Gartner throws Moyane under bus

Multinational technology and consulting group Gartner has revealed how former SA Revenue Service (Sars) boss Tom Moyane went out of his way to hand it a multimillion-rand IT contract, with 40% of the proceeds ending up with a personal friend of his.

Gartner, which stopped short of admitting guilt, agreed to pay US authorities $2.45m to settle charges that it violated the country’s anticorruption laws by bribing officials at Sars.

Gartner is based in Stamford, Connecticut in the US. The group, which has yet to admit guilt or be hauled over the coals in SA, settled on Friday with US watchdog the Securities Exchange Commission (SEC).

Gartner, present in almost 100 countries, told the SEC that on December 10 2014 it became aware that Sars wanted to conduct an assessment of its information technology systems.

However, the company said it did not learn of this from Sars, but from a third party working for another private company, whom it did not name. Gartner also said that the unnamed businessman helped it draft the terms of reference of the R200m tender it would later be awarded, with the businessman taking 40% of the proceeds from the contract.

While Gartner in its disclosure to US authorities did not disclose the name of the businessman, evidence led before the Nugent commission in 2018 by Garter senior managing partner Neville Willemse said he drafted the scope of the work with Patrick Monyeki, a personal friend of Moyane.

Moyane was appointed chief tax collector in September 2014.

Gartner told US authorities that on January 9 2015 Sars requested expansion of the proposal’s scope and suggested that it use Monyeki’s company to qualify for the contract under BBBEE legislation.

To justify selection of Monyeki’s company Rangewave for the IT project, Gartner Consulting sent a letter to the group’s management and said it had no option but to use Rangewave. “Both the client [Sars] and private company are quite savvy … the private company knows that we cannot bid without them.”

Sars and Gartner signed a master consulting services agreement (phase 1) on February 5 2015. The contract, which was to assess Sars information technology systems, was for about $1m. The contract with Sars, according to Gartner, contained no reference to Rangewave.

Gartner also did not enter into a subcontract with Rangewave.

However, Gartner told the SEC that it directly engaged as consultants four individuals affiliated with Rangewave to conduct work on Gartner’s behalf “with the full knowledge of key personnel within Sars’s procurement division”.

Gartner said that in April 2015 it met with Moyane and other Sars top officials to discuss Gartner’s report on its completion of the service agreement.

It was at this meeting that Gartner said Moyane suggested a follow-up project to implement its recommendations and asked the Gartner Consulting manager for a rough estimate of the cost.

Gartner said it advised that the work would cost about $10m.

Monyeki again resurfaced, and Gartner said it was advised by its sales agent, Zimeleyo Research & Consulting, that Monyeki was working with Sars officials “to set the expectations with them” regarding the pricing for phase 2 of the Sars project in advance of Gartner submitting its formal proposal to the tax agency.

Sars and Gartner signed a phase 2 master consulting services agreement on July 31 2015, without going to tender. The value of the contract was $10m

– the same amount Gartner suggested two months earlier.

In an email between Gartner’s top brass, the group described Rangewave as a “client-mandated partner to meet black empowerment legislation.”

The communication also shows that Sars wanted Rangewave to get 40% of the contract.

“Client directed 50% workshare with private company – we have negotiated this down to 40% on the basis that we own the risk and key skills.”

Gartner did not enter into a subcontract with Rangewave for phase 2 of the Sars project, but the money still flowed to Monyeki’s company, according to Gartner’s disclosure.

It said that it made its payments to Zimeleyo, which in turn paid Rangewave.

The SEC said that Gartner had entered into a “corrupt

arrangement with a private SA company with close ties to SA government officials, knowing or consciously disregarding, that all or part of the money paid to the private company would be used to bribe government officials”.

The SEC accepted the Gartner offer to settle, and demanded that it pay it within 10 days $675,974 of the net profit it scored from phase 1 and 2 of the project and a further $180,790 in interest.

The SEC also said that Gartner must pay it a civil penalty of $1,6m. This too must be paid within 10 days.

“In determining to accept the offer, the commission considered Gartner’s self-disclosure following press reports in SA, co-operation, and remedial efforts. Its co-operation included providing regular updates and sharing facts identified in the course of its own internal investigation, making foreign-based employees available for interviews in the US, and encouraging co-operation by former employees,” the SEC said.

Nugent, in his report, released in 2018, said in relation to the Gartner contract: “It is recommended that Sars considers commencing proceedings to set aside the contracts and to recover expenditure incurred that added no value to Sars.”

Sars and Moyane did not respond to questions.