{"id":240685,"date":"2022-10-20T17:08:17","date_gmt":"2022-10-20T15:08:17","guid":{"rendered":"https:\/\/www.groundup.org.za\/article\/lotteries-commission-cracks-down-on-sky-high-spending-on-lawyers\/"},"modified":"2022-10-20T17:08:17","modified_gmt":"2022-10-20T15:08:17","slug":"lottery-cracks-down-on-sky-high-spending-on-lawyers","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/lottery-cracks-down-on-sky-high-spending-on-lawyers\/","title":{"rendered":"Lottery cracks down on sky-high spending on lawyers"},"content":{"rendered":"<div id=\"article_body\">\n<p><a class=\"bigger-image\" href=\"https:\/\/www.groundup.org.za\/media\/uploads\/images\/photographers\/Ashraf%20Hendricks\/Lotto-8518HR.jpg\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" alt src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/10\/lottery-cracks-down-on-sky-high-spending-on-lawyers.jpg\"><\/a><\/p>\n<p class=\"caption\">Minister of Trade, Industry and Competition Ebrahim Patel says he has asked the National Lotteries Commission for details of legal expenditure. Archive photo: Ashraf Hendricks<\/p>\n<ul>\n<li>Minister Ebrahim Patel has asked the National Lotteries Commission for details of legal costs involving himself, media houses and journalists.<\/li>\n<li>Legal expenses last year skyrocketed to R78-million.<\/li>\n<li>\u201cIrregular\u201d legal and information technology contracts are to be terminated.<\/li>\n<li>The Acting Commissioner has told staff not to brief any lawyers on its legal panel.<\/li>\n<\/ul>\n<p>The National Lotteries Commission (NLC) has cracked down on fees running into tens of millions of rands paid to lawyers, including fees paid in matters involving the Minister of Trade, Industry and Competition, and the media.<\/p>\n<p>The NLC\u2019s legal fees in the 2021\/2022 financial year <a href=\"https:\/\/drive.google.com\/file\/d\/1kU8WbW_oWRqcNX4Ed-GhGBIqPn_Q9wJ2\/view?usp=sharing\">skyrocketed to R78-million<\/a>, nearly twice as much as the previous year, according to the Auditor-General.<\/p>\n<p>The NLC has also cancelled \u201cirregular\u201d Information and Communications Technology (ICT) contracts, new board chairman Barney Pityana told Parliament\u2019s Trade, Industry and Competition portfolio committee last month.<img loading=\"lazy\" decoding=\"async\" alt class=\"leave\" height=\"1\" id=\"gu_counter\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/10\/lottery-cracks-down-on-sky-high-spending-on-lawyers.gif\" width=\"1\"><\/p>\n<p>\u201cAll irregular ICT and legal contracts were terminated on 16 September 2022,\u201d Pityana told MPs.<\/p>\n<p>And, responding last week to a<a href=\"https:\/\/drive.google.com\/file\/d\/13EB6KgDg7BanxnPLv12CnUpFvO26oysm\/view?usp=sharing\"> written parliamentary question<\/a> by Democratic Alliance MP Mat Cuthbert, Minister of Trade, Industry and Competition Ebrahim Patel said he had asked the NLC for details of expenses incurred for litigation or legal advice involving himself or any politician, media house or journalist, and the South African National Editors\u2019 Forum (SANEF).<\/p>\n<p>The background to this, and the steps taken by the NLC to clamp down on exorbitant legal expenses, are outlined in a recent <a href=\"https:\/\/drive.google.com\/file\/d\/1OXPXzXnO_68lvck9LRVLA5vjinGYIGh5\/view?usp=sharing\">memo<\/a> to the NLC\u2019s management from acting Commissioner Lionel October. October wrote that since the Auditor-General had declared payments to the NLC\u2019s legal panel to be \u201cirregular expenditure\u201d, management should stop briefing the panel of lawyers on new or continuing matters. A new \u201ccompetitive bidding process\u201d for legal services \u2026 if still required\u201d would be initiated, he added.<\/p>\n<h2 class=\"subheading\">Auditor-General\u2019s damning report<\/h2>\n<p>The Auditor-General noted in a confidential management report to the NLC on its findings for the 2021\/2022 financial year, that: \u201cAs per the analysis of the financial expenditure for the NLC, we noted that legal fees increased by R37-million, which represents a 91 percent increase from the prior year,\u201d. Legal fees had amounted to R78-million, which made up 31% of all goods and services that were procured, the Auditor-General said.