South Africa’s Special Investigating Unit (SIU) investigators have entered the National Lotteries Commission (NLC) offices in Hatfield, Pretoria, this week after obtaining a search-and-seizure warrant on Monday.
President Cyril Ramaphosa signed a proclamation in November authorising the SIU to investigate alleged corruption and maladministration involving the NLC.
The investigation is looking into, among other matters, serious maladministration in connection with the affairs of the organisation; unlawful appropriation or expenditure of public money or property; improper or unlawful conduct by employees or officials at the commission; unlawful, irregular or unapproved acquisitions, transactions, measures or practices having a bearing on state property; and intentional or negligent loss of public money or damage to public property.
The NLC has been subject to many corruption allegations recently, mainly centering on the distribution of proceeds of the national lottery.
The commission’s job is to regulate lotteries and distribute funds to good causes. It generates its funding and operational budget from national lottery proceeds, which is about R1.5bn-R2bn annually. Proactive funding represents around 10% of total annual funding by the commission.
The commission has the authority to grant funding to worthy causes without the need for applications through a 2015 amendment to its enabling act. While the amendment addressed the need for funding when organisations lacked the ability to submit formal applications, it rendered the funding process subject to abuse and corruption.
Some NLC executives, such as COO Phillemon Letwaba, who was suspended earlier in 2020, have been accused of channelling multimillion-rand grants to non-profit organisations that are connected to family and friends.
Last week, the NLC stated it would be investigating an unusual national lottery draw which resulted in 20 jackpot winners.
