Bain: Worm on the SARS hook

William Saunderson-Meyer on how the 'KGB of consulting' withered before the Nugent inquiry


Disgraced, dismissed, and disbelieved. And now, to add to the pain, disappointed. 

That’s former SA Revenue Service Commissioner Tom Moyane. Moyane, whose shenanigans while head of SARS are now the subject of an inquiry chaired by retired Judge Robert Nugent, must have been dismayed by the performance last week of Vittorio Massone, consultants Bain and Co’s managing partner in South Africa. 

Massone had been summoned before the inquiry to explain why Bain had provided such patently poor management advice to SARS. The service had declined from being feted by its international counterparts for its efficiency at extracting blood from stone, to posting a revenue collection shortfall of R100bn over the past four years.

I have sympathy for Moyane. Surely, when you have spent a couple of hundred million rand buying the co-operation of one of the world’s top management consultancies — one that revels in the sobriquet of being the “KGB of consulting” — you should be able to reasonably hope that whatever their other professional shortcomings, they will at least be able prevaricate with a straight face?

Alas for Moyane, as Massone’s performance last week at the SARS inquiry showed, it’s one thing to pull the wool over the eyes of a gullible CEO, in a cosy top-floor office after a few convivial brandies. It’s quite another to pull off the same magic at a televised public inquiry, under probing questions from the panelists and an absolute bulldog of an evidence leader, Advocate Carol Steinberg.

As Daily Maverick investigative journalist Pauli van Wyk tweeted caustically during the interrogation of Massone: “He started straight-backed and confident this morning … but is now speaking all the more softly and has sunk so low in his chair that I struggle to photograph him”.

Massone was pathetic. He squirmed; he contradicted himself; he was transparently disingenuous. The relentless questioning about the poor quality of the work that Bain had done left him metaphorically wringing his hands and saying “I feel very stupid” and “I’m very sorry” so often that Nugent eventually sharply interrupted him and told him to save the apologies for later.

There is much to apologise for. There has been evidence from a number of witnesses that Bain was irregularly appointed and that the “reorganisation” was scripted around Moyane’s desire to eviscerate the SARS investigative units that were inconveniently targeting the wealthy and corrupt individuals behind state capture.

Massone met President Jacob Zuma and Moyane to discuss structural changes to SARS long before Moyane was appointed Commissioner. Massone, according to media reports, often boasted of his insider track access to the former president. 

Bain’s expensive advice — SARS says they paid R200m, Bain says it was paid R164m — was based on pure film-flam. Over a period of six days, Bain junior consultants conducted interviews, each lasting only 10-15 minutes, with 33 mostly junior SARS staff, all of whom had been chosen by Moyane. No notes were kept of the interviews, or if they were, they have conveniently been destroyed.

The perfunctory nature of the work that was done for SARS is difficult to square with Bain's position as one of the top three global management consultancies, with annual revenues in excess of $4bn. On the evidence presented at the inquiry, Bain & Co are either inept buffoons or else they are simply hired guns, political mercenaries who cynically tailored their proposals to destroy SARS, the country's most highly organised and effective government agency.

Whichever is correct — it might well be both — is difficult to see how Massone can survive as a Bain top honcho. He damned himself, several times over, with his own words. 

Take these two, of a number of similar exchanges:

Nugent: “Are you saying, [Bain] come in, the client says do this and [Bain] unquestioningly do whatever the client says?”

Massone: “Yes.” 

Steinberg: “You said [Bain] would need to understand how [SARS] was evolving but you took a mandate where you were actually precluded from understanding how the organisation was evolving?

Massone: “Yes.” 

Nugent: “I know you had 33 interviews in six days but beyond that, you really just moved in, changed the structure. That’s really what happened. Is that fair?”

Massone: “Yes.”

These are astonishing admissions by Massone. He is stating, under oath, that if paid sufficient money, Bain & Co will spend fewer than eight hours assessing the problem and then just recommend what the CEO wants. One needs an MBA for this?

Two other firms implicated in the corrupt process of state capture, KPMG and McKinsey, eventually both buckled to pressure and apologised to South Africans, as well as, reluctantly, paying back the enormous amounts of money they earned. This week, McKinsey finally coughed up R99.5m in interest it earned on R902m in Eskom fees, which has also been refunded. 

There have been similar calls for Bain to #PayBackTheMoney. There can be no doubt that they will eventually have to do so, although it's clearly very difficult for Bain to get its supposedly smart collective head around the idea of giving back money, however tainted it might be.

On Tuesday, Bain issued a statement saying that they would conduct a “deep and extensive” investigation into the SARS debacle. They said, also, that there was a “growing frustration internally” that Bain had not recognised that they “may have been used to further a political or personal agenda”.

Ag, shame. It’s all such an ethical and organisational tangle. Perhaps they should hire some hotshot international management consultants to help them get out of the muddle.

Follow WSM on Twitter @TheJaundicedEye