Lottery spent more than R1m on lawyers to stop GroundUp exposing alleged corruption

Under its previous board and administration, the National Lotteries Commission spent at least R1-million on legal advice and lawyers’ letters to try to intimidate GroundUp and stop it from publishing stories exposing alleged 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 National Lotteries Commission sent a letter saying it intended to lay a criminal complaint against GroundUp and this reporter.

The commission 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, Parks Tau, in response to written questions from DA MP Toby Chance.

Read more in Daily Maverick: Lottery spent R1.5million on obstructive lawfare in bid to stop minister Patel's anti-corruption battle

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

A reliable source, who worked at the commission 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.


• “National Lotteries Commission/Advice on defamatory publication/TimesLive includes a payment of more than R376,573 (at that time TimesLive regularly published GroundUp’s Lottery stories).


• “National Lotteries Commission advice on defamatory publication” at a cost of R395,053.

By comparison, the sum of these three amounts, just under R1.4-million, exceeds the legal fees GroundUp incurred in its first 12-years of existence, which has involved considerable litigation.

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 commission 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 commission 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 National Lotteries Commission’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 commission’s interpretation of the regulations.

Three weeks later, the commission 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 organisation, United Civil Society in Action, which was trying to stop GroundUp from publishing details of lottery grantees. The National Lotteries Commission was named as a respondent in the matter and Malatji represented the commission and filed answering papers. But, even though the commission was listed as a respondent, United Civil Society in Action put forward arguments similar to those the commission had used to claim that it would be illegal for details of grants to be made public.

United Civil Society in Action, headed up by Tebogo Sithathu, who was close to the commission’s previous administration, sent a lawyer’s letter to Ebrahim Patel (then the trade, industry and competition minister, who has since 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 National Lotteries Commission Commissioner Thabang Mampane (who would later resign under a cloud). A few days earlier, GroundUp 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 National Lotteries Commission board and commissioner.

Media campaign

The commission 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 commission 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 commission 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 commission said it was the “subject of a campaign of relentless vilification by online publication GroundUp and Raymond Joseph. This sensationalised campaign has harmed the commission 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 rand had been misappropriated, the National Lotteries Commission 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 commission subsequently removed our names from the copy of the media release it published on its website.

A misinformation campaign

The commission 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 more than 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-profit organisatios 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 commission’s grants system could have known.

Disgraced former National Lotteries Commission Chief Operating Officer 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 Trade, Industry and Competition 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 National Lotteries Commission Commissioner Mampane that “the National Lotteries Commission received ‘a formal anonymous complaint’ relating to Mr Raymond Joseph having a direct or indirect interest in eight National Lotteries Commission-funded organisations”.

Patel said the commission 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 National Lotteries Commission. DM 

First published by GroundUp.