No protection for graft whistle-blowers – witness

The lack of protection for whistle-blowers in the face of unethical leadership and rampant procurement irregularities in public institutions has been highlighted at the commission of inquiry chaired by retired Judge Robert Nugent, notes Legalbrief. One of the key witnesses in the investigation of fraud and corruption in SARS since the appointment of suspended Commissioner Tom Moyane has expressed concern over the lack of protection for whistle-blowers, notes a report on the IoL site. It says National Treasury head of procurement Solly Tshitangano was testifying for a second time before the commission about rampant procurement irregularities since Moyane took over. Tshitangano initially testified about the fraudulent awarding of a R200m tender to Bain Consulting Agency, to implement a failed turnaround strategy at SARS.

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Bain’s strategy, the commission heard, led to the increase of illicit flow of money, increase in cigarette syndicates as well as organised crime. On Tuesday, Tshitangano said that since his initial testimony last month, an alleged ‘pro-corruption group’ and those perceived to be close to Moyane had opened a criminal case against him at Sunnyside police station, notes a report on the IoL site. He said his accusers had told the police he ‘has millions in his bank accounts’. Tshitangano made the remarks when he implicated Moyane in the awarding of a multimillion-rand IT tender to Gartner SA without following a competitive bidding process in December 2014 - three months after his appointment (see report below). Tshitangano said: ‘Where were the whistle-blowers? The reason is that there is no effective protection of whistle-blowers and anti-corruption individuals.’

Meanwhile, more of SARS’ shady dealings were revealed yesterday. A report in The Star says SARS spent R3m on prosecuting anti-corruption head Yousuf Denath for allegedly favouring big tobacco companies at the expense of small players such as former President Jacob Zuma’s son, Edward. The newspaper says Denath told the commission that he was one of the officials placed on suspension for blocking the flow of counterfeit cigarettes and alcohol through SA’s borders. Denath said he was accused of colluding with big tobacco industry players, allegedly at the expense of Edward Zuma and his business partner, Yusuf Kajee. Denath said SARS spent R3m on kicking him out but the CCMA ruled in his favour in July this year.

A tobacco task team, set up in SARS, which was seen as the ‘new rogue unit’, targeted investigators and the internal tax agency instead of focusing on big businesses. This was alleged in testimony from Denath and another senior manager at SARS’ internal fraud investigation unit yesterday, according to a Business Day report. Denath said he was suspended the day Gobi Makhanya – who previously headed SARS investigations in KZN and was then a member of the tobacco task team – was appointed head of SARS’ internal fraud investigation unit. He said from that day the fraud investigation unit and the tobacco task team merged. The purpose of the unit was now to target investigators who were probing the cigarette industry, he alleged. Denath said he believed he was targeted because Moyane and his loyalists wanted to take over internal investigations. Another witness, who was also a senior member of the internal fraud investigations unit, told the commission that under Moyane, SARS’ investigative capacity was diminished. The witness, who did not want to be identified, told the commission about the tobacco task team and how it had not investigated any matters relating to the industry since 2015.

A SARS official told the commission how a change in the revenue service’s operating model had a severe impact on SARS’ anti-corruption and security unit, which was later renamed ‘fraud investigations’. A report in The Citizen notes the unit investigated internal corruption at SARS and the witness, who testified under anonymity, said because of the changes the unit stopped working on syndicated crimes but rather on cases the witness described as ‘rats and mice cases’ dealing with behavioural issues and fraudulent sick leave notes. ‘We moved from investigating syndicated crimes to investigating small sick leave notes fraud, kilometre claims, that was the one impact. The other impact was that the number of (reported) cases to us dropped. So people were just not aware that we still existed in terms of that we were still an anti-corruption internal investigations (unit),’ Witness X told the commission. Witness X testified that they had found it strange that in December 2014 Moyane had disbanded the unit even though it had been rated highly by the Department of Public Service and Administration in previous peer reviews.