Zondo Inquiry secretary takes ‘special leave’ amid graft allegations

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JOHANNESBURG, January 18 – Deputy Chief Justice Raymond Zondo announced on Friday that the secretary of the commission, Dr Khotso de Wee, has taken a special leave pending the outcome of the investigation into allegations of taking bribes levelled against him.

Bosasa chief operations officer, Angelo Agrizzi said he was told that De Wee was one of senior officials of the justice and constitutional development department who were paid bribes by Bosasa in order to secure a 2013 tender for the installation of security systems at various courts around the country.

But Agrizzi did concede that he had no other information to confirm the correctness of this allegation.

Agrizzi is is currently testifying at the State capture inquiry. The Black First Land First staged a sit-in at the Zondo Commission demanding De Wee’s immediate suspension.

De Wee was appointed as the secretary for the commission in March 2018, but at the time the tender was awarded he was the chief operations officer (COO) at the department.

“After I had become aware of the above statement in Mr Agrizzi’s affidavit, I brought it to Dr De Wee’s attention. Dr De Wee confirmed that he was the COO of the Department of Justice and Constitutional Development in 2013. However, he has informed me that he was never at any stage paid any money by Bosasa or by anybody from Bosasa including the person mentioned in Mr Agrizzi’s affidavit,” Zondo said in a statement.

“Through its investigators, the Commission is investigating the allegation against Dr De Wee. In the light of this and the seriousness of the allegation against him, Dr De Wee has offered not to report for duty – in effect to take special leave – pending the outcome of the investigation of the allegation against him.”

Zondo said that he had accepted De Wee’s offer of taking a special leave. Zondo said that next week Tuesday he will appoint someone else as acting secretary of the commission and perform De Wee’s duties pending the outcome of the investigation.

On Friday, Agrizzi testified among other things that Bosasa had a scheme to defraud the department of correctional services using a frozen chicken supplier as the company had a catering contract with the department. He said Bosasa had to pay its chief accountant, Carlos Bonifacio, R10,000 a month to run this scheme.

Bosasa, according to Agrizzi, had at least seven other methods of raising cash, including casual workers and a ghost workers system, running cash bars and canteens at mining hostels, and pay-as-you-go telephones at Lindela Detention Centre.

Agrizzi said that the ruling African National Congress (ANC) in North West province was one of the beneficiaries of money laundering in which his former employers were allegedly involved after it asked for money for electioneering.

Agrizzi told the Zondo Commission of Inquiry into state capture that the North West government would sometimes pay Bosasa monies for non-existent software programmes at a youth development centre. Bosasa would later help the ANC in that province with electioneering money even though Agrizzi did not disclose for which election.

Agrizzi said that Syvion Dlamini, the director of professional services at Bosasa Youth Development Centres, and an unnamed MEC disclosed to him the purpose of the fraudulent IT contract. He said that estimate of the value of that North West transaction was about R3.4 million, of which R1.8 million was paid to a “client” for electioneering.

After Agrizzi said that Bosasa was involved in paying for an electioneering campaign of a certain political party, Deputy Chief Justice Raymond Zondo cornered him to mention at least the name of the party and not individual politicians, saying that there would be ample time for that.

“Do I have to say it, chair?” Agrizzi asked. “My answer to your question is the ruling party. If I recall, it was about R3.4 million. I think cash of R1.8 million was paid to the individual.”

Agrizzi also told the commission of a Bosasa scheme to defraud the department of correctional services using a frozen chicken supplier, as well as other zero-rated VAT products, as Bosasa had a catering contract with the department. He said Bosasa had to pay its chief accountant, Carlos Bonifacio, R10,000 a month to run this scheme.

Bosasa, according to Agrizzi, had at least seven other methods of raising cash, including casual workers and a ghost workers system, running cash bars and canteens at mining hostels, and pay-as-you-go telephones at Lindela Detention Centre.

Earlier, Agrizzi told the commission that Bosasa laundered its money and paid bribes using a web of fictitious  “arms-length companies”, cash cheques and fake invoices in order to win government tenders. He said the invoices paid out by Bosasa would later return to the company’s secret vaults as hard cash used to pay bribes.

He also testified that Bosasa exploited the deaths of employees’ relatives by defrauding a death benefit scheme that was insured by Metropolitan. Bosasa made profits of between 28 percent and 32 percent so auditors were not suspicious about any transaction, Agrizzi said.

Agrizzi explained the intricate system used by the company to allegedly launder money and pay bribes using a web of fictitious companies, cash cheques and fake invoices in order to win government tenders.

Agrizzi told the Zondo Commission of Inquiry into state capture that Bosasa and its chief accountant were involved in forming small “arms-length companies” with a short lifespan and using them to generate fake invoices.

The invoices paid out by Bosasa would later return to the company’s secret vaults as hard cash used to pay bribes.

Bosasa changed to a new system of drawing up dummy employees and issuing cash cheques after the Special Investigation Unit had picked this up. All this was done, Agrizzi said, in order to cheat the tax authorities.

“There would be companies that we eventually had to start up, register them, do the payments and then liquidate them when the everything had been paid,” he said in his testimony, referring to the second batch of his three thick affidavits.

“Basically the purpose of starting these companies was to facilitate these corrupt payments, there were a number of these companies but I think I remember five of them.”

“The method of concealing cash was issuing a cash cheque and fake invoices and cashing it at the bank, using companies that were near liquidation. They would issue fake invoices that had no VAT numbers. These were small companies, like Kgetlo Events, that had no VAT exposure and when I queried I was told that it was because they would not be queried by tax authorities.”

“Because these expenses were recorded as operational expenses, they would dilute profit margins and would affect any tax that you would have to pay to the revenue service. I have counted more than R120 million of tax evaded over nine years.”

Agrizzi detailed how a middleman had worked out a system in which Bosasa would pay Jumbo Liquor Wholesalers a large sum of money for an order of alcohol. At least a week later the middleman would deliver the exact amount of money Bosasa paid for liquor, taking a five percent to 7.5 percent cut for himself.

Bosasa would also exploit the deaths of employees’ relatives by writing two cheques, one for the actual benefit and another to pay bribes.

When Bosasa employees suffered bereavements, the company would pay out an advance instead of waiting for the death benefit policy, recover the cash from the insurance company and use that money to pay bribes.

“If a family member died, they would get two cheques. A Metropolitan cheque and a cash cheque, the second cash cheque would be issued from Bosasa but the employee would not get it. The cheque was a means of writing off cash Bosasa used for bribes,” Agrizzi said.

Earlier, Agrizzi said Bosasa had done a lot of favours for individuals helping it win contracts in government companies, including an official from the Airports Company of South Africa (ACSA).

“There was a lot of vehicle repairs that would invoice one or another Bosasa companies and people would take their cars into a garage near our offices and we would pay,” Agrizzi said.

“This included a security liaison officer at ACSA, Reuben Pillay, among others. It was early days when Bosasa got a contract to guard the multi-storey parking parkade at OR Tambo. Pillay was employed by ACSA and was involved with the Bosasa contract.” (ANA)