The Public Protector, Advocate Busisiwe Mkhwebane, released a controversial report on 19 June 2017 detailing the failure of the South African Government to implement the CIEX report and recover funds from Absa. The report also calls on Parliament to amend the Constitution so as to change the mandate of the South African Reserve Bank (SARB). SARB has already filed an urgent application against the Public Protector. Parliament and Absa have also signalled their intention to challenge the findings in court.

These seven key points highlight the significant findings and failings in the report:

Pay back the money? – Absa: In her report, the Public Protector found that Absa, previously Bankorp, should repay an amount of R1,125-billion. This relates to an alleged so-called “lifeboat” loan made by the South African Reserve Bank to Absa bank between 1986 and 1995. If the Public Protector has sufficient evidence to substantiate these allegations then Absa should be compelled to pay back the amount owing. This is an important step towards holding banks accountable in a domestic and international climate where banks often act with impunity. However, it is unclear if the current Absa bank is the correct entity to pay back the funds. This is because at the time of the irregular loans, the majority shareholder was Sanlam. This raises questions, explored in a commission headed by Judge Dennis Davis, as to who should be liable for paying back the money.

Beware the bounty Hunters – the CIEX Report: The Public Protector focused her investigation on the CIEX report. This report was commissioned by the South African government in 1997 to investigate and help recover public funds and assets misappropriated during the apartheid era. This investigation was conducted by CIEX, a UK-based asset recovery agency headed up by former MI6 intelligence officer, Michael Oatley. The South African Government paid a fee of £600,000 for the report. The Public Protector found the government guilty of improper conduct and maladministration of funds for not implementing the findings made in the CIEX report. However, the CIEX report that Open Secrets has access to appears to be largely unsubstantiated and has the appearance of a shopping list. This suggests that there are those who continue to look for ways to profit from the financial crimes of the past. We need to guard against those who claim to use the rhetoric of economic liberation to justify their own self-interested profiteering. In the absence of hard evidence and the full report, the value of the CIEX report to the public interest is questionable.

The bigger picture – the apartheid “loot”: The Public Protector’s investigation had the potential to add value by opening the door to a larger discussion about recovering public funds stolen during apartheid. Starting such a discussion has been at the heart of Open Secrets’ work in recent years. We therefore welcome a critical look into the role of financial institutions that facilitated apartheid-era looting. In particular, over the past five years, we have investigated a Belgian bank, Kredietbank and its Luxembourg subsidiary, as central players in this unjust and illegal system of sanctions busting. The role of the bank has been set out in great detail in the recently published book Apartheid Guns and Money: A tale of Profit. Indeed, within this international network, Absa is a relatively small player. That doesn’t mean that they should not be held accountable, but that the investigation should not fixate on a potentially small player. In so doing there is the very real risk that the primary beneficiaries will be the so-called bounty hunters and/or business and political groupings linked to current allegations of state capture.

Free the Apartheid Archive – We have a Right to Know: It is essential that all documents related to the investigation are made publicly accessible so that they and the findings they support can be scrutinised. This includes the full CIEX report and SARB documents. Open Secrets supports the access to information and supports the South African History Archive (SAHA) in taking the SARB to court later this year for their refusal to release records relating to economic crimes of the past. It is in the public interest that the entire apartheid archive is made accessible so that access to this information is not left to a few gatekeepers.

Spot the political opportunism: There are those looking to profit from the corruption of the past, and there are also those looking to use reports such as the Public Protector’s to further their political or business interests. We need to be as wary of these players as we are of the bounty-hunters who are after the stolen loot. The argument that “white monopoly capital” is at the heart of South Africa’s current economic, political and social woes is a familiar one. It holds true in that the concentration of wealth continues to be in the hands of a few. These family dynasties, mostly white, perpetuate and compound the unacceptable levels of inequality that stubbornly persist today. Often these riches have been gained through historically exploitative and corrupt business practices and should be investigated. We need to guard against state capture in all its forms, past and present. We cannot allow a false separation between the economic crimes of apartheid and those of the present. Vocal groups, some of them said to be paid by people benefiting from contemporary state capture fixate on “white monopoly capital” in order to distract us from current post-apartheid corruption in both the public and private sectors.

The Public Protector’s curious “expert” – Stephen Goodson: In her report, the Public Protector draws on an interview conducted with former SARB non-executive director (2003-2012), Stephen Mitford Goodson. Open Secrets is critical about the credibility of Goodson as a source due to his publicly held beliefs that the Holocaust was a “huge lie”. Reputable news sources have detailed Goodson’s support of bigotry and racism. Goodson has publicly stated that he views the Holocaust as a fiction invented by international bankers to extract money from defeated Germany after World War ll. He has made similar arguments about the motivations behind the uprisings against Muammar Gaddafi in Libya and Bashar al-Assad in Syria. He is also an ardent admirer of the architect of apartheid and self-published a book in 2016 entitled Hendrik Frensch Verwoerd: South Africa’s Greatest Prime Minister. By drawing on such sources, the Public Protector risks undermining the credibility and integrity of her report. Why rely on Goodson? Social media interactions seem to suggest that Goodson’s views have curiously resonated with the alleged Gupta-supported group Black First Land First (BFLF), one of the few parties given an opportunity to comment on her report.

Enforcing the Findings: The Public Protector recommends that the Special Investigating Unit (SIU) is the appropriate body to enforce the findings of her report. However, Open Secrets contends that the high-level political corruption of recent years has lead to the political elite hollowing out existing anti-corruption agencies. The SIU, which investigates systemic corruption in the public sector, mostly at local and provincial level is not equipped, experienced or even has the mandate to lead an investigation into an array of international corporations including financial institutions. The alternatives, such as the Hawks, are equally unfit due to numerous allegations that they have been captured by political interests. This once again highlights the need for a well-resourced, effective and independent anti-corruption agency such as the now disbanded Scorpions. In the absence of this, a commission of enquiry appointed by the President of the Constitutional Court (not a politician) and closely monitored by civil society could provide some remedy.

It is important to investigate apartheid-era corruption and hold those responsible to account. This is vital not just in terms of individual cases, but also in opening the door to probe the systematic financial crimes of the past that impoverished the majority of South Africans. Examining the past also reveals the origin of contemporary corrupt networks. However, these investigations should be done in order to benefit South African citizens, not to line the pockets of lawyers, bounty hunters, arms dealers and to bolster political factions benefiting from contemporary state capture. DM

Photo: Public Protector Busisiwe Mkhwebane listens during a briefing at Parliament in Cape Town, South Africa October 19, 2016. REUTERS/Mike Hutchings