<\/p>\n<p>Based on a sample of legal fees paid out by the NLC, the Auditor-General found that 37% of these fees were for \u201cdisciplinary hearings\u201d and \u201cCCMA cases.\u201d The next highest category, 30%, was for \u201clegal opinion on corporate governance and review of regulation\u201d.<\/p>\n<p>The Auditor-General also <a href=\"https:\/\/drive.google.com\/file\/d\/12S6buG3wR_fd6yogoVqCXcjIOKDLYVkI\/view?usp=sharing\">highlighted issues<\/a> with the NLC\u2019s information technology spending in its management report.<\/p>\n<p>\u201cThe status of information and communications technology (ICT) audit outcomes remain stagnant as they show no improvement in addressing the previous year\u2019s audit findings relating to user access management controls.<\/p>\n<h2 class=\"subheading\">Expensive legal battles<\/h2>\n<p>GroundUp has previously reported on the NLC\u2019s<a href=\"https:\/\/www.groundup.org.za\/article\/litigious-lottery-spends-millions-rands-lawyers\/\"> legal expenditure<\/a>, including <a href=\"https:\/\/www.groundup.org.za\/article\/nlc-spends-millions-litigation-former-employees\/\">litigation against former staff<\/a>. Included in this earlier expenditure was almost R1-million spent on unsuccessful legal attempts to stop the publication of information about recipients of Lottery grants, including how much they had received.<\/p>\n<p>At least R720,000 was spent on a failed <a href=\"https:\/\/www.groundup.org.za\/article\/lottery-threatens-legal-action-against-minister-ebrahim-patel\/#:~:text=Lawyers%20acting%20for%20the%20National,Competition%20Ebrahim%20Patel%20to%20court.&amp;text=The%20NLC%20letter%20%E2%80%94%20marked%20%E2%80%9CExtremely,him%2024%20hours%20to%20respond\">legal battle<\/a> with Ebrahim Patel, the Minister of Trade, Industry and Competition. The NLC had sent the minister a <a href=\"https:\/\/drive.google.com\/file\/d\/1BrWCSRfbLVlT3pkQlxtdexg1pk5NKR6j\/view\">letter of demand<\/a> giving him a 24 hour deadline to hand over a <a href=\"https:\/\/www.groundup.org.za\/article\/evidence-lottery-probe-handed-police\/\">dossier<\/a> with details of an investigation commissioned by Patel. A judge <a href=\"https:\/\/www.groundup.org.za\/article\/judge-dismisses-lottery-bid-to-have-corruption-probe-declared-unlawful\/\">dismissed an application<\/a> to have the appointment of the investigators declared illegal.<\/p>\n<p>The NLC also spent R5.7-million in <a href=\"https:\/\/www.groundup.org.za\/article\/nlc-spends-millions-litigation-former-employees\/\">a legal battle<\/a> with a former employee. Mzukisi Makatse, who <a href=\"https:\/\/www.groundup.org.za\/article\/lottery-whistleblower-pays-high-price\/\">was suspended and then dismissed<\/a> after he was accused of insubordination when he refused to sign off on <a href=\"https:\/\/www.dispatchlive.co.za\/news\/2018-02-10-festival-in-r6m-funds-scandal-npos-lotto-money--went-to-buyelekhaya\/\">a dodgy 2017 grant<\/a> for a music festival in East London.<\/p>\n<p>Ndobela Lamola, Justice Minister Ronald Lamola\u2019s former law firm, which acted against Makatse, <a href=\"https:\/\/www.groundup.org.za\/article\/lottery-law-firm-and-minister-more-questions-answers\/\">earned R19-million<\/a> over four years for legal work for the NLC.<\/p>\n<h2 class=\"subheading\">Minister demands answers<\/h2>\n<p>In his answer to Cuthbert\u2019s questions, Patel made it clear that he was not satisfied with the NLC\u2019s response to his request for information, and said he had requested additional details about \u201cspecific matters covered in legal briefs.\u201d<\/p>\n<p>He said he had asked the NLC to furnish details of \u201cthe total legal and<br \/>consultancy costs of the various matters involving the Ministry, \u201cincluding but not limited to\u201d<\/p>\n<ul>\n<li>litigation on the <a href=\"https:\/\/www.groundup.org.za\/article\/minister-and-lottery-board-at-war-over-a-new-chair\/\">appointment of an acting chairperson<\/a>;<\/li>\n<li>litigation on disclosure of information and <a href=\"https:\/\/www.groundup.org.za\/article\/lottery-threatens-legal-action-against-minister-ebrahim-patel\/#:~:text=Lawyers%20acting%20for%20the%20National,Competition%20Ebrahim%20Patel%20to%20court.