Capture of SARS
Boris Johnson asks Cabinet Office to ‘look into’ freezing Bain & Co’s UK contracts
‘I… am aware of the seriousness of the situation. Corruption has the ability to erode trust and undermine public confidence and it should rightly be challenged,’ said Johnson.
UK Prime Minister Boris Johnson has asked his Cabinet Office to look into Lord Peter Hain’s request to freeze multinational consulting firm Bain & Company’s UK government contracts after the Zondo Commission found it unlawfully helped gut the South African Revenue Service’s (SARS’) investigating capacity.
“I have read your letter and am aware of the seriousness of the situation. Corruption has the ability to erode trust and undermine public confidence and it should rightly be challenged,” said Johnson in a letter to Hain dated 28 January 2022.
“I have asked the Cabinet Office to look into this matter with urgency and to respond to your letter in further detail,” his brief letter continued.
The Cabinet Office is a government department that supports the prime minister and cabinet.
Johnson was responding to Hain’s 5 January letter that outlined the findings of the Zondo Commission’s first report. That report explained how Bain executives worked with former president Jacob Zuma and former SARS commissioner Tom Moyane to restructure the revenue authority, a plan they started working on even before Moyane was appointed.
Acting Chief Justice Raymond Zondo said it was a clear example of how corporates colluded with politicians “to capture an institution that was highly regarded internationally and render it ineffective”.
He recommended that the government and all public bodies re-examine their contracts with Bain and assess their lawfulness. Zondo said the South African Police Service should probe the contracts and the National Prosecuting Authority should determine whether to lead any prosecutions against the company or executives involved.
In his letter, Hain wrote: “That a multinational company such as Bain would act as a willing and knowing accomplice to corruption by those intent on undermining the South African state and its democracy, is outrageous. I therefore find it completely unacceptable that Bain & Co is licensed to operate commercially in the UK and is endorsed by your government by contracting for work with government departments and public sector bodies.
“Can you therefore immediately freeze all government contracts with Bain, and advise UK public bodies to do the same, subject to Bain fully cooperating with the South African prosecutorial and investigative authorities and ensuring all the £8-million fees received from SARS are repaid in full to the SA Treasury.”
Hain, who has a long history of advocating for justice and accountability in South Africa, has been vocal in his calls to act on the architects and agents of State Capture. He has also had some success in holding corporates accountable.
Leading communications firm Bell Pottinger was expelled from the UK’s Public Relations and Communications Association after an investigation found it had stoked racial divisions in South Africa for its clients, the Gupta family. The DA laid the complaint with the industry association, while Hain repeatedly raised the issue in the House of Lords.
Bain dismissed Zondo’s report, claiming it relied heavily on testimony from one witness, a reference to former senior partner Athol Williams, and did not consider two affidavits submitted by the company.
“While we remain supportive of the commission and its work, we are disappointed that Part I of the commission’s report mischaracterises Bain’s role at SARS. While we made mistakes in our work with SARS, we remain confident that we did not in any way wilfully or knowingly support state capture at SARS or elsewhere,” the company said in a statement.
According to the final report from the SARS Commission, led by retired judge Robert Nugent, Bain repaid with interest the fees it was paid by SARS, amounting to R217-million.
Following a public outcry, Bain recently withdrew its membership from Business Leadership South Africa, claiming it had become an “unwitting participant in a process that inflicted serious damage” on SARS.
Johnson, who faces calls to resign over parties he and his staff had during the Covid-19 lockdown, said the UK enjoys a close relationship with South Africa.
“I am proud of the strong relationship that the UK has with South Africa. We have worked together as allies and partners on a range of issues, including health, climate and security. President Ramaphosa was also a guest at the G7 Leaders’ Summit in Cornwall last year.” DM
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