R500m SAPS HQ lease deal unlawful

NATIONAL police commissioner Bheki Cele and Public Works Minister Gwen Mahlangu-Nkabinde have fared the worst in the Public Protector ‘s damning report on the R500-million police HQ lease deal.


A five-month investigation by advocate Thuli Madonsela’s office details shocking findings about the conduct of South Africa’s top cop, and how his “improper and unlawful” conduct was central to the signing of the lease.


Flanked by Special Investigating Unit head Willie Hofmeyr, Madonsela revealed how Cele authorised funding for leasing the Middestad building in central Pretoria from property mogul Roux Shabangu.


The Middestad building he wanted to lease as his new police headquarters is next door to the current headquarters.


“The conduct of the accounting officer [Cele] … in respect of the procurement of the lease was improper and unlawful,” wrote Madonsela in her 91-page report.


Madonsela’s findings vindicate the Sunday Times reports that exposed Cele’s involvement in the deal. She praised the newspaper’s “courage” for exposing the deal.


Cele has repeatedly denied any wrongdoing, claiming that he merely signed the SA Police Service needs analysis. Yesterday, he released a statement saying that he was “vindicated” by the report.


But Madonsela found that:



  • Lease negotiations between the Department of Public Works and Shabangu were already at an advanced stage when the police gave their needs analysis to the department;


  • The police first identified the building and then adjusted the needs analysis to correspond to, or “retrofit”, the specifications of Middestad, which Shabangu had not yet bought;


  • The leasing of Middestad was not budgeted for in the police leasing or capital works budget;


  • The lease was not cost-effective;


  • Public Works failed to record its reasons for deviating from the prescribed tendering processes; and


  • The terms of the lease between Public Works and Shabangu were not approved by the Special National Bid Adjudication Committee, which they should have been.

Said the report: “The conduct of the accounting officers of the Department of Public Works and of the SAPS [Cele] . was improper and unlawful.


“It was evident throughout the investigation that a number of the officials interviewed expressed their reservations with the process followed by the SAPS to procure the lease. However, they were reluctant to raise their concerns with their superiors due to the culture of the SAPS in terms of which instructions are followed and not questioned,” the report said.


Former deputy national police commissioner Hamilton Hlela said in his interview with Madonsela that he was “unwilling to question the decisions and instructions of the national commissioner [Cele]”.


In his statement, Cele said: “The Public Protector not only stops at finding that General Cele did not sign the lease for Middestad Sanlam Centre, she goes further and vindicates General Cele’s widely disregarded protestations that businessman Roux Shabangu, the owner of Middestad Sanlam Centre, was a stranger to him up until their meeting in June 2010, when Middestad Sanlam Centre had already been selected by the Department of Public Works as the building that the SAPS were going to move into.


“General Cele will now be consulting his lawyers to explore what avenues are available to him as he seeks redress over these allegations that have caused him and his family so much pain and suffering over the past five months or so.”


In her report, Madonsela said that Mahlangu-Nkabinde ignored the opinion of two senior advocates and sealed the deal with Shabangu on November 22, the day that senior advocate Pat Ellis told Mahlangu-Nkabinde that the lease was unlawful.


Mahlangu-Nkabinde disregarded an undertaking made by her predecessor, Geoff Doidge, who had told the police that he would not finalise the lease pending the outcome of Madonsela’s investigation.


An internal Public Works inquiry in October, ordered by Doidge , also found the deal to be “invalid”.


But President Jacob Zuma fired Doidge in his cabinet reshuffle in early November. Shortly after she took office, Mahlangu-Nkabinde’s staff told Nedbank, Shabangu’s financier, that the department would honour the lease and the bank should release funds to Shabangu. Mahlangu-Nkabinde announced in December that the deal would go ahead.


Mahlangu-Nkabinde suspended her director-general, Siviwe Dongwana, on December 8 – the day he was due to be interviewed by Madonsela for her report.


Describing Public Works’ involvement in the deal as “reckless”, Madonsela said Mahlangu-Nkabinde must explain her decisions to the cabinet.


Madonsela said further investigations will determine whether anyone will be criminally charged or will have to reimburse the state.


Finance Minister Pravin Gordhan, commenting on a draft of the Madonsela report, had harsher words: “The National Treasury supports the further review of the lease agreement as a matter of urgency. This may include, if necessary, the initiation of criminal prosecution.”


The million-dollar question, Madonsela said, was: “How did Shabangu get involved with [the police]? His own evidence was not very helpful.”


She said the findings of a subsequent investigation into another lease deal between the police and Shabangu, for a building in Durban, to be released in a month, would determine whether any of those involved would be criminally charged.


Opposition parties yesterday again called for Cele’s head – and that of Mahlangu-Nkabinde.


Freedom Front Plus’s Pieter Groenewald – who, along with Paul Hoffman, the director of the Institute for Accountability in Southern Africa, lodged complaints against Cele with Madonsela – yesterday called on Zuma to act swiftly.


“If President Zuma is serious about his comments that corruption should be eradicated, he should fire both [Cele] and the minister because he appointed both. If he does not do it, he makes a mockery of clean administration and promotes corruption,” Groenewald said.


“More questions are arising about the firing of the former minister of public works, Geoff Doidge, who stopped the process to wait for the report of the Pubic Protector. The Freedom Front Plus will, after carefully studying the report, decide whether criminal charges will be laid.”


Hoffman said Cele should “be redeployed in politics, which is where he belongs”.


He said the Treasury should have no difficulty in cancelling the lease because regulations were clearly violated.


Hoffman criticised Mahlangu-Nkabinde’s failure to heed the advice of her advocates.


Shabangu said his lease agreement with the police was still valid.

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