Establishment and Development of the SIU: A Historical Review of Anti-Corruption Efforts

2. Historical Review • 1995 – Heath Commission established by E Cape government – headed by former Judge Heath • 1996 – became a national body ito SIU Act 74/1996 • 1997 – first SIU set up by Proc R24 • 2001 – 1 August: New SIU set up by Proc R118 - Head Willie Hofmeyr

3. Historical Review (cont.) • Vision • To be a world class anti-corruption agency • Mission • An anti-corruption agency that performs high quality investigations of corruption and takes legal action to prevent and recover losses of state assets in the public interest

4. About the SIU • SIU is a Schedule 3A Public Entity • Established by the President and reports to him and Parliament • Employs a multi-disciplinary approach • Investigations aim to establish whether civil liability exists • SIU refers any criminal conduct uncovered by investigations to prosecution authority

5. SIU mandate & legal scope • Main purpose of SIU is to investigate corruption and serious maladministration in connection with the administration of state institutions, state assets and public money • Has limited mandate to investigate private sector conduct “which may seriously harm the interests of the public” • Cases are referred to the SIU by the President by proclamation

6. Adopting a civil law approach • SIU only institution that uses normal civil law to recover money (AFU has a special law) • Can investigate criminal matter and institute civil proceedings at same time • Corruption does not always amount to criminal conduct • In civil law only need to prove case on balance of probabilities • In civil law a negligent or even innocent misrepresentation is sufficient

7. Adopting a civil law approach (cont.) • Can still take profit out of crime even if cannot prove corruption or fraud • SIU mandate differs from other agencies such as SAPS & DSO • In multi-agency task teams SIU complements other agencies’ functions- DSO, SAPS, AFU

8. Delivering an effective and efficient service • SIU has skilled and experienced forensic auditors, commercial investigators, financial analysts, former prosecutors, attorneys and advocates • Provides forensic investigation services at no additional cost to departments • Able to do complete investigation and civil recovery, and assist in criminal prosecution or disciplinary inquiry

9. Delivering an effective and efficient service (cont.) • Private investigations generate a report referred to SAPS to obtain proper evidence, leading to delays • Can match almost all private sector services at about half the cost • SIU assistance with the investigation and prosecution of the criminal matter can assist with the resource constraints in the criminal justice system

10. Partnerships • A major innovation has been to work together with departments that have identified major maladministration or corruption problems • They have agreed to pay for the investigation – enables us to put dedicated resources at their disposal • Eg Correctional Services after Jali Commission • Justice – after AG reports • This has a number of advantages for those departments

11. Partnerships (cont) • The costs are less than half of private sector • Effective forensic investigations that produce court ready dockets • Recover losses and secure savings through civil litigation • Assist with disciplinary inquiries • Assist with prosecutions • Provide ongoing advice to ensure systemic improvements • The objectivity of the investigation • Also smaller projects with: DoT (Limpopo), Housing (KZN and national) • Far advanced with NDoT, ECP Municipalities

12. Report on progress of SIU 10-point plan • SIU commenced with 10 point strategy in 2002 to put the SIU “back in business” as one of the premier corruption fighting institutions in our country • Significant progress has been made in implementing this strategy

13. 1.  Creating certainty about the future of the SIU • Uncertainty no longer affecting staff morale • In past two years, very few resignations • Many members who previously resigned due to uncertainty returned to Unit • Still a need to address long term certainty

14. 2. New cases for SIU • Demand for SIU services greater than ever • In fact, more than we can cope – may have to turn away some unless able to pay • 18 ongoing investigations • Finalised 10 matters through closure or referral for prosecution or other action • Initiated 6 new investigations

15. 3. Growing capacity to fight corruption • Staff increased by 57% (121 to 190) • Mainly because of significant additional funding from departments – now nearly 31% of budget • Staff may increase by 60% this year to about 300 • Received 35% increase in budget this year • And further funding from departments • Recruited auditors, financial analysts, attorneys, former prosecutors, experienced investigators

16. 3. Growing capacity to fight corruption (cont) • Training department established, and donor assistance • Start own trainee investigators programme – to improve capacity and representivity • Also a proper Performance Development Programme, and Potential Leadership Programme • Established an Internal Integrity Division to ensure highest level internal integrity

17. 4. Improving representivity • SUI has an employment equity plan and employment equity forum • Major focus in recruitment to improve representivity, especially at a management level • 80% (47 of 59)of new staff from designated groups • 67% of all permanent staff are from designated groups • 43% are black - 48% incl contract workers • Managers – only 1 black, 1 woman in 2001 • Now: 9 designated groups, 8 black, 3 women

18. 5. Ensure competitive salaries • New salary grading implemented to align salaries with the public and private sector  • Entire process completed and all staff on placed on correct levels • Enabled SIU to have proper career paths and retain present staff • Have been able to attract good quality applicants

19. 6. Promoting greater efficiency • Developed pro-active project approach ensure greater impact and faster outcomes • Improved project management approach towards outcomes based results • Identify premier projects where potential impact is greatest • Introducing time sheets

20. Legal changes to improveeffectiveness • Effectiveness of SIU severely affected by a number of judgments re ability to litigate • Present referral processes re proclamations are ineffective and cumbersome • SIU propose amendments to clauses relating to litigation and power to authorise investigations internally • SIU obtained opinion from senior counsel on the amendments, and related constitutional issues • Urgent amendments to Parliament second half of year

