The commission of inquiry into state capture has found that former Johannesburg mayor Geoff Makhubo, who died in 2021, played a role in the city’s “improper” acceptance of a dodgy, unsolicited R100m proposal.
The controversial contract was one of several awarded to tech giant EOH, which had been bankrolling Makhubo since he was the ANC’s Greater Johannesburg regional treasurer.
Chief justice Raymond Zondo also found the “improper processes” involved repeated payments directly and indirectly to Makhubo’s company, Molelwane, which scored numerous payments from EOH amounting to millions.
The R100m proposal had been sent to Makhubo during his tenure as the city’s finance MEC by an EOH executive, Patrick Makhubedu. It was sent two days before an invoice for R106m was submitted to the city.
Part 4 of the state capture commission’s report, released on Friday, detailed how EOH submitted the unsolicited proposal to the city to upgrade its network and security infrastructure on April 16 2014.
“On the same day, EOH Managed Services donated R3m to the Greater Johannesburg region of the ANC. A letter acknowledging receipt of the donation and thanking EOH ... was addressed by Mr Makhubo to Mr Makhubedu,” the report stated.
Zondo found that Makhubo, who died after contracting Covid-19, had scored improper financial benefits from EOH directly or via third parties.
The report said days after Makhubo would ask for donations, EOH executives would oblige.
In August 2014, Makhubo, who was then finance MMC in Johannesburg, asked EOH in his capacity as regional treasurer to make a donation to the ANC Greater Johannesburg region and detailed expenses at R6.1m.
Just 12 days later, Makhubedu paid R20,527 to the Sandton Convention Centre on behalf of the ANC.
Another R70,000 was paid to the ANC two days later with proof of payment sent to Makhubo, the report said, while a separate R80,000 was paid on the same day to Molelwane.
Zondo found there was prima facie evidence of corrupt arrangements and recommended that law enforcement agencies investigate the awarding of the city’s SAP network and security infrastructure contracts to EOH.
Molelwane continued to receive regular payments from EOH.
“On August 27 2014, Mr Makhubo e-mailed Mr Makhubedu, asking for a donation to cover the accommodation costs related to the regional ANC Youth League relaunch that was due to take place that weekend,” the report said.
Makhubo asked EOH to foot the bill for accommodation, which amounted to R582,100. EOH paid this amount to the ANC Greater Johannesburg account the next day.
Ten days later, Makhubedu sent the unsolicited proposal to Makhubo, which the city accepted as EOH issued an invoice to the city two days later.
“The amount of R106m [was] for the upgrading of network and security infrastructure,” the report stated.
A payment of R109.7m — more than the invoice amount — was made on September 12 2014, the report stated.
Three days after the payment was made, Makhubedu e-mailed Makhubo a draft letter of award from the city in relation to the unsolicited proposal.
Zondo said in the report that Makhubo knew he had no business getting involved in procurement matters “particularly unsolicited proposals from an entity from which he recently solicited substantial donations for the ANC”.
“Mr Makhubo did not deny receiving the unsolicited proposal from Mr Makhubedu but could provide no explanation for why it was sent to him,” the report stated.
EOH had, after being paid for its unsolicited proposals, continued with its substantial donations to the Johannesburg ANC, often at the request of Makhubo.
EOH continued to score tenders from the city amounting to R38m and R26m for ICT LAN and WAN services and ICT security services respectively.
Zondo also placed Makhubo at the centre of a SAP support services tender that was “irregularly extended on several occasions” to EOH from 2012 to 2016.
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