It is a supreme but delicious irony that the old new Minister of Finance, Pravin Gordhan, will now be the person dealing with a compromised KPMG report, commissioned by SARS to look into a so-called “rogue unit” allegedly established under his watch as commissioner of the revenue service. President Jacob Zuma's hubristic move in firing Nhlanhla Nene last week - triggering a tailspin for the Rand - left No 1 with no option but to surrender the public purse back to Gordhan and in so doing scoring a spectacular own goal. Let the games begin. By MARIANNE THAMM.
“Put bluntly, who collects what money from whom in order to spend on what is all there is to politics and in a serious country should be the central preoccupation of the media.”
What one would have given this weekend to have had just a tiny insight into the thoughts of Retired Judge Franklyn Kroon, chair of the Kroon Advisory Panel into a SARS “rogue unit” allegedly tasked with spying on or for (depending on who you believe) President Jacob Zuma, senior politicians, organised criminal networks, big tobacco companies evading tax as well as various other rogues and villains blotting the political and business landscape.
So too what must have run through the mind of one of Kroon’s key committee members, Advocate Rudolf Mastenbroek, recently revealed to be the alleged source for the Sunday Times’ original investigations into the unit and which ultimately led to the swift exit of former deputy SARS commissioner, Ivan Pillay and group executive, Johan van Loggerenberg (among others). Mastenbroek is the former husband of Sunday Times editor Phylicia Oppelt.
It was investigative journalist Pearlie Joubert’s affidavit (submitted with regard to another SARS matter) read at a Press Ombud hearing that upset the hornet’s nest this month when she alleged that the newspaper had acted dishonestly and unethically in printing stories on the unit. She revealed that Mastenbroek had been her original source for the stories and that the “leaks” were not only a breach of his oath of secrecy but appeared to be part of an orchestrated campaign to remove Pillay and Van Loggerenberg. These are claims that have all been denied by the Sunday Times.
And just like that, literally overnight, the report by the Kroon Committee, set up by former Minister of Finance Nhlanla Nene currently roaming the wilderness, will now have to be dealt with by old new Finance Minister, Pravin Gordhan, the very man accused of setting up the unit in the first place during his watch as head SARS between 1999 and 2009.
The Kroon Committee report essentially endorsed findings of the earlier, preliminary Sikhakhane Report – led by Advocate Muzi Sikhakhane – and which had recommended that individual members of SARS management – including Pillay and Van Loggerenberg – should “be held to account” for their roles in the unit.
But wait, there’s more.
An explosive and now deeply compromised KPMG report, commissioned by current SARS head Tom Moyane, will also have to be dealt with by Gordhan who is now effectively Moyane’s boss.
The draft report allegedly suggests that Gordhan should face a “probe” into whether he was aware of the existence of the unit. None of the panels or committees “investigating” the SARS matter tested the veracity of claims or called Pillay, Van Loggerenberg or Gordhan to testify before making findings.
Ah, the Circle of Life.
The KPMG report landed on Nene’s desk (now Gordhan’s) a few weeks ago but had been leaked to the media beforehand. Its findings, unsurprisingly, mirror those of the Sikhakhane and Kroon reports. The KPMG report alleges that Pillay established the unit during Gordhan’s tenure and while it found “no evidence that Gordhan was informed about the existence of the unit” that “considering his [Gordhan’s] position as accounting officer, it is reasonable to expect that he ought to have known of the existence of the unit. This aspect requires further investigation.”
The KPMG report also recommends that “SARS should consider instituting criminal proceedings into the approval of Pillay’s contract … the minister of finance [Gordhan] at the time approved a three-year period but the period was mysteriously changed to five years”.
However, a leaked memorandum (seen by the Daily Maverick) addressed to KPMG from a law firm, Mashiane Moodley and Monama, dated 21 August 2015 and signed off by attorney David Maphakela, appears to suggest that Johan van der Walt, a forensic auditor with KPMG, should make specific findings with regard to Pillay and Van Loggernberg. This without interviewing or cross-examining the men. Daily Maverick learned that Mastenbroek is connected to the firm and worked for Mashiane Moodley and Monama for a short while in 2013.
The existence of this memorandum calls into question the independence of the KPMG report and the validity of its findings in their entirety.
And that’s just the prologue.