21. Establishing nationalpresence • Previously SIU based in East London with teams for each province and a satellite office in Umtata • Decided that it would be more effective to establish a national presence • Pretoria office now fully established • Head office move to Pretoria end 2004 • Durban office experienced significant growth • Satellite offices in Nelspruit and Cape Town established • These offices beginning to generate work in their regions

22. Improved cooperation withlaw enforcement • SIU enjoy good relations with number of law enforcement agencies and government institutions: SAPS, DSO, NPA, OAG, PSC • In process of finalising MoUs with these agencies • SIU involved in multi-agency task teams with a number of other agencies wherein each agency complement powers others, eg. DCS, JACT • Due to resource constraints in the criminal justice system, SIU provide capacity deal with prosecution, criminal investigations, etc. • Integrated project management approach result in recognition of each agency’s contribution

23. Employment Equity

24. 10. Building partnerships with government • Important to collaborate with government to fight corruption effectively • Dealt with partnerships earlier

25. Investigations • Developed a clear focus for investigations based on environment scan, internal case audits, review of SCOPA and AG reports • Investigations focus on national, provincial and local departments and some parastatals • SIU focus informed by its strong forensic investigative capacity maladministration identified in some government departments

26. SIU investigative capacity • SIU provides full investigation of corruption cases • Members can take proper affidavits • Powers of search and seizure • Power to interrogate witnesses and suspects under oath similar to DSO • Witnesses have to answer self incriminating questions • Strong forensic investigative capacity • Can ensure civil, criminal or internal disciplinary outcome • Completed investigations resulting in court ready cases, civilly or criminally • An operative Special Tribunal will ensure speedy litigation proceedings unlike delays in ordinary civil courts

27. 1. Profiling: DCS • Emanate from DCS after Jali commission • DCS funding half the cost of a team of 25 • Recovered R17 million from 6 doctors • Secured savings of R370 million re medical aid – prev year R122 million • 113 matters referred for further criminal investigation and prosecution • Incl Prov Commissioner Eastern Cape • 39 internal departmental hearings

28. 1. Profiling: DCS (cont.) • Investigating prisoner-warder allegations through prison visits • National procurement processes • First Auto petrol & maintenance card abuse • Assaults, drugs • Booking prisoners out unlawfully • Selling of jobs • Promotions and appointments – nepotism • False qualifications • Irregular parole, remission

29. 2. Profiling: DoJ • Focus on maladministration and possible corruption at 40 magistrates’ courts: • Main focus – Estates, maintenance, overtime and fines • Secondary – Bail, leave, S&T, etc • Work in terms of comprehensive audit-based generic work-plan • Completed investigations at 8 Magistrates Courts • Additional 4 courts are nearing completion • Ongoing investigation at 9 courts

30. 2. Profiling: DoJ (cont.) • Recovered R258 660 from DoJ officials • Calculated the total potential loss to DoJ at R19 million • 49 criminal cases being investigated against DoJ officials • And 54 disciplinary cases

31. 3. Profiling: DoT (Limpopo) • Focus on unlawful issuing and selling of licenses, and irregular registration of vehicles • Investigating all drivers’ licences issued since 1994 • Examined 13 centres thus far • Found another 5 000 licences issued irregularly • Another 1 400 physically cancelled • Concluded 41 disciplinary hearings, 22 dismissals • National DoT working with SIU to extend investigation nationally

32. 4. Profiling: WPP (KZN) • Serious financial irregularities at KZN Witness Protection Program prior to takeover by NPA • Worked with new Director to investigate • Rentals from family and friends of staff members • Safe house rentals inflated • Paid rent for houses that do not exist • Mismanagement of resources / lack of controls • Improper handling of witnesses • Criminal charges against 2 previous employees and 6 estate agents for fraud committed to value of R4.3 m thus far – bail R 1 million

33. 5. Profiling: DoH KZN • Massive investigations of all state subsidies granted in Gauteng, KZN and N Cape • Identify several attorneys involved in fictitious subsidy claim schemes with housing money • Fraud amounting to more than R20 million • R3.4 million returned to government • SIU pursuing claim against fidelity fund iro bankrupt attorneys

34. 6. Profiling: JACT • Joint Anti Corruption Task Team in Eastern Cape – with SAPS, Scorpions, AFU, AG • SIU instrumental in setting up infrastructure • Several SIU members seconded to work full-time on JACT • JACT has a caseload of 340 cases • Investigations ongoing at various departments, which include essential service providing departments such as Health, Education, Public Works and Welfare • In the past year JACT has made 96 arrests

35. Return on Investment

36. Verification report detail

37. Other areas of impact

38. Budget

39. Administration • Spent R11.9m more • Proud that overheads only increased by R1.8m – 15% of increased spending • Cut expenses to the bone – to extent of staff sharing rooms when travelling • Excellent administration and financial controls • Fully PFMA compliant • Good use of information technology • Serious about training – eg CBT • Filled 59 new positions – received 9140 applications

40. Conclusion • SIU very successful year • Made massive savings of R374 million • Made big impact in systemic improvements in key departments • Partnership collaborations – contribute to successful SIU profile • Good return on government investment demonstrates any increase will be effectively used • Negotiate legal hurdles through legislative amendments