The Committee requested the Public Protector to comment on two specific matters of public interest: her report into the Vrede Dairy farm in Free State; the adverse findings against her in two separate court judgments in the Gauteng High Court, which set aside aspects of her remedial action in the ABSA matter and the order to Parliament to amend the Constitution to change the South Africa Reserve Bank mandate.
The Chairperson noted with concern the Public Protector’s statement that she encountered resistance from public officials when conducting the Vrede investigation. He said it is unacceptable for public officials to hinder the Public Protector in the performance of her duties by suppressing information. Officials who do so, violate their oath to protect and uphold the Constitution and should be exposed and dealt with accordingly.
The Public Protector outlined the context and the findings in the Vrede Report. The Vrede Report did not deal with allegations of corruption, state capture or other allegations of criminal activity which fell outside the ambit of the initial complaint. The initial complaint was lodged by a DA member in the Free State. The scope of the investigation and report was limited to investigating instances of irregular procurement and maladministration not criminal matters. Criminal matters fall outside her jurisdiction, but the Hawks are conducting investigations into the Vrede matter.
When the Public Protector took office, the Vrede Report was already at an advanced stage. All that remained was for notices under section 7(9) of the Public Protector Act to be issued to implicated parties. Section 7(9) notices were issued to the Free State Premier, Mr Ace Magashule, and former Free State Agriculture MEC, Mr Mosebenzi Zwane. The remedial action obligated the Premier to institute disciplinary proceedings against the implicated officials within 30 days, but that 30-day period had not yet expired. Both the DA and the Council for the Advancement of the South African Constitution (CASAC) had taken the Vrede Report on judicial review. The matter is sub judice and the Public Protector stated she would thus be unable to comment on certain aspects.
As a whole the Committee expressed disappointment, frustration and even anger at the responses of the Public Protector and the manner in which she conducted the Vrede investigation.
Members said her report had failed to investigate the politicians and the Gupta family who are at the centre of the Vrede scandal. The Vrede Report failed to investigate any allegations contained in the 2017 Gupta Leaks and she had failed to interview the intended beneficiaries. The Public Protector had stated she would be the protector of the “little man” but she had dismally failed in that. It was unacceptable for the Public Protector to say she could not investigate corruption because it fell outside the scope of her investigation as it is the Public Protector herself who determines the scope of her investigations. A core part of her mandate is to act as the custodian of the Executive Members Ethics Act and she had failed in that duty.
Members said the Constitutional Court in the Nkandla judgment set out the important role the Public Protector plays as a voice for the poor and marginalised. Failing to consult the intended beneficiaries of the project is at odds with her constitutional duty. One could not accept the response of the Public Protector that limited resources had prevented her from embarking on a fuller investigation as the Public Protector Act allows her to request assistance from any organ of state including National Treasury. It is unacceptable for the Public Protector to state that personal cost orders undermine her independence. For far too long public officials have adopted an unduly combative attitude to litigation and it is time they personally bear the costs instead of the taxpayer.
The Public Protector emphasised she does not engage in vexatious litigation. She said that it was odd for the Gauteng High Court to find that it is possible for the Public Protector to order the President to institute a judicial commission of enquiry in the State Capture review, but in another find it is unlawful for her Office to instruct the Special Investigating Unit (SIU) to recover money from the Bankorp loan. The different judgments against her were inconsistent and that both failed to engage with the substantive merits of her reports and set aside the reports based only on findings that she failed to adhere to procedural fairness.
Members responded that as a result of her remedial action severe damage had been dealt to the independence of SARB, her Office and the economy as a whole. The full bench judgment stated the Public Protector had acted in a disingenuous manner by trying to pass off what was clearly a peremptory order to change the Constitution to amend the mandate of SARB as merely permissive. The Public Protector failed to afford ABSA and SARB an opportunity to review the final report despite affording that opportunity to the State Security Agency. It is ironic that the Public Protector states she cannot perform her mandate effectively due to a lack of adequate resources, yet engages in litigation that is clearly vexatious and frivolous as illustrated by the two High Court judgments.
Members said it was unacceptable for the Public Protector to publicly state that the judges in the matter had failed to apply their minds in an impartial and objective manner. It is shocking that the Public Protector, herself an officer of the court, could express such statements which border on contempt of court. The Public Protector would do well to reflect on the adverse comments made against her in the ABSA judgment which found she did not sufficiently appreciate the constitutional duties of honesty, objectivity and integrity imposed on her by her Office.
She was asked by some Members if she could still reasonably expect people to believe that she is a fit and proper person to occupy her Office. She should consider doing the honourable thing and should resign, just as the former President had done.
Other questions and comments were about the numerous meetings with the former President before the report was finalised yet she did not afford the same opportunity to ABSA or SARB; why she had attended a meeting with Black First Land First (BLF) but had failed to extend the same opportunity to ABSA or SARB; if she had ever worked for the State Security Agency; and why she thought it was necessary to have a meeting with the State Security Agency on this matter.
The Chairperson concluded the meeting by saying the Public Protector was not brought before the Committee to be put on trial. Rather, they requested her presence so that she could fully explain herself and dispel any negative perceptions which the public may have. She has conducted herself with integrity before the Committee.
The Chairperson gave a few opening remarks about the context of the meeting. The meeting was not an ordinary Committee meeting. The Committee had summoned Adv Busisiwe Mkhwebane, Public Protector of South Africa, to report on various serious matters of public interest affecting her Office in the performance of its functions. This was necessary to give the Public Protector an opportunity to respond to these challenges and present her side of the story. This was important to prevent her from been tried in the media without her presenting her side of the facts. A negative public perception of the Public Protector brings her Office into disrepute and it is important to deal with these proactively when they arise.
Committee members however do have a number of serious concerns. The Committee concerns relate primarily to various reports issued by the Public Protector. The Public Protector had failed to provide one of those reports to Parliament, but she had subsequently provided it and was thanked for doing so. More seriously, there are public debates about two different court applications which made various serious adverse findings about the Public Protector. The first case was the South African Reserve Bank v Public Protector and Others. The second case was ABSA Bank Ltd v Public Protector and Others. In both cases the presiding judges made serious negative findings about the way the Public Protector handled both investigations. Parliament itself – and the Portfolio Committee on Justice – had gone to court to review remedial action by the Public Protector mandating Parliament to amend the Constitution to change the mandate of the Reserve Bank.
The Committee and Parliament both have the view that the Office of the Public Protector is a fundamental office supporting constitutional democracy. Clouds should not hang over Office in the performance of its functions. It was therefore necessary for the Public Protector to officially appear before the Committee, so she could personally give her side of the story to dispel any clouds or negative perceptions against her about the manner in which she has performed her duties. This is preferable to a trial by media or where the Public Protector gives responses through intermediaries which may distort her true response on these matters of public interest. Parliament and the Committee as a whole have a duty and an interest in protecting the Office of the Public Protector to enhance and strengthen constitutional democracy.
The Chairperson requested the Public Protector focus her presentation and responses on the specific issues raised. As this was no ordinary meeting, it would not be necessary to deal with the usual contents of Committee presentations such as the mandate of the Public Protector or the challenges facing her Office generally which are not connected to the agenda of the current meeting.
The Public Protector agreed to the Chairperson’s request. The presentation was prepared according to the agenda her Office received from the Committee. The presentation would therefore deal with aspects of the financial challenges facing her Office.
The Chairperson noted the Public Protector’s response. The Committee and the Chairperson therefore are on the same page about the manner of proceeding. The presentation should deal with the contents of her various reports. The Vrede Dairy Report stated public officials refused to cooperate in her investigation. Alternatively, they obstructed her in the execution of her duties. This is a very serious matter as the Public Protector exercises constitutional powers in the interests of the public and constitutional democracy. Politicians have taken an oath to uphold and protect the Constitution. It is a serious matter then for officials in government to obstruct the Public Protector in the execution of her duties. If that is true who are those individuals? Officials who obstruct the Public Protector in the execution of her duties undermine and violate the Constitution which can never be tolerated. What assistance can the Committee and politicians generally give to the Public Protector to ensure such a situation is prevented from arising in the future?
The Public Protector stated she assumed that her report – referred to by the Chairperson – alleging various public officials had obstructed her in the performance of her duties or refused to cooperate with her Office, was the Vrede Dairy Report. The report noted that some information requested was not provided.
The Chairperson responded he was referring to the Vrede Dairy Report. He would like the Public Protector to respond to allegations that she had suppressed information. The Public Protector should speak to all matters to dispel clouds which the public perceives to be hanging over her personally and her Office generally.
