Zondo's stumble on SARS

Jeremy Gordin writes on that section of the State Capture report dealing with the Moyane/Bain takeover of the revenue service

It was with a high level of expectation and interest that I read Part One of the Judicial Commission of Inquiry into State Capture report, compiled under the aegis of Justice RMM (Raymond) Zondo, acting Chief Justice of the Republic of South Africa, and handed over to President Cyril Ramaphosa about a week ago. (It can be found on the Presidency website and various other places.) [i]

In particular – because I have been following this saga more carefully than others – I perused with focus and attention chapter two, “the summary and analysis of evidence and recommendations relating to the South African Revenue Service (SARS),” which is on pages 625-714 of Part One.

The Zondo report begins by pointing out there is no need to reinvent the wheel – “This commission has no desire to repeat the work of the Nugent Commission of Inquiry into Tax Administration and Governance by SARS, nor does it seek to re-enter the fray [relating to the events that took place at SARS, such as the rogue unit fracas, and others].

“In the absence of any judicial review of the Nugent Commission’s Report, its factual findings will stand, and no evidence in contradiction of any such findings can be accepted (Para 10).”

I understand not wanting to reinvent the wheel, but there is a problem here, Houston. Much as one respects the Nugent Commission and/or Judge Nugent (and I certainly do), was the Nugent commission’s report Torah m’Sinai? Did it emanate from the Mount on stone tablets – immutable as the Word of God?

The Nugent commission made factual findings; they might have been correct; they might not have been. Anybody is quite entitled to challenge these findings if they wish. What’s more, contradictory evidence is acceptable.

So do the words of the Zondo commission mean it ignored evidence in contradiction to what the Nugent commission found, and accepted only evidence consistent with Nugent’s findings? If so, what value the Zondo commission report?

Later on, in para 211, we also come upon this: “[Tom Moyane, former SARS commissioner] could not himself say why the Full Bench of the High Court was wrong [to have adjudged that Moyane was incorrect in saying that the rogue unit was unlawful]. In any event, until that [high court] judgment is overruled, it set the legal position [my emphasis].”

What? Does this mean nobody is entitled to question whether the high court got it right? Does this mean the Zondo commission did not even weigh the matter itself? One doesn’t need a law degree to appreciate that a court’s views are “definitive” only insofar as such views operate as judicial precedent – which is irrelevant as far as a commission is concerned.

The point is that if the Zondo commission thinks the high court or the Nugent commission was correct, it ought to say so if it can (i.e., after weighing the evidence) – and ought not to consider that any person or body is an unquestionable oracle of truth. Just a small question: is the Zondo commission pre-empting the questioning of its own report?

The Zondo report rumbles on (and on). It does add some detail and background absent from the Nugent commission report, the media reports or rather misreports of the day, and Jacques Pauw’s book, The President's Keepers: Those Keeping Zuma in Power and out of Prison (2017).

But in the scheme of things these details seem to be peripheral – and, anyway, if you’re going to delve into peripheral detail, you need to take such delving to some sort of conclusion, don’t you?

Take, for example, the “hostage” drama involving Vlok Symington (para 226 et seq). What is served by paragraph after paragraph of “who said what to whom” on what is in the end a minor event? (There were many, many events of a similar kind, as is to be expected way in which SARS was run by Moyane.)

More to the point, what then is made of the event? That there should be a prosecution for subverting the ends of justice? No. That the police officers concerned should be brought to account? No.

And this example is, alas, illustrative of most of this chapter. After some 87 pages, what recommendations are made? There are four – and all look remarkably innocuous, even (I’m sorry to say) flaccid.

First, contracts between Bain and other government entities should be examined for tender irregularities. Well, duh. Second, law enforcement agencies should “conduct such investigations as may be necessary” to enable the NPA to decide whether to prosecute in connection with the contracts with Bain.

What further “investigations” are required? Is there evidence of wrongdoing or is there not? Of course there is, and they’re well documented, as the report shows. Well then, tell the NPA to get on with it and prosecute for fraud, which is what the Nugent commission recommended (but has not been implemented).

What’s the point of a years-long, billion-rand commission that grabs at every opportunity to kick the can farther down the road?

Third, the SARS Act of 1997 (as amended) needs to be further amended to provide a transparent process for appointing a commissioner. Again, this merely repeats a Nugent commission recommendation, except Nugent went further and proposed a particular process that ought to be followed (and speaking under correction, I’ve been told the Act is already in the process of re-amendment).

But it is the fourth recommendation that is truly gorgeous: Moyane should be prosecuted for giving false evidence to parliament. Aha, so that’s the crux of what Moyane did wrong. A porkie to a parliamentary committee. Not fraud in the allocation of contracts? Not subverting the course of justice? Not wasteful expenditure in his own interests?

