Inflated prices, stolen food parcels and spending sprees: Covid-19 looting reeks of state capture, says Ramaphosa

President Cyril Ramphosa says that the latest revelations of the alleged looting of Covid-19 funds by government officials has “opened the wounds” of state capture – with the president promising to launch new initiatives to tackle the culture of corruption in the country.

In his latest letter to the public published on Monday (3 August), and following several reports of billions of rands being looted by so-called “Covidpreneurs”, the president pointed to the types of Covid-19 looting that has been brought to the attention of authorities.

These include:

  • Businesses that have inflated the price of a surgical mask by as much as 900%;
  • Corruption in procurement processes;
  • Allegations of councillors stockpiling emergency food parcels – meant for the poor – for their own family;
  • A councillor diverting water tankers en route to a needy community to their own home;
  • An entire family whose member stole funds meant for unemployed workers to go on a spending spree, “buying cars, paying for renovations and beauty treatments, and even tombstones”.

“Attempting to profit from a disaster that is claiming the lives of our people every day is the action of scavengers. It is like a pack of hyenas circling wounded prey,” he said.

“As we find ourselves in the grip of the greatest health emergency our country has faced in over a century, we are witnessing theft by individuals and companies with no conscience.”

The president said that the latest revelations of Covid-19 looting have “opened up the wounds of state capture”, where senior figures in society seemed to get away with corruption on a grand scale.

“As a country, we have done much to turn our back on that era by disrupting and dismantling the networks that had infiltrated government, state companies and even our law enforcement agencies to loot public resources,” he said.

While much has been done to rebuild vital institutions like the National Prosecuting Authority, SA Revenue Service and the Hawks to combat this type of behaviour, “it is clear that we need to do more. And that we need to act more decisively,” Ramaphosa said.

New approach

He said that regulations were put in place to safeguard Covid-19 funds and relief packages, which empowered the Competition Commission and the Auditor General to ensure that things moved above board.

However, the evidence at hand now shows that these measures failed to prevent looting, he said – with further action needed.

“Just over a week ago, I signed a proclamation authorising the Special Investigating Unit (SIU) to investigate any unlawful or improper conduct in the procurement of goods and services during the national state of disaster.

“This is a broad remit that extends across all spheres of the state and, importantly, provides for civil proceedings to recover misappropriated funds. It enables the SIU to probe each credible allegation that is made about the theft of Covid-19 funds,” the president said.

“I will be receiving interim reports every six weeks on the cases at various stages of investigation and prosecution. When investigations yield evidence of criminality, they will be speedily referred for prosecution.”

To assist in this, the president said that a ‘fusion centre’ will be established, which will bring together the Financial Intelligence Centre, the Independent Police Investigative Directorate, National Prosecuting Authority, the Hawks, Crime Intelligence and the SAPS Detective Service, South African Revenue Service, Special Investigating Unit and the State Security Agency.

“These bodies are now working together not just to investigate individual allegations, but also establish linkages between patronage networks that are trying to hide their activities. Because of this cooperation, prosecutions should proceed more quickly and stand a better chance of success,” he said.

Ramaphosa said that this new approach will not only safeguard Covid-19 funds today, but will help prevent this kind of corruption in the future.

Culture of corruption

The president said that to effectively tackle corruption, it requires a culture change, calling on citizens and officials to adopt a “new consciousness and new sense of accountability”.

In particular, he said that public servants and political office-bearers need to stop abusing state contracts for financial gain.

“We must allow ordinary members of the public who have interest in doing business with government a fair chance to bid for such business opportunities, instead of passing on inside information about opportunities to our families and friends.

“We already have regulations, such as annual financial disclosure, in place to discourage public servants doing business with the state. Anyone bidding for state work has to make a declaration of interest, including whether anyone connected to the bid is employed by the state,” he said.

However, this is not enough, the president said.

“While everyone in South Africa has a right to engage in business activities, we are faced with the real problem of families and friends of political office-bearers or public servants receiving contracts from the state.

“Not all conduct of this sort is necessarily criminal, but it does contribute to a perception and a culture of nepotism, favouritism and abuse. And it undermines public confidence in the integrity of our institutions and processes.”

Ramaphosa said that the government will “finally deal” with the entrenched patronage networks that enable government employees to bid for state contracts through their friends and relatives.

While he gave no specifics on how this will be dealt with, the president said that it will require better laws and stronger enforcement – and also political will and social mobilisation.

“We will not allow public funds hard-earned by loyal taxpayers or donations by patriotic companies and individuals and the international community to vanish down a black hole of corruption.

“Those found to have broken the law to enrich themselves through this crisis will not get to enjoy their spoils, regardless of who they are or with whom they may be connected.”

Read: Another R1.2 billion in ‘Covidpreneur’ looting under investigation: report

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Inflated prices, stolen food parcels and spending sprees: Covid-19 looting reeks of state capture, says Ramaphosa