Advocates rip into 'biased, incompetent' Mkhwebane

Advocates for the Finance Minister, the Reserve Bank and Absa delivered blistering attacks on Public Protector Busisiwe Mkhwebane’s Absa-Bankorp report in the Gauteng High Court (Pretoria) yesterday, raising serious doubt about her motives, notes a Business Day report. The importance of the Public Protector in SA’s constitutional democracy necessitated that she ‘not misuse the powers afforded her’ and complied with requirements of legal fairness, ‘at the heart of which is rationality’, said Tembeka Ngcukaitobi, counsel for Finance Minister Malusi Gigaba. ‘In order to be rational, a decision must be based on accurate findings of fact and correct application of the law.’ In papers, Gigaba, the Reserve Bank and Absa have repeatedly asserted that Mkhwebane’s findings paid no regard to the evidence before her, including the findings of previous probes into the Absa-Bankorp lifeboat and submissions made by various parties on the matter. The arguments presented by the applicants yesterday suggest that, at best, Mkhwebane has been incompetent and negligent in this investigation and, at worst, had ulterior motives. Three judges are hearing the matter, which dates back to a 2010 complaint laid with the Public Protector by Paul Hoffman, director of Accountability Now, over the government’s alleged failure to implement the ‘Ciex report’. The report was the work of British Intelligence officer Michael Oatley, who in 1997 agreed to help the government recover misappropriated apartheid-era public funds. This included the R1.125bn bail-out granted to Bankorp. Absa later bought Bankorp and, Oatley alleged, benefited from the Reserve Bank assistance – a conclusion with which Mkhwebane agreed.

Full City Press report

The entire report should be overturned, Gigaba’s lawyer told the court. In a fundamental misunderstanding of how contracts work, Mkhwebane had decided that the government should take orders from private British intelligence agency Ciex, Ngcukaitobi told the court. ‘She flips the entire relationship upside down,’ said Ngcukaitobi, according to a Mail & Guardian Online report. Mkhwebane found the government had failed in its duty to act on a Ciex report that said billions could be recovered from Ciex – with a percentage going to Ciex in commission. That simply was not a conclusion she could have reached rationally, said Ngcukaitobi. ‘She has elevated the Ciex report and elevated the Ciex agreement into a binding instrument, as if it were some kind of Act of Parliament. What she has failed to appreciate is that this was simply an agreement between the government and a service provider.’ The government was not required to follow advice it paid for, said Ngcukaitobi, as evidenced by the advice it regularly receives from lawyers, then ignores. So it had been ‘totally irrational’ to criticise the government for not following Ciex’s advice, he said. This had been explained to her several times, but she had ignored those submissions. Because of those and other failures, Gigaba has asked the court to overturn the entire Bankorp report rather than just striking down sections of it, as Absa and the Reserve Bank has asked.

Full Mail & Guardian Online report

Absa also painted a grim picture of the Public Protector’s handling of the investigation, raising issues of lack of jurisdiction‚ independence‚ impartiality and procedural fairness – and a report riddled with plagiarised work. Absa’s legal team told the court how Mkhwebane had refused to hear Absa out after the release of her provisional report‚ but had no problem meeting with the Presidency‚ the State Security Agency‚ and Absa’s ‘adversaries’‚ the Black First Land First (BLF) movement, notes a TimesLIVE report. Advocate Gilbert Marcus SC‚ for Absa‚ said it was common cause that BLF protested against Absa after the leaking of the provisional report‚ and that the same organisation and the ANC Youth League marched to Absa after the release of Mkhwebane’s final report. He said Mkhwebane also refused his clients access to the original complaint. Marcus said that this‚ as well as Mkhwebane’s refusal to hear Absa out‚ exposed her lack of appreciation of the principle of procedural fairness‚ and that her failure to hear Absa out while she did take submissions from other parties amounted to bias. ‘These (meetings) took place during the course of finalising the report – this was post-provisional report. She justifies these meetings on the basis that these parties were implicated‚ but did not afford Absa the same‚’ he said. Marcus said Mkhwebane’s interpretation of her remedial action did not do her office any credit‚ saying‚ ‘Five years after investigating‚ she recommends another investigation?’ He also pointed the court to sections in Mkhwebane’s report that he said were lifted verbatim from economist Dr Tshepo Mokoka’s report on the legality of the Bankorp loan. Marcus said Mkhwebane lifted Mokoka’s conclusion that the transaction was illegal and used it in her report as if it were her finding. He said if Mkhwebane were a student‚ she would have been disciplined for plagiarism.

– TimesLIVE

The Reserve Bank wants the court to declare Mkhwebane breached the Constitution‚ because she failed to act impartially and independently in her investigation. Of concern to the central bank are several undisclosed and scantily recorded meetings that Mkhwebane had with the Presidency and State Security Agency spies during the course of her investigation, notes another TimesLIVE report. Advocate Kate Hofmeyr‚ for the bank‚ told the court that there were at least two meetings Mkhwebane had with the Presidency and the SSA in the period between her provisional and final reports. She noted that no other party was afforded the same treatment‚ and that there was no proper recording of these seemingly clandestine meetings. Hofmeyr said that also of concern was the meeting which Mkhwebane had with the SSA during which the vulnerability of the central bank was discussed. She re-iterated that there was no recording of the meetings‚ but rather‚ in the case of the June 2017 meeting with the Presidency‚ a handwritten note that she said appeared to have been scribbled by Mkhwebane herself. ‘This investigation was handled in a manner that abuses her office... her independence was further breached by her meeting with the SSA. There was a handwritten note of the meeting (at which) the subject matter was how vulnerable the South African Reserve Bank was‚’ Hofmeyr said. She added that in the meeting with the Presidency‚ Mkhwebane’s widely criticised remedial action – that the Constitution be amended to take away the core functions of the SARB – was discussed. Hofmeyr said Mkhwebane has not denied these facts in her answering affidavit. ‘These facts require a declaratory order from this court. There has been a breach of the Constitution by the Public Protector. The Public Protector is required to act impartially and independently. She has failed to do that‚’ Hofmeyr said.

– TimesLIVE

Earlier, non-profit organisation, Open Secrets was barred from being joined as an amicus curiae. Open Secrets sought to be joined as a friend of the court over concerns that the court’s determination could close the door on the investigation of apartheid-era economic crimes altogether, notes a BusinessLIVE report. ‘All we want is to ensure the court does not make an order that prevents further investigation of apartheid-era economic crimes,’ Open Secrets’ Advocate Seena Yacoob said. ‘Open Secrets does not take a position on the issue between the parties.’ The role of an amicus, however, was to be of assistance to the court by putting forward submissions that were relevant to the matter before the court, said Judge Dawie Fourie. ‘It is clear from the rules of court that the role of an amicus is to be of assistance to the court, by putting forward submissions that are relevant to the court, will be useful and are different from those of the other parties. If these requirements are not met, the court should refuse the application,’ Fourie said in handing down judgment. ‘Open Secrets wants to advance an entirely new course of action, which falls outside the ambit of the main issue referred to ... (and) will not assist the court in considering and deciding the main issue. For these reasons the application is refused.’ BusinessLIVE notes Open Secrets describes itself as an independent non-profit organisation ‘with a mission to promote private-sector accountability for economic crime and related human rights violations in Southern Africa’. In a separate case, it is, together with the SA History Archive, seeking a court order forcing the Reserve Bank to release records pertaining to individuals who had been implicated in apartheid-era financial fraud.

Full BusinessLIVE report