TRAINSPOTTER

SnowBank – BLEFF, Pravin Gordhan and the imaginary R675m Canadian account

By Richard Poplak 29 November 2018
Caption
PRETORIA, SOUTH AFRICA – NOVEMBER 27: EFF supporters sing as their leader Juluis Malema open a criminal case involving money laundering, corruption, racketeering, fraud, perjury, as well as contravention of the Intelligence Act and Prevention and Combating of Corrupt Activities Act against Public Enterprises Minister, Pravin Gordhan and his daughter Anisha Gordhan at the Brooklyn police station on November 27, 2018 in Pretoria, South Africa. (Photo by Gallo Images / Phill Magakoe)

So how does a five-time ANC minister serving a notoriously corrupt developing-world kleptocracy offshore 675-million Madibas to distant Canada? He doesn’t.

First, some perspective. In South Africa, depending on whom you ask, Private Enterprises Minister Pravin Gordhan is either a tireless warrior against the scourge of corruption, or the head of an Indian cabal pumping hundreds of millions of rand into faraway bank accounts, while inhibiting the development of Floyd Shivambus family holdings and ruining Tom MoyaneChristmas in Mauritius.

The facts are less ambiguous — the courts have routinely, and with great exasperation, slapped down the accusations against the minister (rogue units at the revenue service, cushy retirement plans for his buddies, etc, etc), and it’s become clear that his enemies form the rump of Zuma-era rent-seekers within the ANC and its exiled adjuncts. Life must be unpleasant for Gordhan, but its straight-up embarrassing for his enemies, who are starting to froth at the mouth and resemble slavering mental patients every time they leave the confines of their air-conditioned Mercedes luxury vans.

International bankers, however, could not give less of a fuck about these nuances. To them, Minister Gordhan is a card-carrying member of the ANC — a political party that is widely perceived to be corrupt, rent-seeking, and awash with dirty money. (Also Bathabile Dlamini.) Sure, any international banking CEO worth his or her salt has a picture with Madiba from some forgotten ‘90s corporate event hanging on the wall. But to the developed world banking sector, the ANC is political smegma. While Gordhan’s two tenures as finance minister earned him much respect in Davos and other powerhouse neoliberal talk-shops, a Davos keynote address doesnt mean much when a banks regulatory requirements kick in.

Second, why are we even discussing this? On Tuesday of this week, the Economic Freedom Fighters expended a small portion of their limitless resources in order to hold a dance party outside the Brooklyn police station, whereafter they filed a raft of charges against the Public Enterprises minister. (A day after he laid the charges of his own against Malema.) The most significant was a charge of racketeering and/or money launderingthat refers to an account held with the Royal Bank of Canada, which allegedly contains the staggering — and yet symbolically significant — amount of R675-million. Why symbolically significant? That’s almost equivalent to the amount the Gupta brothers offered former deputy finance minister Mcebisi Jonas when they tried to bribe him into take Nhlanha Nenes position back in 2015, give or take some chump change.

Six hundred million. Sign of the beast.

While the EFF are unlikely to be working directly in favour of the Guptas, theyre certainly running interference for those formerly associated with the Brothers Grim. One doesnt need to be a numerologist (or a banker) to see how this is playing itself out.

But anyway, welcome to the Royal Bank of Canada! Take a seat over there maam, and try one of these delicious moose-flavoured sweets while you wait!

At this point, its probably necessary to have a quick word about the banking sector in Canada, which just so happens to be one of the most highly regulated in the world. (A parenthetical question: why did the EFF choose Canada for this particular stroke of bullshit? Because it sounds far away? Because they’re dead impressed with Prime Minister Justin Trudeau’s abs? To get even with Nickelback?) After Canadas economy tanked back in the early to mid-’90s, a deal was struck between the government and with what would become the countrys Big Four financial institutions: we regulate the Bejesus out of you, and you retain an unbreakable shared monopoly. So far, so good — and although the banks were to varying degrees exposed to the subprime mortgage mess in the late zeroes, they (and, by extension, Canada) weathered the financial crisis with minimal damage.

And the bankers got rich AF.

The take-home here is that Canadas Big Four banks dont play around, mostly because they have no need to. (The Big Four should not be confused with the opaque and dangerously munificent Export Development Canada, the agency that lent the Guptas the $45-million for their Bombardier jet. And nor should they be confused with Bombardier, the Montreal-based aerospace/transportation company that is alleged to be one of the most corrupt in the world.) Moving $45-million USD would not be a cinch, but it would not be impossible. And nor would Gordhan be the first person to make fraudulent deposits into a Canadian bank, which accept the deposits of shysters all the time. But they’re different breed of shysters, the likes of which we don’t produce in South Africa.