Vrede Report and allegations of suppression of information
The Public Protector, Adv Busisiwe Mkhwebane, first outlined the background and context giving rise to the Vrede investigation and report. The complaint was launched with her Office in 2013 by a DA member in the Free State. The Report is now a matter of public record. The DA member complained of the following: In September 2013 the Free State portfolio committee of agriculture was informed by the department head, Mr Thabete, that an agreement between the Agriculture Department and a private entity called Estina had been concluded. The agreement was subject to a confidentiality clause. The confidentiality clause raised a red flag with the complainant. Under the agreement Estina had partnered with an Indian company which held 90% of the shares in Estina. The agreement stated that Estina would be paid R338 million and the government would contribute a certain amount to the Vrede empowerment project. A related issue in the investigations was whether the proper procedures regulating transparency in the project were complied with.
In 2014 the complainant wrote a second letter. This letter was received while her Office was in the process of investigating the matter. That letter raised additional issues that had subsequently come to light – that Estina would only contribute to the project if necessary and would receive other personal financial benefits from the project. There was a concern that the government would then have to contribute beyond the initial R240 million agreement and that Estina was irregularly inflating the project price. During this time the Free State Agriculture Department had already supplied Estina with R240 million worth of equipment which included farming equipment such as tractors and electronic equipment.
In 2016 another letter was received alleging the agreement making Estina the partner in the project did not comply with procurement regulations. The appointment of Estina was approved by the legal department in the Free State Premier’s Office of Mr Ace Magashule. This gave rise to a potential conflict of interest as it would mean that Estina would be both a partner and an implementing agent.
Once the complaint was received the Public Protector first had to determine which issues would form the subject matter of the investigation. These included additional issues pertaining to environmental impact which were not raised in the initial complaint. The Department of Environmental Affairs (DEA) and the Department of Water Affairs (DWA) however conducted the majority of these investigations which properly fall within their mandate.
By 2015 the investigation had made substantial progress. Within the Office of the Public Protector, there is an internal think tank which scrutinises investigations and reports before they are made public. That think tank includes the provincial Public Protector representatives and senior investigators in each matter. By 2015 the investigation was close to completion and a draft report was produced. Directives were given to the applicable office to finalise that draft report.
When the 2016 letter was referred to the Public Protector, various items had already been investigated especially those allegations of irregular procurement processes.
When Adv Mkhwebane joined the Office of the Public Protector in October 2016, the Vrede matter was one of the reports which had already been completed. The Vrede matter therefore did not form part of the items to be considered by the internal think tank. This is because when matters are pending she is required to prioritise the various matters to ensure that all investigations are properly finalised. The Vrede matter however was later prioritised. When she visited the Free State as part of the Public Protector road shows, the DA member had complained to her that he had been waiting for the final report for an unreasonable amount of time. She followed up on the status of the report. The report was in the office of a member of the quality assurance team. She examined what matters still required completion before the report could be finalised. On a subsequent visit to the Free State with the investigative team, she discovered the project was no longer managed by Estina but was now managed by the Free State Government Corporation (FSGC).
Given that the report was almost ready for publication, the only outstanding item was to issue the requisite section 7(9) notices under the Public Protector Act. A section 7(9) notice must be issued when there are implicated parties in a report. Throughout the investigation, the initial complaint was limited largely to financial mismanagement and irregular procurement processes. The focus therefore was on those issues specifically. There was nothing in the initial complaint or report which implicated certain politicians or private business people or a certain family.
When the report was initially compiled the investigators had already indicated they did not receive the requisite cooperation from the Free State Department of Agriculture. The particulars of who was not cooperating, was not expressly indicated. There were stages that the investigators did not receive the documentation which they had requested whatsoever, especially when such requests were for financial resources.
The section 7(9) notices were issued to the Premier of the Free State and the MEC for Agriculture and Head of Department of Agriculture. The only issue implicating the Premier was the failure to take disciplinary action against the Head of the Department of Agriculture. The Premier was the only person empowered to take disciplinary action, given the particulars of the contract of employment with the HOD. The Premier responded in detail which was indicated in the report. The HOD had indicated that he would furnish further responses. Both the Premier and the HOD did provide the further invoices requested. The Public Protector instructed the investigating team to compare those invoices with other invoices they had received from the Free State to determine whether the figures were properly captured.
During this process, the Public Protector received a letter from Mr Mmusi Maimane, Leader of the Opposition, requesting a meeting on the progress of the Vrede investigation. The Free State office however never met the beneficiaries in the project. The initial complaint did request that the beneficiaries be interviewed in the interests of transparency. Mr Maimane later brought the various beneficiaries to the Office of the Public Protector. During those discussions the Public Protector requested the assistance of Mr Maimane. It was agreed that it would be necessary to obtain statements from the beneficiaries on the implementation of the project.
As is common knowledge both the DA and the Council for the Advancement of the South African Constitution (CASAC) launched an application seeking to judicially review the final report. This is a positive development as it would ensure that the entire record becomes a matter of public knowledge.
The Public Protector stated to the beneficiaries that they should write down their statements and complaints and forward those statements to the DA. Mr Maimane agreed to this request. An additional meeting occurred where the information was collated and analysed. A further undertaking was given to contact the DA member – who had initially lodged the complaint – to receive further input. It was agreed the final report would not be released until the beneficiary statements were included. The DA member however stated – which was reported in the media – that he was of the opinion there was no further information he could provide to the Public Protector that would be of assistance in the matter. The view of the DA member was that the Public Protector should immediately release the report as it was already finalised at the end of 2015. The media report stated that various whistleblowers where been intimidated and even killed for revealing sensitive information. This made the matter far more urgent to ensure that appropriate criminal investigations could take place. The Hawks had investigated the matter and had obtained various preservation orders against Estina and the Gupta family. This is the reason for the manner and form in which the report was issued.
As indicated the final report is now the subject of a judicial review application launched by CASAC and the DA. The Public Protector said she is perfectly willing to avail all of the relevant records to the Committee under Rule 53 of the Uniform Rules of Court (URC).
The Public Protector then dealt with the allegation she had suppressed evidence in the final report.
The Public Protector stated she was unsure what evidence this allegation specifically speaks to. The source of that allegation is a Sunday Times article. The article refers to two nameless anonymous sources as the authority for that allegation. Both sources claimed they were close to the investigation and that certain evidence implicating politicians had been suppressed. The Report should be studied in its entirety – and the record in the judicial review application – fully scrutinised to determine whether there is any truth at all to that allegation.
As the matter is now before court it will be fully adjudicated in the judicial forum. The matter furthermore is sub judice and the finer aspects of the details of the report will emerge fully in that forum. There is nothing preventing any person from taking any Public Protector report on judicial review as that is there legal right.
Both the DA and CASAC had requested the court to issue a personal costs order against Adv Mkhwebane. This has serious negative implications for her institution which is independent and impartial. The Public Protector is obligated to exercise her powers without fear, favour or prejudice.
On the Gupta Leaks – as they relate to the Vrede Report – those emails were leaked to the public in 2017. By this time the Vrede investigation was already complete. There was however no direct complaint relating to the Gupta family in the Vrede investigation. The only issues investigated were confined to the initial complaints related to mismanagement of funds and irregular procurement in the Free State.
The Chairperson requested the permission of the Committee to engage in a discussion with the Public Protector on each issue as it is presented, as opposed to a single discussion once the Public Protector had completed all her responses.
The Committee agreed to this suggestion.
Adv G Breytenbach (DA) noted the Public Protector stated that in March 2014, the Vrede investigation was subject to consideration by her internal think tank. The Gupta Leaks become public in June 2017. Adv Mkhwebane was appointed in late 2016. The ambit of her investigation into the Vrede matter dealt with the following issues: the public private partnership which had been concluded, the monitoring of the agreement and whether the price of goods and services were inflated by Estina. She failed however to investigate the most significant allegations. These included: the Gupta Leaks allegations, how the money transferred to Estina was spent and the ultimate impact of the project on the intended beneficiaries. The most serious criminal allegations of money laundering, corruption and theft related to the Gupta family, their partners and prominent politicians were not investigated whatsoever. Significantly the Public Protector completely failed to investigate criminal allegations against then Free State MEC of Agriculture, Mr Mosebenzi Zwane and the Free State Premier, Mr Ace Magashule. Allegations against Mr Zwane, Mr Magashule and the Guptas were widely published. What explanation is there for completely failing to investigate the allegations against those individuals?
