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Tens of millions out, billions in Half II: Firm paid tens of millions to ANC, and Malema scored huge in Ekurhuleni

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  • LTE Consulting, a politically related consulting agency, paid tens of millions to EFF chief Julius Malema and numerous ANC constructions.
  • The corporate’s patronage seems to have secured political help for it in a botched Limpopo water venture, and earn it favour within the awarding of profitable authorities tenders.
  • LTE obtained greater than R345 million out of Ekurhuleni from contracts.

Politically related businessman Thulani Majola has disbursed his largesse far and huge, and throughout political divides – his patronage spreading as each the political panorama and his personal pursuits have turn out to be extra diversified.

Since 2016, he has paid greater than R14 million to varied ANC entities. He has additionally paid greater than R3 million to Santaclara Buying and selling, a entrance firm of EFF chief Julius Malema (see graph in Half 1 of the collection).

Majola’s historical past of bankrolling the ANC predated his relationship with the EFF, however because the latter grew in political affect, so too did Majola’s monetary help for Malema and his celebration.

Because the 2016 municipal elections made the EFF a kingmaker in Johannesburg and Tshwane, and demonstrated the celebration’s clout, Majola’s funds to Malema have tracked the celebration’s rise. Aside from the Malema firm, he has made funds to an organization linked to EFF secretary-general Marshal Dlamini, a key fixer in metros.

As recounted in Half I of this collection, the EFF management got here to his help in Giyani, Limpopo, the place his firm was slowed down in a botched multibillion-rand water venture.

Malema’s help didn’t forestall the venture from finally collapsing, however by that point Majola had shifted his focus.

He has honed in on native powerbrokers elsewhere, seemingly courting politicians wherever he does enterprise. In KwaZulu-Natal, the place he bagged a R100 million infrastructure evaluation tender, he paid the provincial ANC – see Huge cash in KZN alongside.

Equally, in Ekurhuleni, he has given cash to the native ANC, which runs the metro.

Majola’s political connections have been brazenly on show earlier than. A late 2019 {photograph} snapped at Mzwandile Masina’s 45th birthday celebration reveals the Ekurhuleni mayor standing with, amongst others, ANC nationwide govt committee member Tony Yengeni, Malema, and then-EFF spokesperson Mbuyiseni Ndlozi. Between Malema and Ndlozi, in a bowtie and darkish blue dinner jacket, is a grinning Majola.

Thulani Majola, second from proper, at a celebration together with politicians together with Julius Malema, Mbuyiseni Nldozi, Mzwandile Masina and Tony Yengeni.

The EFF didn’t reply to requests for remark for this text. Spokesperson Vuyani Pambo stated a 2019 ban on amaBhungane remained “firmly” in place.

A spokesperson for the Ekurhuleni metro stated the mayor didn’t have a detailed relationship with Majola.

The spokesperson stated:

Mr Majola didn’t obtain a private invite to the chief mayor’s 45th birthday occasion. The mayor is a well known public determine, and his birthday celebration attracted many patrons. It have to be said that there’s a differentiation between figuring out a person and having a detailed relationship with somebody.

AmaBhungane makes an attempt get remark from ANC spokesperson Pule Mabe elicited no substantive response.

In earlier correspondence with amaBhungane, Majola and LTE admitted to R200 000 in funds to Santaclara that had been reported on by the Sunday Occasions. However they denied figuring out Santaclara was linked to Malema – solely it sought donations for political T-shirts.

In addition they denied any additional funds to Santaclara or any to DMM Media and Leisure, the corporate linked to the EFF secretary-general.

Majola and LTE distanced themselves from allegations the EFF had lobbied on LTE’s behalf in Giyani or the cash paid to Santaclara had something to do with political safety, saying if the EFF had engaged the federal government over the water venture, “LTE was not celebration to any of those engagements”.

They didn’t reply to later questions on whether or not the tens of millions they paid to the ANC and EFF had been linked to tenders in Ekurhuleni or elsewhere, or whether or not they had been in alternate for political goodwill from the 2 events.

