In 2019 South Africans bought R7,07bn worth of Lotto tickets, in what is regarded by economists as a regressive tax on the poor. A common justification for this spending is that the National Lottery Commission (NLC) distributes a portion of this — 26.22% or R1.83bn in 2019 — to “good causes” and “worthy projects”.
But would people still buy Lotto tickets if it was common knowledge that the NLC was channelling some of these “charity” funds to friends, family and others?
In an interview in March the chairperson of the NLC board, Alfred Nevhutanda, said: “The biggest mandate (of the NLC) is to breed conducive atmospheres for people to play Lotto and how to collect money for the state.”
The board and executive of the NLC are also trustees of the National Lottery Development Trust Fund, which adjudicates and grants applications through distributing agencies. Members for the three distribution agencies for charities, arts and sport are appointed by government.
Sports journalist Graeme Joffe began an investigation into the NLC in 2013, and the outcome was published in a book, Sports: Greed and Betrayal. At the centre of his investigation was the Sports Confederation & Olympic Committee (Sascoc), which together with a dozen sports association affiliates received more than R2bn of funding between 2002 and 2016, almost as much as the NLC gave to education (R2.8bn).
In July 2014 Joffe handed his dossier of evidence of malfeasance at Sascoc, the SA College Principals Organisation, the SA Institute for Drug-Free Sport and the soccer museum to lottery investigators. But, he says, the investigation was halted at the request of then sports minister Fikile Mbalula.
There were further attempts to expose the governance issues plaguing the NLC through a 2015 report by attorney Trevor Bailey. But an article by non-profit news agency GroundUp pointed out that this was “quashed by NLC board and DTI [department of trade & industry] minister at the time, Rob Davies”, and the whistle-blower, chief risk officer Bathabile Kapumha, was hounded out of the position. This was not the first or last incident of unfair dismissal against an honest employee at the NLC. Cases are mounting in the Commission for Conciliation, Mediation & Arbitration, and the high and labour courts.
In 2017, seasoned journalist Raymond Joseph, with OpenUp, a Cape Town-based civic tech non-profit organisation (NPO), digitised the entire list of NLC grantees’ data. This data was scraped and used to populate an online open-source and freely available tool that made the information keyword searchable. The platform could be used to search for multiple or unusual grantees and become the data source for a string of exposés published by GroundUp.
The investigations revealed prima facie evidence of corruption, and that a facilitator of this came in 2015 when a new regulation was introduced to the Lotteries Act allowing for “proactive funding”. Suddenly noncompliant NPOs could receive funding through “conduits”. The NLC, its board or the trade & industry minister could fund projects without application.
Such proactive funding now accounts for about 10% of the annual collection for distribution, which amounted to R156m in 2019. According to Brendan Lace of civil action organisation Outa: “The process is being manipulated and not going through the proper procurement policies.” As a result, a large number of projects, including drug rehabilitation centres, retirement homes, schools, school toilets, museums, libraries and sports facilities have been left incomplete or built substandard. Outa has laid criminal charges against the NLC board.
Zoutpansberger publisher Anton van Zyl, who has also published a number of lottery exposés, explained: “The most important lesson to be learnt is how NPOs are abused in SA. The NLC, like a crooked tender committee, seemingly view NPOs as means of channelling part of its funds to crooked people, to achieve dubious goals. And like tenderpreneurs, the lottopreneurs are very willing to pay kickbacks.”
Evidence has linked attorney Lesley Ramulifho and former CFO and (suspended) NLC COO Philemon Letwaba to questionable Lotto allocations. The allegations against them include that lottery funding of more than R60m has gone to Ramulifho and employees of his Pretoria legal firm, and there have been multiple accusations of conflict of interest and nepotism against Letwaba.
In an attempt to stop the flow of information, in 2020 the NLC took the decision to stop publishing the list of Lotto beneficiaries on its website — for the first time since its inception in 2002. This decision was backed up in parliament when Nevhutanda called on the Special Investigative Unit (SIU) to investigate those who exposed the corruption.
Joseph then became the subject of a smear campaign. A 1,000-strong crowd went to the department of trade & industry's headquarters in Pretoria, where they chanted “Voetsek Raymond Joseph, pansi” and called on the department to keep the identities of Lotto beneficiaries secret. An entity calling itself United Civil Action Group, which took responsibility for the march, has since made an urgent application to the high court to prevent GroundUp from publishing any details of Lotto beneficiaries.
There have also been allegations that the NLC is functioning as a political patronage network sending kickbacks to the ANC — in line with testimony at the Zondo state capture inquiry — though Joseph says this has not been specifically investigated. But as Corruption Watch head of legal Karam Singh points out, “testimony in front of the Zondo commission by Steven Powell from ENSafrica and others has provided precedent to the process whereby kickbacks go back to the ANC.”
Last month Hawks spokesperson Hangwani Mulaudzi resigned when it emerged that he had received R3m from the NLC to build a sports centre in Limpopo, though he denies wrongdoing.
Whatever the outcome of the investigations in progress, it is clear that the road is running out for corruption, secrecy and bullying at the NLC. Spokesperson Ndivhuho Mafela was rude and aggressive in response to questions six months ago, and now simply does not respond. Meanwhile, parliament has ordered Nevhutanda to resign. And in terms of a presidential proclamation the SIU and Hawks recently raided the NLC offices in an attempt to access the paper trail.
The process of appointing a new NLC chairperson has begun in parliament, but delays in the portfolio committee means it will have to start afresh next year. Encouragingly, Singh says the two potential candidates who have been identified so far, Frank Chikane and Barney Pityana, “have pretty unblemished records when it comes to issues of good governance”.
There is still a long way to go, but Singh is “cautiously optimistic” that the SA lotteries slate will eventually be wiped clean.
• Douglas is an author and cultural activist.
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