The Special Investigating Unit (SIU) has reported to parliament that it is investigating executives from the Road Accident Fund (RAF) for allegedly taking kickbacks from lawyers appointed by the organisation.
In a three-hour presentation in parliament on Friday, the SIU updated previous presentations to parliament’s standing committee on public accounts (Scopa) on its investigations into the RAF, which concern a wide array of alleged offences by the fund over the past few years.
One important addition to these investigations has been detailed scrutiny of contracts signed by the RAF with firms of attorneys hired to assist in the process of adjudicating claims made by road accident victims into the roughly R22bn the fund administers every year.
In its presentation to parliament, the SIU said, without naming the law firm or the executives involved, that one legal firm was paid 90% of the total cost of hiring. The RAF has previously requested help in identifying firms it could work with from the Government Employees Pension Fund (GEPF), but this firm was the only one not cited by the GEPF.
It appeared, the SIU said, that an estimated R142m was an irregular payment, as there was no approval of the board nor the special operations and information technology committee (committee of the board) for the contract and/or extension when appointing the corporate panel of attorneys.
“The SIU conducted financial analysis, including [of] bank statements of the attorneys appointed in the RAF corporate panel of attorneys, and the preliminary findings suggest that some of the RAF executives were possibly paid monies by the attorneys appointed in the RAF corporate panel of attorneys,” the investigations unit said.
The SIU has identified the executives involved and asked for an explanation, in terms of the legal requirement to allow rebuttal and hear all sides, after which a decision will be taken on referring the matter for criminal prosecution. The reply has not yet been forthcoming.
Lack of co-operation
Asked by Scopa chair Songezo Zibi how it came about that RAF officers were identified and whether the SIU was certain about the identity of the recipients, SIU chief operations officer Leonard Lekgetho said the organisation had “followed the money”.
“We have done the financial analysis in terms of our investigation methodology. When we conduct the investigation, we identify the person of interest. And we follow the money being paid to the other side until we see where the money goes,” he told the committee.
Asked if there wasn’t the possibility of mistaken identity, Lekgetho said this was the reason why, among others, the SIU had “capacitated our investigating teams with forensic accountants, who are skilled at ensuring that they assess this question”. In the case of one of the RAF executives allegedly involved, they had discovered he had two ID numbers with the same name barring a single letter, a common method of trying to throw investigators off the scent.
The head of the SIU, advocate Andy Mothibi, also included in the report a complaint about the lack of co-operation from the RAF in its investigations.
In the RAF investigation the SIU noted “with concern” a directive issued by RAF CEO Collins Letsoalo that instructed employees who had been issued with requests from the SIU in terms of their right of reply to clear their statements with management first.
“Employees were directed to forward the SIU right of reply to the RAF management such that responses to the SIU are well co-ordinated,” Mothibi said.
“The directive is thus viewed by the SIU to directly compromise the investigation and may amount to interference.”
The RAF has not responded to the report, and has in the past refused to do so.
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