When it rains, it pours

From 2016, the Metropolis of Ekurhuleni, considered one of Gauteng’s main industrial centres, turned LTE’s new rainmaker, awarding the corporate a collection of enormous contracts. Since that 12 months, the metro had paid it in extra of R345 million based on detailed data the Metropolis disclosed in response to a Promotion of Entry to Info Act request.

On 15 July 2016, Ekurhuleni marketed a young for the institution of a panel of “technical useful resource groups” to supply constructed atmosphere consulting for the Metropolis’s actual property division over a three-year interval.

Over the following 5 days, LTE paid R2 million to the ANC in Gauteng and an additional R500 000 to the celebration’s Ekurhuleni area.

The funds got here simply in time for the ANC. Hotly contested native authorities elections had been solely a few weeks away.

In that very same month, Santaclara, the Malema entrance firm, additionally obtained cash: that preliminary LTE fee of R500 000 talked about in Half I. Simply what this fee was tied to – Giyani, Ekurhuleni or maybe solely a marketing campaign donation – stays unclear.

Although there are indications that a few of LTE’s funds to politicians could have been tied to particular tenders – such because the fee to the ANC in Ekurhuleni coinciding with a young from that metro – different funds can’t be linked to specific business alternatives for LTE.

It’s potential that Majola made common funds to events to earn their favour, and retain it, whereas on the similar time doling out extra money for specific quid professional quos.

By the tip of the 12 months, LTE’s appointment to the constructed atmosphere panel was confirmed, alongside a handful of different service suppliers. A letter confirming such is dated 25 November 2016. Bid paperwork present effectively over 100 corporations submitted bids, however the majority had been rejected on one or different technicality.

The worth of the work the panel was anticipated to carry out was estimated at R911 million excluding VAT and escalations, and can be divided up among the many panel members based mostly on how effectively they scored within the bid. LTE was given an in-principle allocation of round R81 million of the full, although it will earn far in extra of that.

Requested if Majola’s funds to politicians had any affect on LTE profitable tenders from Ekurhuleni, the metro’s spokesperson stated: “This allegation is unfounded and never true. The Metropolis of Ekurhuleni follows all due processes outlined within the Municipal Finance Administration Act [MFMA] and the Metropolis’s provide chain administration insurance policies in awarding contracts.

“The Metropolis follows a clear aggressive bidding course of in awarding contracts and it have to be emphasised that our bid adjudication course of is open to the general public. It should even be said for the document that, by way of MFMA no politicians are concerned in any course of associated to the awarding of contracts/tenders.”

Pay for play?

LTE’s success in scoring the 2016 consulting tender was adopted by one other Ekurhuleni tender in October of the next 12 months, once more awarded by the Metropolis’s actual property division.

The division deliberate to nominate “various constructing know-how contractors … on an as and when required foundation … till 30 June 2020”.

Service suppliers can be appointed to considered one of 4 panels from the place they might be tasked to supervise building initiatives for the metro from starting to finish, utilizing applied sciences and supplies to make constructing extra sustainable, eco-friendly and low price.

LTE’s bid, in a three way partnership with Setheo Engineering, was profitable and it was appointed to one of many panels. Nevertheless, LTE would discover itself in a partnership that turned ugly.

Timeline graphic of Giyani saga

Setheo Engineering was already a controversial firm. On the centre of a R126 million Johannesburg venture in 2015 to improve the Eldorado Park substation, it was accused of colluding with officers to be paid for work that was not carried out, and falsifying a financial institution assure.

However this time spherical, Setheo could have been outsmarted by LTE.

In courtroom papers, Setheo alleged LTE reduce it out of the tender, commencing work with out informing it. This was solely found when one other firm, Afribizz Development, “got here knocking at [Setheo’s] door demanding fee for having carried out subcontracting companies for the JV”.

Setheo, in its model, had by no means contracted with Afribizz, which presumably had been subcontracted by LTE.

