Bain, the US-based management consultancy firm, is facing renewed pressure to come clean about the full extent of its role in bringing the SA Revenue Service (SARS) to its knees during the corrosive State Capture years.
Calls for Bain to play open cards have come over the past two years from senior government officials including Minister of Public Enterprises Pravin Gordhan, who once headed SARS, and National Treasury deputy director-general for tax and financial sector policy Ismail Momoniat.
But now Athol Williams, a former Bain partner, has accused the firm of silencing him from speaking about its work to allegedly ransack and destroy SARS under former commissioner Tom Moyane. This is because Bain launched an application at the State Capture Commission on 23 November 2020 to have half of Williams’s 700-page affidavit and annexures blocked from going public. Bain has also applied to cross-examine Williams on his evidence.
“I have a lot of evidence, such as internal emails and documents, that Bain doesn’t want me to expose,” Williams told Business Maverick, adding that he views the firm’s applications to the commission as an attempt to muzzle him.
Bain rejected suggestions that it wants to prevent the commission from hearing Williams’s evidence or to gag him, saying in a reply to Business Maverick questions that it “fully supports and endorses the commission and its work”. Bain said it wants to block a portion of Williams’s evidence because it contains “sensitive” and “commercial information”, including the identity of current and former employees who contributed to Bain’s own investigation about the quality of its work when it restructured SARS’s operations between 2014 and 2018.
In 2014, Moyane awarded Bain the tender to restructure SARS’s operations, including overhauling its IT infrastructure and changing its organisational/governance structure. A final report by the SARS Commission — chaired by Judge Robert Nugent — found that the Bain restructuring destroyed key SARS units, including its large business centre, legal and compliance units, and enforcement capacity. About 200 senior managers were displaced, and several skilled employees left SARS, weakening its capacity to collect tax revenue.
About its cross-examination application, Bain said: “Mr Williams’s allegations against the firm, linking Bain to State Capture, are rooted in speculation and conjecture. Bain’s application to cross-examine Mr Williams is intended to challenge these unfounded allegations and assist the commission to get to the truth.”
Williams wants to spill the beans
Williams rejoined Bain as a partner in May 2019 to clean up its public image and tighten its ethical standards after it emerged from the SARS Commission that the firm had a big role in capturing the once world-class tax collection agency. Williams barely lasted six months in the Bain top job as he publicly resigned, citing the lack of full disclosure by the firm about its work at SARS. When Williams left his R11-million-a-year Bain job, he was offered a payout of an undisclosed amount in exchange for his silence. Williams said he refused to accept the payout, which was accompanied by a non-disclosure agreement that would prevent him from speaking about Bain affairs.
As a Bain insider, Williams said he can demonstrate how Bain executives, including former SA managing partner Vittorio Massone, had unfettered access to former president Jacob Zuma through regular and clandestine meetings about the restructuring of state organs beyond SARS.
“Judge Nugent made no connection between the intensive engagements between Bain and Zuma, and what was happening at SARS. That is significant.
“The Bain senior team was made up of all foreigners. They had regular access to our former president, speaking behind closed doors and after hours about issues relating to the structure of our government. That’s where the focus should be. For [Deputy Chief Justice Raymond] Zondo, [who chairs the State Capture Commission], it opens up a can of worms that our country needs.”
Williams was meant to testify at the State Capture Commission on 30 November 2020 — seven days after Bain launched its evidence redaction and cross-examination application — but the evidence leader fell ill and his testimony was postponed. He is yet to hear from the commission about a return date. Williams’s evidence has not only rattled Bain, but also Moyane and Telkom CEO Sipho Maseko, as the pair have been implicated in his evidence and indicated that they want to cross-examine him. Williams said his evidence places Maseko in meetings with Bain and Zuma.
Bain rejects State Capture link
Bain has rejected suggestions that it has become one of the highest-profile faces of State Capture, with McKinsey and KPMG. “We reject all assertions that the firm was wilfully or knowingly party to any effort to engage in State Capture,” it said.
But Nugent was damning in his findings against Bain.
Bain’s Massone enjoyed enormous proximity to power; he met Zuma at his homestead in Nkandla around 2013 at least 12 times and was informed that Moyane would be appointed as SARS commissioner before this was made public in 2014.
Massone appeared before the SARS Commission once and snubbed further invitations — claiming he was sick and returning to his home in Italy to receive treatment; but he offered an affidavit instead. The commission found that Massone didn’t “tell the whole truth” and withheld information, as his version of events was “littered with perjury, both in what he said and in what he didn’t”.
Bain said it believed it had sufficiently disclosed information on its work at SARS, adding that it had set its version of events through a “comprehensive affidavit” at the State Capture Commission.
Although Bain has paid back the fees and interest it earned from its botched work on SARS, Williams said the firm had to go beyond this by telling the truth to atone for its conduct during the State Capture years. DM/BM