Hawks probe dodgy R300m tenders
John Block, ANC leader in Northern Cape, is fingered in new investigation
Apr 10, 2011
The Hawks are investigating dodgy security contracts worth almost R300-million for government buildings awarded to a company linked to Northern Cape finance MEC John Block.
This is the latest tender scandal linked to the provincial ANC chairman after he was charged with fraud, corruption and money laundering for his role in dodgy hospital equipment deals worth R112-million last year.
At the time, Block also headed the party's deployment committee, which decides who holds influential provincial government positions, including those with authority to award tenders.
Provincial police spokesman Cherelle Ehlers confirmed this week that the Hawks were investigating a case of "fraud and corruption" against Global Crown Security Services, based in Kimberley. "No arrests have been made yet," she said.
Sources close to the investigation said Block's involvement in Global Crown formed part of the probe. A local businessman linked to the case, who did not want to be named, fearing victimisation, also told the Sunday Times the Hawks had questioned him about Block's alleged links to Global Crown.
The Hawks declined to confirm or deny this.
"The investigation is at a very sensitive stage, so we cannot divulge any further details," said Ehlers.
But company documents, court papers and a forensic audit seen by the Sunday Times expose a host of irregularities, including inflating invoices from R3.5-million to R5-million a month, large monthly "donations" and a failure to comply with tax law or register guards with the industry's regulatory authority.
Regular "donations" were made to a "community fund" - R1-million in one month - while Global Crown struggled to pay wages or supply workers with basic equipment, including uniforms and radios.
The documents show Global Crown is linked to Block through a web of friends and associates, who all received generous payments, described as "admin fees", "settlements" or "consultancy".
They include Mandla Staffa, an "ordinary friend" of Block's who admits he flew to China with the MEC's wife, Noluthando. Others are Block's lawyer, Dali Mjila, his childhood friend and former best man, Nkosinathi Mbethe, and former Northern Cape ANCYL secretary Vuyo Roji.
The documents detail how Staffa hastily set up Global Crown Security Services to take advantage of two security tenders worth almost R300-million. It was formed in July 2009 and registered with the Private Security Industry Regulatory Authority only weeks before the R145-million health department bid closed in September.
Soon afterwards, it was also awarded a R150-million contract to provide security guards for all social development offices in the province.
Court papers and a forensic report by Gauteng accountants Vernitos Consulting identify Staffa as the driving force behind Global Crown, which was run by his girlfriend, Sylvia Jantjies. She declined to answer detailed questions.
Staffa confirmed his own company, Xhuntas Security, couldn't bid for the tender because of unpaid taxes.
Several sources formerly close to Block alleged Staffa was fronting for him. "He was always there when I visited John's house," said one. "But not as a friend or business partner. He was always being sent on errands - more like John's butler. There's no question he was a front for Block."
This was confirmed by Global Crown's former legal adviser, Ross Henderson. "From various meetings I attended, it was clear that Mandla Staffa was there to look after the interests of John Block," he said.
Staffa admitted that he was close to Block and his wife, but denied being his front. "When you have a friend in politics, people always think you get tenders through them," he said. "We are just ordinary friends."
Block, through his lawyer, Mjila, denied all the allegations. "It is also undesirable for our client to respond to any averments if it is correct that this matter is under investigation."
Block is out on R100000 bail after being charged with fraud, corruption and money laundering for his role in allegedly corrupt hospital equipment deals worth R112-million last year. The case continues on June 10.