A tale of two narratives — with the truth hidden somewhere inbetween
BY: NATASHA MARRIAN, 02 MARCH 2015, 06:48
Source: Business Day (BDLIVE.CO.ZA)
THE ructions at the South African Revenue Service (SARS) is a tale of two narratives.
Widely regarded as the most efficient and cleanest institute of the state, SARS has been racked with scandalous allegations of an inappropriate love affair; a covert unit which spied on the president and ran a brothel; attempts by organised crime networks to infiltrate the agency; and backstabbing employees and political interference.
After no fewer than five investigations, the truth behind the unravelling at SARS has yet to emerge.
The first narrative dominates the public space and is largely accepted by SARS decision makers — that the agency created “covert” investigative capacity and conducted activities outside of its legal mandate.
The final investigation dismissed explanations about the covert unit as a “rehearsed narrative” aimed at misleading a previous investigation led by Adv Muzi Sikhakhane.
The post-Sikhakhane probe adopted the counternarrative and its report set off an unprecedented shake-up of SARS top management.
In August 2014 City Press reported on a special unit which included “rogue agents” from the State Security Agency who used state resources in “dirty tricks campaigns” that included smuggling cigarettes and disgracing top civil servants, such as Hawks boss Anwa Dramat and senior SARS management.
A Sunday Times report two months later claimed that it was SARS playing dirty — it had a “covert unit” located in its bowels which was engaged in illegal intelligence gathering — including on the president — and in running a brothel.
IT IS widely agreed, months later, that approval was obtained by former SARS commissioner Pravin Gordhan to boost the agency’s intelligence capacity through a partnership with the National Intelligence Agency (NIA) to aid its investigations into the illicit economy — ranging from rhino and abalone poaching to trade in illicit tobacco.
Where the narratives deviate is what eventually became of this unit, meant to be located in the NIA. SARS deputy commissioner Ivan Pillay said in submissions to the Sikhakhane panel that the NIA had pulled out of the agreement. His detractors said it was SARS that had withdrawn and had illegally established the unit in its fold.
The report of the Sikhakhane panel claims to have found evidence “of a narrative rarely exposed to the public about our revenue service. It (the evidence) exposed minority activity of idiosyncratic and egocentric personalities, deception, intrigue and plain falsity. It was, as evidence will show, a product of an ill-conceived idea to deal with the real challenge of organised crime”.
The “evidence” included statements by witnesses that they had been involved in “what seemed like covert operations”; in electronic tracing of vehicles and surveillance of individuals; and in using “certain electronic devices”. Members of the unit were asked by “one of their handlers” to pose as drivers to then ANC Youth League president Julius Malema and national executive committee member Fikile Mbalula. Three witnesses confirmed using fake SARS identity cards.
The panel found the unit was unlawful; there was “prima facie evidence” it had abused its powers and resources; it had violated recruitment policies; and had possibly engaged in rogue behaviour.
BUT this narrative has been around since 2009. The allegations emanating from an “intelligence dossier” have been morphing since to suit the politics of the time.
Insiders say SARS has faced attempts to discredit it before — from disgruntled staff, certain sections of the electronics industry and even the disbanded Scorpions. Allegations of corruption were made when SARS, instead of private company Gijima, was contracted to upgrade Department of Home Affairs information technology (IT) systems, which resulted in huge cost savings. One of the more colourful accusations was that SARS was working for the Central Intelligence Agency.
The second narrative has hair-raising implications: the destabilisation of SARS is likened to a shark-feeding frenzy by a coalition of the unsavoury working to bring it down. It is alleged this coalition includes competing state institutions such as the NIA, the illicit tobacco industry, and disgruntled former and current staff and powerful politicians.
The worst-case scenario is that SARS has been “captured” on the inside by forces more susceptible to outside influence than their predecessors.
The allegations originate from Michael Peega, a former member of the National Research Group, SARS’s covert special projects unit. Mr Peega was fired after he was arrested for rhino poaching.
Since his dismissal, according to documents responding to a dossier he had kept, he has been seeking to enlist other staffers to join him in discrediting SARS, and has collaborated with former regional operations manager Kenneth Fitoyi.
The Sikhakhane report highlights the challenge SARS faced in dealing with the illicit tobacco industry, by citing a Mail & Guardian report in March last year, on how two multinational companies used their resources to influence security agencies to protect their commercial interests.
A SARS document shows that members of security cluster institutions were involved with the tobacco industry and in February last year met officials of the Hawks and the South African Police Service to express concern.
AT THE same time SARS met President Jacob Zuma and handed him a document recounting attempts to “malign and discredit” the tax agency and the role of State Security Agency members in the tobacco industry. SARS also submitted a note on how the illicit tobacco industry contributed to its current woes to Finance Minister Nhlanhla Nene in August last year.
The much publicised affair between SARS enforcement head Johann van Loggerenberg and attorney Belinda Walter was found to be a conflict of interests by the Sikhakhane panel, as she was a representative of the Fair-Trade Independent Tobacco Association (Fita) and tobacco manufacturer Carlinix. The report says she admitted that she had worked for the State Security Agency until 2012.
Another example of the interface between state institutions and big tobacco is cited in Mr Pillay’s submission to the Sikhakhane panel, in which he describes how the State Security Agency asked SARS to delay a raid on tobacco manufacturer Lonrho/Rollex. When SARS eventually raided the company’s premises, it was found that evidence had been removed and destroyed.
Political interference is part of the “confluence of interests” at play in SARS. In his submission Mr Pillay describes how seven politicians sought to intercede on behalf of a company with which SARS has been in litigation since 1998.
Questions also emerged about Mr Zuma’s role in the suspensions of SARS officials, from opposition parties in particular, after Mr Pillay had broached the issue of a fringe benefit tax on Nkandla.
The Presidency has denied the allegations.
SARS had Robert Huang, who has ties to the Zuma family, in its sights in its investigation of clearing agency Mpisi Trading. The ANC abandoned a court battle with SARS ahead of the elections last year after it refused to release T-shirts Mr Huang had imported for the ANC from China, allegedly without custom duties being paid.
Office politics at SARS played a role in the battle — some staffers felt sidelined by Mr Pillay and his allies. Anticorruption head Clifford Collings faced a disciplinary hearing for failing to provide a car on time for SARS Commissioner Tom Moyane. He resigned afterwards — although Mr Moyane had not pitched up to testify.
Three senior officials are suspended and Mr van Loggerenberg agreed to leave after the damning findings of the Sikhakhane report.
While the truth is likely to lie between the two competing narratives, it would be perilous for decision makers to ignore either of them. Last week Mr Nene appointed retired judge Frank Kroon to run yet another “review”.