Fighting Corruption Together for a Better Society

1. Presentation to SCOPA20 November 2007 SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

2. Importance of fighting corruption • According to ISS second National Victims of Crime Survey (2004): • Housebreaking most prevalent crime (7.5%) • Corruption second most prevalent crime (5.6%) • Perceptions of corruption has improved, but still serious • Poor often suffer most from need to pay extra for basic services • Significant amounts of money wasted, eg procurement • High impact of corruption and maladministration on service delivery SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

3. Threat of corruption to Departments • Departments facing combined threats of fraud, corruption and maladministration • Also challenge to protect integrity of systems and processes, eg social grants, service delivery, issuing driving licenses, procurement, tax collection • Either opportunistic or more organised exploitation of system gaps • Initial detection usually through an escalating loss or lack of delivery SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

4. Public Service Anti-Corruption Strategy • Fight corruption in a holistic manner • Distinguishes: Prevention, Detection, Investigation and Resolution of corruption • Establish minimum anti-corruption capacity within departments • Central Management of Information System on corruption • Good governance and sound business practices equally important SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

5. National Anti-Corruption Entities Multiple bodies vested with range powers deal with parts of corruption – about 13 Constitutional and Oversight Bodies Auditor- General (AG), Public Protector (PP), Public Service Commission (PSC), Independent Complaints Directorate (ICD) Criminal Justice Agencies South African Police Service (SAPS), National Prosecuting Authority (NPA), Directorate of Special Operations (Scorpions), Asset Forfeiture Unit (AFU), Special Commercial Crimes Unit (SCCU), Special Investigating Unit (SIU) Other Entities and Stakeholders Department of Public Service and Administration (DPSA), National Intelligence Agency (NIA), South African Revenue Services (SARS), National Anti-Corruption Forum (NACF), Financial Intelligence Centre (FIC), Other Government Departments – Minimum Anti Corruption Capacities

6. Profile of Agencies:(1) SA Police Service SAPS has a wide mandate Commercial branch focus corruption cases More serious cases by Organised Crime Units Office for Serious Economic Crime deal with very complex economic crime cases, including corruption

7. Profile of Agencies (cont):(2) National Prosecuting Authority National Prosecution Service has a mandate to prosecute all forms of corruption in normal courts Specialised Commercial Crime Courts set up in 1998 in Pretoria, being rolled out in other centres (5) Deals with medium level economic crime, including corruption Combines work of SAPS and NPS

8. Profile of Agencies (cont):(2) NPA cont. DSO (“Scorpions”)partNPA Prosecutors leading investigation at all stages Focus on high-level organised crime, corruption and economic offences AFU uses Prevention of Organised Crime Act to seize and forfeit proceeds of crime including corruption Can seize assets even if no conviction – when enough evidence to prove case on a balance of probabilities Powerful weapon when officials have unexplained wealth but there is little other evidence

9. Profile of Agencies (cont):(3) Other institutions DPSA – coordinates overall strategy, part of specific interventions Public Service Commission – monitors effectiveness Auditor-General – mainly preventative role, but often commissions forensic audits Public Protector – investigates individual complaints Independent Complaints Directorate –SAPS only SARS – often vital role to play in specific cases

10. SIU: Background and historical review • 1995 – Heath Commission established by Eastern Cape government – headed by former Judge Heath • 1996 – became a national body in terms of the SIU Act, 1996 • 1997 – first SIU set up by Proclamation R24 • 2001 – 31 July: New SIU set up by Proclamation R118 Head: Willie Hofmeyr Deputy head: Faiek Davids • SIU Vision: Working together to rid society of corruption • Mission: We are a state body that fights corruption through quality forensic investigations and litigation SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

11. Mandate and legal scope • The major functions of the SIU are to: • Investigate corruption and maladministration • Institute civil legal action to correct any wrongdoing • Focus on state or public domain – and the collaborators • Primary purpose to recover losses as a result of unlawful or corrupt action by officials or other persons, but also prevention of losses, maladministration that may lead to losses • Investigations often focus on conduct that facilitates systems abuse SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

12. Scope of Allegations The allegations must relate to one or more of the following matters: Serious maladministration in any State Institution Misconduct by State employees Unlawful appropriation or expenditure of public money or property Dealing unlawfully or irregularly with State property Intentional or negligent loss of public money or damage to public property Corruption in any State Institution Unlawful conduct by ANY person causing serious harm to the public interests

13. Investigative powers • SIU has formal powers similar to a commission of enquiry • Powers triggered by a Presidential proclamation • Special powers similar to commission: • Subpoena documents and records • Search and seizure • Summons and interrogate witnesses and suspects under oath • Compel them to answer self-incriminating questions • Cannot be used against them in criminal trial • But can be used to recover money SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

14. Building anti-corruption capacity in the public sector • Key challenge is to build sufficient capacity to deal with fraud, corruption and maladministration • Still massive outsourcing of investigations to private sector due to lack of capacity • Increased recognition that an agency such as SIU: • Can deliver excellent value for money to the state • Ensures that corrective action is taken • Recognition reflected in significant increase in budget from Treasury contributing the SIU’s growth SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

