The Presidency cherry-picked four of the most devastating charges against suspended Commissioner of SARS Tom Moyane – some of which may result in criminal charges being instituted against him if proven to be true. Additional allegations against Moyane have been farmed out to the commission of inquiry into SARS, expected to be initiated before month’s end. This include several VAT payments to the Guptas – a case which needs proper forensic analysis and investigation, which will take some time to prove conclusively. Moyane’s attorney Eric Mabuza took serious issue with this development.

It is clear that Ramaphosa wants a quick resolution. Moyane knows that, and appears to be kicking for touch. He wants to be paid out for the remainder of his contract running until September 2019 as well as the bonuses he claims to have earned. Moyane further wanted Ramaphosa to acknowledge publicly that he has been an effective and ethical SARS Commissioner, who ran the institution well. Ramaphosa declined.

Ironically, Moyane’s strategy of prolonging the inevitable may be self-detrimental.

Moyane must fund his defence from his own purse, Ramaphosa instructed. The longer Moyane stretches this impasse, the more it will cost him. This will become a fighting point, too.

But more important: SARS is busy with an internal investigation into Moyane’s conduct, and the Presidency is preparing its case against Moyane. Once SARS starts properly delving into all contracts to service providers and investigations and VAT payments to taxpayers Moyane had a hand in, the disciplinary charge sheet and criminal investigations against him may grow exponentially.

It seems Ramaphosa had this in mind when he signed his letter off with:

“Please note that this Office reserves the right to amend and/or supplement these charges at any time.”

‘No State Capture charges’

Eric Mabuza instructed adv. Dali Mpofu to defend Moyane in this disciplinary matter “after a long and protracted media campaign of vilifying him”, Mabuza said. But before the merits of the case against Moyane get discussed, his legal team wants some assurances and answers of their own:

“As matters stand, the inquiry is fundamentally flawed, it will not be fair because the President has proclaimed that it must be done on affidavits. This will deprive Mr Moyane of his constitutional right to confront and cross-examine his accusers,” Mabuza said.

“What have they got to hide? We will be writing to the President to seek, among others, an undertaking that he will retract and/or withdraw the part of the notice which limits the taking of evidence to affidavits.”

Mabuza also wants Ramaphosa to pay for Moyane’s legal cost to ensure a level playing field:

“We will approach court to determine the aforesaid issues should the President fail to give the undertakings sought.”

Mabuza further finds it strange that Ramaphosa accused Moyane of being involved in the Guptas’ fat VAT payout in the letter suspending Moyane, but do not add a charge relating to this “State Capture” in the charge sheet.

The DC Charges

A nine-page document titled ‘Notice of Disciplinary Inquiry’ and dated 2 May 2018 sets out Ramaphosa’s case against Moyane.

The tax boss has been charged with four major charges, each summarised by a series of accusations describing the charge.

Moyane’s alleged misconduct includes the violation of his duties and responsibilities as Commissioner of SARS in terms of the SARS act, the Public Finance Management Act (PFMA), the SARS code of conduct as well as his fiduciary duties, and his duties prescribed by the Constitution.

The charges are:

1. Gross mishandling of the Financial Intelligence Centre (FIC) report of 17 May 2016 looking into SARS official Jonas Makwakwa;

2. Unauthorised bonus payments of R3-million Moyane earmarked for his executive committee;

3. Misleading Parliament; and

4. Instructing SARS official Helgard Lombard not to co-operate in KPMG’s SARS investigation.

This last charge of actively sabotaging an investigation may prove cataclysmic not only for Moyane, but also for the National Prosecuting Authority (NPA).

Let’s dig deeper into the charges, starting with this last one:

Instructing SARS official Helgard Lombard not to co-operate in KPMG’s SARS investigation

The disciplinary charge sheet states:

“On or about 7 May 2015 you instructed a SARS official, Helgard Lombard, not to co-operate with the KPMG investigation into the SARS High Risk Investigative Unit by instructing Mr Lombard to feign illness on the day that he was scheduled to be questioned by KPMG in relation to the investigation. Your action constituted an abuse of the Office of the Commissioner of SARS, a violation of the SARS Code of Conduct and egregious misconduct.”

This is a startling accusation first recorded in a long letter Ivan Pillay, Andries Janse van Rensburg and Johann van Loggerenberg sent to the NPA days after being charged for alleged fraud and intercepting the NPA’s communication.

The NPA accused the trio of illegally intercepting communication emanating from the offices and boardrooms of NPA officials, including those of former prosecutor Gerrie Nel. It was nicknamed Project Sunday Evenings.

The accusations emanate from the discredited KPMG report that investigated an alleged “rogue unit” in SARS. In 2017 KPMG had to withdraw their findings and recommendations – including those on the existence of a rogue unit.

Helgard Lombard, suspended SARS official, has a recording of how Moyane instructs him not to give his version to KPMG, Scorpio has been informed.

Lombard is central to Project Sunday Evenings, and would have confirmed additional accusations against his colleagues relating to interception equipment to be false. Moyane instructed Lombard not to give his version to KPMG. The NPA based their prosecution against Pillay and company on the KPMG report.

