Lottery promises to fight corruption

Minister Ebrahim Patel lays out measures that must be implemented

| By

Minister of Trade, Industry and Competition Ebrahim Patel has requested that the National Lotteries Commission implement a string of measures to counter corruption. Archive photo: Ashraf Hendricks

  • Minister Ebrahim Patel has requested that the National Lotteries Commission (NLC) implement measures to counter corruption.
  • These include much greater transparency on funding.
  • The NLC must also implement internal processes to complement investigations into corruption at the lottery.
  • Fraud and corruption has overshadowed the good work the organisation undertakes.

The National Lotteries Commission (NLC) has published a list of Lottery grants it paid out during the first quarter (April to June) of its new financial year, and it says it will publish details on a quarterly basis, rather than annually as was done by the corruption-riddled previous administration.

This is one of several measures that Minister of Trade, Industry and Competition Ebrahim Patel had requested the NLC implement during its 2023/24 financial year.

“We are making a statement about transparency and how we will do things going forward,” said Commissioner Jody Scholtz, who was appointed earlier this year.

“We are determined to stop corruption and the way to do this is through transparency, giving it light and oxygen,” she said.

Even though the NLC released first-quarter grant payments, it has not yet released details of grants paid out in the previous financial year.

“We will release the 2022/23 beneficiary information when the annual report is released [in October.] This will ensure that the AG (Auditor-General) audits it and we can also ensure the credibility of the information we make public.”

The minister had requested the NLC to publish a monthly list of grantees, but Scholtz said the organisation did not yet have the capacity.

“Currently, we don’t have the capacity to issue monthly reports that have been internally verified, so we are doing it on a quarterly basis.”

Patel has also asked the NLC to take additional measures to address the corruption that overwhelmed the organisation under the previous board and executive and to hold those responsible to account.

These include

  • Taking actions on Special Investigations Unit (SIU) findings to date, to complement the work of the law enforcement agencies (the SIU, which has been investigating Lottery corruption since October 2020, has already uncovered corruption of over R1.4-billion involving dodgy lottery grants);
  • completing a review of proactive funding, which has been at the heart of the looting of the lottery;
  • finalising investigations of transactions involving consultants over the past ten years, including law firms, IT services and public relations services;
  • initiating a wider investigation that includes all contracts by the NLC “and all channels through which payments were made by or on behalf of the NLC”;
  • reviewing all previous forensic and internal reports and considering recommendations for systemic changes to avoid opportunities for corruption;
  • reviewing findings of the Auditor General in management reports over the past ten years;
  • supporting whistleblowers who were threatened or dismissed; and
  • addressing “the position of communities or NGOs who were deprived of the support for which the NLC funding was designed”.

In its Annual Performance Plan for 2023/24, the NLC is frank about the damage that corruption has done to its reputation: “[The] NLC’s Brand Building Campaign is aimed at continuously developing a positive perception of the entity.

“Unfortunately, the spate of fraud and corruption has cast a shadow on the good work that the NLC undertakes and the lives that are positively impacted by the proceeds that are derived from the sale of lottery tickets.

“Given the enhancement of processes and the tweaking of internal controls, it is imperative that fraud risk morphs into a proactive approach with the primary objective of efficiently and effectively identifying areas susceptible to fraud, prioritising risks, investigating, and remediating those risks before they occur.”

Grant info hidden

In earlier years, the NLC published monthly lists of non-profit organisations that received Lottery grants.

But this was halted after former NLC Commissioner Thabang Mampane — who resigned last year after she was implicated in corruption involving a lottery grant — was appointed in 2012. The main reason for the decision appears to have been questions being asked by journalist Graeme Joffe after each list was published.

GroundUp’s five-year-long investigation into the NLC has confirmed that many of the projects highlighted by Joffe were in fact corrupt.

After that, the NLC began publishing a list of grantees only once a year in its annual report. But an 18-year-long practice of publishing grant recipients was halted in 2019, after the former NLC board chairperson Alfred Nevhutanda claimed that beneficiary details were stolen and being used for “generating money” for journalists.

Nevhutanda, who told MPs that he had asked the State Security Agency to investigate, has also been implicated in corruption involving Lottery funds.

The NLC also used a section of the Lotteries Act and “safeguarding” the “privacy” of grant recipients to justify its decision.

After months of ducking and diving it finally bowed to pressure from Parliament and the media, and it published the list of grantees. But a list of Covid relief beneficiaries, which it also released after it had also been refusing to do so, was incomplete. The Covid relief grants, which included several dodgy non-profit organisations, is now being investigated by the NLC.

TOPICS:  Corruption Government National Lotteries Commission

Next:  No bail for Langa woman accused of scalding toddler

Previous:  NUMSA Western Cape in new fight with national leadership

© 2023 GroundUp. This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.

You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.

We put an invisible pixel in the article so that we can count traffic to republishers. All analytics tools are solely on our servers. We do not give our logs to any third party. Logs are deleted after two weeks. We do not use any IP address identifying information except to count regional traffic. We are solely interested in counting hits, not tracking users. If you republish, please do not delete the invisible pixel.