NPA cases: National Director progress report

Public Accounts (SCOPA)

14 March 2018
Chairperson: Mr T Godi (APC)
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Meeting Summary

The National Prosecuting Authority (NPA) briefed the Committee on cases currently being handled, and acknowledged that the scourge of both private and public sector corruption, money laundering, illicit financial flows, terror financing, collusive behaviour and organised crimes in all their forms and manifestations corroded the very fabric of South Africa’s young democracy. In the process, it also depleted the country’s national health, undermined people’s trust in the business community, the government and the political system, and negatively impacted on essential services.

The NPA said that the Specialised Commercial Crime Unit (SCCU) was dealing with 232 cases which they categorised as either highly complex or high profile matters, involving offences within both the private and public sector. It had contributed significantly to addressing victims of commercial crime by securing compensation to the value of R72.5 million. The Anti-Corruption Task Team (ACTT) had obtained convictions against 39 people in cases classified as “serious corruption.”

The state capture investigations were divided into eight legs. These involved Vytjie Mentoor, Mcebisi Jonas, the Government Communications Information System (New Age), Eskom/Tageta, Transnet/Trillian, Denel/VR Laser; the Public Protector offences against Collen Maine and the former President, and the Estina matter. The investigations were ongoing in respect of these matters. The Asset Forfeiture Unit (AFU) had conducted a preliminary assessment of the various matters and incidents under the state capture framework. 17 cases with asset forfeiture potential to the value of R50 billion had been identified and were to be deal with in terms of Chapter 5 and 6 of the Prevention of Organised Crime Act. To date, three preservation orders: McKinsey and Trillion (R1.6 billion), Estina (R284 million), and the Optimum and Koornfontein Mines Rehabilitation Fund (R1.72 billion) had been obtained. The AFU was working closely with partners such as the SCCU. and had prioritised a total of 133 cases, which were a combination of complex high value and impact cases.

The NPA said that it was facing severe financial constraints, which had resulted in vacant posts not being filled, placing a severe strain on its staff establishment. The NPA had reached a state of emergency as a direct result of the budget cuts, which were impeding its ability to fulfil its legal and constitutional mandate. Much work, collaboration, and synergy was still required and the NPA could do better. Processes and strategies were in place to do so. The reality was, however, that without adequate resources it could not make the impact that it strived to achieve.

Members welcomed the presentation, but felt that information was lacking. The Committee needed more detail on all the cases referred to the NPA by government departments, as well as investigative entities. However, they were in agreement that the presentation laid the foundation for future engagements. Members sought clarity on progress in countering the political violence in Kwazulu-Natal, why the Estina matter was taking so long to finalise, and the NPA’s position on the status of the Guptas.

Meeting report


The Chairperson said the public should know what the NPA was doing in the fight of corruption. The work of the NPA was intertwined with the work of the Hawks and other investigating entities. It was in this context that the NPA should brief the Committee.

NPA Director on cases currently being handled

Mr Shaun Abrahams, Head: National Prosecuting Authority (NPA) said the NPA acknowledged that the scourge of both private and public sector corruption -- money laundering, illicit financial flows, terror financing, collusive behaviour and organised crimes -- in all their forms and manifestations corroded the very fabric of South Africa’s young democracy, depleted its national health, undermined people’s trust in the business community, the government and in the political systems. These types of crimes negatively impacted on essential services.

The Specialised Commercial Crime Unit (SCCU) was dealing with 232 cases which they categorised as either highly complex or high profile matters, involving offences within both the private and public sector. It had contributed significantly to addressing victims of commercial crime by securing compensation for victims of crime to the value of R72.5 million.
The Anti-Corruption Task Team (ACTT) had secured convictions against 39 people in cases classified as serious corruption, and falling within the ambit of ACTT’s operations. The state capture investigations were divided into eight legs. These involved Vytjie Mentoor, Mcebisi Jonas, the Government Communications Information System (New Age), Eskom/Tageta, Transnet/Trillian, Denel/VR Laser; the Public Protector offences against Collen Maine and the former President, and the Estina matter. The investigations were ongoing in respect of these matters.
The Asset Forfeiture Unit (AFU) had conducted a preliminary assessment of the various matters and incidents under the “State of Capture” framework. 17 cases with asset forfeiture potential, to the collective value of R50 billion, had been identified and were to be dealt with in terms of Chapter 5 and 6 of the Prevention of Organised Crime Act 1998 (POCA). To date three preservation orders --McKinsey and Trillion (R1.6 billion), Estina (R284 million), and the Optimum and Koornfontein Mines Rehabilitation Fund (R1.72 billion) -- had been obtained. Other cases involving fraud/corruption and money laundering included S v Monye and Others, S v Malokoane and others, Victory Ticket and Others; S v Edith Ngqondi and 4 others, S v Zolani Gulwa, Acting National Commissioner of Police: Lt Gen Phalane and PRASA complainants.