Adv Breytenbach said the Public Protector continuously referred to her internal think tank. Was there any disagreement amongst the members of the think tank for refusing to investigate allegations against those individuals? If so, how were those disagreements dealt with? The Public Protector had stated the reason for not investigating those investigations was because they fell outside the scope of her investigation. That is an inadequate response as the scope of Public Protector investigations is entirely within her own hands. There is no justifiable reason for she failed to increase the scope of the Vrede investigation when such serious and egregious allegations are brought to her attention. What new investigation – if any – was conducted on the matter between 2014 and the date when the final report was ultimately issued? The Vrede Report relies heavily on the Treasury investigation which was conducted into the matter, but Adv Breytenbach personally struggled to find any evidence that the Public Protector had engaged in any independent investigation whatsoever. If independent investigations were conducted, the Public Protector was invited to direct Adv Breytenbach to evidence to that effect. The matter was investigated for over four years yet only six interviews were conducted. No interviews were conducted with any of the intended beneficiaries. The beneficiaries themselves barely feature in the final report. If the Public Protector did interview the beneficiaries, why does that not reflect in her report? If she did not interview the beneficiaries, why did she did decide on that course of action? When the Public Protector was appointed she made various public statements affirming she would be the protector of the “little man” and would uphold and protect the rights of the people. This was a perfect opportunity for her to do exactly that, yet she has failed dismally to uphold her earlier public statements to that effect. There was absolutely nothing to prevent her from extending the scope of her investigation nor was there any reason why the report could not be released later, to allow her to fully investigate those additional allegations. Overall, the reasons given by the Public Protector are vague and frankly unacceptable.
The Gupta Leaks contained various invoices from a company called Linkway Trading which shed light on the manner in which the Guptas had spent public money at their Sun City wedding. It is now a matter of public knowledge that the money intended for the beneficiaries was unlawfully siphoned away to pay for that wedding. The invoice from Linkway Trading provided a breakdown of the money spent makes for shocking reading. R13 000 was spent on Lindt Chocolate, R13 million was spent on luxury services, R230 000 was spent on flying a guest from Moscow to South Africa, R33 000 were spent on flowers, R2 million was spent on scarves. That amounts to R1350 per a scarf. All of this is taxpayer’s money which has been unscrupulously stolen and wasted by the Gupta family. How could the Public Protector think that it could be legally and morally acceptable to not include that expenditure in the scope of her investigation?
Mr W Horne (DA) said he fully and unequivocally aligns himself with the comments of Adv Breytenbach. It is completely absurd for the Public Protector to argue that she was unable to investigate any allegations relating to the Guptas or prominent politicians because those issues fell outside the scope of her investigation. Mr Horne focused on politicians implicated in the Vrede matter. The Public Protector herself had mentioned that the Vrede project was never underwritten by National Treasury. A meeting of the Executive Council of the Free State – involving all of the MECs in the province and chaired by former Premier Magashule –took a decision to implement the Vrede project without the backing of National Treasury. This decision was taken despite strong warnings from Treasury that the project was not legally above board. This was not a run of the mill project. From the outset it was clear the project was politically driven. Mr Zwane took an active stance in convincing the Free State Executive Council of the supposed benefits of the project. Mr Zwane even took a trip to India which was signed off by the Premier. On his return Mr Zwane took an active stance in convincing the Executive Council to sign off on the project, although absolutely no due diligence had been conducted on Estina. This begs the question that – given what is what is an apparent and glaringly illegality – that the Public Protector can take a position that she was unable to investigate the project in any meaningful sense due to the scope of her investigation? This is completely shocking given the additional fact that the Public Protector is supposed to be the custodian of the Executive Members Ethics Act. It is absurd to say that simply because the initial complaint did not allege a violation of the Executive Members Ethics Act, that the Public Protector was now unable to investigate any violations of that Act. A core part of her mandate is to ensure compliance with the Act which should play a part in every investigation that she undertakes. It is shocking that the Public Protector could accordingly take a position that she would not focus whatsoever on any allegations levelled against politicians. Following the initial complaint, a second set of payments were made by the Provincial government. This flew completely in the face of clear warnings by the Auditor General (AG) and other independent auditors that the project failed to meet the bare minimum of legal requirements. When Estina was finally asked to go, then Free State MEC, Mr Mamabatha informed Estina of that fact but shockingly informed Estina that the provincial government would not be implementing the penalty clause included in their agreement. That agreement itself – a fact which is matter of public record – was not drafted by any government department, but was in fact drafted by personal legal advisors in the Office of the Free State Premier. How can the Public Protector reasonably expect the South African public to accept the manner in which she has conducted her investigation? It is completely absurd to expect the public to accept that she could not investigate serious allegations of public officials violating fiduciary duties to utilise public money in the public interest, simply because of the mere fact that the initial complainant had not specifically asked her to investigate that specific allegation. Should the Committee and the public now accept the absurd situation that if politicians or other individuals alleged to be corrupt will not be investigated by her Office unless they are specifically named in complaints? It is glaringly obvious that the politicians at the centre of this matter had acted with a complete disregard for the provisions of the Executive Ethics Members Act.
Mr S Swart (ACDP) noted what was said in the Constitutional Court matter of Economic Freedom Fighters v Speaker of the National Assembly, which emphasized the fundamental role of the Public Protector in fighting corruption and acting as custodian of the interests of all South Africans, especially the poor and marginalised. It is highly unfortunate that the Public Protector then omitted to make any meaningful reference to the ultimate beneficiaries of the Vrede project in her final report. Can it really be true that there was no space or time in the final report to refer to the experiences of those individuals in this matter? The ultimate inference one gets from reading the report is that the voices of those individuals were not heard or properly considered at all. The remedial action chosen by the Public Protector was for the Premier to institute disciplinary action against those officials found to have been implicated in this matter. This is somewhat absurd given the clear conflict of interest that the Premier and other individuals face given the central role they played in this situation from the outset. This raises serious concerns about the correctness of various findings the Public Protector had made in this matter. To what degree was she pressurised by politicians into making her findings? There is a mountain of evidence in the public domain inclusive of the Gupta Leaks. The Mail and Guardian for example has reported comprehensively on the Estina issue since at least 2014. Why was all the damming evidence – which exists as a matter of public record – ignored by the Public Protector in her final report?
While the matter is currently subject to judicial review, the wider issue is why the Public Protector failed to protect ordinary people from the activities of corrupt politicians and the Gupta family? It is unacceptable for the Public Protector to now state that the reason for failing to conduct a thorough and extensive investigation was simply because a lack of adequate capacity. The Public Protector herself has powers in terms of section 7(3)(a) of the Public Protector Act to request assistance of any person inclusive of Treasury, the AG or the Special Investigating Unit (SIU). The findings in this matter are in stark contrast to what Adv Thuli Madonsela, the previous Public Protector, made in the State of Capture report. At the very least, there should have been some sort of referral under section 6(4)(c)(i) of the Public Protector Act which enables the Protector Report to bring the notice of matters which – in the opinion of the Public Protector – may disclose the commission of an offence to the relevant authorities, whether the National Prosecuting Authority (NPA), the South African Police Service (SAPS) or the Directorate for Priority Crime Investigation (DPCI or the Hawks). We now know that the Hawks have finally engaged in some action on this matter through the Asset Forfeiture Unit (AFU) but arguably this is too little too late. There is clearly a case at face value, given the totality of the evidence that there is at least some apprehension that various offences may have been committed, including but not limited to the trip of Mr Zwane to India.
The comment of the Public Protector that the CASAC and DA request for personal costs against her in the review application undermines the independence of her Office, is absurd and shocking. Simply because a litigant seeks personal costs against the Public Protector in judicial proceedings, does not lead to the conclusion that the independence of her Office as an institution will be undermined. Personal costs have already been granted against her in the ABSA bank matter. Serious adverse findings were made against her in that matter which – amongst other things – found that the Public Protector does not have a sufficient understanding and appreciation of her constitutional duties. It is therefore never correct to say that it is vexatious or detrimental to the independence of government institutions when personal costs orders are sought against them. For far too long government institutions have had taxpayers foot the legal bill when government Departments or organs of state engage in reckless or illegal conduct, especially when adopting an unduly combative attitude in litigation. While he understood that review applications do place an additional financial burden on her Office, in defending such litigation. However, this simply makes it all the more important for the Public Protector to ensure that every decision she takes is rational, lawful and completely above board in terms of the Constitution and the law.
