State shelled out R5m employing family of Crime Intelligence boss Richard Mdluli

Former Crime Intelligence boss Richard Mdluli allegedly used a 2010 recruitment drive to illegally appoint and promote friends and family members into the division. File photo.
Former Crime Intelligence boss Richard Mdluli allegedly used a 2010 recruitment drive to illegally appoint and promote friends and family members into the division. File photo.
Image: Peggy Nkomo

Seven members of former Crime Intelligence boss Richard Mdluli's family who were appointed in the division in 2010 are said to have cost the state about R5m in salaries and  expenses, although some spent their time shopping or visiting family in other provinces.

Crime Intelligence officer Dhanajaya Naidoo told the state capture inquiry on Tuesday that he was put in charge of "handling" the family members and overseeing the administration of their expenses in the unit.

He told the commission on Monday that Mdluli and other senior officials allegedly used a 2010 recruitment drive as an instrument to illegally appoint or promote friends and family into the division.

The recruitment process, which saw 250 Crime Intelligence agents  appointed without normal procedures being followed, was initiated by Mdluli and the division's secret service account finance boss Solomon Lazarus. Both men stand accused of looting the secret service account to finance overseas trips and luxury cars and maintain their private homes.

They allegedly used the recruitment process to appoint dozens of friends and family members into high-ranking posts, although some were ordinary civilians.

Naidoo was put in charge of handling seven agents who he identified as members of Mdluli's family.

"I was tasked with handling their claims for salaries, medical claims, vehicles," he said.  

He said four of Mdluli's family members were appointed in the Crime Intelligence cyber crime unit. Naidoo said he did not know what they did operationally because he only handled their administrative needs. He said they were tasked to run a covert internet cafe.

"I was responsible for setting up this front company. The amount to set up the internet cafe was about R75,000. I don’t think they had a particular knowledge of computers. They went for a basic training course regarding computers. This was paid for out of the secret service account. This cyber crime unit, I believe they should have some sort of expertise to work within this environment," Naidoo said.  

Another family member was also appointed to the same unit, but Naidoo said he hardly reported to work.

"On numerous occasions when compiling these claims I would see from petrol slips that he travelled to Mpumalanga, another province in which he is based. He would be away from work for extended periods," Naidoo said.

Two other family members allegedly worked from "covert premises" in Johannesburg. They worked in the loss management division of Company X, a front company used by crime intelligence to purchase vehicles and equipment.  

"Company X already had a loss management section at their office. A covert office was created to provide employment for these two individuals. It was a parallel structure to what was already in place. There was no need for that office," Naidoo said.   

"On numerous occasions I had to deal with their payment of salaries and reconciling their fuel claims. On most occasions they would not be at the office. They would either be at home or at the mall shopping. It was very rarely I found them at the office." 

Naidoo estimated that between March 2010 and October 2011, before he was put in witness protection, the total spent by crime intelligence on these seven members was around R5m. This covered salaries, the purchase of company vehicles, hiring safe houses and remuneration for medical and fuel claims.

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