Last round for Mkhwebane abuse-of-office case
SA’s highest court will have to decide the last round of a legal battle between Public Protector Busisiwe Mkhwebane and the Reserve Bank — and the stakes for Mkhwebane are very high.
The Reserve Bank wants the Constitutional Court to find that Mkhwebane “abused her office” when she conducted her investigation into an apartheid-era Reserve Bank bail-out given to Bankorp, and later ordered that the constitutional mandate of the Reserve Bank be changed.
The Reserve Bank says the “secretive” way Mkhwebane conducted her Bankorp investigation — which included undisclosed meetings with the Presidency and State Security Agency — showed she had an “ulterior purpose to undermine the Reserve Bank”.
According to Reserve Bank legal adviser Johannes Jurgens de Jager, records showed that “before she issued her final report, the public protector discussed the vulnerability of the Reserve Bank with the State Security Agency and her intended remedial action to amend the Constitution to remove the Reserve Bank’s powers with the Presidency”.
Mkhwebane released her Bankorp report at the height of the ANC’s leadership battle, as then president Jacob Zuma and his supporters pushed for “radical economic transformation”.
Mkhwebane ordered that the Constitution be amended so that the mandate of the Reserve Bank would be “to promote balanced and sustainable economic growth in SA, while ensuring that the socioeconomic wellbeing of the citizens is protected”.
That new mandate — which
would have replaced the Reserve Bank’s primary objective of protecting the value of the rand — fell squarely within the definitions and aims of radical economic transformation.
Mkhwebane admitted in the early stages of the Reserve Bank/Bankorp litigation that she had been wrong to seek a constitutional amendment but insisted her report was based on solid economic advice.
Some of that advice, Mkhwebane has confirmed, was given by former independent nonexecutive director of the Reserve Bank Stephen Goodson.
If the Bank obtains an order that Mkhwebane abused her office in the Bankorp investigation, it will add impetus to calls for a parliamentary inquiry into her fitness to hold office.
Mkhwebane, meanwhile, wants the Constitutional Court to reverse the high court’s findings that she could be reasonably suspected of bias, and that she did not understand her constitutional duty to be impartial and to perform her functions “without fear, favour or prejudice”. Those findings would be pivotal in any fitness inquiry she may face.
She is also challenging the estimated R900,000 personal costs order made against her after the Reserve Bank and Absa, which took over Bankorp in the 1990s, successfully overturned her entire report.
Mkhwebane wants the Constitutional Court to rule that the costs order “impacts adversely and directly on the exercise by the public protector, a chapter nine institution, of her constitutional power, obligations and functions without fear, favour or prejudice”.
IMPARTIALITY
She adds that she may well investigate the Reserve Bank in the future, and the costs order made against her in the Bankorp case could result in “my independence and impartiality in any future investigation by my office involving the Reserve Bank being adversely affected or seriously placed in doubt in the eyes of the public”.
Mkhwebane persuaded the Constitutional Court to hear her appeal after arguing “prejudices to the public good and good governance may occur if this application is not granted” and “the issue to be decided has a grave bearing on the soundness of our constitutional democracy”.
She insists there are innocent explanations for her meetings with the State Security Agency and the Presidency, and the finding of suspected bias made against her is not fair.