Tom Moyane – the now suspended Commissioner of SARS – is depicted in a rather unflattering manner in Jacques Pauw’s bestselling book, The President’s Keepers. If Pauw’s book is to be believed, Moyane is not a great friend of either the truth or the law. However, whether Moyane will ultimately be able to hang on to his job will not be determined by reports in a bestselling book. Instead, one must turn to the law.
Before considering whether the President has the legal authority to suspend and/or dismiss the SARS Commissioner (without complying with the requirements of procedural fairness), let us look at the allegations that Moyane might be guilty of breaking the law, and that he should therefore be prosecuted.
There is evidence that Moyane passed on information provided to him by the Financial Intelligence Centre (FIC) to his then second in command, Jonas Makwakwa. FIC had alerted Moyane about suspicious deposits amounting to hundreds of thousands of Rand made into Makwakwa and his girlfriend’s bank accounts, and it is alleged that Moyane then alerted Makwakwa that FIC was looking into his banking activities.
If this is true, Moyane might have committed a criminal offense. In terms of section 60 (read with section 40(6)) of the Financial Intelligence Centre Act, it is a criminal offence for any person to disclose confidential information held by or obtained from FIC, unless it is within the scope of that person’s powers and duties to do so.
It was clearly not within the scope of Moyane’s powers or duties to warn a potential criminal suspect (Makwakwa) that he was being suspected of money laundering and/or corruption. Section 60 (read with section 40(6)) of the Act aims to protect the integrity of any criminal investigation against a suspect. If suspects know that their bank transactions have been flagged as suspicious by FIC, suspects might flee the country (as the Guptas did) or may attempt to destroy incriminating evidence.
Suspects may also cease all unlawful activity to avoid further suspicion. According to news reports this is exactly what happened, as all mysterious deposits into Makwakwa’s bank account ceased after Moyane allegedly alerted him that FIC had alerted the Commissioner about his suspicious financial dealings.
There is also evidence that Makwakwa did favours for some individuals or companies linked to the mysterious deposits made into his account. (The most recent allegations in this regard led to Makwakwa’s sudden resignation.)
But even before it became apparent that Makwakwa did favours for an organisation who paid money into his account, the report by FIC about the payments would have alerted his boss, Moyane, that he may have been involved in corruption. After all, when large sums of money are inexplicably deposited into the bank account of a very senior SARS official, any reasonable person would begin to suspect that the official may be involved in corruption.
In terms of section 34 of the Prevention and Combating of Corrupt Activities Act (PRECCA) any person who holds a position of authority (such as that of SARS Commissioner) and who knows or ought reasonably to have known or suspected that any other person has committed corruption or the offence of theft, fraud, extortion, forgery or uttering a forged document, involving an amount of R100 000 or more, that person “must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official”.
The available evidence suggests that Moyane did not report Makwakwa to the police, despite the fact that he ought reasonably to have suspected that Makwakwa was guilty of corruption. (It is unclear whether he got somebody else to report this to the police.) It is therefore possible that his failure to act constituted a criminal offence in contravention of section 34 of PRECCA and that he could be charged and convicted for contravening this section of the Act.
Only time will tell whether Moyane will be prosecuted and whether he will be convicted of either or both of these criminal offences. A successful prosecution is only likely if the Hawks (after an impartial and fearless investigation) finds sufficient evidence against him and if the National Prosecuting Authority (NPA) then acts in an impartial and efficient manner to ensure a conviction. At this stage it is unclear whether either the Hawks or the NPA is capable of acting impartially in this matter, and whether there is sufficient evidence to secure a conviction.
(If the Hawks and the NPA fail to investigate and prosecute the matters, there is also the possibility that Corruption Watch will launch a private prosecution.)
But if we assume (for the moment) that Moyane will not be convicted of any criminal offence, the question still arises whether President Cyril Ramaphosa will be able to remove him from office. Can he be summarily dismissed or is he protected by ordinary laws applicable to other civil servants?
