Some local government corruption is highly organised, and will further undermine the delivery of essential services and democratic governance.

How closely does local government corruption in South Africa resemble organised crime? Given that municipalities – the sphere of government closest to citizens – are in a ‘dire state,’ according to the Auditor-General of South Africa (AGSA), people have a right to know.

Like more traditional forms of organised crime, graft in municipalities is both organised and criminal. However, the predicate offences are not trafficking drugs, arms and people – they are crimes such as corruption and fraud.

Local government is responsible for driving economic growth, providing infrastructure and delivering essential services in its jurisdiction. To do so, municipal actors regularly interact with private sector service providers, the mechanisms of which are governed by the Municipal Finance Management Act.

But the lack of internal legislative compliance and consequence management means these interactions can be easily exploited. Actors inside and outside municipalities have formed corrupt networks and processes that facilitate personal benefit. These are organised and maintained over time.

To understand the connections between graft and organised crime in local government, the Institute for Security Studies (ISS) mapped incidents of corruption or alleged corruption at three municipalities. It used reports from AGSA, the Special Investigating Unit (SIU) and parliamentary committees, as well as South Africa’s 2024 Governance Performance Index, news articles, and investigations.

Reported corruption at the three municipalities – Madibeng Local Municipality (Madibeng), OR Tambo District Municipality (ORTDM) and City of Johannesburg Metropolitan Municipality (COJ) – followed similar patterns of organisation.

First, influence is gained through irregular appointments, nepotism and patronage. Second, this influence is used to manipulate and exploit legitimate systems for personal gain. Third, the illicit activities are abetted or protected by either administrative or violent means, or both.

One of the ways in which corruption in Madibeng has been organised is through family, friendship or political connections in the municipality, extending into the private sector. This has created networks (not necessarily involving the same individuals) that facilitate financial crimes, such as bank account tampering, tender fraud, illegal investments, and duplicate payments.

All of these have required a coordinated effort to perpetrate, sustain and conceal. The systematic nature of these activities, resembling organised crime, is what makes this type of corruption ‘organised’ rather than ‘ordinary’ or ‘systemic’.

Some corruption in ORTDM has taken advantage of the opportunities created by the ongoing water crisis in the province. It is organised through relationships between municipal officials, government utility employees and private contractors.

ORTDM’s water and sanitation department had a ‘prepaid’ scheme for paying contractors for work on various dam projects. Many of them were never delivered. Several irregular payments and advances were paid to the provincial water board, as well as independent construction contractors involved in water projects – some of whom are being investigated by the SIU.

Corruption at COJ has involved levels of organisation often associated with state capture. The AGSA recently reported poor consequence management, material non-compliance with procurement and contract management, and high levels of irregular, fruitless and wasteful expenditure across COJ’s agencies and entities.

The SIU outlined several ‘systemic weaknesses’ in COJ’s operations, including collusion between supply chain management officials, bid committee members and service providers; overpricing of goods and services; and inadequate or flawed systems and processes.

In all three municipalities, appointing individuals with political or familial connections places them in positions that can protect perpetrators from whistleblowing and reporting. Protection through intimidation was illustrated in ORTDM. There, Gift of the Givers aid workers distributing free water after the June floods, were threatened by a ‘water mafia’ with alleged links to water contracts with the municipality.

The more organised, normalised and profitable corruption becomes in municipalities, the less incentive there is for good governance. The implications are serious and directly affect the daily lives of South Africans, with health, sanitation, environmental and economic consequences. Corruption scandals and service delivery challenges also erode public trust, resulting in protests or disengagement from democratic processes.

If being highly organised helps offenders to initiate, embed and benefit from corruption, it is important to understand how that organisation happens so that it can be disrupted or prevented.

The term ‘organised corruption’ has been coined to describe ‘a symbiosis of organised crime, criminal methods and high-level corruption.’ But it is most often applied to the capture of state-owned entities – not local government.

So how do we recognise the varied types of organised corruption that are becoming entrenched in South Africa’s municipalities? They often involve private sector actors and include forms of criminality that may, but do not necessarily, fall under the traditional understanding of ‘organised crime’.

Nuanced analysis is needed to provide further insights into the organised dimensions of corruption in local and other levels of government in South Africa. This includes understanding the actors involved, the nature of their relationships, the processes used, the benefits accrued, and how these are distributed, concealed and used.

Understanding these dynamics will enable us to collect intelligence, build prosecutable cases, address accountability gaps and design effective interventions.

For more on this topic, click here to read our new policy brief: ‘Corruption in SA municipalities: a form of organised crime?’

Written by Romi Sigsworth, Research Consultant, ENACT, ISS