Gaming the Lottery

National Lotteries Commission grilled in Parliament

Questions asked about conflicts of interest and unfinished projects

“We’ve come with the correct pictures of the toilets we’ve built in Limpopo and the Eastern Cape. You can give us two members [of Parliament] to go see what we’ve built. The toilets were built by EnviroLoo, a big company, that’s white-owned, that’s competent,” Professor Alfred Nevhutanda, chair of the National Lotteries Commission, told Parliament’s Portfolio Committee on Trade and Industry on Tuesday. The NLC was presenting its 2018/19 annual report.

Nevhutanda was trying to dispel media reports of unfinished projects paid for by the NLC. For example, activist group OUTA reported on Monday that toilets at schools it had visited in Limpopo were in an appalling state despite millions of rands being distributed by the NLC to improve them.

Earlier this year the NLC published photos of toilets in Limpopo that it was building. It turned out that photos of one facility were used to show progress at several other facilities.

The chairperson of the portfolio committee, Duma Nkosi (ANC), suggested that members of the committee ask their questions and the NLC respond in writing since the meeting was running out of time. Dean Macpherson (DA) objected and pointed out that there were “serious questions that need to be asked and answered”. Nkosi then agreed that the NLC representatives should answer during the meeting.

“You say that we should be interested in what you have built, but what I’m interested in is what you haven’t built. There are still massive questions about a company called Denzhe,” Macpherson told the NLC representatives. Denzhe is a company that received tens of millions of rands from the NLC to build a drug rehabilitation centre but failed to do so. (GroundUp has reported that attorney Lesley Ramulifho used money given to Denzhe to pay towards his luxury house.)

Macpherson asked the NLC representatives to explain media reports of companies with ties to NLC COO Phillemon Letwaba benefitting from projects that received R60 million, including a library, old age home and the Denzhe rehab. None of these projects has been completed (the library has been built but has barely any books).

Macpherson also challenged the NLC on its decision not to publish its list of beneficiaries for the first time in 18 years. “I would argue that that is not in the interest of good corporate governance and transparency. I would ask that without further delay that you table and submit a report on the beneficiaries of the 2018/19 financial year. It’s absolutely critical that you submit that.”

But Nevhutanda told the committee that producing the list of beneficiaries for the 2018/19 financial year was not easy.

NLC secretary Nompumelelo Nene said that following legal advice and complaints received by beneficiaries, who claimed that the publication of their names and the amount of funding they’d received led to people extorting them, the NLC had decided to no longer publish their names.

On the question of Denzhe, Tsietsi Maselwa, the NLC’s Legal Executive Manager said: “There’s an internal legal report that’s been sent to the [trade and industry] department. There is work that is being done.”

Last week the NLC presented to Parliament’s Sports, Arts and Culture Portfolio Committee. There too, NLC representatives had to answer questions on an investigation into Letwaba’s alleged conflicts of interest. According to the Parliamentary Monitoring Group (PMG) report on the meeting, NLC Commissioner Thabang Mampane defended Letwaba. The PMG report states:

“The COO, Mr Letwaba, was a registered accountant. He had worked in other government entities before, like the Special Investigating Unit. She [Mampane] condemned the consistent allegations against one single individual. She would not comment on the investigations; the matter was in court. The NLC Board investigated the issue. A huge amount of money was spent on these outsourced investigations. It was not an internal NLC staff member who conducted the investigation, but an independent external investigator. The investigators spoke to beneficiaries and examined the granting process of funds. The NLC’s only task was to monitor and evaluate.”

It’s not clear what investigation or court case Mampane is referring to, but as reported by GroundUp in September, in a letter to NLC board chairman Alfred Nevhutanda, DTI minister Ebrahim Patel has raised concerns about the quality of an investigation into Denzhe. He asked the NLC to recover the money and pursue a “criminal case”.

Letwaba is suing GroundUp for R600,000 for alleged defamation.