Before we get too far into the weeds, though, let’s get through the really weak part of the EFF’s story. First, it should be noted that when filing the charges, they made up a bank account number that doesnt correspond with anything that RBC would issue. (As first noted in News24, and corroborated by Daily Maverick, the numbering system the EFF invented doesn’t exist at the bank in question.)

That is really, really stupid.

But sadly, its not the stupidest thing about their accusation. The stupidest thing is that the name attached to the account is not Pravin Gordhans but, R Jamandas Gordhan, who may well be a person, but is not the right person.

Oh, wait! Thats not the stupidest thing! The stupidest thing (for real now) is that the location where they insist the numerically impossible, fake-name account to be doesn’t exist. There is no such place as Shebrook, Montreal. (They were either thinking of Sherbrooke, Quebec — which is a town in the French-language province — or an RBC branch in Sherbrooke, Montreal.)

So what we have here is the fucking Hogwarts of banks.

But there is, as I think weve already mentioned, a very real problem with Gordhan himself — hed be considered by the rigorous Know-Your-Client global banking requirements as a Politically Exposed Person (PEP), and the fines and reputational risk associated with such characters are not really worth the upsides that come with banking them. There are, of course, many ways in which Gordhan could hold what a banker described to me as an anonymous beneficial interest in an offshore assetwhich would need to be set up with the help of sophisticated financial and legal advisers he wont be the first to do this successfully.(The banker didnt want to be named because he didnt feel like meeting sad-face Godrich Gardee at 3am on his lawn, holding a rally with 11 people in red T-shirts.)

Whats more, as the banker told me, it is possible that this much money could be off-shored to Canada, considering the set-up was carefully arranged (and thus beyond the ken of the EFFers, Im sad to say). To wit:

Regarding the amount: from an SA Exchange Control perspective it is possible to get to this quantum legally, either through a once-off individual or corporate application to SARB and SARS, or through the annual R10m per individual limit. To bypass the application process one could use an SA asset managers Asset Swap limit. To get to this quantum legally using the below-the-radar R1m per annum per individual discretionary allowance will take a long time or the cooperation of a big extended family. Point is, all three methods leave a paper trail.

But this is not what the BLEFFers are saying. They are literally saying that Prasorry, R Jamandas Gordhan has opened an account in his or her name at RBC, without bothering to do the highly specialised work undertaken by proper thieves — a distinct breed from VBS mini-pilferers — in order to secure and hide their money. Non-resident accounts are common in Canada, opened through either personal or corporate means via entities such as companies or partnerships — provided the funds deposited are from legal or legitimate sources, and that the narrative adds up.

This would, according to a second banker I spoke with, work just like any bank account. If its a corporation we’re talking about — and we’re not — Gordhan would have had to provide corporate documents showing the company exists, that he has the right to open accounts, while identifying people who can act on behalf of the company or partnership. Then he would have to say where the funds came from, why he’d chosen Canada, and the bank would look to independently corroborate the story.

All of this could have happened. But again — it requires a trail of incriminating paper.

In other words, this is a very sloppy libel. But it may come at a significant cost. RBC and Canadas Office of the Superintendent of Financial Institutions, the equivalent of SAs SARB/Prudential Regulatory Authority, have already been petitioned to investigate this matter. They will obviously not divulge details regarding personal accounts, but if they find that Gordhan has “ordered various taxpayers” to deposit “large amounts of money” into an RBC account in exchange for favours— he will be unbanked from his not-bank account, and his fake money will be frozen. But if the EFF are lying — which of course they are — they’re screwed. The bank will almost certainly sue for damage to reputation, and they can inflict real pain because the allegations concern transactions that have been conducted in US dollars.

Oops.

So, two things. Unforgivably, the EFF assumes its supporters are idiots with no critical thinking skills. Worse, they’re counting on financial illiteracy and lack of access to reasoned fact-checking in order to exploit the very reasonable outrage that attends these late days of the ANCs South African republic. Second, theyre so desperate that any lie — no matter how undercooked — will do. Either way, they have abnegated any claims to being a reasonable opposition party. They’re just another group of goons in pyjamas, looking to extract rents from the state. The Pravin Gordhan they’ve invented is not their scourge. He’s their hero.

Its a shame, but it seems like you cant bank on anyone these days. DM

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