The AFU was working closely with partners such as the SCCU on the matters they were dealing with. The AFU had prioritised a total of 133 cases, which were a combination of complex high value and impact cases.

Mr Abrahams said that the year had not gone without challenges. In this regard, budgetary constraints had resulted in vacant posts not being filled, placing severe strain on the NPA’s staff establishment. This had also resulted in the stopping of the Aspirant Prosecutors’ Programme, which was critical in sustaining the organisation’s professional staff component. As from 2016, there had been a reduction in the budget. There had been a reduction of 34% in the overall NPA operational budget for the 2018/19 financial year, resulting in a vacancy rate of 15.9%. The NPA had reached a state of emergency as a direct result of the impact which the budget cuts had had on the institution, and which were impeding its ability to fulfil its legal and constitutional mandate.

With regard to matters related to the NPA emanating from the last Committee briefing, he said that as a direct result of the imposition of non-custodial sentences and suspended sentences in respect of serious corruption matters, the National Director had directed a review of the guidelines and policy directives on plea and sentence agreements in terms of the Criminal Procedures Act 51 of 1977. Although this process was still under consideration, no plea and sentence agreements in respect of ACTT and Special Investigating Unit (SIU) matters could be entered into without the concurrence and authority of the National Director.

Mr Abrahams acknowledged that much work, collaboration and synergy was still required and that the NPA could do better. Processes and strategies were in place to do so. The reality was that without adequate resources, the NPA could not make the impact that it strived to make and was committed in doing.

Discussion

The Chairperson made a follow up on whether the NPA had directed some investigations to the police. The NPA had the power to direct matters to the police for investigation and this had been agreed to in a meeting the Committee had had with the Hawks. The NPA should have assigned an individual to the Committee to advise it on how certain matters should be dealt with.

Mr Abrahams responded that it had been agreed that the Chairperson had to write to him so that he could direct a person who would assist the Committee in dealing with these issues.

Mr T Brauteseth (DA) said that it was true that in the Committee’s engagement with the Hawks, there had been an agreement that Hawks would establish a list of matters to be directed to the police for investigation. There were specific matters that he would like to comment on. He asked whether he should provide a case number or whether he could cite them by name.

The Chairperson asked for a copy of the list of cases to be handed to Mr Abrahams, so that he could follow.

Mr Brauteseth referred to the famous Booysen case of 2015, which had been referred to the NPA in November 2017. There was the Agri B case, which had been referred to the NPA a year ago. It involved R10 million and had been confirmed by the Director of the Land Bank and the Special Advisor to the Minister of Agriculture. The internal procedures had been followed and there was evidence from the Hawks that the money had been used to buy vehicles. There was a Kempton Park case in 2016 that had been referred to the NPA in July 2017. It had involved a R15 million tender to do an evaluation of the Ekurhuleni Metropolitan Municipality. There was the Nelspruit case of 2016 involving the Mpumalanga Department of Human Settlements, which was about money laundering.

The Chairperson asked whether a copy of the list of these cases had been handed to Mr Abrahams.

Mr Abrahams said that he would like to have a list of the cases so that he could look at them and respond in writing.

Mr Brauteseth agreed. He explained that he had received the list of cases via email, and there was no print out. As he had explained to Hawks, it was a matter of cooperation between the ACTT, the Hawks and NPA. If matters were sitting with the NPA for a quite long period of time, it would not just be a matter of delaying, but rather that the NPA would start losing the public’s confidence and trust. There might be legitimate delays, but it was incumbent on the NPA to explain to the Committee why those delays were happening. This was the reason why he had submitted a list of cases, so that the NPA could explain the delays.

