Will watchdog keep on digging for bodies?
• Outgoing FIC director Murray Michell played a key role in exposing the Gupta shenanigans
The Financial Intelligence Centre (FIC) is looking for a new director. The outgoing head, Murray Michell, will be leaving after more than 15 years when his contract is complete at the end of 2017.
In normal circumstances, this sort of natural progression would go relatively unnoticed, but given the FIC’s central role in the identification of financial crimes and the circumstances we as a country find ourselves in, the appointment of a new director requires the utmost scrutiny.
The primary mandate of the FIC is to identify the proceeds of crime and combat money laundering and terror financing.
Established in 2001, the centre plays a critical role in the economy because it acts as a nexus between the country’s business community, supervisory bodies, law enforcement agencies and prosecutors.
In brief, financial institutions and business are required by law to report any suspicious transactions to the FIC when they see them.
In turn, the FIC collates the information and passes it on to the relevant bodies for prosecution if necessary.
In an ideal world, this would be an efficient set-up, but if the disclosures of the past few weeks have shown us anything, it would be that financial crime is rampant in SA, and even those who are meant to uphold our financial systems — the likes of KPMG and McKinsey — are not immune to corruption by a small and powerful elite.
All of this reinforces the importance of an independent body such as the FIC to ensure financial crimes are not committed, and most importantly, that billions of rand that should be spent on schools, roads and hospitals don’t make their way across our borders, never to be seen again. It is here where the director of the FIC comes in.
To give you an example of the importance of the role, cast your mind back to October 2016 when then finance minister Pravin Gordhan submitted an application to the High Court in Pretoria, requesting a declaratory order that he was not legally permitted to intervene in the decision by the four big local banks to close the accounts of Oakbay Investments.
He alleged that representatives of the Gupta family had been putting pressure on him to force the banks to reopen their accounts, and wanted it to be stated publicly that, by law, he could not get involved.
This was all well and good, even if the motive was clearly political, but the real cracker was in the annexure to his application, in which he included evidence compiled by the FIC of 72 irregular or suspicious transactions totalling R6.8bn that were linked to Oakbay accounts or the Gupta family.
The man who signed off on this list of suspicious transactions was Michell.
It might be hard to believe now, but looking back, this truly was the beginning of the end of the Gupta saga.
The closing of Oakbay-linked bank accounts earlier in the year was bad for the Guptas, but revealing that these accounts were linked to billions of rand in suspicious transactions, many of which involved money leaving our shores, made it clear to everyone that this was about more than just creaming a bit off the top.
To be blunt, it became clear money laundering was involved, and the FIC was central to exposing that.
With this in mind, it is hard to imagine there is anyone else in SA who has a more thorough knowledge of the systems and extent of financial crime in SA than Michell.
As the head of the FIC since its inception, he knows where all the bodies are buried, so to speak, be they put there by the Guptas or others. And he will be gone by December.
Michell also works closely with international anti-money laundering and financial crime organisations, which as far as I understand, are in advanced stages of their investigations into the financial behaviour of the Gupta family.
You don’t need to be a conspiracy theorist to wonder why, after so many years, one of the country’s most crucial individuals in combating financial crime is choosing to leave his position now.
When I raised this concern with Treasury spokesman Mayihlome Tshwete, he made a very valid point: “There will never be a good time for someone as excellent as Murray to leave, and money laundering is always an important issue.
“We are confident that we can find someone who can uphold his standards of integrity and they will probably come from within the FIC itself.”
In response to my concern that the new director is appointed directly by the finance minister and is ultimately accountable to the finance ministry, Tshwete was confident the existing procedures worked well and that the minister would not make a delinquent appointment at the FIC. He pointed out that Gigaba’s other appointments — specifically the Treasury director-general and South African Airways CEO – had been above board and put the right person in the job.
Although Tshwete said he had no idea why Michell had declined to renew his contract, he believed it would be unfair to expect anyone to stay in the same job indefinitely — no matter how valuable they were to the country.
He also quite rightly warned of placing too much importance on a single figure in an organisation: “Be careful of compromising institutions and make them about an individual.
“This is an institution that is full of people who have been there for decades and who will be able to carry on his work.”
I think this is an important point and it needs to be made clear that institutions such as Treasury, the FIC and the Public Investment Corporation are full of excellent individuals who are as concerned as we are with the events taking place in SA.
These individuals continue to work for the greater good — not for personal enrichment — and they require all of our support.
Still, I cannot pretend that I am not nervous over Michell being replaced at the FIC.
It is doubtful that we shall ever know for certain whether he jumped or was pushed – but I do know that, now more than ever, we need to be extra vigilant and scrutinise every senior public appointment.
THIS INSTITUTION IS FULL OF PEOPLE WHO HAVE BEEN THERE FOR DECADES AND WILL BE ABLE TO CARRY ON HIS WORK