How to turn around captured SOEs
If anyone can be found guilty of malicious prosecution, it is the Sars boss, an expert says
Calls for the head of National Prosecuting Authority boss Shaun Abrahams to roll are coming thick and fast after he brought — and then dropped — sham fraud charges against Finance Minister Pravin Gordhan.
But the South African Revenue Services (Sars) head, Tom Moyane, has so far escaped much of the heat, despite being the one who brought a complaint against Gordhan in the first place. Of all the characters involved in the political drama, Moyane is the best target for a successful case of malicious prosecution, said Paul Hoffman, an advocate and the director of the Institute for Accountability in Southern Africa.
“He laid the complaint and tailored it to look like there was a case … He did not give the full file of relevant documentation to the cops.”
The documentation Hoffman refers to would include a 2009 opinion by a senior Sars lawyer, Vlok Symington, which advised that there was no technicality preventing former Sars head Ivan Pillay’s early retirement or his re-employment.
Although the opinion was already a public document — it was used in Pillay’s labour case against Sars in 2014 — it seemingly only came to the NPA’s attention when it was pointed out in a letter sent to them by the Helen Suzman Foundation and Freedom Under Law dated October 14.
As reported by the Mail & Guardian last week, it was only on October 17, one week after Abrahams announced the charges at a media briefing, that the Hawks lead investigator in the Gordhan case, Brigadier Nyameka Xaba, was asked by the NPA to obtain a statement from Symington, which was done three days later.
But in a trail of email exchanges given to Symington, Moyane inadvertently copied an exchange with an external lawyer used by Sars, David Maphakela. He had been requested to deal with the matter but refused, indicating he did not want to be involved for ethical reasons, suggesting that even Sars’s own lawyers disagreed with Moyane’s actions.
Then, according to leaked recordings, the Hawks investigator and others, including Moyane’s bodyguard, Thabo Titi, held Symington hostage in a Sars boardroom, demanding that he hand over printouts of Maphakela’s email. The recordings also suggest Titi may have been speaking to Moyane by phone during the Symington ordeal.
Since the incident, Hawks members, including Xaba, have reportedly been charged by the Independent Police Investigative Directorate.
In May last year, Moyane opened a case against Gordhan, former Sars boss Ivan Pillay and Sars high-risk investigations head Johann van Loggerenberg relating to what the Sunday Times infamously and incorrectly dubbed a “rogue unit”.
That investigation has so far come to nought, but that did not prevent Abrahams announcing on October 11 that Gordhan, Pillay and former Sars commissioner Oupa Magashula would be charged with fraud and, alternatively, theft, arising from Pillay’s early retirement in 2010.
This resulted in Sars incurring a penalty due to the Government Employee Pension Fund. As the M&G reported, this was permitted by the pension fund rules.
When the NPA announced it would press charges of fraud against the finance minister, it wreaked havoc in the financial markets, causing the currency to weaken and the government’s cost of borrowing to rise.
The announcement this week that the charges would be dropped saw these i ndicators recover. They improved further when, on Wednesday, President Jacob Zuma withdrew his application to interdict the public protector’s report on state capture, which was subsequently released before 5pm on Wednesday.
Hoffman said any of the three involved in Moyane’s complaint could pursue a civil case but he thought it unlikely Gordhan would do so. Already his attempts to bring down Moyane have failed.
Although the Sars Act requires the finance minister, in consultation with the Cabinet and the Sars board, to appoint the commissioner, in practice, the president has been shown to hold the reins.
In February, Gordhan delivered an ultimatum to the president insisting that Moyane be fired but Zuma refused. In a statement at the time, the presidency said it could not intervene or fire the commissioner, citing prescripts within the government that stipulate the processes to be used to resolve labour relations issues or disputes in the working environment.
But action may come from other quarters. Moyane faces charges brought by the civil society organisation Corruption Watch for his handling of a Financial Intelligence Centre report detailing fraud and corruption by senior Sars employees, Jonas Makwakwa and Kelly-Ann Elskie, relating to R1.2-million in suspicious transactions.
Last week, Corruption Watch notified him of its intention to lay charges against him, firstly, because “it is public knowledge that” Moyane told Makwakwa and Elskie of the content of the FIC report, which contravenes section 29(4) of FIC Act. This prohibits the disclosure of suspicious and unusual transactions to certain people, but specifically those implicated in such reports.
Secondly, as chief executive officer and the commissioner of Sars, Moyane had a duty to report knowledge or suspicions of corrupt transactions over R100 000 to the Hawks for investigation in terms of section 34 of the Prevention and Combating of Corrupt Activities Act.
In response to Corruption Watch, Moyane claimed he tried to refer it to the Hawks but was told the matter had already been referred to the South African Police Service for investigation.
All these political shenanigans and now the state capture report show that the rot runs very deep. But Ralph Mathegka, the head of political economy at the Mapungubwe Institute for Strategic Reflection, said simply removing the president — calls for which have intensified — would not solve the problem.
“It’s not about a single head of state. You have to understand interest group politics at play, and there are those using this issue of state capture to remove those who outmanoeuvred them in getting close to state resources,” he said.
“The current debate is still dominated by interest groups themselves. I think they might have attempted to hijack this debate.”
Hoffman said: “The president is at the centre of the web. But the web has many strands to it. There are many people in the Cabinet who are very much beholden to the president for their share of the patronage network … Now they are all scrambling to see who they can attach their patronage wagon to on the assumption Zuma is going now or in 2017.”
He said the answer was to follow the advice of ANC chief whip Jackson Mthembu and get rid of the party’s entire national executive committee. “But whether that’s politically possible, I don’t know, when Zuma has a little black book documenting where all the bodies are buried.”
Neither the treasury nor Sars responded to emailed questions.