ALLEGATIONS OF FRAUD, CORRUPTION, FINANCIAL MALADMINISTRATION AT KNYSNA MUNICIPALITY
Having been the target of verbal abuse and a total freeze-out by former Acting MM Gratz to avoid dealing with our complaints against CFO Memani and others, we are heartened to see that none other than Western Cape MEC for Local Government Anton Bredell is finally taking our complaints about corruption seriously.
The following letter speaks for itself. ...
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When Dr. Gratz arrived as Acting Municipal Manager (“Acting MM”) in February, Knysna municipality was experiencing a serious cash crunch for which the then Municipal Manager (“MM”), Dr. Vatala had been suspended. We had full confidence that the proposed new Acting MM, Dr Gratz, would build on her excellent track record in Mossel Bay and return Knysna to a path of financial sustainability and good governance. In her first month Dr. Gratz achieved more than her predecessors had done in years.
Because of our appreciation of the enormity of the task faced by Dr. Gratz, we did not request a meeting, nor did we contact her telephonically or correspond via email. We made a conscious decision to allow Dr. Gratz to continue with her work undisturbed.
Prior to accepting the position as Acting MM, Dr Gratz asked one our committee members, Susan Campbell, to come to her house.
Ms Campbell informed the KRA about her interactions with Dr Gratz, which were as follows:
Ms. Campbell already knew Dr. Gratz, as in 2019, at the request of Dr. Gratz, she investigated the management of a public benefit organization in George and Mossel Bay.
Ms Campbell attended to the request from Dr. Gratz on an ex gratia basis (i.e. no fees charged), even though the investigation was time consuming and involved the interview of more than 40 witnesses in George and Mossel Bay, requiring Ms. Campbell to spend a significant amount of her own resources travelling to and from George and Mossel Bay, and to get witnesses to attend the disciplinary hearings that ensued.
While Dr. Gratz was considering whether to accept the position of Acting MM of Knysna, she asked Ms. Campbell to come to her house on the 1st of February 2020. Dr. Gratz and Ms. Campbell had a frank and detailed discussion about the situation in Knysna. The discussion included Ms. Campbell’s opinion relating to officials she considered to pose a risk to the Knysna Municipality, as well as the troubling protection of certain officials by some of the politicians.
Thereafter Dr. Gratz and Ms. Campbell corresponded for more than two months via Whatsapp. Many of the messages were initiated by Dr. Gratz, seeking information about politicians or officials. Dr. Gratz also contacted Ms. Campbell telephonically on more than one occasion to discuss various issues, including specific staff members.
Ms. Campbell specifically raised the issue of the CFO and another director’s involvement in the conduct that resulted in the complaints that the KRA had submitted against the suspended MM, Dr. Vatala. The complaint related to the alleged fraudulent removal of municipal properties to the value of more than R60 million, from Knysna’s Annual Financial Statements (“AFS”) as contingent assets. The properties, including Swartvlei Caravan Park and three properties at Walker’s Point, Buffalo Bay, were the subject of a dispute between Knysna and Garden Route District Municipality (“GRDM”). In August 2018, the GRDM had advertised the properties for development proposals and the removal of the properties from Knysna’s AFS would pave the way for GRDM to develop them.
During this entire period, the relationship between Ms. Campbell and Dr. Gratz appeared to be one of mutual respect.
Sometime during lockdown, it came to Ms. Campbell’s attention that Dr. Gratz’s attitude to her had changed dramatically.
Dr. Gratz had complained to Councillor Myers that Ms. Campbell had met with Mr. Graham Paulse, from the Provincial Local Government Department, about“rehashed charges” against the CFO and that this was adding to her workload. According to Ms Campbell, this was untrue as she had not met with Mr. Paulse since 2014. Ms. Campbell thereafter had a telephonic conversation with Dr. Gratz to explain this. In the ensuing conversation, she stated that the animosity from Dr. Gratz was palpable and that it was clear that something or someone had influenced Dr. Gratz.