Mr B Bongo (ANC) had a single question. The Public Protector’s presentation makes it clear this matter was brought to the attention of her institution before she came to office. The issues relating to the Gupta Leaks would be the subject of the judicial commission of enquiry into State Capture. In terms of the sub judice rule and under the judicial commission of enquiry, would it not then be prudent to raise issues of that nature in the judicial proceedings and the enquiry respectively? This would save time and costs and prevent issues from been subjected to overlapping enquiries.
Mr G Skosana (ANC) noted that previous reports of the Public Protector had focused primarily on high level cases which attracted a great degree of public interest. Generally, the Public Protector would hold media briefings when reports are finalised, following which the report would be submitted to the relevant parties under section 8 of the Public Protector Act. The Vrede report however appears to have been handled away from the public generally especially various media houses. On the issue of not interviewing the intended beneficiaries why did those interactions only commence once Mr Maimane become involved in the investigations? The beneficiaries are the individuals who were directly affected by this matter and should have been involved at the outset. Is the Public Protector satisfied that – given the allegation that the Free State government suppressed or refused divulge relevant information – that the final report is a true reflection of all the relevant issues in this matter?
Mr M Maila (ANC) said that the report appeared to have been concluded in 2015. What could be the reason then that if the report was concluded in 2015, it was not released at that time? If the report was already concluded, then was Adv Mkhwebane’s only role to determine the appropriate remedial action? He aligned himself with the comments of Mr Skosana on the failure to involve the intended beneficiaries at the outset and the allegation that the Free State government had suppressed or refused to divulge relevant information. If the Public Protector’s explanation for why the report was drafted and released in its current format – inclusive of the fact that the intended beneficiaries were not consulted – was because of a lack of adequate resources, then that is a serious issue. The Office of the Public Protector is intended, first and foremost, to protect and uphold the rights of the vulnerable in society. If the vulnerable are sidelined, then the credibility of her Office is seriously undermined which is a problem.
Ms M Mathapo (ANC) took issue with the failure to properly involve the intended beneficiaries in the investigation. The Public Protector is established under section 182 of the Constitution which confers her with various powers and functions. However, the issue of not consulting with the intended beneficiaries is not acceptable. As noted by Mr Bongo, there are issues which the Vrede Report raises which will be subject to judicial review and the state capture enquiry. It is a serious omission on the part of the Public Protector to not consult with the Public Protector. A proper response to why the intended beneficiaries were not consulted should be forthcoming.
Mr T Mulaudzi (EFF) noted the report dealt with a figure of R30 million which had been utilised for environmental impact reports. Had the Public Protector received a detailed breakdown of that expenditure? There is a serious conflict of interest in her remedial action in respect of the Premier. As raised by Mr Horne, the contract itself was drafted by the personal legal advisor in the Office of the Premier. The Premier himself is an implicated person and it is clear that the entire Vrede scandal involved the knowledge and input from the Premier at the outset. Who then is to take appropriate remedial action against the Premier himself? Around ten issues were not properly investigated. The Public Protector stated this was due to a lack of adequate capacity. As things stand now, does the Public Protector lack adequate resources to properly discharge her functions? It is common knowledge that the Premier’s son has a business relationship with the Guptas, a fact which the Premier himself has confirmed in public statements. Again, it is a serious matter of concern that the Public Protector deemed it acceptable for the Premier – as an implicated party – to be the same person who must now implement remedial action in respect of this matter.
Mr N Xaba (ANC) asked whether when the current Public Protector took office, she discuss the Vrede report with her predecessor, Adv Madonsela. Was there a proper transitional process in respect of this report particularly? In future, the Public Protector would do well to ensure that the ordinary citizens of the country are placed at the centre of any investigations she undertakes. In her initial interview she had stated she would place the problems of the people at the centre of her work but unfortunately, she appears to have failed to do that in the present case. Have any further investigations or undertakings been made with regards to what should happen to the Premier given that he is implicated in this report but is expected to take remedial action against the various implicated parties? If the Premier is expected to discipline implicated officials subject to his authority, then the Premier himself should be subject to disciplinary action by officials senior to himself. Given the shortcomings of the report is the Public Protector willing to reopen the investigation into this matter? Is there any formal complaint lodged against the Guptas in respect of this matter or any other matters generally? If not, then serious consideration should be given to reopening this matter.
Before responding to the questions, the Public Protector reminded the Committee that this matter is currently before the courts and therefore is sub judice. To the extent possible she will answer all of the questions of the Committee but cannot do so in a manner that would interfere with the functioning of the courts pursuant to section 165 of the Constitution. As stated earlier all of the available records would be forthcoming under URC Rule 53.
In response to Adv Breytenbach, the Public Protector said that the member would be aware the Public Protector does not jurisdiction over any criminal matters. The issues relating to money laundering, theft and corruption were therefore not investigated as they are subject to the jurisdiction of the Hawks. The matter was finalised in 2014 and it was in 2015 that the internal think tank considered the report before it was published. The decision taken by the think tank in 2015 was that the report was ready. The only time the Free State office of the Public Protector was engaged was in 2017.
On why the scope of the investigation was not expanded, the reason was that when she joined the institution the investigation was already at an advanced stage. When a complaint is received the Public Protector first has to determine which issues will be investigated which will form the scope of any investigation. The Vrede matter focused purely on issues of maladministration and the manner in which the agreement was entered into as well as the manner in which the project was managed as a whole. The investigation focused primarily on violations of the Public Finance Management Act (PFMA). She agreed with Adv Breytenbach that a portion of the report had incorporated the Treasury report into this matter. Various findings were made that the HOD and various other officials had violated the PFMA in that respect. When drafting a report however the Public Protector must be mindful of any prejudice which the complainant may suffer. This is the reason why the beneficiaries were not consulted as the initial complaint did raise specific allegations about the impact on the ultimate beneficiaries of the project. The Public Protector however could not make use of information which appears in the media – such the Gupta Leaks – and then include it in any final report. To do so, would result in a situation where the Public Protector would be accused of using unreliable information as evidence. Any information or evidence received must be properly scrutinised to determine if it is reliable if the report were later to be challenged in a court of law. The Organisation for Undoing Tax Abuse (OUTA) had provided her Office with the Gupta Leaks but that information could not be utilised for the above reasons, which was communicated to OUTA. The complaint lodged by CASAC dealt mainly with issues and information which appeared in the Gupta Leaks and – for the same reason – that information could not be used in the final report, which did not form part of the scope of the Vrede investigation. The Public Protector agreed with Mr Bongo that issues of that nature would be properly ventilated in the state capture enquiry which would be the applicable forum to properly engage with those issues.
Responding to Mr Swart, the Public Protector agreed with the sentiments that had been raised in the Nkandla judgment. Ordinary South Africans must be first and foremost in the investigations which the Public Protector undertakes. There should however be transparency – at the very least – about how the project was managed. In response to Mr Horne, the Public Protector responded that it was only in 2015 that the details of the beneficiaries were acquired from the Department of Agriculture. The meeting with Mr Maimane was only initiated later to acquire that information but – as stated earlier – the scope of the report was limited primarily to the initial complaint which was limited to maladministration and not the impact of the project on the ultimate beneficiaries per se.
On unilaterally expanding the scope of the investigation at the report writing stage, the Judge Murphy judgment in the ABSA bank matter criticised the Public Protector for unilaterally expanding the ambit of the investigation in that matter. It was stated that this caused prejudice to other parties and it would not be acceptable to include information which was not initially investigated in the final report. While the ultimate beneficiaries should have been included at the outset, it would not have been advisable to include interviews and other information pertaining to them when that information was not canvassed or tested during the initial investigation stage.
[Members of Black First Land First (BLF) raised various banners in the meeting alleging that Parliament was biased against the public protector and a protector of White Monopoly Capital. The Chairperson requested the BLF protestors to lower their banners which was not behaviour acceptable in a Parliament Committee Meeting. The BLF protestors refused to do so and Parliament security escorted the members out of the meeting following a two minute adjournment of the meeting].
The Public Protector responded she did not investigate the matter of the conflict of the interest of the Premier. If a complaint is lodged, the matter will however be investigated. As noted earlier the scope of the investigation was limited to the initial complaint which dealt with abuse of state resources and maladministration.
The Public Protector stated that when she joined the institution the Vrede Report was already at an advanced stage. She had requested information about the beneficiaries at this stage which is why she involved Mr Maimane as the leader of the DA, which was on the initial complainants in the matter. As the scope of the investigation had already been determined it was determined that to involve further beneficiaries at that stage would cause undue prejudice to the complainant. It is true however that the agreement was drafted by the legal advisor in the Premier’s Office. Part of the remedial action was that disciplinary action should be taken against whoever had drafted that agreement. The agreement itself was not properly drafted as it provided undue protection to the company at the expense of the government.