The NPA’s case against the trio is evidently messy, and has just got messier.

Moyane is the NPA’s complainant in their case against Pillay, Van Loggerenberg and Janse van Rensburg.

Moyane will now have to explain accusations that he actively sabotaged the investigation against his former colleagues to retired judge Kate O’Regan.

If found guilty, the NPA’s complainant is a fraud who obstructed and defeated the ends of justice. There would also be no telling what else Moyane tainted or lied about until it is way too late.

All those prosecuted and harassed based on this report may also have a strong case for recompensation against Moyane and KPMG.

If found guilty, Moyane may have to answer to criminal charges in this regard.

Gross mishandling of the Financial Intelligence Centre (FIC) report of 17 May 2016 looking into SARS official Jonas Makwakwa

Scorpio revealed and wrote much about the Makwakwa-debacle in a series of five stories labelled the ‘Makwakwa Dossier’.

Makwakwa was caught by the FIC while stuffing hundreds of thousands of rand into ATMs and receiving mysterious payments. A Scorpio investigation proved that Makwakwa grew a dependency on these payments – he spent up to three times more per month on luxury clothes, food and friends than what he legitimately earned per month from SARS. In a cooked investigation and disciplinary hearing conducted by Hogan Lovells, Makwakwa could never conclusively explain the root and origin of these mysterious payments. Yet Moyane injected him right back into SARS while attempting to keep the facts of the investigation secret.

Scorpio further revealed that Moyane misused SARS as a postbox by attempting to ferret out secret information from the FIC. Documents showed he planned to provide the information to Makwakwa’s lawyer in order to assist her in their case against SARS.

Scorpio also revealed that the mysterious payments into Makwakwa’s bank account stopped the moment Moyane provided him with the secret FIC report – an act that amounted to tipping off Makwakwa.

All of the above contravenes the FIC Act and may land Moyane in jail or with a hefty fine if criminal charges are laid against him and proven in court.

Moyane will have to answer why he did this, and will attempt to argue that he did not contravene prescripts of the FIC Act.

States the charge sheet:

“The information in the Report was extremely serious with the potential, if not handled correctly, to damage the credibility of SARS, tax morality and the collection of tax revenue. You grossly mishandled the Report and the issues arising therefrom…”

Moyane also stands accused of failing to take any rational or effective action when the FIC report landed on his desk. He did not report the matter to then minister of finance, Pravin Gordhan, or the Hawks.

Instead of taking decisive action, Moyane kept the report secret and allowed Makwakwa and his co-accused and girlfriend Kelly-Ann Elskie to remain at SARS. He only acted against them when amaBhungane lifted the lid on the secret.

Ramaphosa accuses Moyane further of “grossly” mishandling Makwakwa’s disciplinary matter. He signed off on terms of reference that were inadequate, Ramaphosa says, and failed to ensure that an in-depth tax evasion investigation was done. Moyane further failed to charge Makwakwa with serious charges emanating from evidence provided in the investigative reports and refused PwC and Hogan Lovells access to crucial information that would have aided their investigation.

Said Ramaphosa:

“Your handling of the report and the issues arising therefrom was in violation of the SARS Code of Conduct… which required you to perform your duties… with utmost professionalism, diligence and honesty, to act in utmost good faith and in the best interest of good governance…

“Your gross mishandling of the report and the issues arising therefrom brought SARS into disrepute and caused serious damage to the credibility and legitimacy of the institution.”

Unauthorised bonus payments of R3-million Moyane earmarked for his executive committee

Moyane signed off on an exorbitant bonus payment of R3-million to his executive committee without the approval of the minister of finance. This is a serious contravention of the Public Finance Management Act and pitted him in a fight against the Auditor-General (AG).

Makwakwa received R930,000 as a bonus payment while he was on suspension.

AG Kimi Makwetu had none of it, finding SARS guilty of internal control deficiency and irregular expenditure, thereby “bringing SARS into disrepute and causing reputational harm to the institution”, Ramaphosa said.

Misleading Parliament

Moyane told Members of Parliament that Hogan Lovells had been appointed to conduct an investigation into all the issues raised in the FIC report about Makwakwa.

In reality Hogan Lovells did not “investigate” the allegations, but farmed it out to PwC.

Hogan Lovells also did not have sight of the tax investigation PwC supposedly conducted and provided to SARS.

It is further unclear whether the tax investigation actually was concluded: Moyane contradicted Hogan Lovells, saying the investigation is still ongoing.

This will form one of the charges in this section.

Another charge relates to a directive relating to tenders Moyane sent out to SARS officials shortly after his appointment in September 2014. The directive stated that Moyane will now sign off on tenders with a rand value much lower than the historical threshold. He effectively had direct oversight over many more SARS tenders than his predecessors.

Said Ramaphosa:

“Your above actions constituted gross misconduct in your capacity as Commissioner of SARS and violations of the SARS code of conduct… and brought SARS into disrepute.” DM