&amp;text=The%20NLC%20letter%20%E2%80%94%20marked%20%E2%80%9CExtremely,him%2024%20hours%20to%20respond\">appointment of forensic investigators<\/a>;<\/li>\n<li>litigation on the appointment of an NLC board;<\/li>\n<li>legal or consultancy advice sought on the powers of Minister or the Department of Trade, Industry and Competition <a href=\"https:\/\/www.groundup.org.za\/article\/lotteries-commission-goes-court-force-minister-appoint-new-board\/\">relating to the previous NLC board<\/a>, including its removal;<\/li>\n<li>legal or consultancy advice sought on the <a href=\"https:\/\/www.groundup.org.za\/article\/national-lotteries-commission-refuses-release-list-beneficiaries\/\">disclosure of beneficiary information<\/a>;<\/li>\n<li>legal or consultancy advice sought on the appointment of <a href=\"https:\/\/www.groundup.org.za\/article\/judge-dismisses-lottery-bid-to-have-corruption-probe-declared-unlawful\/\">forensic firm Nexia SAB&amp;T<\/a> by the DTIC and the appointment of the SIU [Special Investigations Unit] by the President;<\/li>\n<li>media consultancy or lobbying costs involving matters relating to the Ministry or the DTIC;<\/li>\n<li>legal or consultancy cost in relation to disciplinary proceedings commenced by the Minister against members of the Board;<\/li>\n<li>legal and consultancy costs of the various matters involving any member of Parliament; and<\/li>\n<li>legal and consultancy costs of the various matters involving any journalist or media house or SANEF.<\/li>\n<\/ul>\n<p>Patel said: \u201cThe <a href=\"https:\/\/www.groundup.org.za\/article\/judge-dismisses-lottery-bid-to-have-corruption-probe-declared-unlawful\/\">new board<\/a> is currently reviewing the legal costs of the NLC. I will request the board to consider that the review should cover whether legal costs are justified; and to adjust future NLC budgets based on the outcome of the review.\u201d<\/p>\n<p>He said he would also ask for a review of work done by NLC\u2019s legal unit, which has seven members of staff.<\/p>\n<\/p><\/div>\n<div id=\"article_copyright\">\n<p>\u00a9 2022 GroundUp. This article is licensed under a <a href=\"http:\/\/creativecommons.org\/licenses\/by-nd\/4.0\/\" rel=\"license\">Creative Commons Attribution-NoDerivatives 4.0 International License<\/a>.<\/p>\n<p>You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.<\/p>\n<p>We put an invisible pixel in the article so that we can count traffic to republishers. All analytics tools are solely on our servers. We do not give our logs to any third party. Logs are deleted after two weeks. We do not use any IP address identifying information except to count regional traffic. We are solely interested in counting hits, <b>not tracking<\/b> users. If you republish, please do not delete the invisible pixel.<\/p>\n<\/p><\/div>\n<p><img decoding=\"async\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/10\/lottery-cracks-down-on-sky-high-spending-on-lawyers.jpg\"><a href=\"https:\/\/www.groundup.org.za\/\">Source: GroundUp<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Minister of Trade, Industry and Competition Ebrahim Patel says he has asked the National Lotteries Commission for details of legal expenditure. Archive photo: Ashraf Hendricks Minister Ebrahim Patel has asked the National Lotteries Commission for details of legal costs involving himself, media houses and journalists. Legal expenses last year skyrocketed to R78-million. \u201cIrregular\u201d legal and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":240686,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9928],"tags":[28001],"class_list":{"0":"post-240685","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-groundup","8":"tag-groundup","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/10\/lottery-cracks-down-on-sky-high-spending-on-lawyers.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/240685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=240685"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/240685\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media\/240686"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=240685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=240685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=240685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}