The position of the SARS Commissioner is somewhat unique and is not that different from the position of the Director General of Intelligence (I indicate below why this may be relevant). While section 18 of the South African Revenue Services Act deals with the terms and conditions of employment of SARS employees (including managers), the section does not seem to be applicable to the SARS Commissioner.
A different section of the Act (section 6) deals with the employment of the SARS Commissioner and merely states that the “President must appoint a person as the Commissioner for the South African Revenue Service”. There is no provision made in the Act for the removal of the SARS Commissioner from office. (I am also not privy to the details of any employment contract that may have been entered into between the President and the SARS Commissioner.)
Does this mean the President can appoint but cannot fire the SARS Commissioner before his contract comes to an end? A somewhat similar situation arose when then President Thabo Mbeki first suspended and then fired Billy Masetlha, the then Director General of Intelligence. Mastelha challenged his suspension and firing in court. The Constitutional Court then considered his legal position in Masetlha v President of the Republic of South Africa and Another and rejected Mastetlha’s argument that he was illegally dismissed.
Although the position of Director-General of the National Intelligence Agency is explicitly mentioned in the Constitution (and that of SARS Commissioner is not) the empowering legislation in both cases grants the power to appoint the individual to the President but remains silent on the power of the President to dismiss the person he is empowered to appoint. In the Masetlha case the Constitutional Court held that:
“The power to dismiss is necessary in order to exercise the power to appoint… Without the competence to dismiss, the President would not be able to remove the head of the Agency without his or her consent before the end of the term of office, whatever the circumstances might be. That would indeed lead to an absurdity and severely undermine the constitutional pursuit of the security of this country and its people.”
The court furthermore rejected the argument of Masetlha that he was entitled to a procedurally fair process before being fired. This was because the Promotion of Administrative Justice Act (PAJA) which guarantees such a right to a procedurally fair process to a person affected by administrative decisions did not apply to executive functions performed by the President in terms of the Constitution or in terms of national legislation.
If it is correct that Moyane is appointed (and can be dismissed) by the President exercising an executive functions in terms of the SARS Act, this would mean that Moyane would not be entitled to a fair hearing or any other procedural safeguards before being dismissed. As the Court held in Masetlha:
“The power to dismiss – being a corollary of the power to appoint – is similarly executive action that does not constitute administrative action, particularly in this special category of appointments. It would not be appropriate to constrain executive power to requirements of procedural fairness, which is a cardinal feature in reviewing administrative action. These powers to appoint and to dismiss are conferred specially upon the President for the effective business of government…”
This does not mean that Moyane would not be able to challenge the lawfulness of his dismissal. As the Constitutional Court explained in the Masetlha case:
“This does not, however, mean that there are no constitutional constraints on the exercise of executive authority. The authority conferred must be exercised lawfully, rationally and in a manner consistent with the Constitution…. The exercise of such power must be rationally related to the purpose for which the power was given. . . As long as the regulation of the practice, viewed objectively, is rationally related to the legitimate government purpose, a court cannot interfere simply because it disagrees with it or considers the legislation to be inappropriate.”
If the power to dismiss the SARS Commissioner is indeed not administrative action subject to PAJA, all that would be required for President Ramaphosa to show that he validly dismissed Moyane would be that there was a legitimate purpose to do so (safeguarding the integrity of SARS) and that there was some rational relationship between the dismissal and this legitimate purpose.
When applying the rationality standard a court will not ask whether the decision was wise, nor whether it was the best decision under the circumstances. It will only ask whether the reason given was legitimate (it clearly was) and that the dismissal was not animated by an ulterior purpose.
At the time of writing it is unclear whether Moyane will approach the courts to challenge his suspension or whether he will do so if he is dismissed. But as I read the existing case law, it is not likely that a court will ultimately declare a suspension or dismissal unlawful. DM