DA, why not admit wrongdoing and move on?

When newspapers first published reports alleging that Julius Malema might have enriched himself by taking bribes in return for influencing the awarding of tenders to certain companies, Malema rejected this claim, arguing that he does not sit on any tender committee and can therefore not influence the awarding of tenders in his home Province of Limpopo.

Whether he did or did not take bribes with the understanding that he would influence the awarding of tenders in Limpopo, his defence was not plausible. This is because one does not have to sit on a tender committee to influence a tender. All one needs to do, is to ensure that one has influence or power over those who sit on the tender committee. One can obtain influence or power over those who sit on such a committee by ensuring that that political underlings sit on the committee or by bribing its members or by ensuring loyal political allies sit on the committee or by obtaining a hold over those who sit on the committee by letting it be known that one has damaging information about them which might be leaked to the media.

It is therefore not too difficult unfairly or even corruptly to influence the awarding of tenders without formally breaking the law. This is because it is very difficult to insulate the procurement process from informal loyalties and political considerations. That is why – with tenders – perceptions can be almost as important as the reality.

Not that the Constitution and South African legislation do not attempt to address these problems as best it can. Section 217(1) of the Constitution therefore states that:

When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.

Section 217(2) qualifies this general statement as it states that organs of state are allowed to implement a procurement policy providing for categories of preference in the allocation of contracts; and the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. But this has to happen in a manner that is fair, equitable, transparent and competitive.

In terms of section 76(4)(c) of the Public Finance Management Act (PMFA) the National Treasury may make regulations or issue instructions concerning the determining of a framework for an appropriate supply chain management at national or provincial level which is fair, equitable, transparent, competitive and cost-effective. However, according to section 38(1)(a)(iii) of the Act it is the responsibility of the accounting officer/authority of a department, trading entity or constitutional institution to have and maintain an appropriate procurement and supply system which is fair, equitable, transparent, competitive and cost-effective. Where a procurement system is established that is not fair, equitable, transparent, competitive and cost effective, the awarding of a tender through that system would be unlawful.

Which brings us to the curious case of the Western Cape government’s curious politicisation of the tender process in a case that implicates the government at best in improper behaviour.. During 2011, the Department of the Premier in the Provincial Government of the Western Cape contracted with a company for the provision of various communications services. Two special advisors of Premier Helen Zille were appointed to the Committee tasked with evaluating the various bids for this contract. In a draft report by the Public Protector regarding the alleged improper or unlawful participation of these special advisors in the evaluation of the bids, it was concluded that these appointments was unlawful and had rendered the adjudication management and the entire procurement process invalid and constituted improper conduct and maladministration. One of these special advisors, Ryan Coetzee, is often referred to as the political brains trust of the DA and during the last national election he was the party’s main election strategist and Chief Executive.

The DA’s obtained legal advice to try and counter this preliminary finding. The legal advice, prepared by Geoff Budlender, distinguishes between conduct which is unlawful because it is in breach of a prescription of the law and may affect the legal validity of the conduct in question on the one hand and improper because it is inappropriate in some way. The fact that conduct has been improper does not necessarily affect its legal validity.

Budlender then argues – correctly as far as I can tell – that there is no provision in the law which explicitly prohibits the participation of Special Advisers as members of a Bid Evaluation Committee. He also, rather technically and formalistically, argues that the Constitution, read with various guidelines and regulations, do not implicitly prohibit the participation of a special advisor in a bid evaluation committee. Although the involvement of Zille’s special advisors might have been improper, it may not have been unlawful. But the legal advice is not nearly as unequivocal as the DA presented it as being, as Budlender writes that the question whether the appointment of the Premier’s special advisors to the bid evaluation committee was unlawful or not “may be in some doubt”:

In this matter, however, the situation is somewhat blurred by the fact that there is no explicit prohibition of Special Advisers being members of Bid Evaluation Committees. If there is such a prohibition, it is one which is to be inferred from other provisions of the law. It seems to me that this weakens the applicability of the general proposition that the legislation contemplates that a failure to constitute the BEC lawfully is to result in a nullity.

I would argue that in deciding whether the presence of Zille’s special advisors were unlawful or not, one should look at the purpose of section 217 of the Constitution and the relevant provisions in the PFMA in order to judge whether a tender procedure complies with it and that one should also take into account the specific context of each case (as the Constitutional Court often does). One should therefore not look at this question in the abstract (as Budlender seems to do), but should look at the facts of each case and ask whether the system set up to evaluate the tender was in a particular case indeed fair, equitable, transparent, competitive and cost-effective as required by the Constitution and the PFMA.

As I see it, the purpose of section 217 of the Constitution, the PFMA and the procurement regulations set up to give effect to it, is to prevent corruption and to establish a fair tender system in which political or personal financial considerations would play no role in the decision-making of the committee called upon to evaluate and award tenders. Where one of the Premier’s special advisors happens to be a highly controversial and profoundly political appointee (how could he not be, given that he was one of the leading political strategists of the DA during the last national election and that he stood for the position of the Parliamentary leader of the DA a few years ago), it is clearly improper that the special advisor should be part of a tender bid evaluation committee.

As Budlender suggests, it is arguably also unlawful as the participation of such a political animal, someone who advises the Premier and the leader of the DA and is known to be politically highly influential, would sabotage the integrity of the procurement process and would create the reasonable perception that the system is not fair and equitable. Luckily for the DA government, the Premier’s special advisors were not particularly effective and did not manage to sway the committee to support the bid of their choice, which means that the government would probably not have to cancel the contract even if it had followed an unlawful process in awarding the tender.

However, these seem to me to be a rather technical and unnecessarily formalistic approach to a matter of impropriety (or, perhaps, unlawful conduct). What, I wonder, would the DA have said if Paul Ngobeni, the then special advisor to Minister Lindiwe Sisulu, had been appointed to a bid evaluation committee of the Department of Defence? Or if Gwede Mantashe had been appointed to a bid evaluation committee in the Office of the Presidency?

Even if, following the formalistic narrow reasoning of the DA’s legal opinion, such appointments would not be deemed unlawful, they would be wrong and improper and the DA would have had a field day painting the ANC government as corrupt because of the involvement of such highly controversial individuals with clear and unwavering political commitments and loyalties to a bid evaluation committee. The same rule should therefore surely apply to the DA in this case.

It is not appropriate for a special advisor to a politician to sit on a bid evaluation committee, full stop. It is even more inappropriate if that special advisor is controversial and is perceived to be and is in fact, a politician him or herself and is widely viewed as representing the views of the politician he or she supposedly advises.

The DA would do well to stop parsing words and drop the reliance on the formalistic technical legal arguments and admit that what the Western Cape government did was wrong. Although there is no evidence of corruption, it does not make an otherwise improper or unlawful process proper and lawful.

What was Ryan Coetzee doing on this bid evaluation committee in any case? Why did he, unlike everyone else, favour a different bidder? Was he improperly pushing for the awarding of a tender to the bidder favoured by his political boss, Helen Zille? There might be innocent answers to these questions, but because of his high political profile, the perception is necessarily created that something is fishy with his involvement in this process. That is why special advisors, especially special advisors of this kind, should never sit on bid evaluation committees. Why the DA cannot just admit this and move on is beyond me.

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