It emerged that Dr. Gratz had apparently become very close to the CFO and that she had set her sights on officials who had no involvement whatsoever in the municipality’s financial woes. In early May Dr. Gratz told Councillor Myers that she planned to dismiss the Director of Planning. Dr. Gratz was also targeting an official who had delivered complaints about the CFO to the suspended MM, Dr. Vatala.
Dr. Gratz’s focus then apparently also turned to Ms. Campbell, as on 14 May she brought an item before Council where the Director of Planning and Ms. Campbell were omitted from the Knysna Municipal Planning Tribunal. The appointment of a new Tribunal was rushed through Council at a meeting that the public could neither attend nor follow electronically. No reasons were given for the omission of the Director of Planning and the process that was followed fell hopelessly short of the requirements of the Promotion of Administrative Justice Act. One of our concerns was that one of the members who had been appointed had resigned from Nelson Mandela Metropolitan Municipality while he was facing disciplinary charges involving more than 100 unlawful planning approvals.
We then requested reasons and access to information relating to the appointment, but received no reply from Dr. Gratz.
During September 2019, KRA had delivered several complaints against the Manager Town Planning to the then MM, Dr. Vatala. KRA was aware of many instances of misconduct by the official in question, but the final straw was the unlawful approval of a planning application and building plans for a building in the commercial section of Thesen Islands. The matter is currently the subject of a high court review application brought by the Thesen Islands Home Owner’s Association. The municipality has acknowledged that the application was unlawfully approved, has agreed to abide by the decision of the court and has tendered a contribution towards the costs.
We were aware of the fact that the official in question had been suspended, but we have yet to receiveany information relating to the progress of his disciplinary hearing. During May 2020, Ms. Campbell was informed by a councillor that Dr. Gratz intended to terminate the disciplinary proceedings against the official. KRA was concerned that Dr. Gratz might not be aware of the seriousness of the allegations against the official and therefore sent Dr. Gratz a copy of the KRA complaint. The KRA also informed Dr. Gratz of further serious transgressions by the official that had since come to its attention.
As was the case with our requests for information, Dr. Gratz simply ignored this letter. We have yet to receive a response to any communication we have sent to Dr. Gratz.
When it became clear that the CFO was not being investigated for his role in the matters that gave rise to our complaints against Dr. Vatala, KRA delivered a complaint againsthim involving four instances of financial misconduct by the CFO. The first two complaints against Dr. Vatala were included. Within minutes of our complaint being delivered Ms. Campbell, who prepared the complaint, received extremely insulting Whatsapp messages from Councillor Myers. Councillor Myers also contacted another committee member about the matter. A municipal director was also contacted by Councillor Myers, who asked her to try to persuade Ms. Campbell to withdraw the complaint.
The day before the KRA complaint was intended to serve before the Knysna Council, it received a letter from the Deputy Mayor, advising the KRA that the complaint was defective, as it had neither been signed nor dated. A resolution from KRA was also required. Since the KRA had submitted complaints in exactly the same format before, which were acknowledged and attended to by the Knysna Municipality, the KRA was curious as to why this complaint did not meet the municipality’s requirements. The only assumption to be made is that this was clearly an attempt to protect the CFO. The KRA complained to politicians about this.
During the meeting of the Knysna Municipal Council of 28 May 2020,Council resolved that the KRA complaint would be entertained at the next Council meeting.
At the end of the meeting on 28 May, Dr. Gratz, the CFO and Councillor Myers resigned in a clearly pre-meditated and dramatic fashion. In her resignation speech Dr. Gratz made several false and defamatory allegations, which were clearly aimed at Ms. Campbell and the members of the KRA committee, attempting to lay the blame for her resignation at our door.
In her speech, Dr Gratz alleged that one of our members had contacted the Deputy Mayor and said that “Gratz must go”. That allegation is patently false and could not be confirmed by the Deputy Mayor when we contacted him about this. As a result of these false and defamatory allegations, some of our committee members have been subjected to insults and defamation on social media and elsewhere.
