Ngubane report found that the municipality directly contravened supply chain management policy by allowing VCA control over the Chatsworth rehabilitation tender process.

Vaughn Charles and former president Nelson Mandela’s granddaughter, Nandi Mandela, were directors of Dolphin Whispers, which ran aground after defaulting on a R48-million loan from state-run Ithala Bank for an apartment block development on the Point Waterfront. Because of structural defects, the building remains unfinished six years after the initial loan was made.

The Ngubane report found that in Chatsworth the R23-million Bayview contract went to Doctor Khumalo Construction, which had no tax certificate, occupational health and safety certificate or Workmen’s Compensation Fund certificate, as legally required.

The report also found that Uhlanga Trading Enterprise’s contract price leapt from an initial R12,7-million to almost R22-million. A total of R16,7-million had been paid to Uhlanga by September 2008, compared with just R7,8-million according to payment certificates “which were found”.

RGZ Project’s contract price was doubled, from R8,7-million to almost R17,5-million. While the total amount paid to the company by August 2008 was R12,4-million, payment certificates that were found accounted for just R6,9-million. Sutcliffe, in a terse response to emailed questions from the Mail & Guardian, said that these figures are “not true” and Ngubane’s allegations that he, Pather and Naidoo had acted unlawfully are also “not true”.

He did not respond to the M&G’s query about the revised cost of the Chatsworth rehabilitation projects. Asked whether he was unwilling to cooperate with the SIU audit, he said: “Who from the Hawks said this about me?”

Sureshinee Govender, the eThekwini housing department spokesperson, said it will cost the department about R1-billion to demolish and rebuild 22 000 housing units inspected since May last year and deemed unfit for habitation.