No other remedial action. No action against Moyane’s buddy, Jonas Makwakwa. No recovery of moneys. No action against former president Jacob G Zuma, even though the report remarks that “It is a notable feature of the SARS evidence, in contrast to the rest of the evidence which the Commission heard, that this is one of the few instances where President Zuma was himself directly and personally involved in the activities and plans to take over a government entity, namely SARS [p. 652]”? [ii].

A porkie to a parliamentary committee will suffice [iii].

This gormlessness on the part of the Zondo commission is concerning. What will the standard of the entire report be like? And, of course, there is a matter of fundamental importance worth thinking about in anticipation of the further two reports. For, although Zondo has said (see endnote 2 above) that “state capture” will be dealt with fully and conclusively in Part Three, what should we make of the conclusion in this part that SARS was an incident of “state capture”?

For what it is worth – and I do know a little about Zuma and about so-called consultancies, such as Bain – I for one don’t think what happened at SARS falls under any of the vague definitions of “state capture” that I have encountered.

By which I mean this: What if Tom Moyane is not in fact one of the sharpest pins in the box (which he gives every indication of not being), and what if his erstwhile friend Zuma – also something of a fool when it comes to 21st century appurtenances such as technology & so on – what if Zuma was told inter alia by his erstwhile attorney Michael Hulley that SARS was being a pain in the butt about Zuma’s paucity of tax returns, etc.?

And so Zuma, being Zuma, says to his old buddy from the Mozambique days that he’s going to make him the SARS commissioner (Moyane is bored and useless at Prisons anyway and is interested in “business”); and that in that position Moyane can also sort out SARS and stop these axxholes from hassling Zuma and his son Edward (who deals in illegal smokes, or so Jacques Pauw says); but that what they need to do is get hold of some fancy-shmancy “strategic plan” from one of these fancy Consultancy firms. Such firms are all the rage and, boy, do they know how to talk the talk – and he and Moyane need one of them to sell to the country what they are doing – refurbishing SARS.

Enter Vittorio Massone of Bain, who knows diddeley squat about tax collection and control, but who, like most Consultants, is greedy as all hell. Massone sells Zuma a bullsxxt plan, it’s what many Consultants do, in terms of which SARS can be “refreshed”– but which would entail getting rid of anyone who says or suggests the emperor is actually not wearing any clothes at all. There is, of course, no one around Zuma in those days who is competent or willing to tell the President that the plan is all horse manure.

Tom runs with it – and, well, THE REST IS HISTORY. Everything happens as it’s bound to do, SARS becomes a disaster, of which the Rogue Unit saga, Johann van Loggerenberg’s appalling travails, Vlok Symington’s “hostage drama”, etc., etc., are but symptomatic byproducts. The media of course love the movie, get most (if not all of it) wrong. And it snowballs – and, ironically, Zuma and Tom are hoist with their own petard, just as much as the country is screwed by their behaviour.

Think about it: why in heaven’s name would Zuma and Moyane want to intentionally run down or destroy SARS? They would not; it was one of the geese that laid golden eggs. Trouble is that things got out of hand.

In other words, what I’m suggesting is that there was not an enormously elaborate plan to “capture” SARS for the purposes of some sinister strategy; what happened was – and is – what you get when you have no checks and balances, two nincompoops, and a host of greedy others playing with the country’s organisations (such as SARS) because there’s money to be made and troubles to be set aside. I.e., this was as much a bizarre and tragic comedy as a conspiracy, albeit not a very sophisticated one (one can actually picture Zuma going heh-heh-heh the more Massone sketched his hastily cobbled-together “plan”).

Point is: if you follow Joseph Stalin’s career, you can trace a complex plot, many of them; but Zuma and Moyane ... gimme a break.

You don’t agree with me? Think about it. And think back to a comment that appears in chapter 3, para 1 of the Nugent report: “We think what occurred can fairly be described as a premeditated offensive against SARS, strategized by the local office of Bain & Company Inc, located in Boston, for Mr Moyane to seize SARS, each in pursuit of their own interests that were symbiotic, but not altogether the same [my emphasis].”

Not then a state capture plot per se –Moyane’s interest was in taking control of SARS (inter alia to assist Zuma with his troubles, such as they were), Bain’s interest was making money.

Still, in the interests of audi alteram partem, let me note that the Zondo commission (as we have gathered) and Pauw would also not agree with me. Pauw’s book, mentioned above, suggests a plethora of cogent reasons why Zuma would want to control SARS [iv].

But there is a difference between “controlling” something (because you can, because Moyane wanted a new post, and because Massone had been introduced to Zuma) and launching a “state capture” plot; I also think Pauw exaggerates the level of Zuma’s anxiety when it came to SARS [v].