We believe that our serious, well-founded complaint against the CFO and Dr. Gratz’s desire to be appointed as Administrator, with full executive powers of Council, were the true reasons for the dramatic resignations of Dr. Gratz, the CFO and Councillor Myers. On the evening of her resignation, Dr. Gratz requested the CFO to stay on until the end of July. The CFO has yet to hand in a written resignation and appears to be going nowhere.
We have evidence that the CFO has falsely accused a municipal official and a director of being the whistleblowers in connection with our complaint against him. Two days before her departure, Dr. Gratz suspended the relevant official for allegedly leaking classified information to Ms. Campbell and to Ralph Stander. From the information at our disposal, we believe that the official so accused had never even met or spoken to Ralph Stander. The complaints prepared by Ms. Campbell were based onpublic documents and information obtained from private individuals. We have since been informed that Dr. Scheepers has uplifted the patently unlawful suspension and we commend him for his swift action to reverse the unlawful conduct of Dr. Gratz.
Immediately after Dr. Gratz resigned, an orchestrated campaign to request Premier Alan Winde to appoint Dr. Gratz as administrator of Knysna kicked off. Four days after her resignation speech, the DBSA threatened to withhold a loan and Dr. Gratz agreed to stay on, but only as administrator with the full executive powers of council.
By Thursday the 4th of June Dr. Gratz brought an item to Council requestingCouncil to agree to have her appointed as administrator for six months with the full executive powers of Council. The report was from Dr. Gratz, yet the recommendation was purportedly from the Deputy Mayor. We have been informed that the Deputy Mayor has denied that he made the recommendation.
The blatant conflict of interest in Dr. Gratz submitting a report and requesting Council to appoint her for six months, to a position in which she would have almost no accountability to the Knysna Council, and ultimately to the people who elected members to represent them to the Knysna Council, seems to have escaped all of those who were signing the petition.
The DA walked out when the ANC did not want to entertain the item before the budget had been approved. The budget process was shamelessly being held hostage in an attempt to force through the appointment of Dr. Gratz as administrator. For those who do not understand, the failure by Council to approve a budget before the end of the financial year, may give rise to the Municipality being placed under administration. Such a process would give the appointed Administrator (one person), full powers to make decisions about rates, charges and any other matters that affect the residents of Knysna.
If the DA and Dr. Gratz had had their way, Dr. Gratz would have been able to hire and fire municipal staff, sell properties owned by the municipality and basically do just about everything except approve the IDP and Budget and pass By-Laws. Dr. Gratz would have been accountable to no one, yet our elected representatives would have continued to earn their full salaries—a lose-lose situation for Knysna.
Fortunately, cooler heads prevailed and the coalition between the ANC and COPE appointed Dr. Scheepers as AMM. Our budget has since been approved and the DBSA loan is no longer an issue. KRA looks forward to working with Dr. Scheepers for the benefit of Knysna.
KRA has since established that Dr. Gratz’s conduct relating to the Planning Tribunal has been influenced by certain property developers, a planner, and the owner of the Thesen Island Property that is the subject of the litigation.
We intend to consult an attorney with a view to consider taking legal action against Dr. Gratz and all other parties who participated in the character assassination following Dr. Gratz’s false and defamatory claims against us. Dr. Gratz will have the onus to prove that the damaging allegations she made against us are true. ...
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KRA RESPONSE TO DR GRATZ COMMENT
If Dr. Gratz wanted to avoid a trial by media, she could have chosen to go quietly and in a dignified manner. Instead she chose to broadcast her dramatic resignation speech on the most public of platforms. Having extolled her own virtues, she proceeded to make false and defamatory allegations against the KRA’s committee and used the same platform to advocate for Knysna to be placed under administration. Days later in her capacity as Acting Municipal Manager , Dr. Gratz brought an item to Council recommending her own appointment as administrator.
KRA RESPONSE TO MYERS COMMENT
Whereas Myers appears to have lost his enthusiasm for tackling corruption, he certainly has retained his unique brand of superficial verbosity. His response is heavy on disdain, fake news and vitriol ....and light on facts. ...
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