Treasury probes R320m IEC lease agreement

The Treasury is conducting a forensic investigation into the R320 million lease agreement reportedly irregularly concluded between the Independent Electoral Commission (IEC) and a property development company. There is also a dispute as to whether the company had submitted the tax certificate at the time of bidding. Sources told The Sunday Independent that the Treasury says the certificate was not submitted on time. Treasury spokeswoman Phumza Macanda said they were following Public Protector Thuli Madonsela’s recommendation that chief procurement officer Kenneth Brown should commission a forensic investigation.

The probe will examine the lease and the related expenditure to determine the fair market value of the contract and recover any extravagant expenditure incurred. Madonsela also asked Brown to investigate the transfer of the agreement from Abland to Riverside Office Park Trust. The Treasury has already conducted a review of the lease of the IEC’s Centurion head office from Abland. “As to whether the lease will be invalidated or not, that would depend on the outcome of the investigation,” Macanda said. Abland director Dave Savage said: “As part of the bidding process and in response to requests made by the IEC, the necessary tax clearance certificates would have been issued.” Abland’s BEE partner is IEC chairwoman Pansy Tlakula’s business associate and ANC MP Thaba Mufamadi’s company, Manaka Property Investments.

Madonsela found that Manaka owns 20 percent of Abland and that Tlakula’s role amounted to improper conduct and maladministration. Tlakula told The Sunday Independent three weeks ago that she had filed papers at the Pretoria High Court to review and set aside Madonsela’s findings and recommendations. Madonsela’s spokesman Oupa Segalwe said she would oppose that application. The IEC had already incurred more than R63.2m in irregular expenditure for the Riverside Office Park’s monthly rentals by the end of March this year, according to its annual report in which it blames the irregular expenditure on “a technical issue in respect of compliance… namely the failure to indicate the manner for evaluating the proposals (90:10) in the advertisement” of the tender.

Chairman of the National Assembly’s ad hoc committee considering Madonsela’s recommendations, Luwellyn Landers, said the IEC must tighten its procurement processes with the help of the Treasury, the auditor-general and Home Affairs, to which the commission reports. Landers said the IEC would have to deal with Tlakula’s disciplinary hearing because the National Assembly and the committee “lack the competence to discipline Tlakula”. Meanwhile, United Democratic Movement (UDM) leader Bantu Holomisa will serve papers at the Electoral Court to lay a formal complaint against Tlakula. He said the papers would be filed next week. This comes after a decision by the ad hoc committee to refer the matter to the IEC, the Treasury and the auditor-general. According to the Electoral Commission Act, only President Jacob Zuma can remove a commissioner for misconduct, incapacity or incompetence after a finding to that effect by a committee of the National Assembly following a recommendation of the Electoral Court.

Holomisa, who complained to Madonsela about the lease in October 2011, said Tlakula was appointed IEC chairwoman by Zuma after he had complained to Madonsela. “Zuma and Parliament were wrong to appoint Tlakula,” he said. Tlakula declined to comment on Holomisa’s statements.