Cabal aims for Pillay in the last kicks of a dying horse
The resuscitation of charges against former South African Revenue Service (SARS) officials Ivan Pillay and Johann van Loggerenberg has largely been seen as the last kicks of a dying horse.
The “rogue unit” case at SARS was the first sign of the stepping up of the state-capture project, culminating in the removal of Nhlanhla Nene as finance minister in 2015.
For nearly three years and after five investigations, charges involving the unit have hovered over former SARS officials like a dark cloud.
Slowly, the narrative was rolled back — from the NPA’s embarrassing about-turn in the charging of Public Enterprises Minister Pravin Gordhan in 2016, to KPMG retracting parts of its discredited report on the unit in 2017. Significantly, it also refunded the R23m SARS paid it for the work, which it used to cull the organisation of Gordhan loyalists since 2014.
Now SARS commissioner Tom Moyane faces an inquiry into his running of the organisation and is set to be grilled in Parliament over his handling of the allegations against his second-in-charge, Jonas Makwakwa.
The disciplinary action faced by Makwakwa, who was suspended over a Financial Intelligence Centre (FIC) report detailing some R1.2m in suspicious and unusual transactions into his account and that of his partner, Kelly Anne Elskie, cleared him of all charges. However, questions have been raised about the legitimacy of the process.
First, Moyane sat on the FIC report for four months and only acted on it after it was reported on by the Sunday Times. He then appointed Hogan Lovells to investigate the allegations. More than a year later the law firm admitted it was not mandated to investigate the very allegations for which Makwakwa was suspended — those contained in the report.
SARS conducted a “disciplinary process” based on recommendations by Hogan Lovells, which eventually cleared Makwakwa of all charges and he returned to work. Makwakwa — according to the report on the disciplinary proceedings — faced six charges, none of which dealt directly with the allegations in the FIC report. Instead, he was charged with breaching his suspension conditions, bringing SARS into disrepute, exercising undue influence, breaching SARS internal ethics policy on conflict of interest and failing to declare properties and rental income.
The controversy over Makwakwa’s return to SARS is over the fact that he has not yet answered to the allegations in the FIC report, which include potentially corrupt activities, yet he was allowed to return to the tax agency in the key post of head of the large business centre and individual taxes.
The report on the disciplinary process is nonsensical — a likely reason Moyane has been reluctant to share it with Parliament’s finance committee. SARS’s handling of the case against a senior official who allegedly contravened the country’s money laundering laws should be scrutinised. Instead, SARS jumped through hoops to ensure that Makwakwa did not answer to those allegations. This is in stark contrast to SARS’s handling of the alleged “rogue unit” narrative, which has been discredited.
Currently, President Cyril Ramaphosa, along with Nene — after his spectacular comeback — are moving to clean up SARS and return it to its former prominence. ANC insiders have long been uncomfortable with the erosion of the credibility of the institution under Moyane’s watch. Mcebisi Jonas is among those tipped as being considered for the interim task of cleaning up the institution.
The move against Pillay, in particular, was probably aimed at ensuring he does not return to the institution. Only when Moyane and his cabal are long gone will the true extent of the damage emerge. But this is unlikely to be as smooth a process as returning Nene to the Treasury. Moyane and his allies in the NPA, including its head, Shaun Abrahams, are resisting their inevitable downfall with recklessness.