Date: 24/08/2004
Source: SA Parliament
Title: B Mbete: Misuse of travel vouchers
STATEMENT BY HON. MS BALEKA MBETE, MP, SPEAKER OF THE NATIONAL ASSEMBLY, ON THE DEBATE ON MISUSE OF TRAVEL VOUCHERS, 24 August 2004
Madam Deputy Speaker
Honourable members
BACKGROUND
When I received a request for a debate on the misuse of parliamentary travel vouchers, I decided that it would present an opportunity for the House and the public to get information, some of which has not been given before, or which has been badly distorted or misunderstood so far. This debate should be approached as a measure to account to our people who are justifiably eager to know what happened, what the issues are, what Parliament's position is on various questions and what the future holds on these matters.
The travel vouchers given to all MPs are valid for travel by air, train and road. Travel for purposes of approved committee work is provided for separately.
A document called Circular LO 19/2001 exists to provide checks and balances to ensure that Travel Warrants are used according to set stipulations. I am giving this detail to indicate that we do have systems in place, which introduced in 1999 as an attempt to improve on an earlier green form system. The critical question raised by the probe which has been going on for over a year now, is whether our systems are working well, what the weaknesses are and how Parliament must improve to ensure that the problems we've identified do not re-occur. I want to dwell a bit more on the issue of the problems in the systems because if they did not exist we would not be having this debate today. So dealing with our own internal problems must be a key outcome of this whole exercise. This is something on which we make an unequivocal commitment as Presiding Officers with the responsibility for running the Institution. It is with this in mind that the Secretary to Parliament, the Deputy Speaker and Deputy Chairperson of the NCOP are working on a comprehensive re-look at the LO19 document and a range of other issues that might not be provided for at present. The earlier disciplinary cases of the years exposed some of the problems with the travel arrangements. In the report to the then Speaker, from the disciplinary Committee, the need to tighten systems was highlighted as one of the key recommendations. (African language)
INVESTIGATIONS
Parliament started suspecting that something was going wrong at the end of 2002 when staff in Finance realised that one member whose home is in Vrede was supposedly repeatedly travelling to Umtata. At the same time records also had him driving to Vrede from Johannesburg. When the Member was questioned early in 2003, it transpired that he had never been to Umtata in his life. The travel agent called Sure ITC Travel (Pty) Ltd was engaged by Finance staff with the aim of establishing exactly what was happening. When ITC's responses were unsatisfactory all transactions with that company were checked and were found to have been fraudulent. It is then that - with the help of SAA - a broader probe was done which resulted in the other travel agents being identified.
To come back to the investigation, the first thing I want to clarify is that it is Parliament that instituted this probe. The Forensic Auditors, Price Waterhouse Coopers were contracted in May 2003. Subsequently, the Commercial Crimes Unit of the SAPS were brought on board in July 2003 when it became necessary to confiscate documents from the offices of a number of travel agents who had not co-operated when approached. Lastly, the National Directorate of Public Prosecutions was approached in February 2004 to enhance and expedite the investigation.
After engaging South African Airways it transpired that the extent of damage was serious. As said before we engaged Pricewaterhouse Coopers to ensure that the investigation was conducted as objectively as possible. Payments were then withheld to enable investigators to verify how much Parliament was owed in order for those amounts to first be subtracted before paying what Parliament owed the travel agents.
The implication was that Travel Agents could not meet their financial obligations to SAA and IATA. ITC applied for voluntary liquidation. Another one, Business Executive Travel was involuntary liquidated by Standard Bank at the instance of Parliament. It was clear that in order to recoup our money Parliament had to be represented in the liquidation processes. The close assessment of books and records of ITC revealed that some members had received benefits that appear to have been paid for by Parliament. These included car hire, hotel accommodation and foreign exchange transactions.
To what extent any of the Members knowingly got involved in any wrong-doing has to be clarified through the investigation. Each of the Honourable Members must have an opportunity to shed light on any transactions done in their names. We are happy to say that there's agreement on this approach both with all parties and the investigators and it is on this basis that there is a process of the necessary interactions in this regard.
Madam Deputy Speaker, I must - at this point - refer to a meeting convened by the then Speaker Ginwala with MPs whose names had come out in the ITC liquidation processes. There's nothing mysterious about this particular meeting. It was held in the Old Assembly Chamber on 8 August 2003 in broad daylight. Each MP was handed an envelope containing documents relating to what seemingly involved them. They were advised to meet the Liquidators to give relevant information, clarify their understanding of why their names were coming up. Some of the transactions related to Committee travel, which had been organised, not by MPs, but by the Committee Section of Parliament with no participation of MPs. Some were personal transactions for which instead of the bills being sent to individual MPs they'd been directed for payment by the Institution. Where MPs acknowledged debt they made the appropriate arrangements for payment with Parliaments Finance Section. In some instances, in fact, MPs had never utilised the services of ITC and it was a mystery to them how they became implicated. Clearly, somehow, with or without Members' conscious involvement or participation - even in the cases of other travel agents, the vouchers were providing opportunities for fraud.
