President Cyril Ramaphosa has slammed criminals who took advantage of the country’s Covid-19 pandemic to make a quick buck.
Writing in his weekly open letter to the public, Ramaphosa said that the country has become far too used to hearing stories about corruption.
However, he said that little could have prepared South Africa for seeing, in detail, the lengths to which some people have gone to steal at a time when the nation is facing the worst health emergency in modern times.
“The report released last week by the Special Investigating Unit (SIU) into procurement during the coronavirus state of disaster makes for disturbing reading,” he said.
“At the same time, it provides encouragement that unlawful deeds are being uncovered and action is being taken against those who are responsible.”
Ramaphosa said that what is most disturbing is that this was not simply a matter of negligence or poor oversight. “There was wilful intent to defraud,” he said.
“As scores of people became ill and many were dying, some people saw an opportunity to cash in. They purposefully set out to steal millions in public money, misuse state property and divert resources meant for the South African people into personal pockets.
Individuals and entities with no experience in the manufacture, supply of distribution of critical medical supplies hastily set up companies, he said, noting that in some case they were registered on national databases and received purchase orders.
“In other cases, they weren’t even registered but profited nonetheless. This includes entities operating as a car-wash and a shisa nyama.”
The president said that suppliers used different front companies to obtain multiple contracts from the same department.
Personal protective equipment and other supplies were procured at inflated prices, in some cases at mark-ups exceeding 400%, while some products did not meet the necessary specifications.
“When investigations started, some companies did not have paper trails to substantiate their procurement. Some officials refused to comply or claimed they were ‘only following instructions’ from their superiors. Documents were destroyed.
“The diversion of resources meant for public benefit came at a direct cost to people’s health and lives,” said Ramaphosa.
Ramaphosa said that all those involved in wrongdoing will be dealt with ‘harshly and appropriately’.
“They will not get to enjoy their ill-gotten gains, as steps have been taken to recover stolen money, including the freezing of bank accounts.
“A number of civil litigation cases have been instituted for the return of ill-gotten money. Specific cases have been referred to for prosecution.”
He said that contracts found to be unlawful have been cancelled, while government entities have been directed not to make payments to the service providers pending the outcome of investigations and/or civil proceedings.
The president said that similar action is being taken against individuals and companies implicated in maladministration and fraud around the Covid-19 Temporary Employment Relief Scheme.
“This includes employers who pocketed the benefits owed to their staff, or kept quiet about TERS funds paid to them by mistake.”
The president said that a number of ‘hard lessons’ have been learned as part of this process.
“It has taught us that every regulatory, legislative and procedural loophole must be closed to ensure there is no point of entry for those who seek to exploit them.
“It is clear that those who have made profits from the Covid-19 disaster, and those who have colluded with government officials, took advantage of the urgency of the moment to disregard National Treasury and provincial treasury instructions.
“This was especially the case in the earliest days of the pandemic when PPEs and other equipment were in short supply. It has shown the need for a coordinated approach to fighting corruption that brings in several organs of state.”
However, the he acknowledged that a significant amount of damage has already been done.
“Unfortunately, the reprehensible conduct of those who do have cases to answer has created the impression that the entire Covid-19 period has been marked by corruption and thievery of state resources.
“I would like to assure South Africans that the net is closing on those involved in corrupt acts. This includes not just private companies, but also those in the public service who thought they could collude with outside individuals to sell off resources meant for our people.”