The Hawks are investigating eThekwini mayor Zandile Gumede for actively facilitating money laundering, fraud and corruption, allegedly to pay back cronies who helped her political ambitions.

A hard-hitting forensic report on which the case is based states that Gumede summoned a municipal official to her home to demand that a R25m tender go to handpicked companies.

Those companies, the report states, may have belonged "to councillors and political figures that had supported Gumede in her political endeavours and that councillor Gumede owed them a token of gratitude in the form of contracts from eThekwini".

The investigation, which the Hawks launched last month, is based on information contained in the report, by Integrity Forensic Solutions, into claims that contracts dished out for the hiring and cleaning of chemical toilets in August last year were riddled with corruption.

Hawks spokesperson Hangwani Mulaudzi confirmed the investigation, but declined to name the two councillors under investigation.

But they are named in the forensic report as Gumede and Mondli Mthembu, a councillor who chairs the human settlements committee in council. They and three officials allegedly orchestrated a corruption and money-laundering "scam", which saw eThekwini pay R25m to hire about 800 chemical toilets for six months. Before this, the city had paid about R3m to hire toilets for three years.

This is one of the cases that led to this week's dramatic withdrawal by Auditor-General Kimi Makwetu of his staff from the eThekwini municipality, because they had received death threats.

"They were told to stop requesting documents from the city's integrity and investigations unit and the supply chain departments," a senior city official told City Press this week. "They were threatened with death. Some of them said they received anonymous calls from people telling them that they know where they stay and where their kids go to school."

City Press further understands that the Integrity Forensic Solutions report – which was leaked by opposition parties in the eThekwini council – was requested by the Auditor-General's staff, and that municipal officials had refused to hand it over.

The dossier also implicates three officials: the deputy head of the metro's water and sanitation unit, Sibusiso Vilane; the department's superintendent, Nkosinathi Zuma; and senior manager Vusumuzi Mkhwanazi.

The dossier also found that:

The human settlements unit spent about R3m in providing poor residents with chemical toilets between 2014 and 2017. And, when the water and sanitation department took over in August, its budget ballooned to R15m. By the end of February, the unit had spent R25m hiring about 800 toilets;

Bidvest and Sanitech, whose contracts were cancelled in June last year, charged the metro R1 248 and R780 respectively for supplying and cleaning a toilet a month. But the nine companies appointed to supply the toilets in August charged the metro R4 500 for the first month and R3 840 for the subsequent five months;

The nine companies couldn't supply the toilets at all and ended up subcontracting Bidvest and Sanitech to do it anyway, at a cost of R1 200 per toilet, per month;

Zuma instructed at least one of the nine companies, eThekwini Construction, to pay R1 500 per toilet per month to all the service providers on Mthembu's list. This amounted to between R450 000 and R500 000 a month and "constituted money laundering", the report found; and

The Delangokubona Business Forum and MK NUZ (Umkhonto weSizwe's Umlazi branch) allegedly extorted R85 000 a month from the owner of one of the chemical toilet supply companies, threatening to burn his toilets if he didn't cooperate.

Gumede's spokesperson, Mthunzi Gumede, said: "The mayor takes these allegations very seriously, but she is concerned that nobody has presented such a report to her and that when investigations were conducted, she was never approached. She will seek legal guidance and has vowed to continue fighting corruption.

"She has approached the city manager to look into the matter and act decisively. The mayor and councillor Mthembu have never participated in tender processes. This is just clear propaganda by those working with the opposition to collapse the municipality."

The false emergency

In February last year, eThekwini's human settlements department told the city's water and sanitation unit that it could no longer afford to pay Bidvest and Sanitech to supply chemical toilets. The department went on to say that it would cancel the contracts by the end of June, and that the water and sanitation unit would have to take over the responsibility. But by August, water and sanitation hadn't started supplying toilets, and impoverished residents had no sanitation.

Vilane then wrote to city manager Sipho Nzuza on August 18, requesting permission to bypass procurement rules, claiming it was an emergency, which Treasury allows.

"Vilane was aware of the requests from human settlements for a number of months [and] cannot claim that when he compiled the memo, the need to procure the chemical toilets was an emergency," the report found. It also found that Vilane lied to the city manager.

Zuma later told investigators that the city started supplying toilets on August 9, nine days before Vilane compiled his memo. The report states that Mkhwanazi handed him a list of suppliers, instructing him to ask the companies to start delivering the chemical toilets immediately. "Zuma stated that he was in meetings with Vilane and Mkhwanazi from August 9 onwards, wherein the duo gave him instructions as to what the service providers should be charged, which service providers should be awarded, and which areas to supply and deliver the toilets," the report found.

Gumede's instruction

Zuma also told investigators that the following month, Zandile Gumede summoned him to her home in up-market Sunningdale and "questioned him as to why it was that the list of suppliers that had been given to Vilane and Mkhwanazi by councillor Mthembu had not been awarded the contract".

Zuma stated that the mayor ordered him to see to it that Mthembu's instructions were followed.

After meeting Gumede, Zuma said it dawned on him that Vilane and Mkhwanazi hadn't chosen the companies Mthembu wanted. Mthembu then called the three officials to a meeting, where he rebuked them for not appointing the companies he wanted.

"Mthembu insisted that these service providers be given work to supply the toilets since they were councillors and political figures that had supported councillor Gumede in her political endeavours, and that councillor Gumede owed them a token of gratitude in the form of contracts from eThekwini," the report states.

"The submissions of Mthembu, and the fact that Gumede summoned Zuma to her house to reinforce the instruction of Mthembu, gives probative weight to the allegation that Gumede was using the power of her office to secure the award of contracts for persons on the list provided by councillor Mthembu to Vilane and Mkhwanazi," said the dossier.

Plan B

Zuma said he and the other two officials then "devised a plan to have the service providers put up by councillor Mthembu benefit from the supply of chemical toilets".

This involved instructing one of the companies, eThekwini Construction, to pay R1 500 per toilet per month to all the nine companies on Mthembu's list, and they "were being paid between R450 000 and R500 000 per month ... for six months".

Zuma told investigators that the companies Mthembu suggested rendered no services to the metro at all because they had no capacity to do so.

The company had little trouble passing on R1 500 per toilet per month to the suppliers "which Gumede and Mthembu wished to ingratiate", the report concludes.

eThekwini Construction could not be reached for comment.

The hangers-on

Alvin Naicker, a member of a company called Matt Hayden's – one of the service providers appointed to supply the toilets – told investigators he was approached by members of the Delangokubona Business Forum and MK NUZ, who demanded he pay them R45 000 and R40 000 a month, respectively, for the life of the contract.

Naicker, who could not be reached for comment, told investigators "he was threatened by these representatives [who said] that they will destroy the toilets he was hiring from Sanitech if he did not pay them" – and he did so.

Delangokubona is a Durban-based mafia-style business outfit, notorious for invading construction projects and demanding a stake in them.

Mthunzi Gumede did not respond to a detailed set of questions about the allegations against Zuma, Vilane and Mkhwanazi.