Setheo didn’t reply to questions for this story, saying the case was nonetheless earlier than courtroom.

In 2017, the 12 months LTE received positioned on the choice constructing know-how panel, Majola and LTE paid a complete of R1 350 000 to the ANC and R650 000 to Santaclara.

LTE continued to generate profits from contracts beneath this panel till at the very least the tip of 2020. It raked in at the very least R160 million, the info disclosed by the Metropolis in response to our access-to-information request reveals.

Enjoying the panels recreation

Once more, although it’s tempting to surmise a agency hyperlink between LTE’s earnings bonanza and its political donations, the proof is inconclusive.

Earlier amaBhungane exposés on a Johannesburg fleet tender and a Tshwane gasoline tender the place contractors made funds to Santaclara and one other Malema firm gave insights into how tenders could have been manipulated. How Ekurhuleni tenders would have suffered the identical destiny – in the event that they did regardless of checks and balances – isn’t identified.

Nevertheless, the association of getting panels of pre-approved service suppliers who may very well be referred to as upon as and when wanted, as within the case of the Ekurhuleni tenders, seems to have suited LTE very effectively.

A number of service suppliers are appointed to a panel, normally for a interval of some years, and work is allotted between them over that point.

Panels in concept present an environment friendly means for state our bodies to obtain from a dependable pool of prequalified service suppliers, as a substitute of getting to exit on time-consuming open tenders for each venture of a specific sort, reminiscent of building.

However panels additionally create a further alternative for corruption within the technique of distributing work amongst corporations.

Firms on panels are alleged to be given a good alternative to cite for and carry out work, as an example by being allotted initiatives based mostly on a rotation system, or based on how effectively corporations scored within the tender course of. However in follow there could also be inadequate oversight in allocating the work and it could be left to the discretion of officers.

An Ekurhuleni official advised amaBhungane this created alternatives for favouritism. “Why would one firm get R100 million, and one other get R10 million?”

There could also be authentic causes for some degree of disparity. However why, as was the case with corporations that had been on considered one of LTE’s panels, would some get little or no probability in any respect?

In keeping with two sources from one firm, they didn’t obtain a single venture all through the years their panel existed. They claimed they had been approached by nameless officers from the metro who tried to extort bribes from them.

One stated the officers made it clear if the corporate needed work as a panel member, it must pay.

The supply stated:

We’re not actually related individuals, we needed [to be on the panel] as a result of it is one thing we would prefer to get entangled in. We knew we had been up towards corporations which have good relationships at a political degree in Ekurhuleni, and we had been hoping we would get one thing to do in some unspecified time in the future, however sadly that by no means occurred.

One other firm approached by amaBhungane stated it had obtained no work in any respect.

And the proprietor of a 3rd firm on considered one of LTE’s panels stated there was nothing to make sure equity and transparency as soon as a panel was fashioned. The proprietor claimed his firm solely obtained one comparatively small venture of beneath R10 million, they usually confronted an uphill battle getting paid.

LTE, alternatively, has benefitted handsomely from the panels it sits on.

Whereas LTE was initially allotted work to the worth round R81 million as a part of its 2016 “technical assets groups” panel, it ended up making about double that quantity. And from the 2017 panel it made an identical quantity once more: R161 million.

All advised, since 2016, the metro paid LTE greater than R345 million for contracts beneath the 2 panels plus a couple of smaller ones – a wholesome return on funding for Majola, whether or not or not he paid the events for particular favours or simply to maintain them candy.

Responding to the allegation of unfairness within the allocation of labor, a Metropolis spokesperson stated: “The Metropolis of Ekurhuleni follows all due processes outlined within the Municipal Finance Administration Act and the Metropolis’s provide chain administration insurance policies in awarding contracts.

“The Metropolis follows a clear aggressive bidding course of in awarding contracts, and it have to be emphasised that our bid adjudication course of is open to the general public.

“Please present us with these alleged ‘main discrepancies and inequities’ in how work has been divided. We urge the contractors to method the South African Police Service to report any incidents of extortion or corruption that will have taken place.”