Responding to Mr Horne, she said the process taken in the Executive Council which supported the agreement, resulted from a delegation from the council to Mr Thabete. The investigation therefore focused more on his role as a result.
Responding to Mr Skosana, she said she is obliged under the Public Protector Act to publish her reports. However, she is not obligated to publish her reports in a specific forum or format such as through a media briefing. A media statement was deemed to be the appropriate manner to publish the report in this instance.
Responding to Mr Maila, she said that the think tank had taken a decision in 2015 that once the report was finalised it should be issued. The report however not issued in 2015 and it was only once she took office that she took the matter further and ultimately decided to publish the report. There should be a greater focus on the rights of individuals – in this case the ultimate beneficiaries. However, responding to Mr Bongo, the Public Protector is functus officio on this matter and therefore will not be able to reopen the investigation unless the initial report and its findings are set aside in judicial review proceedings. If a new complaint is lodged, then Public Protector will be able to open a new investigation to investigate the impact on the beneficiaries specifically. In the CASAC review, one of their prayers is that the report is set aside and then remitted back to her Office for additional investigation.
Responding to Ms Mathopo, she said accessibility of the public to her Office is underpinned by the Constitution. Responding to issues of individuals at grassroots levels is of utmost importance but – as raised above – the scope of the report was limited to the initial complaint which did not specifically raise the issues of beneficiaries.
Responding to Mr Mulaudzi, she said she did not have a detailed breakdown of the R30 million figure. The body of the report does contain numerous invoices which were received from the Free State office. Most of those invoices had already been received by the time she had joined the office. However, whilst the investigation was ongoing the Office encountered a high amount of resistance to disclosing certain invoices. Page 5 of the Vrede report did however contain a breakdown of various amounts of expenditure but specifically focused on matters relating to the inflation of goods and services.
The Premier had never charged any officials. The Premier’s response to the Public Protector was any disciplinary action taken on his part would only occur once the Public Protector’s report was finalised. The ultimate remedial action instituted was that the Premier is obligated to institute the appropriate disciplinary proceedings within 30 days.
No specific complaint was received on any violation of the Executive Ethics Members Act either generally or specifically in relation to the Premier. There is nothing stopping other members of the Executive from taking further action regarding a violation of the Executive Ethics Members Act. Certain issues were not investigated. This was due to the fact that the DEA and DWA had already investigated certain issues such as the death of cows sold to the project. Capacity continues to remain a serious problem. The budget has been cut further in the current financial year which places further strain on resources.
On the Gupta wedding and Gupta Leaks, there was no direct complaint in respect either issue. There is nothing however stopping her Office from investigating those matters on her own initiative -as the Public Protector Act permits her to investigate on her own initiative – or if a member of the public lodges a complaint in that respect. The efficacy of conducting such an investigation however, must be seen in the context of the limited resources which her Office currently has.
Responding to Mr Xaba, she said there was a transitional process but the Vrede report did not specifically form part of that transition. It was only when the Public Protector later visited the Free State and requested the beneficiary’s information that she decided to prioritise the release of the report. As noted in response to Mr Bongo, she cannot reopen the investigation at this time as she is functus officio. The investigation can be reopened if the report is set aside in a court of law as is currently been sought by CASAC. A decision was taken that the issue of the Gupta Leaks is a matter that properly falls within the ambit of the judicial commission of enquiry into state capture and therefore a decision was taken not to investigate those matters in this report.
The Committee then responded to the Public Protector’s answers.
Mr Skosana noted the Public Protector stated she struggled to obtain information from the government in the Free State. Is she satisfied that she had received all of the necessary information by the time the report was concluded?
Mr N Matiase (EFF) asked if the Public Protector is aware that – as of the present – absolutely no action has been taken against those individuals implicated in the Vrede scandal. Has the Public Protector taken any steps to determine whether the Premier has taken any steps to implement disciplinary action of any form whatsoever? He expressed extreme disappointment that the Public Protector is adopting a lackadaisical and lax attitude about the performance of her duties. When will she begin to take her duties as the Public Protector seriously and drop the lackadaisical attitude she thus far exhibited?
Mr Matiase was interrupted by Mr Mpumlwana (ANC) who wanted to raise a point of order. Mr Matiase expressed annoyance at Mr Mpumlwana’s conduct and requested the protection of the Chairperson.
The Chairperson requested the members of the Committee respect each member’s right to freedom of speech. Nevertheless, he allowed Mr Mpumlwana to raise his point of order.
Mr Mpumlwana’s point of order was that it irregular and unparliamentary for members to insult the personal character and integrity of the Public Protector. He requested that members refrain from such conduct.
The Chairperson requested Mr Matiase to focus on the agenda of the meeting which specifically relates the Vrede report and other matters. This is not the appropriate forum to pass personal judgment or make adverse comments against the Public Protector generally.
Mr Matiase asked whether the Chairperson was sustaining Mr Mpumlwana’s point of order. To sustain a point of order would itself be out of order.
Mr Mpumlwana interjected again. Is the Chairperson adopting a position that is correct and permissible for members to insult the personal integrity and character of the Public Protector?
The Chairperson replied that the purpose of the meeting is to gain information and responses from the Public Protector. He requested that Mr Matiase and the Committee generally not pass personal judgment against the Public Protector in their questions.
Mr Matiase asked the Public Protector whether she had conducted a comparative analysis to determine what the value of the project would have been had it been properly completed. The project ultimately cost taxpayers in excess of R130 million.
Mr Mpumlwana interjected and stated that the Committee should seriously consider the request of the Public Protector for additional funding to increase the capacity of her Office to fulfil its constitutional mandate.
Ms Mathapo had a follow up question. Based on the responses of the Public Protector – with regard to the sub judice rule – Ms Mathapo referred the public protector to the decision of the Supreme Court of Appeal (SCA) in MultiChoice v Pistorius. In that case the SCA stated that the interests of the public to be informed is of paramount importance as measured against the interests of the accused against disclosure. The point is that in this matter, the Committee is not delving into the merits of the judicial review application and therefore the Public Protector should respond in those instances where the sub judice rule is not fully applicable.
The Chairperson agreed with the suggestion of Ms Mathapo.
The Public Protector responded to Mr Skosana. Her Office did struggle to obtain certain information. Other pieces of information were only obtained at a late stage in the investigation. When a in loco inspection was conducted by her Office then further information was acquired. A section 7 subpoena was issued to the Premier which resulted in the acquisition of other information.
Responding to Mr Matiase, the remedial action obliges the Premier to institute remedial action within 30 days of the publication of the report. That 30 day period has not lapsed but the implementation of the remedial action is been monitored by her Office. There was no comparative analysis investigation but on page 130 of the report all of the issues which were not investigated are stated. The reason for not investigating that matter was because only the wholesale prices were investigated and no other companies were approached in respect of that particular issue. The report – as mentioned earlier – focused primarily on irregular procurement processes and maladministration.
Responded to Ms Mathapo on the issue of sub judice, the Public Protector stated that certain other matters – where appropriate – should be left to the appropriate forum. Full cooperation would be forthcoming where possible.
The Chairperson asked whether it would be correct to classify the project as a provincial project which was decided on the Executive Provincial Council. If that is so, then the officials which the Public Protector focused on in her investigations, would simply be implanting that Executive Council decision. If there was a lack of cooperation would it have been prudent to approach the principals to inform that there are issues with implementation?
The Public Protector responded that it was correct the decision was an Executive Council decision. The National Treasury would have exercised a degree of oversight of the project. In all instances the authority was delegated to the HOD of agriculture. The HOD was responsible for signing the agreement and overseeing its implementation. The report did state that an interview with Mr Thabete was conducted which informed him that officials were not providing requested information. Where investigators struggled to obtain requested information then subpoenas were issued. However, when the report was presented there was disclaimer that certain information was not provided. The report did note there was a lack of cooperation throughout the investigation. However, towards the end of the investigation additional information was provided. There were adverse findings against the MEC however the ultimate conclusion was that the process was driven by the HOD from the outset.
The Chairperson asked the Public Protector whether she exhausted all available avenues to ensure that all persons involved in the administration and Executive had cooperated in her investigation and were properly apprised of the progress of the investigation while it was ongoing.
The Public Protector responded that it was during the investigative phase that there was a lack of cooperation in the disclosure of information. It was only when she personally conducted an inspection that this properly brought to the attention of other officials. It was only when the subpoenas were issued that the additional invoices were provided to her Office. The primary challenge was that at no stage was the Executive or other politicians were individually investigated. At no stage did any records reveal that letters were written to the Premier or the MEC about their role in the matter.
