Special Investigating Unit

Presentation to Parliament 17 June 2004

Willie Hofmeyr Head

Historical ReviewHistorical Review1995 – Heath Commission established by

E Cape government – headed by former Judge Heath1996 – 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

Historical Review (cont.)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

About the SIUAbout the SIU SIU is a Schedule 3A Public Entity Established by the President and reports to

him and ParliamentEmploys a multi-disciplinary approachInvestigations aim to establish whether civil

liability existsSIU refers any criminal conduct uncovered

by investigations to prosecution authority

SIU mandate & legal scopeSIU mandate & legal scopeMain 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

Adopting a civil law approachAdopting a civil law approachSIU 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

Adopting a civil law approach Adopting a civil law approach (cont.)(cont.)Can still take profit out of crime even if

cannot prove corruption or fraudSIU mandate differs from other agencies

such as SAPS & DSOIn multi-agency task teams SIU

complements other agencies’ functions- DSO, SAPS, AFU

Delivering an effective and Delivering an effective and efficient service 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

Delivering an effective and Delivering an effective and efficient service (cont.)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

PartnershipsPartnershipsA 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

• 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

Partnerships (cont)Partnerships (cont)

Report on progress of SIU Report on progress of SIU 10-point plan10-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

1. 1.  Creating certainty aboutCreating certainty about the future of the SIUthe future of the SIU

Uncertainty no longer affecting staff moraleIn past two years, very few resignationsMany members who previously resigned

due to uncertainty returned to UnitStill a need to address long term certainty

2. New cases for SIU2. New cases for SIUDemand for SIU services greater than everIn fact, more than we can cope – may have

to turn away some unless able to pay18 ongoing investigationsFinalised 10 matters through closure or

referral for prosecution or other actionInitiated 6 new investigations

3. 3. Growing capacity to fightGrowing capacity to fight corruptioncorruptionStaff 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 yearAnd further funding from departmentsRecruited auditors, financial analysts,

attorneys, former prosecutors, experienced investigators

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

3. 3. Growing capacity to fightGrowing capacity to fight corruption (cont)corruption (cont)

4. Improving representivity4. 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 workersManagers – only 1 black, 1 woman in 2001Now: 9 designated groups, 8 black, 3 women

5. Ensure competitive salaries5. 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

6. Promoting greater efficiency6. Promoting greater efficiencyDeveloped pro-active project approach

ensure greater impact and faster outcomesImproved project management approach

towards outcomes based resultsIdentify premier projects where potential

impact is greatestIntroducing time sheets

7.7. Legal changes to Legal changes to improveimproveeffectivenesseffectiveness 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

8.8. Establishing nationalEstablishing nationalpresencepresence

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

9.9. Improved cooperation withImproved cooperation withlaw enforcementlaw 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

Employment EquityEmployment Equity

0

20

40

60

80

100

120

140

160

180

200

2000/2001 2001/2002 2002/2003 2003/2004

Years

PDI's

White males

10. Building partnerships with10. Building partnerships with governmentgovernmentImportant to collaborate with government to

fight corruption effectivelyDealt with partnerships earlier

InvestigationsInvestigationsDeveloped 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

SIU investigative capacitySIU 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

1. Profiling: DCS1. Profiling: DCSEmanate from DCS after Jali commissionDCS 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

1. Profiling: DCS (cont.)1. Profiling: DCS (cont.)Investigating prisoner-warder allegations

through prison visitsNational procurement processesFirst Auto petrol & maintenance card abuse• Assaults, drugs• Booking prisoners out unlawfully• Selling of jobs• Promotions and appointments – nepotism• False qualifications • Irregular parole, remission

2. Profiling: DoJ2. 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

2. Profiling: DoJ (cont.)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

3. Profiling: DoT (Limpopo)3. Profiling: DoT (Limpopo)Focus on unlawful issuing and selling of

licenses, and irregular registration of vehiclesInvestigating all drivers’ licences issued since

1994 Examined 13 centres thus farFound another 5 000 licences issued

irregularly Another 1 400 physically cancelledConcluded 41 disciplinary hearings, 22

dismissals National DoT working with SIU to extend

investigation nationally

4. Profiling: WPP (KZN)4. Profiling: WPP (KZN)Serious financial irregularities at KZN Witness

Protection Program prior to takeover by NPAWorked 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

5. Profiling: DoH KZN5. Profiling: DoH KZNMassive 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 millionR3.4 million returned to governmentSIU pursuing claim against fidelity fund iro

bankrupt attorneys

6. Profiling: JACT6. 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

Return on InvestmentReturn on Investment

Outputs

Performance

Measures

2003/2004 Target

2003/2004

Actual

(unaudited)

2004/2005 Target

Investigation of corruption and prevention of losses to the State

Savings

(incl preventions)

Cash

recoveries

R70m

R50m

R373,9m

R 14,0m

R500m

R 30m

Totals R120m R387,9m R530m

Verification report detailVerification report detail

Cash Recoveries

(incl. cash recovered by third parties)

2003/2004

Actual

(unaudited)

Total

Notable cases: DCS DoE (Limpopo) DoH

R14,0m

R7,6m

R1,6m

R1,4m

Other areas of impactOther areas of impact

Description

2003/2004

Actual number of

cases

2004/2005

Target number of

cases

Evidence prepared for use in civil litigation

Evidence prepared for use by criminal prosecutions

Evidence prepared for use in disciplinary proceedings

165

52

114

40

200

330

BudgetBudget

Details

2003/2004

Unaudited

2002/2003

Audited

Income

- Government grants

- Partnership agreements

- Other

Expenditure

- Operational salary expenses

- Operational/investigation expenses

- Non-operational salary expenses

- Overhead expenses (incl. depreciation)

R40,9m

R25,5m

R12,9m

R 2,5m

R42,0m

R25,2m

R 6,3m

R 4,3m

R 6,2m

R26,3m

R22,9m

R 2,9m

R 0,5m

R30,1m

R 16,1m

R 5,3m

R 3,1m

R 5,6m

AdministrationAdministration 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

ConclusionConclusionSIU very successful year Made massive savings of R374 millionMade big impact in systemic improvements

in key departmentsPartnership collaborations – contribute to

successful SIU profileGood return on government investment

demonstrates any increase will be effectively used

Negotiate legal hurdles through legislative amendments