*To undergo the paperwork utilized in amaBhungane’s investigation, click on right here to entry the proof docket.

– Further reporting by Information24

Malema’s entrance – a refresher

Santaclara Buying and selling, the recipient of LTE donations, has figured in earlier amaBhungane investigations. It was implicated in a questionable Johannesburg R1.2-billion fleet tender and a gasoline tender value lots of of tens of millions in Tshwane. In each metros, the EFF had political clout as de facto companions in unstable DA-led coalitions.

AmaBhungane’s prior reporting, additional monetary data which amaBhungane has seen, and Sunday Occasions stories, have confirmed that Malema controls the account and that he personally – and to an extent the EFF – have benefitted from Santaclara.

Santaclara’s director is Jimmy Matlebyane, a Polokwane-based DJ who goes by the title Jimmy-fire Malema on Fb, and frequently performs at Makete Lodge, a enterprise enterprise intently tied to Malema household pursuits.

Matlebyane has additionally listed 49 Edward Rubenstein Drive in Sandown, Johannesburg, amongst his residential and enterprise addresses – the identical property owned by Malema’s Munzhedzi Household Belief.

Matlebyane hung up when amaBhungane contacted him for remark.

Malema doesn’t reply to amaBhungane questions, however has beforehand distanced himself from Santaclara, telling Sunday Occasions he had “no relationship” with it.

He stated: “They’re younger boys who’re looking for their ft … they’re authentic merchants, however due to their affiliation with me, you guys need to destroy them. Go on.”

Santaclara is utilized in a lot the identical means as one other of Malema’s corporations, Rosario Funding, which has additionally catered to each private and celebration pursuits.

Rosario, previously Mahuna Investments, can be fronted by a relative of Malema – his cousin, Matsobane Phaleng.

Like Santaclara, Rosario has obtained cash from corporations which have been awarded authorities tenders. The 2 corporations are an ironic nod to revolutionary symbolism. Rosario, Argentina, is the place Che Guevara was born. Santaclara is the Cuban city that homes Guevara’s mausoleum.

Huge cash in KZN

One other huge cash spinner for LTE was a contract it obtained from KwaZulu-Natal’s cooperative governance and conventional affairs division (KZN Cogta). The contract has echoes of the Ekurhuleni tenders.

On four August 2017, KZN Cogta marketed a young to nominate a panel of engineers and infrastructure practitioners, who can be appointed to varied initiatives when required.

Being on the KZN panel supplied LTE entry to doubtlessly profitable infrastructure jobs, and in mid-2018 a panel which included LTE was established.

From the time the panel was marketed to January 2019 when LTE gained its first contract as panel member, Majola paid R3.9-million to ANC accounts, Santaclara and DMM Media and Leisure, the corporate that featured partially I that’s linked to EFF secretary normal Marshall Dlamini. Dlamini’s political stronghold is in KwaZulu-Natal and he’s credited with constructing the celebration’s membership in that province.

There is no such thing as a direct proof that any of those funds associated to the KZN Cogta tender and most had been in all probability not. However fee of R1-million to the ANC in KZN on 12 January 2019 seems greater than coincidence, as a result of LTE’s letter of appointment to the KwaZulu-Natal contract is dated the day earlier than – and it’s the first Majola donation we are able to see to the ANC in that province.

The R3.9-million in ANC and EFF-linked donations was small change subsequent to the worth of LTE’s January appointment “to undertake the evaluation of the state of present water, sanitation and electrical energy infrastructure” in KwaZulu-Natal.

The job’s price ticket was a whopping R100 562 000 earlier than escalations.

KZN Cogta supplied data on the contracting course of and scope of the work carried out by LTE, however didn’t reply to questions relating to LTE’s political funding.

*For simple studying, obtain amaBhungane’s free e book on our Tens of millions out, billions in two-part investigation. For the cellphone model click on right here, and for the desktop model click on right here.


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