If we are to accept Vidal’s view of politics – that it is all about the money – it is unsurprising that the battle for the crown jewels – SARS and the Treasury – was never going to be pretty. Particularly with a sitting President who has miraculously slipped the coils of justice with regard to over 700 charges of alleged money laundering, corruption and racketeering, who is accused by the Public Protector of abusing tax revenue to renovate his personal home, who has created vast networks of sycophantic patronage and on whose watch public-owned enterprises have almost collapsed while spending has ballooned to support a growing public sector wage bill.
A president who has undermined parliament and the Public Protector in rejecting recommendations that he pay back a portion of the money spent on Nkandla. Who has undermined, among others, the NPA, SARS and the Public Investment Corporation, who has a cavalier approach to transparency and accountability and who sees no shame is publicly stating that he “loves” the ANC more than the country.
In this we have all the makings of the hubristic wrong-footed and ill-calculated move the President made in firing Nene last week.
President Zuma could not have imagined that by default, Pravin Gordhan, a man who built SARS into the most efficient state institution and who was, during his term and Minister Of Finance, turning off the fiscal taps would now be once again in charge of the country’s coffers. It must rank as one of the most spectacular own-goals in recent political history and must surely signal the beginning of the end.
Economic markets reacted so swiftly and so negatively to Zuma’s irrational firing of Nene and the installation of the little-known David Van Rooyen that Zuma could not backtrack and appoint Nene’s deputy, Mcebisi Jonas, and had to turn to the trusty old Gordhan instead.
So here we are.
While it must be borne in mind that the Nkandla renovation splurge happened on Pravin Gordhan’s watch as Minister of Finance, it was in February 2014, ten months before he was sidelined by President Zuma, that Gordhan announced he was “on the warpath” and “fed up with bad public service and the wastage of resources”.
He had found a backbone that had gone missing (and is still missing) from many senior ANC members who seem to have drunk President Zuma’s Kool Aid.
In February 2014 Gordhan announced that the Office of the Accountant-General had been strengthened to improve service and plug massive leaks in government’s financial system. He said that 68 investigations into fraud, corruption and maladministration had resulted in 47 criminal investigations, 65 disciplinary hearings, the cancelling of payments worth R503 million, while R61?million had been surrendered back to the fiscus. Budgets for consultants, travel, accommodation and venue hire were slashed and spending reviews, conducted by Treasury and the Department of Performance Monitoring and Evaluation, were under way he boldly declared.
By December Gordhan was gone, shafted and shifted to the position of Minister of Co-operative Governance and Traditional Affairs and his deputy, Nene, was sworn in. A tumultuous 2015, with Zuma facing mounting pressure during chaotic appearances in parliament and as multiple scandals (SAA) and crisis ESKOM unspooled, Zuma laughed and danced his way through it all, secure in the comfort and support friends (the Guptas specifically) and comrades in high places, including business.
Ivan Pillay’s woes began shortly after his bold announcement that he was going after tax dodgers of all shapes and sizes including British American Tobacco, whom the Economic Freedom Fighters alleges owed R1,74 billion of unpaid taxes between 2006 and 2010, a matter BAT is obviously disputing.
Being the “serious country” of Vidal’s description, the South African media – particularly amaBhungane for the Mail & Guardian – have been compulsively preoccupied with the convoluted sordid saga which involves spies, honey traps, gangsters, tobacco bosses, politicians and which can be traced all the way back to Jackie Selebi, the Scorpions and Thabo Mbeki. The Sunday Times, it appears, flew too close to the sun and its role in breaking the stories is yet to be fully investigated.
But there is one main actor in every single scene of this drama, President Jacob Zuma.
With the Zuma’s longtime Operation Vula comrade, Pravin Gordhan, once the target but now back in the hot seat by default – by Zuma’s own overplayed hand – the rules of the game are set to change as a groundswell of public sentiment points to an ANC that is seriously tarnished. In the meantime, reports that cabinet had approved the start of the massively expensive nuclear procurement programme in a meeting shortly before the president fired Nene have subsequently been denied by acting Cabinet spokesperson Phumla Williams.
Meanwhile the power struggle at SARS is not yet over but with Monyane now accountable to Gordhan the outcome might not be the one President Zuma had been hoping for. The very same goes for SAA board chairperson Dudu Myeni. DM
Photo: South Africa’s Finance Minister, Pravin Gordhan gestures during a media briefing after he was reappointed to the position on Sunday night by President Jacob Zuma in Pretoria, South Africa December 14, 2015. REUTERS/Siphiwe Sibeko