IS THERE a basis to arrest Finance Minister Pravin Gordhan? Since
news of the existence of an investigating unit in the South African
Revenue Service (SARS) first broke in mid-2014, there have been several
investigations into the saga from various quarters. The current Hawks
investigation will be the sixth.
But none have made a decisive
finding against Gordhan, and all have serious weaknesses: most failed to
interview the main protagonists who set up and ran the unit and, in the
case of the KPMG probe, its own report states that it cannot be used
for the resolution of any disputes. That means the Hawks — whose
investigation has become politically charged — have some way to go in
piecing together a case against him.
There are two overarching
questions about the unit that was established by Gordhan in 2007 when he
was SARS commissioner: was it legally formed, and did it break the law
or go rogue?
Regarding its formation, Gordhan has cited the
Customs and Excise Act, the Income Tax Act, the Value Added Tax Act and
the Tax Administration Act as a basis for SARS’s powers of
investigation. These laws allow SARS to investigate taxpayers, including
following them and tracking them, but not to enter homes or to bug
them.
Gordhan says that the unit’s formation came with full
executive authority and was in line with a commitment made by then
president Thabo Mbeki in February 2007 to crack down on organised crime.
The
internal SARS probe into the unit headed by Advocate Muzi Sikhakhane,
however, found that the unit was established without the "requisite
statutory authority".
Curiously, Sikhakhane never interviewed
Gordhan or then finance minister Trevor Manuel and provides limited
analysis of legislation to show why the unit was illegal. Perhaps this
is because he recommended a judicial inquiry into the unit, which, had
it been established, would have been better able to get to grips with
all evidence.
Sikhakhane also found that SARS was prohibited from
gathering intelligence in a "covert" manner by the National Strategic
Intelligence Act, a finding which many legal experts say was an error in
law. The act refers to the gathering of intelligence for national state
security, which it says is the sole right of the intelligence agencies.
The unit did not rely on this act for its establishment, and its
activities were not subject to its provisions.
Another issue is
that Gordhan’s memo states that the National Intelligence Agency (NIA)
would accommodate the unit, which in the end did not happen. Responding
to the Hawks questions on this, Gordhan says SARS retained the unit once
the NIA had "lost traction for the project", but "with an appropriate
mandate".
The second question then arises — did the unit break the
law through its activities or go rogue? Of the reports in the public
domain there is little detail about what the unit actually did.
The
Sikhakhane report states that "it is generally accepted" that the unit
never progressed to conduct anything more than the "limited intelligence
it did when it started". This entailed "desktop research" and physical
surveillance and tracking, using borrowed vehicles and tracking devices
"in its entire lifespan". The report also notes the returns of this
limited intelligence work were "impressive", and that the unit had
contributed "immensely" to turning SARS into the "best revenue service
on the continent and one of the best in the world".
The KPMG
report, which was requested by SARS commissioner Tom Moyane, mostly
paints a similar picture — saying it was difficult to determine what the
output of the unit actually was.
However, it also uncovers a
contentious project — codenamed Operation Sunday Evenings — in which the
unit is found to have planted bugging devices in the offices of the
National Prosecuting Authority in 2007. This, it said, was at the
request of top prosecutor Gerrie Nel, who requested it during the case
against top cop Jackie Selebi.
Two SARS officials — who have been
suspended for more than a year — have been fingered for involvement in
this project. The KPMG report said the pair, Helgaard Lombaard and Johan
de Waal, had provided it with information. It cited a memorandum to
Moyane from Lombaard in which they confessed their role in Operation
Sunday Evenings to the Hawks. It is understood that the pair were asked
to co-operate with the Hawks probe by SARS.
It is not clear
whether Operation Sunday Evenings was sanctioned by SARS and its
leadership, or whether the two were moonlighting on their own, along
with the unit head at the time, Andries Janse van Rensburg.
The KPMG report suggested that deputy commissioner Ivan Pillay was aware of the operation.
What
is not at issue is that no evidence has been produced to link Gordhan
to the operation, and KPMG makes no claim of any link between them. In
recent weeks, the two have been approached by the NPA to agree to a
"plea bargain", it appears with a view to link Gordhan to the operation.
Two years and after several investigations into the unit, the Hawks are continuing their hunt for new evidence.
With Carol Paton
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