As Parliament these are the loopholes we must study in detail as we re-look at the system, so we close the gaps and restore confidence in the Institution and the Honourable Members elected to serve our people.
For instance, there was a lack of proper control over:
* The issuing, use and cancellation of vouchers
* There was no system to check how often travel agents invoiced Parliament for the same trips undertaken
* No system existed to properly validate invoices submitted for travel
* No system existed for members to validate trips undertaken in their names
NEW PRESIDING OFFICERS
After the 2004 elections, the new Presiding Officers asked for a progress report on the investigation and received a summarised one in June 2004. For the first time the issue of possible charges to MPs appeared in that report. As everyone knows, the media has carried numerous stories implicating current and former members. I have consistently refused to add to the confusion and the frenzy that has tried and sentenced Honourable Members ahead of time. No amount of intimidation will change my approach on this.
Our Constitution is clear that any person is presumed innocent till proven guilty by a court of law. We will not violate that principle. We must allow the law to take its course. Whoever is found guilty will of course face the full consequences of due process. It is irresponsible to score political points on a matter such as this, which has serious implications for an institution such as Parliament and indeed for the country as a whole.
The issue of the Draft Report of Pricewaterhouse Coopers has provided a lot for media reports in the past few weeks. A few facts must be clarified in this respect.
(a) There was no promise on my part to make the report itself public. No matter what the media said on this. I promised to come back after reading the report especially on the issue of tightening of the systems in Parliament
(b) Even if I wanted to, I was not at liberty to publish the report when the investigation is still underway and the report itself is "Strictly Private and Confidential"
(c) Thirdly, the report does not at all mention my name and the Deputy Speaker's.
In fact, it does not deal with the names as such. A final report is still awaited. Please be patient and watch this space.
The document circulated to all parties gives the current status in respect of travel agencies, which are implicated without jeopardising the ongoing investigation.
CONCLUSION
I wish to appeal to all of us to remember the sacrifices made by our people for the democracy we are now enjoying. Some times we take our achievements for granted. We will not disappoint those who fought for the country. We will stop at nothing in fighting corruption and promoting the rule of law.
Issued by: SA Parliament
24 August 2004
Source: SA Parliament
Title: B Mbete: Misuse of travel vouchers
STATEMENT BY HON. MS BALEKA MBETE, MP, SPEAKER OF THE NATIONAL ASSEMBLY, ON THE DEBATE ON MISUSE OF TRAVEL VOUCHERS, 24 August 2004
Madam Deputy Speaker
Honourable members
BACKGROUND
When I received a request for a debate on the misuse of parliamentary travel vouchers, I decided that it would present an opportunity for the House and the public to get information, some of which has not been given before, or which has been badly distorted or misunderstood so far. This debate should be approached as a measure to account to our people who are justifiably eager to know what happened, what the issues are, what Parliament's position is on various questions and what the future holds on these matters.
The travel vouchers given to all MPs are valid for travel by air, train and road. Travel for purposes of approved committee work is provided for separately.
A document called Circular LO 19/2001 exists to provide checks and balances to ensure that Travel Warrants are used according to set stipulations. I am giving this detail to indicate that we do have systems in place, which introduced in 1999 as an attempt to improve on an earlier green form system. The critical question raised by the probe which has been going on for over a year now, is whether our systems are working well, what the weaknesses are and how Parliament must improve to ensure that the problems we've identified do not re-occur. I want to dwell a bit more on the issue of the problems in the systems because if they did not exist we would not be having this debate today. So dealing with our own internal problems must be a key outcome of this whole exercise. This is something on which we make an unequivocal commitment as Presiding Officers with the responsibility for running the Institution. It is with this in mind that the Secretary to Parliament, the Deputy Speaker and Deputy Chairperson of the NCOP are working on a comprehensive re-look at the LO19 document and a range of other issues that might not be provided for at present. The earlier disciplinary cases of the years exposed some of the problems with the travel arrangements. In the report to the then Speaker, from the disciplinary Committee, the need to tighten systems was highlighted as one of the key recommendations. (African language)
INVESTIGATIONS
Parliament started suspecting that something was going wrong at the end of 2002 when staff in Finance realised that one member whose home is in Vrede was supposedly repeatedly travelling to Umtata. At the same time records also had him driving to Vrede from Johannesburg. When the Member was questioned early in 2003, it transpired that he had never been to Umtata in his life. The travel agent called Sure ITC Travel (Pty) Ltd was engaged by Finance staff with the aim of establishing exactly what was happening. When ITC's responses were unsatisfactory all transactions with that company were checked and were found to have been fraudulent. It is then that - with the help of SAA - a broader probe was done which resulted in the other travel agents being identified.
