On March 9 the Press Ombudsman ruled on a paragraph in this article referring to Martin Wingate Pearse. Daily Maverick apologises to Mr Wingate-Pearse for stating that he is a tax offender and a suspected drug dealer. Mr Wingate Pearse denied the accusation that he is a suspected dealer and said that raid on his home twelve years ago proved fruitless. We erroneously stated he had paid penalties to SARS, that we did not verify information critical of Mr Wingate Pearse and neglected to give him the right to reply and exercise the necessary car and caution in matters involving his dignity and reputation. For a full judgement visit www.presscouncil.org.za

e  Businessman Mark Lifman, who is known to be close to the ANC in the Western Cape and particularly the now-suspended former chair Marius Fransman, lodged a court application late last year seeking to halt all further collection steps by SARS with regard to his almost R400-million tax bill while a “new” SARS review of the original audit takes place.

In April 2015, City Press published an explosive report that Moyane had been allegedly approached to “go easy” on Lifman because the businessman “is an important man because of his money and influence and his proximity to powerful people. It was suggested that Moyane lean on the (SARS) team to go easy on Lifman and give him a deal,” City Press reported a source as saying. The City Press story has not been challenged or contested since its publication and the allegation, said the newspaper, had been verified by four different sources.

In papers submitted to the Cape High Court last year, Lifman claims that information illegally obtained by the “rogue unit” had informed the original SARS inquiry and that this information had been based on “untested covert intelligence procured”.

This is what has become known as the “rogue unit defence” and it is one that has been used in another case by tax offender, suspected drug smuggler and Carnilinx tobacco shareholder, Martin Wingate-Pearse, who coughed up millions in penalties after a 2005 SARS probe.

Wingate-Pearse later claimed that information on his taxable income between 1998 and 2005 had been obtained by the “rogue unit”, was unlawful and should be set aside. The Wingate-Pearse matter is regarded as a test case, one that will have serious repercussions in the recovery of revenue from several other tax evaders.

The facts with regard to the Lifman audit is that it was launched in 2013 at the request of SAPS to SARS and that a unit known as National Projects spent years joining the dots between Lifman’s various and varied business interests before slapping him with a R388-million tax bill.

One of the key, seasoned investigators on National Projects who worked on the Lifman case, which ran into several thousand files, was Keith Hendrickse, who is named as the second respondent in Lifman’s court application in which the businessman is seeking to block SARS’ efforts to liquidate his companies.

Contained in the court papers is a peculiar e-mail from a low-level SARS auditor, Gavin Cairns, who is a member of Commissioner Moyane’s new investigative unit – launched in September 2016 ostensibly to investigate the involvement of SARS officials in criminal activities – confirming a meeting with Lifman, due to take place at his office in Sea Point for two weeks from January 16 to 27, “to attend to the review of a recent audit SARS conducted on your group of companies”.

How Lifman fits into the mandate (investigating SARS employees) of Moyane’s new unit, headed by senior SARS manager with the anti-corruption unit in Pretoria, Yegan Mundie, as well as SARS KwaZulu-Natal investigator Gobi Makhanya, is baffling. Cairns, in his November 3, 2016 e-mail to Lifman, cc’d Mundie and another SARS employee, Waseem Jacobs.

Cairns, who appears to be on first-name terms with Lifman, wrote, “Such a review stems directly from your allegation of ‘unfair’ treatment during the investigation/audit.”

In his court papers, Lifman’s lawyers also state that the businessman fears that he might have been “the target of illegal spying by government functionaries, especially after realising that a known spy had arranged to meet him in November 2013”.

Later, Lifman’s attorneys, in setting out the parameters of a September 6, 2016 application under the Promotion of Access to Information Act (PAIA) to SARS, write that Lifman had been introduced to double State Security/BATSA agent Belinda Walter “at a meeting in November 2013 at the Mount Nelson Hotel in Cape Town under very suspicious circumstances”.

The meeting referred to by Lifman’s lawyers was a tobacco seminar where the businessman met with Walter and Carnilinx director Adriano Mazzotti. Carnilinx (who were viewed as in competition to British American Tobacco BATSA) were hoping to rope Lifman in as a cigarette distributor.

Walter was, at the time, in fact spying on Carnilinx for Chris Burger, her State Security Agency handler. When Lifman met Walter in November 2013, her relationship with SARS group executive Johan Van Loggerenberg was barely two weeks old. It was to prove a costly mistake on Van Loggerenberg’s part as it resulted in the loss of his job.

