‘LMDA run like a cartel’

. . . damning report lambasts CEO Chalatse

KANANELO BOLOETSE

MASERU – The top brass at the Lesotho Millennium Development Agency (LMDA), including Chief Executive Officer (CEO) Keketso Chalatse, has been accused of running the quasi government body like a cartel designed to enrich managers.

A damning insider report paints a grim picture of the goings on at the agency and makes the bold allegation that rather than merit or expertise, nearness to Chalatse gives employees the right of passage to quick promotion and lucrative perks.

The information contained in the report, a copy of which Public Eye has obtained, alleges widespread nepotism, malfeasance, bullying and favouritism at the LMDA.

The report has been widely circulated to the Auditor General, LMDA board of directors, Minister of Finance, American Embassy, the United States-based Millennium Challenge Corporation (MCC), the ombudsman and the Directorate on Corruption and Economic Offences (DCEO), among others.

It stated that “disturbing developments have been experienced throughout LMDA” under the leadership of Chalatse from May 2017, which require in-depth investigation by the office of the ombudsman “in order to curb abuse of power by senior management”.

These disturbing developments, according to the report, include “disregard of LMDA policies and procedures, misinformation of the board, disregard of government directives, recruitment malpractices, unethical treatment of contractors, unfair treatment of staff, selective training and development of staff and attempted payroll fraud”.

The LMDA strongly refuted the allegations yesterday.

“LMDA denies all allegations contained in the document in their form and content. The allegations are intended to shift focus on the good work that the organisation is doing to eradicate corruption, fraud, collusion and give confidence to the development partners, including MCC that the country would not be entangled in such unfortunate acts (sic),” CEO Chalatse said yesterday.

He also questioned the legitimacy of the report.

Chalatse indicated that LMDA had noted “from the onset” that the entire document contained issues that concern the agency’s management and various officials, managerial processes and undertaking of the mandate granted by the government yet it was not intended to be addressed to the LMDA itself.

“The document as well has not been signed nor does it show who its author is. In the absence of that it is taken that the document is not official, authentic and valid for the addressed to rely on the truthfulness of its contents and the message that it seeks to convey,” he said.

The report also made a sensational claim that some top officials at the agency have generally corrupt relationships with Chalatse and “they carry out his aspiration to purge people from the LMDA”.

Those officials are, according to the document, Lira Molapo who is Chief Operations Officer (COO) and Litlhokoe Mohlomi – Head Projects Control and Information Management (HPCIM).

It alleged that in September 2016, Chalatse who at the time was Chief Operations Officer (COO) at LMDA, together with Molapo and Mohlomi, registered a private company named Businesswise.

Public Eye verified that the company was incorporated on September 6, 2016 and is owned equally by Chalatse, Molapo and Mohlomi.

At the time their company was registered, Molapo was Head Environment and Waste Management (HEWM) at LMDA while Mohlomi was Head Information and Communications Technology, according to the report.

In April 2017, Chalatse was appointed CEO, Molapo was appointed COO while Mohlomi was appointed Head Projects Control and Information Manager (HPCIM).

The report read: “The three positions are at the top of LMDA’s hierarchy. The three LMDA officers who happen to be shareholders and directors of the same private company are supervisee to each other within LMDA.”

It further stated that “the conflicting factor between these three people is normally seen” when Chalatse and Molapo are not in office.

According to the report, “99.9 percent of the time the Acting CEO position is held by Mohlomi” when both Chalatse and Molapo are not in office.

“It is worth mentioning that Mr Mohlomi is one of the ten section heads within LMDA but he is predominantly acting in the higher executive offices more than any other head of section. The reason is to capacitate the directors of the company in which they are all shareholders.

“This is also seen in selective training… in which we see Mohlomi being selected for executive level trainings which his fellow section heads are not allowed to taste. This is clear evidence that the CEO is equipping his own partners at LMDA’s cost and against other staff members,” it read.