To come back to the investigation, the first thing I want to clarify is that it is Parliament that instituted this probe. The Forensic Auditors, Price Waterhouse Coopers were contracted in May 2003. Subsequently, the Commercial Crimes Unit of the SAPS were brought on board in July 2003 when it became necessary to confiscate documents from the offices of a number of travel agents who had not co-operated when approached. Lastly, the National Directorate of Public Prosecutions was approached in February 2004 to enhance and expedite the investigation.
After engaging South African Airways it transpired that the extent of damage was serious. As said before we engaged Pricewaterhouse Coopers to ensure that the investigation was conducted as objectively as possible. Payments were then withheld to enable investigators to verify how much Parliament was owed in order for those amounts to first be subtracted before paying what Parliament owed the travel agents.
The implication was that Travel Agents could not meet their financial obligations to SAA and IATA. ITC applied for voluntary liquidation. Another one, Business Executive Travel was involuntary liquidated by Standard Bank at the instance of Parliament. It was clear that in order to recoup our money Parliament had to be represented in the liquidation processes. The close assessment of books and records of ITC revealed that some members had received benefits that appear to have been paid for by Parliament. These included car hire, hotel accommodation and foreign exchange transactions.
To what extent any of the Members knowingly got involved in any wrong-doing has to be clarified through the investigation. Each of the Honourable Members must have an opportunity to shed light on any transactions done in their names. We are happy to say that there's agreement on this approach both with all parties and the investigators and it is on this basis that there is a process of the necessary interactions in this regard.
Madam Deputy Speaker, I must - at this point - refer to a meeting convened by the then Speaker Ginwala with MPs whose names had come out in the ITC liquidation processes. There's nothing mysterious about this particular meeting. It was held in the Old Assembly Chamber on 8 August 2003 in broad daylight. Each MP was handed an envelope containing documents relating to what seemingly involved them. They were advised to meet the Liquidators to give relevant information, clarify their understanding of why their names were coming up. Some of the transactions related to Committee travel, which had been organised, not by MPs, but by the Committee Section of Parliament with no participation of MPs. Some were personal transactions for which instead of the bills being sent to individual MPs they'd been directed for payment by the Institution. Where MPs acknowledged debt they made the appropriate arrangements for payment with Parliaments Finance Section. In some instances, in fact, MPs had never utilised the services of ITC and it was a mystery to them how they became implicated. Clearly, somehow, with or without Members' conscious involvement or participation - even in the cases of other travel agents, the vouchers were providing opportunities for fraud.
As Parliament these are the loopholes we must study in detail as we re-look at the system, so we close the gaps and restore confidence in the Institution and the Honourable Members elected to serve our people.
For instance, there was a lack of proper control over:
* The issuing, use and cancellation of vouchers
* There was no system to check how often travel agents invoiced Parliament for the same trips undertaken
* No system existed to properly validate invoices submitted for travel
* No system existed for members to validate trips undertaken in their names
NEW PRESIDING OFFICERS
After the 2004 elections, the new Presiding Officers asked for a progress report on the investigation and received a summarised one in June 2004. For the first time the issue of possible charges to MPs appeared in that report. As everyone knows, the media has carried numerous stories implicating current and former members. I have consistently refused to add to the confusion and the frenzy that has tried and sentenced Honourable Members ahead of time. No amount of intimidation will change my approach on this.
Our Constitution is clear that any person is presumed innocent till proven guilty by a court of law. We will not violate that principle. We must allow the law to take its course. Whoever is found guilty will of course face the full consequences of due process. It is irresponsible to score political points on a matter such as this, which has serious implications for an institution such as Parliament and indeed for the country as a whole.
The issue of the Draft Report of Pricewaterhouse Coopers has provided a lot for media reports in the past few weeks. A few facts must be clarified in this respect.
(a) There was no promise on my part to make the report itself public. No matter what the media said on this. I promised to come back after reading the report especially on the issue of tightening of the systems in Parliament
(b) Even if I wanted to, I was not at liberty to publish the report when the investigation is still underway and the report itself is "Strictly Private and Confidential"
(c) Thirdly, the report does not at all mention my name and the Deputy Speaker's.
In fact, it does not deal with the names as such. A final report is still awaited. Please be patient and watch this space.
The document circulated to all parties gives the current status in respect of travel agencies, which are implicated without jeopardising the ongoing investigation.
CONCLUSION
I wish to appeal to all of us to remember the sacrifices made by our people for the democracy we are now enjoying. Some times we take our achievements for granted. We will not disappoint those who fought for the country. We will stop at nothing in fighting corruption and promoting the rule of law.
Issued by: SA Parliament
24 August 2004
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