The Chairperson asked whether the Public Protector was satisfied that the investigation was properly conducted given the fact that the Premier and other members of the Executive Council were not investigated or involved to determine what steps they had taken to ensure the project was lawfully implemented? Could the report be described as adequate without those individuals been heard?
The Public Protector replied those individuals were heard as section 7(9) subpoenas were issued to the Premier, the HOD and the MEC. The section 7(9) subpoenas were sufficient – in the view of the Public Protector – to sufficiently give those parties an opportunity to state their side of the story. Their responses were included in the final report. All of the violations of the PFMA were included in the report. The accounting officer had violated section 86 of the PFMA which amounts to gross negligence, which borders on the commission of an offence. The Report did reflect that information and recommended that serious action be taken against the accounting officer. Whatever disciplinary action or criminal investigations are later implemented, the report will hopefully form part of those investigations. The section 7(9) records and the response of the Premier were included in the final report.
Mr E Buthelezi (IFP) asked the Public Protector whether she would admit that the Premier and the Provincial Government had ignored information from National Treasury about the project. Was that sufficient in itself for the Public Protector to further investigate suspicious activity and conduct relating to this matter in so far as it pertains to those individuals?
Mr Matiase agreed with Mr Buthelezi. The Public Protector should admit that it was an omission on her part to not fully investigate the involvement of the Premier and the Executive Council. Even if it is true that the implicated officials were only acting on the instruction of their political principals in approving the project, then that should have been sufficient for the Public Protector to properly investigate the role of those political principals in this matter. It is a severe failure on the part of the Public Protector to omit to investigate those officials simply because it would require uncomfortable questions to be asked. Such officials would not have engaged in outright theft and other criminal acts without the knowledge or involvement of senior politicians. The report fails to examine what oversight role – if any – the politicians in this matter exercised over those officials. The project itself was scandalous from the outsight, even more so than the Nkandla scandal. This is an example of corruption on an industrial scale. It should be treated as such and those involved must be named and shamed. Page 18 of the Report states the National Agriculture Department supplied the Provincial government with more than R40 million worth of equipment inclusive of irrigation equipment and tractors. In essence, this then amounts to an instance of double procurement where the same items were procured twice for the same project. At the very least this amounts to wasteful expenditure. Can that expenditure be recovered and if not, then can or will any other person take responsibility for that wasteful expenditure and waste of taxpayer’s money? The MEC and the Premier should take individual responsibility for that waste of taxpayer’s money. It is very disappointing to note the report makes no absolute mention of remedial action which must be taken against prominent politicians and other public officials. It is unacceptable to suggest – as the Report does – that neither the Premier or the MEC should take any responsibility for what has occurred in this project.
Mr Mpumlwana took issue with the manner in which the Public Protector was questioned. The Members appeared to be making adverse comments about the character of the Public Protector. The purpose of the meeting was to engage with her report and not her personal character.
The Chairperson responded that Mr Mpumlwana should limit his engagement to asking his own questions of the Public Protector. The Public Protector is a qualified advocate and is fully capable of protecting herself if there is a perception that unfair questions are been put to her.
Mr Mpumlwana insisted that he finish his point of order. He maintained the view that the Committee was engaging with the Public Protector in an unfair manner.
Mr Swart interjected and raised a point of order. The Committee has always engaged with robustly with the Office of the Public Protector. Even Adv Madonsela was subjected to intense questioning when the Committee had disagreed with her conduct. Mr Mpumlwana himself had subjected the previous Public Protector to very robust questioning. There is absolutely no reason why Mr Mpumlwana should feel the need to now protect the current incumbent. Mr Mpumlwana is wasting time and the meeting should proceed as scheduled.
The Chairperson agreed with Mr Swart and requested Mr Mpumlwana to limit his engagement to direct questioning of the Public Protector and not to express comments on whether the Public Protector is being asked fair questions or not.
The Public Protector responded to Mr Matiase and Mr Buthelezi that, as already noted, the initial complaints were received in 2014 and 2015. Those complaints were specifically limited to the administration of the agreement itself and the finances which were allocated to the project. During the investigation by her predecessor, the report had already been drafted. The report which she received had already been discussed at the internal think tank and the think tank agreed that the investigation be limited to those issues. She does not have the full record of those engagements, but parts of the record do establish that Adv Madonsela had requested various bank statements. However, the record did not establish if the Premier or the MEC had been interviewed. Responses were received from members of the Public Protector’s office in the Free State which stated that the issues in the investigation were limited to the initial complaint and the involvement or culpability of any politicians per se. That office had received no complaints in writing requesting that the investigation include investigating any allegations against the Premier or the MEC.
Responding to Mr Matiase, she said it was not an omission on her part to not investigate the involvement or culpability of senior politicians such as the Premier and the MEC. As was noted in an earlier response to Mr Horne, the report was already at an advanced stage at the time when she became the Public Protector. The expansion of any the scope of any report would necessarily require a consideration of any prejudice other parties may suffer if the scope were to be expanded. In the ABSA bank matter, the court was highly critical of the Public Protector expanding the scope of her report to include an investigation into the mandate of the South African Reserve Bank (SARB). Other action is been taken to recover wasteful expenditure. The Hawks for example have obtained various preservation orders in this respect and money which is wasted must be recovered. If politicians are implicated in the Hawks investigations, then further investigations and potential prosecutions can occur in that respect. It is not the end of the matter as to whether the money incurred in this project will be recovered or whether there will be further investigations and prosecutions. For example, there is a currently a criminal case ongoing against the HOD about the manner in which he grossly misused state resources and violated various provisions of the PFMA.
The Chairperson asked whether the Public Protector was satisfied that the politicians involved had properly exercised their oversight responsibilities and that she was in a position to release a report which was balanced, and which thoroughly dealt with all of the material issues?
The Public Protector replied that, as emphasised, on the key issues raised in the initial complaint the Public Protector was satisfied she had produced a satisfactory report. The Premier was subsequently asked why he had not initially implemented any disciplinary action, and he responded that he was awaiting the outcome of her report before he would initiate any disciplinary processes.
Public Protector presentation of ABSA and SARB court judgements
The Public Protector first outlined the report which was the subject of the two court judgments.
The scope of the Report investigated allegations of maladministration and the misappropriation of funds by ABSA arising from the Bankorp bailout. The remedial action was for the government and the SIU to recover those funds from ABSA. Specifically, the Public Protector referred the matter to the SIU under section 64(1) of the Public Protector Act. The SIU was ordered to approach the President of the Republic to specifically: reopen and amend the SIU proclamation to recover public funds which were unlawfully misappropriated and given to ABSA in the amount of R1.25 billion, to reopen and amend the proclamation to investigate the misappropriation of public funds given to various institutions as identified in the CIEX report and for SARB to fully cooperate in implementing that remedial action. The remedial action mandated Parliament to implement processes to amend the mandate of SARB as contained in the Constitution.
The issue of ordering Parliament to amend the mandate of SARB was discussed at a previous Committee presentation when the Public Protector had presented her strategic plan. She agreed that the remedial action ordering an amendment of SARB’s mandate be set aside by court, when the judicial review proceedings were instituted. The court however continued to hear the matter in its entirety, despite her agreement that that portion of her remedial action be set aside. The judge issued a judgment on that particular matter which her Office had not appealed due to her agreement that that portion of the remedial action be set aside.
Regarding the referral of the matter to the SIU, the judgment stated that the manner in which the SIU would handle the matter was not within the powers of the Public Protector. The court found the referral in that regard was improper. The court then issued costs against the Public Protector on an attorney and client scale.
In the second matter involving ABSA, the court made a finding that the Public Protector would be liable for 15% of the costs personally. This based on the finding that the Public Protector had failed to disclose various personal meetings with the former President before releasing the report. The meeting however was not personally with the President but was with his legal advisor.
It was emphasized that the Public Protector does not engage in vexatious litigation. The matter raised serious questions about the powers of the Public Protector. All implicated parties in the matter were afforded an opportunity to respond in terms of section 7(9) of the Public Protector Act. Her legal team had been engaged and the Public Protector is preparing to launch an appeal against this judgment, in so far as it ruled the Public Protector should be personally liable for certain costs. There are some provisions in the judgment which indicate that one of the parties had sought a declaratory order, to the effect that the Public Protector is unfit to occupy her Office. That declaratory order was not granted due to a technicality. The Public Protector felt it was necessary for her to appeal this part of the judgment as it could undermine the independence of her Office as well as creating a perception that she should not investigate matters relating to ABSA or SARB. The judgment clearly implicates the powers of the Public Protector and the manner in which she should perform her responsibilities and therefore she felt it is necessary to appeal the judgment to that extent.