The accusation by Lifman’s lawyers is that Walter had been in the employ of “law enforcement agencies” and had been “remunerated by the State with the knowledge of the Hawks, South African Police, and the National Prosecuting Authority”.

The reasoning is then that any information that Lifman believes was obtained through this method must be illegal or inadmissible in relation to the audit of his businesses.

In their PAIA request, the businessman’s lawyers repeat Sunday Times allegations – which have since been discredited and withdrawn – that a “rogue unit” existed in SARS, that it spied on President Jacob Zuma and that it operated a brothel and intercepted taxpayers’ phone calls.

Lifman’s PAIA request, however, is bound to place SARS and Moyane between a rock and a hard place. What it attempts to accomplish is to flush out several reports “in the public interest” including the Sikhakhane panel and Kroon Commission reports and their annexes, which would include Deputy Commissioner Ivan Pillay’s as well as Van Loggernberg’s submissions (with annexes).

This would, in turn, open the processes and methods of both inquiries – which have been questioned – to close scrutiny, which SARS appears keen to avoid.

There are charges that both the Kroon Commission as well as the Sikhakhane panel both ignored significant evidence regarding the Tobacco Task Team, a nest of private spies, as well as how the discredited Sunday Times articles had informed Moyane’s extended mandate of the Sikhakane panel.

The entire SARS top executive, including Pillay and Van Loggerenberg, were almost immediately purged by then new Commissioner Moyane in stark contrast to his almost four-month delay in doing anything about serious allegations by the Financial Intelligence Centre that his most trusted right hand, Jonas Makwakwa, had squirreled away around R1.2-million into his private bank account. Makwakwa’s girlfriend Kelly-Ann Elskie had shifted around R450,000 into her private account.

And it is this tardiness on the part of Moyane that has raised the ire of Gordhan and which is reflected in his replies in Parliament earlier this month to questions by the DA finance spokesman, David Maynier.

Moyane has attempted to shift the blame for his failure to report Makwakwa’s alleged criminal behaviour on to the FIC, saying that IT had the duty to report the matter to Gordhan, and not him. Moyane also failed to report the allegations to Gordhan, who is the minister with oversight of SARS.

It is a view Gordhan has rejected, saying the FIC Act “prohibited the FIC from reporting transactions or referrals to the minister of finance or any other person other than those permitted to receive such reports”.

Moyane had been alerted to the possible criminality in top echelons of SARS in May 2016 but only reported it after it had been exposed in the media. Still, Moyane, instead of calling in the Hawks (who incidentally have said they regarded it as “an internal matter”) appointed, at great cost, the law firm Hogan Lovells to investigate the serious allegations.

Corruption Watch has, in the meantime, lodged criminal charges against Commissioner Moyane for his failure to act and for revealing the FIC report to Makwakwa and Elskie.

“Mr Moyane needs to explain why he continued to allow Mr Makwakwa to remain in his position as part of his top management team dealing with individual and corporate taxpayers and allowing him to represent SARS at hearings of the standing committee on finance and the Davis Tax Committee,” Gordhan said in his reply to a question by Maynier.

Gordhan said the Vlok Symington hostage drama in a SARS boardroom in October when Moyane’s bodyguard, accompanied by members of the Hawks, attempted to retrieve an incriminating e-mail they had accidentally handed to Symington, SARS deputy director of law, and other matters “raise serious concerns about the stewardship of a vital fiscal institution. Further consideration will be given to substantially increase the accountability of the top SARS management for their actions and decisions.”

Gordhan also expressed concern at “the concerted campaign of vilification” around the probe into the so-called “rogue” unit established during his stint as SARS Commissioner.

What remained of utmost importance, said Gordhan, who turned SARS into a formidable government department, was the reputation and integrity of SARS “as a critical fiscal institution”.

Under Moyane’s watch, SARS has seen an exodus of hugely experienced staff as well as the demotion of some seasoned investigators, such as Hendrikse (who investigated Lifman), who had to re-apply for his job in January 2016.

SARS and the Treasury remain at the forefront of the last throes of a battle for State Capture that played itself out so destructively in 2016. This is a battle that is bound to reach breaking point in 2017 and it can only be a matter of time before Commissioner Moyane (who is close to President Zuma) finds himself having to account for a series of scandals and errors of judgement that have tarnished the reputation of SARS. DM

Photo: SARS commissioner Tom Moyane (left), Finance Minister Pravin Gordhan. (GCIS)