Party leader in the provincial legislature, Jack Bloom, said Niehaus, who faces a series of allegations of financial misconduct, was hired as the Gauteng Economic Development Agency (Geda) head without the post being advertised.

"Premier Mashatile himself must take personal responsibility," Bloom said.

Bloom said Mashatile then appointed "his Alexandra friend Keith Khoza", as the agency head while remained acting chair of the Geda board.

"... [this] was an outrageous conflict of interest," he said.

"This isn't free competitive capitalism that can uplift the people. I call it "comrade capitalism", where you look after your buddies at the expense of the poor."

The Gauteng provincial government responded to Bloom's allegation dismissing them as "face-saving tactics".

"We would like to state categorically that Bloom is clutching at straws as he desperately tries to divert attention from the blunder he made on Tuesday, 17 February, 2009," spokesperson Simon Zwane said.

This was when Bloom brought a complaint against Mashatile at the Johannesburg Central police station.

The basis of the complaint was that Mashatile, having known about Niehaus' alleged fraud, was required to report it.

Claims against Niehaus have been rolling in since a Mail & Guardian report on Friday on his alleged fraud and lies to maintain an expensive lifestyle that has dumped him in debt.

The former ANC employee is reportedly seeking professional help to deal with his personal situation and reconstruct his life.

Sapa