Lottery Spent Over R1-Million on Lawfare

The National Lotteries Commission spent over R1-million to try to stop GroundUp exposing the corruption that was overwhelming it.

• Under its previous administration, the National Lotteries Commission (NLC) spent at least R1-million on lawyers to try to stop or counter GroundUp’s reportage exposing corruption at the NLC.
• Misinformation was spread and personal attacks launched on the integrity of our reporter.

Under its previous board and administration, the National Lotteries Commission spent at least R1-million on legal advice and lawyers’ letters to try and intimidate GroundUp and stop it from publishing stories exposing rampant corruption.

The payments were part of a concerted campaign against GroundUp that included unsuccessful complaints to the Press Council and the regular issuing of defamatory media releases attacking the integrity of GroundUp and this reporter.

At one stage, lawyers acting for the NLC sent a letter saying it intended to lay a criminal complaint against GroundUp and this reporter.

The NLC also demanded that GroundUp remove 16 stories from its website, many exposing incompetence and probable corruption involving multimillion-rand Lottery-funded projects.

The payments of fees for legal actions against GroundUp were disclosed by new Minister of Trade, Industry and Competition (TIC) Parks Tau in response to written questions from Democratic Alliance MP Toby Chance.

Tau disclosed three matters involving costs totalling nearly R1.4-million, which the NLC incurred for legal advice on media stories it believed were defamatory. Although GroundUp is only named in one of the responses, all three almost certainly involved our stories.

A reliable source, who worked at the NLC at the time, said, “The only media publication house that the old guard pursued was GroundUp.”

The payments disclosed by Tau are:

• “Media article on GroundUp” at a cost of R606,819;
• “NLC/Advice on defamatory publication/TimesLive includes a payment of over R376,573 (at that time TimesLive regularly published GroundUp’s Lottery stories); and
• “NLC advice on defamatory publication” at a cost of R395,053.

By comparison, the sum of these three amounts, just under R1.4-million, exceeds by some margin all the legal fees GroundUp has incurred in its 12-year existence, which has involved considerable litigation. Not a single legal action by the NLC against GroundUp succeeded.

Lawyers letters

Malatji Khanye (formerly Malatji & Co) was the legal firm used in all three of the above matters.

The first was on 30 January 2020, when the NLC demanded an undertaking from GroundUp that it would cease publishing details of lottery grant beneficiaries, failing which it would pursue the matter in court.

The NLC had also tried to use a section of the Lotteries Act to stop GroundUp from publishing the details of non-profit organisations that received lottery funding. In the letter, Malatji quoted a regulation aimed at preventing members of the NLC’s distributing agencies, who adjudicate on funding applications, from disclosing information about grants.

In a second letter, on 1 February 2020, Malatji amplified its demand for the removal of the articles mentioning beneficiaries and claimed that it intended to lay criminal charges.

GroundUp’s attorney, Jacques Louw, responded to Malatji disputing the NLC’s interpretation of the regulations.

Three weeks later, the NLC laid a complaint with the Press Ombudsman. GroundUp opposed the complaint because it was submitted late and was the subject of pending litigation covering the same issues.

The complaint was rejected by the Public Advocate of the Press Council and this was confirmed on appeal. Malatji was not directly involved in the Ombud matter.

The second time Malatji was involved in a matter against GroundUp was in July 2020, when it represented a brand new non-profit, United Civil Society in Action (UCSA), which was trying to stop GroundUp from publishing details of lottery grantees. The NLC was named as a respondent in the matter and Malatji represented the Commission and filed answering papers. But, even though the NLC was listed as a respondent, UCSA put forward arguments similar to those the NLC had used to claim that it would be illegal for details of grants to be made public.

UCSA, headed up by Tebogo Sithathu, who was close to the NLC’s previous administration, sent a lawyer’s letter to Ebrahim Patel (then TIC minister who has been succeeded by Parks Tau) demanding that he not release details of organisations that had received Lottery grants.

Then on 6 November 2020, Malatji wrote to GroundUp on behalf of NLC Commissioner Thabang Mampane (who would later resign under a cloud). A few days earlier, GroundUp had reported how she had told Parliament that a Lottery-funded minstrel museum, which didn’t exist, had been completed.

Mampane, who said that the article was defamatory and “patently false”, demanded a retraction of the story and an unconditional apology. GroundUp’s lawyer responded, stating the facts about the museum, and asked Mampane to disprove them. Malatji never responded.

GroundUp reported earlier this month how Sithathu is involved in a new fightback to dislodge the current NLC board and commissioner.

Media campaign

The NLC backed up its “lawfare” campaign with complaints to the Press Council and defamatory media statements like this one in June 2020, headlined: “GroundUp campaign against the National Lotteries Commission.”

It was in response to an editorial published by GroundUp on the same day, titled “Lawfare launched against GroundUp to stop us from exposing lottery corruption.”

The editorial, based on years of stories published by GroundUp, bluntly stated: “The National Lotteries Commission is a corrupt, captured state institution that is enabling the pillaging of poor people’s money.”

In its statement, the NLC made wild allegations without offering any evidence about GroundUp’s reporting. The allegations, which were similar to claims made in other media statements it had released and would continue to release, began after GroundUp started exposing corruption involving Lottery funds.

The NLC said, “The National Lotteries Commission notes the continued false, defamatory and injurious attacks by GroundUp today. Aside from the content of this campaign being slanted and biased, it is littered with half-truths and supposition.”

In another media statement (July 2020), the NLC said it was the “subject of a campaign of relentless vilification by online publication GroundUp and Raymond Joseph. This sensationalised campaign has harmed the NLC in its business and defamed its leadership”.

And, when GroundUp visited Kuruman to report on a series of lottery-funded infrastructure projects, where tens of millions of rands had been misappropriated, the NLC released a media statement calling on the public to report this reporter to its fraud line. It also asked them to report whistleblower Sello Qhina, who joined me in Kuruman.

The NLC subsequently removed our names from the copy of the media release it published on its website.

A misinformation campaign

The NLC may well have been behind or co-operated with an anonymous, defamatory graphic claiming that this reporter and people connected to him had benefited from over R51-million in lottery grants. The graphic continues to be disseminated.

All those named in it had at some time been directors of The Big Issue, a non-profit magazine. The graphic listed a series of grants to other non-profits in which they were subsequently involved. Tellingly, the graphic lists two grants as having their application for funding rejected – something only someone who had access to the NLC’s grants system could have known.

Disgraced former NLC COO Phillemon Letwaba repeated the claims in a 2021 interview on television. This reporter is now suing him for defamation.

Following the interview, DA MP Mat Cuthbert in a written parliamentary question to then TIC Minister Ebrahim Patel asked for the details of the 12 organisations Letwaba claimed were supposedly linked to this reporter.

In his reply, Patel said he had been given an answer by NLC Commissioner Mampane that “the NLC received ‘a formal anonymous complaint’ relating to Mr Raymond Joseph having a direct or indirect interest in eight NLC-funded organisations”.

Patel said the NLC had failed to provide him with any details of the so-called links to this reporter.

Sithathu included the graphic in a letter he sent recently to Minister Tau, which included a demand that this reporter be investigated. He also reshared the graphic widely on social media but, as with the letter to Tau, supplied no evidence to back up the claims.

None of the grants mentioned have ever been flagged and no evidence of fraud or corruption involving them ever produced. Nor has this reporter, any member of his family or GroundUp ever financially benefited from any Lottery grants. But even had any of us received Lottery funding, it would not constitute a conflict of interest to report on corruption at the NLC.

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