Adv Breytenbach stated that the Public Protector found in her CIEX Report that government had various factual and legal findings were made that the government was prejudiced by the Bankorp bailout, and that the government must recover R3.4 billion from ABSA. The court judgment noted that her instruction to amend the mandate of SARB caused a high degree of public anxiety and consternation. Because of her remedial action the currency depreciated by 2.05%, R1.3 billion of government bonds were sold by investors and bank shares reacted negatively. SARB filed for an urgent review which the Public Protector initially opposed. It was only later that she conceded to the relief sought in its entirety. The court ruled that the attempt of the Public Protector to pass of her remedial action as merely permissive – even though it was clearly expressed in peremptory terms – was at the very least disingenuous. How could the Public Protector allow this to happen? Firstly, how could the Public Protector ever have allowed such a report to leave her Office? Secondly, how could the Public Protector reasonably believe that such a report – and her conduct during litigation – meant she acting in accordance with the constitutional obligations imposed on her Office? It was clear from the outset that the Public Protector had clearly taken a decision to engage in what was patently frivolous and vexatious litigation in opposing the relief sought. It is ironic that the Public Protector complains about a lack of funding and the shortfall in her budget, yet at the same time engages in litigation where there are clearly no reasonable prospects of success whatsoever.
Mr Mpumlwana interjected. It is not correct or permissible for Adv Breytenbach to tell the Public Protector that – during the performance of her official duties – she has personally damaged the South African economy. If a judge appeared before Parliament, it would be unacceptable to put questions to him or her in such a manner.
Mr Matiase requested Mr Mpumlwana to cease from raising frivolous points of order. Mr Mpumlwana is a senior and respected member of the Committee. However, Mr Mpumlwana should not abuse his seniority and the processes of Parliament.
Mr Mpumlwana objected to the manner in which Mr Matiase had phrased his request.
The Chairperson requested the members to behave themselves appropriately. The Committee’s engagement with the Public Protector involves various matters of public interest. Public representatives have the right to put questions to those appear before them. The Public Protector is capable of protecting herself and will respond to any questions put to her accordingly.
Before proceeding with the remainder of her question Adv Breytenbach reminded Mpumlwana of his engagements with the previous Public Protector, Adv Madonsela. Mr Mpumlwana on those occasions had engaged in vociferous and vicious attacks against Adv Madonsela and it would be hypocritical for him to now take issue with such questioning of the current incumbent. The second judgment of the South Gauteng High Court, resulted in ABSA and SARB challenging the report in its entirety. The court found the Public Protector had met with the State Security Agency (SSA) and that she offered them the opportunity to comment on her draft report. However, she completely failed to afford the same opportunity to ABSA and SARB and in so doing had deliberately violated the law. The court further ruled that it was proved there was a reasonable perception of bias and that she acted in a deliberately unfair manner. The full bench found it necessary to express their utmost displeasure and disapproval of her conduct and in that in pursuing her application it was justifiable and necessary for a personal costs order to be made against her. How could the Public Protector allow this happen? How could she have thought it was acceptable to conduct her herself in such a fashion? How could she reasonably believe that such conduct is befitting of a Public Protector.
Mr Horne raised a single question. The Public Protector on Sunday 25 February, had addressed this very matter in a public forum. To her credit, she initially stated she would not venture into the merits of the matter as she is still seeking legal advice about further legal proceedings. Disappoint however, she immediately thereafter twice expressed a view that the judges in the matter failed to bring an impartial mind to adjudicate in that matter. This is very distressing given the fact the Public Protector is an admitted advocate. As an advocate she would be aware that the appropriate route a litigant who is aggrieved by a court judgment would be to review or appeal that judgment. Her comments in that respect border on contempt of court and she should provide an explanation for those comments. The only explanation for gave for that statement – which she repeated today – was that the court was incorrect to find that she had twice met with the Presidency, which was not communicated to the other parties. The only reason that fact is now a matter of public record, is because SARB discovered her notes in terms of two meetings she had conducted with the Presidency. As noted by Adv Breytenbach it was only after she had given ABSA and SARB a final opportunity to comment on her draft report, that she again met with the President. That meeting did not deal with executive ethics but instead dealt with the reopening of the matter to the SIU. The Public Protector must explain why then continues to insist that the second meeting was not in respect of that matter. The court did not make this finding based on no evidence, rather there was clear evidence justifying the conclusion that the Public Protector failed to inform the other parties of that meeting and in so doing, had acted in an unfair and unlawful manner.
Mr Swart noted the finding of the court that the Public Protector had acted disingenuously is highly concerning. A synonym for disingenuous is dishonest, deceitful and underhanded. The serious implications of such a comment cannot be understated. Similar allegations have been levelled against her by the Speaker of Parliament and the Governor of SARB. The judge stated the Public Protector would do well to reflect on her conduct regarding the manner in which she conducted that investigation. The second judgment of the full bench indicated – on page 63 – that it was unclear why the Public Protector had acted in such a secretive manner and had provided absolutely no explanation for acting in such a manner. The full bench noted that such conduct was not befitting of a person who occupies the position of the Public Protector. The court found that she had failed to act in an impartial and fair manner, both of which are essential characteristics of her Office. He appreciated that the Public Protector may want to appeal those findings as is her right to do. However, to the extent that she is able she should provide a response against those very serious adverse findings against her.
Mr Mulaudzi said the full bench ruling clearly showed that the Public Protector had illegally issued instructions to the SIU. Again, the Public Protector had misled the people of South Africa by not disclosing both of her meetings with the President. She had acted in a manner which is inconsistent with her Office and the Constitution. Does the Public Protector believe that – given all of these serious adverse court findings against her – that she is a fit and proper person to occupy that position?
Mr Mpumlwana interjected. It is improper for members to attack the integrity of the Public Protector by asking her whether she is fit to occupy her Office.
The Chairperson responded that the Public Protector is capable of objecting to what may be unfair questions on her own accord and does not require the assistance of Mr Mpumlwana.
Mr Xaba agreed with the comments of the other members about the meetings with the former President. Was the subject matter of those meetings of a general nature regarding the performance of her functions or did she request advice or assistance from the President? The Public Protector had stated she did not challenge the setting aside of her remedial action. If she had decided not to appeal the setting aside of the remedial action what does that say about the ABSA matter as a whole? Is that the end of the matter or will there be a further opportunity to engage with the Bankorp bailout? What does that say about the ultimate validity of the CIEX report? Was the Protector and the public generally mislead about the findings made in that report as a whole?
Mr Matiase noted it is a serious matter to have an adverse court finding made against oneself. The court made various adverse findings inclusive of the concession of the Public Protector that her remedial action was unlawful and that only Parliament has the power to amend the mandate of SARB. Has she properly reflected on her conduct which has resulted in severe damage to the reputational standing of the Office of the Public Protector? Secondly, the Public Protector is reported to have issued instructions to the SIU to request the President to reopen the investigation into Bankorp. Again, it is clear that she engaged in conduct which is beyond her legal abilities. Has she reflected on that fact? The matter of Bankorp and ABSA is a serious matter of public concern. Had this sensitive matter been managed by an Office with a proper appreciation of its constitutional mandate and legal limitations then we would not find ourselves in this situation today. Has the Public Protector not now deprived the nation of over R3 billion which could have been used for the benefit and upliftment of the nation? If the answer is yes, then Public Protector should do the honourable thing and follow the example of the former President and resign from her Office.
Mr Skosana noted the Public Protector had admitted to two meetings with the former President, one of which was with the former President’s legal advisor. She admitted that the details of those meeting were not communicated to either ABSA or SARB. There are no transcripts of either of those meetings. Why did the Public Protector not disclose those two meetings to SARB and ABSA? Secondly, it was indicated the Public Protector had met with the SSA and she failed to communicate that fact to either ABSA or SARB? Thirdly, the Public Protector had met with Black First Land First (BLF) at their request. While there is nothing wrong with meeting with BLF per se, the Public Protector had turned down a similar request from ABSA? How can it be permissible for the Public Protector to grant BLF a meeting yet at the same time not grant a similar request to ABSA?
Mr Maila asked the Public Protector what lessons she had learnt from this experience and what could be expected from her Office going forward. Regarding the personal costs order of the High Court, he would reserve his initial question on that matter given the fact that the Public Protector had indicated an intention to appeal that finding.
