Parliament blazes away at protector’s idea
Parliament has described Public Protector Busisiwe Mkhwebane’s order that the Reserve Bank’s mandate be changed as unconstitutional and encroaching on its exclusive domain.
Mkhwebane made the order in her report on the AbsaBankorp saga.
“The enactment of national legislation is within the exclusive constitutional domain of Parliament. The public protector does not have the power to prescribe to Parliament how to exercise its legislative powers,” speaker Baleka Mbete said.
The cards are increasingly being stacked against Mkhwebane, with the Reserve Bank, Absa, the Treasury and now Parliament all filing high court applications to have the remedial action directing a change in the Bank’s constitutional mandate set aside.
The Treasury has gone a step further, approaching the court to have Mkhwebane’s entire report set aside, including her finding that the Special Investigating Unit should recover R1.125bn from Absa for an illegal apartheid-era loan extended to Bankorp, which Absa bought.
The public protector said she would oppose applications by the Treasury and the Bank to have her report set aside.
In court papers, Finance Minister Malusi Gigaba said that Mkhwebane had disregarded the evidence placed before her.
Mkhwebane found that the government had breached its constitutional duties when it failed to take action, in pursuit of the Ciex report, to recover the “illegal gift” granted to Bankorp from Absa. But Gigaba said this was not true: the government had commissioned two independent investigations pertaining to the financial packages advanced to Bankorp following the Ciex report, which was the outcome of a probe conducted by retired British intelligence officer, Michael Oatley.
In terms of the agreement struck between Oatley and the South African Security Services at the time, Oatley was to receive a cut of whatever money was recovered from Absa.
The subsequent investigations by Judge Willem Heath and Judge Dennis Davis found that while the loan, which was extended to write off Bankorp’s bad debts, was illegal, it was not worth pursuing.
Judge Heath said demanding it be repaid could cause systemic risk to the banking system, while Judge Davis found that the amount Absa paid to buy Bankorp took into account the Reserve Bank assistance.
The public protector advanced no reasons why it was inappropriate or irrational for the Treasury to have accepted the conclusions reached by these independent investigations, Gigaba said.
The public protector “has reached conclusions which are not rationally related to the evidentiary material that was before her”.
The conclusions reached by Mkhwebane did not even flow from the information contained in the report itself, he said.
“On this ground, the report … breaches the principle of legality, at the heart of which is the requirement that decisions must be rationally related to the material before the decision-maker.”
Mbete, meanwhile, said that Mkhwebane’s order that Parliament had to institute a process that would result in a change to the Bank’s constitutional mandate had nothing to do with the improper conduct alleged in the Absa-Bankorp matter.
“Nobody can rationally suggest that the failure by the government and the Bank to recover money from a bank is appropriately remedied by stripping the Bank of its primary object of protecting the value of the currency,” she said.
THE ENACTMENT OF NATIONAL LEGISLATION IS IN … THE DOMAIN OF PARLIAMENT THE CONCLUSIONS … DID NOT FLOW FROM THE INFORMATION CONTAINED IN THE REPORT ITSELF