15. Budget increases enabled Rapid increase capacity 67 in 2001 600 currently 1 000 by 09/10 Growth of 50% pa for 6 yrs Creation of effective national presence 2001: 1 office in East London 2007: 7 provincial offices Increased investigative capacity SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

16. Targets and achievements SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

17. SIU AchievementsENE targets and achievements for 06/07 SIU presentation - 3 May 2007

18. Success factors • Focus on forensic investigations of corruption and maladministration • Delivering an integrated service to departments • Working with departments while maintaining independence • Excellent relations with other law enforcement agencies • Tough internal integrity program • Training & development through innovative programmes • An effective national presence • Project management approach to drive excellent delivery • Emphasis on good governance – clean audit report SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

19. Focus on forensic investigations • SIU has set itself the objective to become the provider of choice of forensic investigations to government • Innovation has been to seek to out-compete private sector in government work • Can do so cheaper – about half cost • More effective – can implement, not just write reports • Focus on corruption and maladministration has enabled SIU to deliver excellent results • Matters range from corruption, fraud, maladministration • Size can vary from small, eg social grants with aggregated impact to medium or complex, eg procurement SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

20. Providing integrated forensic solutions SIU renders comprehensive service to Departments: • A complete multi-disciplinary investigation • With law enforcement powers, ie court admissible evidence • Prepare disciplinary inquiries and testify • Work with law enforcement agencies to ensure arrest by preparing court ready docket • Work with NPA to speed up prosecutions and even assist with prosecution directly • Do civil recovery, eg set aside contracts or claim from pensions of officials guilty of causing losses • Provide advice on systemic improvements SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

21. Working with Departments • Innovation has been for Departments to agree to pay the costs of investigations (often instead of private sector) • These partnerships have driven SIU growth • Grew to nearly 67% of budget • But for independence, not desirable to become too dependent on partnerships • Now decreased to 55% of budget (R120m of R220m) • And will decrease to about 45% over next 2 years • With significant increase in NT funding • Triple in 4 yrs from R56m in 05/06 to R160m in 09/10 SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

22. Major partnerships • Dept of Correctional Services – R10m pa (30 people) • Dept of Transport – R18m pa (75 people) • Dept of Local Govt in Eastern Cape – R6m pa (17 people) • Dept of Social Dev – growing to R58m pa (200 people) • National Treasury – Special Pensions – R18m pa (40 people) • Department of Housing – R 10m pa (35 people) SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

23. Building good relations with law enforcement • SIU has benefited by being able to focus on corruption investigations • Particular focus on areas where corruption is a serious problem because of many small acts of corruption • Previously, state lacked effective capacity • SIU has built and maintained excellent relations with partner agencies – vital to effective service delivery • Has been able to complement efforts SAPS, DSO and NPA SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

24. Maintaining a high level of integrity • Many new members and offices increase integrity risks • Improved pre-employment screening processes • Increase capacity of internal integrity division • Develop ongoing monitoring of existing staff • Eg regular drug testing, voice stress analysis • Has developed excellent Internal Integrity Unit • Also assisting some Departments with screening sensitive staff SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

25. Training to build capacity in state • Managed to build significant additional capacity in state without taking away from others in law enforcement • Trainee program for young graduates – focus on improving representivity • Nearly 200 graduates so far, another 40 still on program • Trained 120 this year, 60 next year • But has also managed to attract significant skills from the private sector – but remains a big challenge SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

26. Project profile • Current projects include: • Social grants • Special pensions • Driving licenses • Housing fraud • Procurement – increasing focus • Provincial government departments • Municipality related forensic matters • Medical Aid Fraud • Tax fraud SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

27. New Proclamations signed since 1 April 2007 1)National Department of Housing: Proclamation R.7 of 25 April 2007 (referred by the National Department) 2) Development Fund Free State Treasury: Proclamation R.21 of 31 August 2007 (referred by the MEC for Finance) 3) MEEC/MEGA: Proclamation R.22 of 31 August 2007 (referred by the MEGA CEO) 4) Witness Protection: Proclamation R.23 of 31 August 2007 (referred by the NDPP) 5) Great Kei Municipality, Eastern Cape: Proclamation R.25 of 12 September 2007 (referred by the office of EC Premier based on findings in the Auditor General’s report) SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

28. Sources of referrals to the SIU • National Departments • Provincial Departments • Public entities (parastatals) • NPA/NDPP • Local Government • Other law enforcement partners • Provincial anti-corruption forums • SARS • Whistleblowers SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

29. Institutional referral mechanisms • Have built excellent relationships with law enforcement • Now focus on building institutional mechanisms of referrals, especially through those with oversight role, eg: • National Treasury and Accountant-General • Auditor-General – national and provincial • DPSA hotline, PSC and Anti-Corruption Coordinating Committee • DPLG • Scopa – national and provincial • Provincial anti-corruption bodies forums – ECP, NWP SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation

30. Possible areas of cooperation with Scopa • SIU looks at both: • Specific instances of corruption/maladministration • Cases of widespread systemic weakness such as social grants • Possible areas of cooperation • Scopa referrals to SIU to enable follow-up with Depts • Recommendations to Depts to work with SIU • Joint research or assessments on particular SIU Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality forensic investigations and litigation