Ms Mathapo spoke in her vernacular language. Is the Public Protector appealing the entire judgment of the full bench or that part which ordered her to personally pay a portion of the legal costs? It is important to note litigation involved in by the Public Protector is a large drain on her budget which is already strained. How can she reconcile the expense cost of litigation and her intention to appeal the judgment?
The Public Protector wanted it placed on record that she was ill equipped to deal with certain questions as the agenda she had received from the Chairperson indicated the discussion would deal primarily with her capacity constraints and various media statements. She is however fully committed to cooperating with the Committee to the greatest extent possible.
She had dealt with the setting aside of certain aspects of her remedial action in the Committee meeting of 5 October 2017. In that response she had provided answers to that question which she would refer to.
On the first judgment of Judge Murphy, she had agreed the remedial action be set aside. The reason she had initially opposed the application was because ABSA and SARB had instituted the proceedings on an urgent basis. She had to first consult her legal team to determine whether there were adequate grounds upon which to oppose the application or simply abide by the decision of the court. The cause of action therefore ended when she agreed that the remedial action be set aside. The decision of the judge to continue hearing the matter, even after she agreed that the remedial action be set aside, was a decision that was beyond her control. In her affidavit in the Murphy judgment she had explained why it was necessary to meet with the SSA. This based on an interview with then Director General of the SSA, Mr Masetla and it was therefore necessary for the SSA to be properly aware of subsequent developments as part of the Public Protector investigation. That meeting was disclosed in subsequent reports where that was disclosed and therefore it Is incorrect to say those meetings were hidden.
The Public Protector denied ever meeting with the President personally. Rather she had met with the legal advisor of the President. The first meeting dealt with the work and operations of the Public Protector. When a matter is not finalised within 30 days, the President is usually apprised of those developments. Whenever a backlog occurs the President is apprised of those events. That meeting therefore was not disclosed as it did not relate to her investigation. The second meeting did relate the investigation and that was disclosed in the final report. This was because the President was issued with a section 7(9) notice which states that implicated person’s must be afforded rights of procedural fairness. Once that notice was issued the President’s legal advisor requested a hearing. The reason why it was necessary to have a meeting was because some of the remedial action recommended a commission of enquiry. At that meeting the President’s legal advisor had engaged with the Public Protector about the review application of the State of Capture Report. The legal advisor argued that the Public Protector could not instruct the President how to exercise his powers. It was therefore necessary to find alternative remedial measures to address that investigation into State Capture. The presidential legal advisors advised the Public Protector that SIU proclamations remain the prerogative of the President and he cannot be instructed how to exercise those powers. The Public Protector emphasised that she conducted this investigation in exactly the same manner as she conducts all investigations. It was necessary to obtain information from all interested parties, inclusive of the President and it was necessary to engage with the President’s Office who had requested a personal meeting.
Responding specifically to Mr Horne, the Public Protector stated she had never hidden any records from any person including a court of law. When the proceedings were instituted her Office had fully cooperated with the court and available all of the records in her possession. If she had intentions of hiding information she would hidden those documents. The document he referred to, was not in her handwriting rather it was the handwriting of an investigator. That was evidence – in her view – that she had not sought to hide anything from the public or the court.
Responding to Mr Matiase and Mr Skosana on the SIU instruction, the Public Protector said that the court judgment found she had acted unlawfully when she instructed the SIU to request the President to reopen the investigation into the Bankorp lifeboat. The court did not however that remedial action was insufficient to warrant a finding that she not fit to occupy her Office. The Gauteng High Court made a finding in another matter upholding the remedial action in the State of Capture Report that the President would be obligated to institute a judicial commission of enquiry into state capture, despite the fact that the institution of judicial commissions of enquiry remain the prerogative of the President. In this instance, there was no report by the SIU and the SIU had never finalised this matter with a report. There was only a media statement in this regard and no final report. The matter therefore should go back to the SIU to recover those funds. ABSA, the President and SARB were all given an opportunity to respond in accordance with procedural fairness as all parties were issued with notices under section 7(9) of the Public Protector Act. SARB and ABSA however both never requested a meeting to explain their response. The President did request an opportunity to respond which was the reason for the subsequent meeting with the President.
Responding to Mr Swart, the Public Protector said she had conducted her investigation with utmost integrity and in good faith. She had no secret meetings and did not act with any ulterior motives. The only reason for the meeting with the former President’s legal advisor was to afford them an opportunity to explain their response to her remedial action. The Public Protector stressed she had never met with the President personally, she only met with the President’s legal advisor.
The Chairperson requested a response to the allegation that she had refused to meet with ABSA and SARB despite requests to that effect.
The Public Protector responded she had never received such a request and that allegation is not supported by any evidence in the record. Both parties were issued with notices under section 7(9) of the Public Protector Act. All that ABSA and SARB had requested was that they be furnished with a copy of the final report before it was published. She had not accepted that request as that is not the manner in which her Office operates and if they had further enquires they would have been informed of the way forward in accordance with the section 7(9) notices issued to them. The only complaint of SARB and ABSA was that the Public Protector had changed her remedial action to refer the matter to the SIU as opposed to establishing a commission of enquiry.
In the initial judgment it was only part of her remedial action that was set aside. That part of the remedial action which was not set aside remained valid. It was only the second judgment of the full bench that set aside the entire report. However, both the first and second judgment failed – in the opinion of the Public Protector – to properly deal with the crux of the matter. In previous non-judicial investigations both Judge Dennis Davis and William Heath had found the Bankorp transaction to be unlawful. The full bench judgment did not deal with the substantive unlawfulness of the bailout and only dealt with procedural fairness irregularities. The judgment itself therefore contains a high degree of inconsistency. The Public Protector could not comment further on those matters however as the matter is currently the subject of appeal proceedings she intends to institute.
The Chairperson asked the Public Protector if she had ever been employed by the SSA and if yes, when she last employed by the SSA?
The Public Protector responded she had previously worked for the SSA and was last employed by them in the period immediately preceding her appointment as the Public Protector in October 2016. She had worked for the SSA for a period of three months.
The Chairperson asked the Public Protector why she felt it was necessary to have a meeting with the SSA on this matter.
The Public Protector responded that a contract was signed between the SSA, the former DG for State Security Mr Billy Masetlha and CIEX. The meeting took place with the SSA to determine whether the SSA is fully aware of that agreement and whether the agreement was in fact signed by Mr Masetlha. The SSA therefore did confirm that the agreement was signed on behalf of the SSA with CIEX which the explanation for why it was necessary to meet with them.
Responding to Mr Matiase, the Public Protector said that the full bench judgment never dealt with the substantive issue of how much money could be recovered from the Bankorp bail out and only limited itself to setting aside the report in its entirety based on a failure to observe the tenants of procedural fairness. On the issue of resignation, the Public Protector responded that she was appointed in terms of a transparent process and she has committed to serving the people of South Africa. She was appointed following a recommendation from the National Assembly and the former President had nothing to do personally with her appointment. She would therefore not be resigning from her Office despite the adverse court findings against her.
Responding to Mr Skosana, the Public Protector said she had never concealed the fact that she had a meeting with BLF. Her affidavit submitted to the full bench proceedings is a matter of public record and appears on the Public Protector website. The BLF had specifically requested a meeting to discuss the ABSA report and another issue regarding Alexandra constructors. All of the records in that respect were attached to the court proceedings. At that meeting the Public Protector had simply informed the BLF that the report was been finalised and that if they wished to make submissions they were entitled to do so. The BLF raised an issue of investigating the tax implications of the bail out which was not investigated but that fact is reflected and expressly appears in the final report.
The Public Protector responded to the questions raised by Ms Mathapo in her vernacular language.
The Public Protector concluded by stating that she occupies a vital institution which has great power following the Nkandla judgement which means her findings are binding and are almost akin to orders of court. She requested that the Committee support her in her work. She should not be judged simply on the basis of a single judgment which has made adverse findings against her. She has published numerous reports which have been fully complied with and she is fully dedicated to carrying out her work in fulfilling her mandate as Public Protector.
The Chairperson reiterated that the Committee fully supports the Public Protector. She was not brought before the Committee to be put on trial. Rather, they requested her presence so that she could fully explain herself and dispel any negative perceptions which the public may or may not have. She has conducted herself with integrity before the Committee and he thanked her for attending the Committee on such short notice. The issues relating to capacity and her budget would be dealt with at a later date to give due regard and consideration to those requests. The Committee is fully willing to operate with her Office in that regard and the Public Protector is free to approach the Committee of her own accord should she wish.
The meeting was adjourned.
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