SARS wars
Inside Tom Moyane’s reign of terror
● Suspended SARS boss Tom Moyane’s management style may have been one factor in the loss of billions in revenue, evidence placed before the Nugent commission of inquiry into tax administration and governance at SARS revealed this week.
Evidence by Sunita Manik, who had worked at SARS for 23 years and was the head of the large business centre that was shut down, or “carved out”, showed that the restructuring of the centre, as well as the intimidation and exodus of key staff, were contributing factors in SARS’s revenue numbers falling by more than R130-billion over the period of Moyane’s administration.
In her final year at the helm, the large business centre had achieved revenue of R380-billion against an expenditure budget of R349-million, but it was closed down and its high-collecting staff pushed out.
Both Bain & Co, which had advised Moyane, and the commissioner himself, have denied that the centre had been shuttered, but Manik said it had effectively ceased operating as the juggernaut it once had been.
Manik said she knew the centre was losing talented staff when external firms told her they were seeing a flurry of CV’s from people who were working at the centre.
Intimidation of staff was rife. In a grievance she lodged against Moyane, Manik said that Nishana Gosai, who led the transfer pricing team, “was targeted to the extent that she has a stage 3 hearing against her and she cannot even meet with staff without the unions alleging victimisation and racism. Yet this is the very individual who banked the highest cash in SARS history [R3.5-billion, with about R20-billion in the assessment pipeline].”
Manik added that “incompetence has also resulted in the appointment of incompetent persons. For example, Desrae Lawrence as head of the investigative audit who can barely get in R100-million. How is she to bring in at least R30-billion in assessments at the LBC (large business centre) every year?” Manik asked in her grievance.
Moyane was appointed in 2014 by former president Jacob Zuma and suspended by President Cyril Ramaphosa in March. Ramaphosa instituted the commission and also brought disciplinary charges against the former prisons boss who became taxman.
On Friday, Moyane’s lawyer Dali Mpofu asked for the hearings to be suspended pending the completion of the disciplinary case against him as running the two together amounted to “double jeopardy”.
In addition, he asked for the recusal of tax lawyer Professor Michael Katz who is assisting Judge Robert Nugent (see below). Nugent will make a decision tomorrow.
In evidence from 12 former and present SARS executives in the first week of commission hearings, staff have revealed that a climate of fear gripped the revenue service, that intimidation was rampant and that executives were moved willy-nilly as Moyane brought in his own people.
Staff revealed that Moyane cut down trees at SARS headquarters as he deemed them to be a security risk; that he called a senior executive to a meeting at the Pretoria central prison; and that spy cameras were procured and installed for staff surveillance.
Manik testified that she finally quit for a top job at a Sandton law firm after being compelled to take a polygraph test by former COO Jonas Makwakwa, who was facing money-laundering allegations at the time.
“We are starting to resemble correctional services with only the bars missing,” said Manik in the grievance notification letter to Moyane before she quit.
Discovery Bank CEO Barry Hore, who was the chief operating officer before Makwakwa, revealed that Moyane had called almost his entire exexcutive committee to a
We are starting to resemble correctional services with only the bars missing
Sunita Manik
Former SARS employee of 23 years
SARS boardroom soon after being appointed. He demanded to know what their role in an alleged rogue spy unit was and then suspended them en masse.
“His attitude was ‘come clean [on the rogue unit] or else’,” Hore told the commission this week.
Hore had been persuaded to leave his previous role at Nedbank by former SARS commissioner Pravin Gordhan. He worked at the revenue service for three months without remuneration before deciding if he wanted a working life in public service. He was having fun, he told the commission, but it rapidly ended once Moyane took over.
After a 37-part series of articles on the alleged rogue unit was run by the Sunday Times, the atmosphere at SARS deteriorated as Moyane used the allegations as a battering ram to purge staff at the agency.
While the unit had made significant inroads into the illicit economies of tobacco, abalone, gold smuggling and those industries aligned to gangland activity such as protection and drugs, and was beginning to extract tax from them, Moyane allegedly told members of the unit that “you are the vomit I need to clean up”.
Both former SARS head of enforcement Gene Ravele and former acting commissioner Ivan Pillay testified that there was no rogue unit at SARS and set out how the highrisk investigations unit worked and what its achievements were.
Mpofu said Moyane believed there was a rogue unit at SARS and offered proof on a memory stick to Nugent. The judge returned the stick and said it needed to be presented as evidence when the SARS commissioner appeared before the inquiry.
What emerged this week, though, was that Moyane had acted on the allegations.
“When commissioner Moyane was appointed, SARS was facing serious challenges and press exposure linked to the existence of a rogue unit.
“Every week was filled with trepidation as it was apparent that there was a concerted effort to taint the organisation. Due to the nature of the information being leaked, there were strong indications that information was being leaked from within SARS,” Manik said in her statement to the commission.
She added: “This, coupled with the existence of a new commissioner and his ‘team’, started to create an environment of suspicion, consternation and uncertainty amongst staff.”
Former chief operating officer Makwakwa also appeared several times in evidence as an allegedly toxic manager.
Former group executive for dispute resolution Bernard Mofokeng testified he had left after being moved from his role without explanation and was ignored for a new operating model. In addition, he felt isolated after mediating in a dispute about the rapid and unprocedural promotion of Makwakwa’s girlfriend (now wife) Kelly-Ann Elskie.
And the group executive for legal affairs, Makungu Mthebule, said she had quit because she “felt lost. I thought I could raise things.” Sidelined and marginalised, she used to read newspapers and do very little, although she was a senior executive earning R2.5-million a year with a 30% bonus.
Mthebule objected when Makwakwa instructed her to reduce and cancel tax penalties or alter the assessments of various VIPs. Asked what had led to her demise, she said: “My big mouth.”