Chalatse told Public Eye yesterday that the allegations contained in the document sought to give the impression that the LMDA management was generally corrupt in its activities, had corrupt relationships within itself and displayed elements of abuse of power in its processes.

He said the fact of the matter was that LMDA management openly announced to all media outlets and the public at large “including the addressees of the document”, that it generally identified corrupt practices amongst its employees and the contractors which it undertook to effectively deal with.

He indicated that LMDA fulfilled its undertaking, especially in relation to the staff members, “hence the various lawful disciplinary processes that are ongoing against the members of staff with some having been completed”.

“Some members of staff have been found to have engaged in acts of corruption; collusion and fraud which involved engaging in nonprocedural staff recruitment processes to provide favours to people who do not deserve to be recruited; carrying out fraudulent practices in the implementation of maintenance contracts; processing and submitting inflated contractor’s claims; colluding with contractors to obtain monetary favours; revealing confidential information to contractors for them to gain awards in procurements; accepting bribery from third parties in exchange of favours; and engaging in acts with contractors which amounted to conflict of interest to the prejudice of the LMDA,” he said.

He indicated that it had been established that in such acts, the members of staff were either grossly negligent in the conduct of their duties; engaged in acts which contravene the operational rules and regulations of LMDA and generally committed acts which are detrimental to the smooth running of the organisation.

“It is not surprising in such situations which have been proved and the employees punished, they come up with the unfounded allegations contained in the document,” he said.

According to the report, all employees on suspension “are on full pay for services they are not rendering” and those in acting positions “are paid acting allowance”.

“This could lead to running costs of the agency far higher than the maintenance cost, which is the core business of LMDA,” the report said.

LMDA was created by the government in 2013 to complete, oversee and manage implementation of work-in-progress of projects which were not finalised by the Millennium Challenge Account Lesotho when the Lesotho first compact ended in 2013.

In December 2015 the mandate of LMDA was further extended to include Compact II development.

MCC signed the first compact with government worth $362.5 million (more than M5 billion) in July 2007, designed to increase economic growth and reduce poverty.

The first compact funded work with other international donors on the infrastructure improvement projects like the Metolong Dam, as well as work with PEPFAR (the President’s Emergency Plan for AIDS Relief) to mitigate the negative economic impacts of poor maternal health, HIV/AIDS, tuberculosis and other diseases.

By the end of the compact in September 2013, the government and MCC had spent nearly 99 percent of anticipated compact funds to improve water supply, increase access to essential health services, and remove barriers to private sector investment.

In December 2013, Lesotho was initially selected to develop a second compact, however, the MCC’s Board deferred its vote on continued eligibility in 2015 and 2016.

Following that two-year hiatus, the board re-selected Lesotho in 2017 as eligible to develop a second compact.

This decision was taken in recognition of concrete steps taken that year that demonstrated a commitment to addressing MCC’s concerns about rule of law.

At the same time, the Board directed MCC to continue to closely monitor events in Lesotho.

That is why the MCC conducted a high-level mission to Lesotho last week, led by its Managing Director of Selection, Eligibility, and Policy Performance, Daniel W. Barnes.

The mission met with a wide variety of stakeholders including government, civil society, and the business community to gather information in advance of MCC’s Board of Directors meeting in December.

During its December 2019 meeting, MCC’s board will have an opportunity to review the most recent information and analysis of the situation in Lesotho.

The board will then determine whether to reselect Lesotho to continue compact II development.

The situational report on the LMDA could be tabled for discussion by the board.

The report concluded that the situation “in LMDA is unacceptable and if not swiftly addressed can have horrific results to the detriment of the organisation, the staff, the beneficiaries and Lesotho as a whole”.

It recommended an in-depth investigation “to reveal unjust acts by LMDA executive management”, investigations into the award of tenders, imposing of “appropriate sanctions” on those responsible and reinstatement of employees who had been “unfairly dismissed”.