So, what then is “state capture”? Is it seizing control of state authority for unlawful purposes? If so, is that a crime? If so, what crime is it? What laws are there to deal with it? Is it a crime to steal a postage stamp from the Post Office, and not a crime to seize control for unlawful purposes of the Post Office itself?

Is it a crime wilfully to damage an Eskom pylon but not a crime wilfully to damage Eskom itself? Is it sedition to “subvert the authority of the government” (which it is) but not a crime for those in government to themselves subvert the institutions of State?

Big questions indeed, to which I can offer no exhaustive answer [vi]. But I fear those are questions that three years and R1-billion might not answer either.

A porkie to parliament, indeed.


[i] As the introduction of the report states, the full report is set to be delivered in three parts, each consisting of a number of volumes (or chapters). Part One has been delivered, Part Two is due by the end of January, and Part Three before end of February.

[ii] In fairness to the Zondo commission, perhaps there will in the forthcoming parts Two and Three of the report be a separate section devoted to Zuma, just as there is going to be – according to Zondo – a summary of the whole report in Part Three, and an explanation for its conclusions “that state capture has been established”.

On p. 342 of Part One (the SAA/Miyeni chapter), Zondo remarks: “Mr Zuma fled the Commission completely without any valid reason. He did so in order to avoid having to answer questions in the Commission about matters such as this. He did not want to account to the nation. He knew he was not going to have answers to many of the questions that were bound to be put to him”.

Maybe we can live in hope.     

[iii] BTW, for those interested in such matters, such a prosecution seems likely to fail. There is no account in the Zondo report explaining on what that recommendation (to prosecute Moyane for a porkie) is based. The “factual account” seems to be in the Nugent commission report (Chapter 16). Undoubtedly what Moyane told the parliamentary committee was not true, but it looks quite likely Moyane did not appreciate it was not true.

In any case, on what basis is telling a porkie to a parliamentary committee perjury? According to a standard textbook on criminal law, “Perjury consists in the unlawful and intentional making, upon oath, affirmation or admonition and in the course of judicial proceedings before a competent tribunal, of a statement which the maker foresees may be false”.

A parliamentary committee has, it seems, the power to summon a person to be examined under oath (or affirmation, etc.), but someone who has given evidence to such a committee tells me that they mostly don’t use that power; I can’t find evidence that Moyane was under oath; and in any event the proceedings of a parliamentary committee, when the committee is merely receiving information from a state official, probably didn’t involve an oath or affirmation.

[iv] “My SARS sources said: ‘We know that Zuma fears the corruption charges. That's common knowledge. But that’s nothing in comparison with his potentially huge tax bill, the fact that his household may have received proceeds of smuggled tobacco, and those payments allegedly made by .... And there are others too, the Guptas and so on. He would never have survived it. He could even have been sequestrated ultimately. That was his biggest fear. And he knew these guys hardly lost cases in court.’ There was, of course, the last and final solution for Zuma; the ultimate way out of his tax problems. This is the one I am suggesting was the reason for the upheaval at SARS and the removal of the ‘Gordhan Four’.” – Pauw, Jacques. The President's Keepers: Those keeping Zuma in power and out of prison. Tafelberg. Kindle Edition.

[v] Incidentally, as readers might know, at the end of last year a North Gauteng High Court granted the Financial Mail and investigative journalism unit amaBhungane access to Zuma’s tax records. Given “the sacrosanct principle of the confidentiality of taxpayer information,” this was, of course, immediately appealed by SARS.

Now I wish the FM and amaBhungane the best of luck, but even if they triumph in court (which I doubt), I’d be willing to bet – say, a fulsome meal including pork potstickers – that what they’ll find would be pretty underwhelming. As best I know, all that SARS files show are your returns, or lack thereof – and what does that prove anyway?

[vi] Nonetheless, let me say at this late stage – and somewhat against (my own) grain – that I am happy that Zondo commission is ascribing whatever they can find to a grand plan of “state capture”. This phrase does capture public indignation far more readily than tired old “corruption” and other stuff. – Just so long as I’m not called upon to justify the phrase “state capture”. (Well, I’m not likely to be, am I?) You saw what happened when Pravin Gordhan claimed “state capture”? Even a second-rater like Dali Mpofu SC was able to make him look silly.

“State capture conspiracy” is proclaimed to the delight of the media and others. Great, I say; when it comes to the stuff we’ve heard about during the last three years, the more hyperbole the better. 

BTW, If Judge Zondo et al need any assistance with definitions at this late stage, I can recommend an article written by Helen Zille in October 2013 [sic], “A race against time to prevent “state capture”.