He asked whether the name Pillay from Rustenburg rang a bell, and asked why there had been no investigation and prosecution. Was the NPA aware of the Steinhoff situation? Had the NPA engaged with the JSE? He believed that there could be a criminal investigation. On the Estina matter, he asked why the NPA had taken so long to act on it, because the Public Protector had referred it to the NPA in 2013. What had the NPA done to ensure the presence of the accused in court in this matter? What was the NPA doing to make sure that the Guptas and others involved appeared before court? Were they in the country, or had they left the country? Did the NPA know their whereabouts? He had seen a report in the media that they knew where the Guptas were.

Members had received a letter from the Police Commissioner about a week ago relating to a company called Forensic Data Analyst (FDA). FDA worked for the South African Police Service (SAPS) and the State Information Technology Agency (SITA). The Committee had asked the SAPS and SITA to withhold payments to this company. The Commissioner’s letter had stated that if these payments were not made, the company would withhold seven services, and two of these services would have an impact on the NPA’s criminal prosecution processes. Had the NPA heard about this company? Had it been warned that there would be a particular threat to the prosecutorial process if there was no payment to this company? He wanted to know the inputs and views of the NPA on this.

NPA’s response

Mr Abrahams referred to the list of cases, and responded that he did not receive dockets, nor did he sit with dockets. Matters referred to him were referred to the relevant authority. There were numerous reasons why there were delays. Some matters took longer than others to investigate. The relationship between the Hawks and the NPA was such that if there were delays, they could be resolved at a high level and sometimes between himself and the boss of the Hawks. There would always be engagement every time matters were brought to their attention.

With regard to the existence of hotlines, he responded that there were complaint mechanisms.

There was a public perception that the National Director was involved in the decision-making in respect of Mr Pillay and others. The decision was made by the Director of the SIU, in consultation with the acting director of public prosecutions in Pretoria. He had not made a decision. A decision was made at that level, and then reported to the National Director. He had been advised that because the matters were not before the court, the warning statements would be made by individuals concerned. He would not reveal when the warning statements would be issued.

On the Steinhoff matter, Adv Govender would respond to it. She would also speak on the Estina matter, even though he had spoken about it in more detail when he was briefing the Committee on Police and the Committee on Constitutional Development.

He said he had never heard of FDA before, and thanked the Committee for bringing this to the NPA’s attention.

Adv Malini Govender, Acting Head: Specialised Commercial Crimes Unit, said the NPA had established a prosecutorial team on the Steinhoff matter, and there had been meeting in order to investigate what was in the public domain. She had requested a meeting to be advised on the findings and what strategies could be applied. There were a number of stakeholders who were interested in the matter.

On the Estina matter, there was a docket in Gauteng which had been requested by the NPA in order for it to get involved. It had taken the NPA seven hard-working months in order to get the Estina matter on to the court roll. Matters had taken a long time because the NPA wanted to ensure that the issues were fully investigated so that the right suspects were arrested. There were ongoing investigations into all the cases, and not only the Estina matter.

Mr Brauteseth said that wanted clarification on one thing. If one looked at matters from afar, one would ask if the NPA should have to wait for a matter to be referred to them by the SAPS. Were there reasonable grounds why the Estina matter had not been prosecuted since 2013? He felt that it had not been prosecuted because the NPA was not interested in it.

Mr Abrahams said he would like to answer in general on all matters, and not only Estina. He was personally proactive when it came to matters that were in the public domain. There were many cases that were brought him in respect of maladministration, fraud and corruption. He requested that these cases be investigated so that nothing would prevent the NPA from writing write to the Hawks or the Police Commissioners at the provincial level, requiring them to investigate those matters. Similarly, there was nothing wrong for him to refer matters to the AFU or the SCCU to advance them further.

Mr C Ross (DA) said that R40 million had been identified and recovered. Referring to page 15, he said that there was perhaps a mistake in the amended Estina preservation order for the release of funds to Mr Atul Gupta. Was the amount R600 000 or R600 million? The status of the Estina investigation should be clear to the Committee. He also wanted clarification on the third report on Eskom. There was confusion over whether the report should be submitted to the Committee. Had the NPA seen the report? Had they dealt with it? What was the status of the report in respect of the prosecutorial authority? Would former President Zuma be charged? Was Mr Abrahams ready to make an announcement on whether Jacob Zuma would be prosecuted or not?

Regarding the reconsideration application on Estina, Mr Abrahams responded that it had concerned him so much when the court had delivered the judgment, that he had called on the head of operations of the AFU, Adv Molelle, as well as Adv Mokatla, to give him a comprehensive briefing on the matter, because he had the same concern. He wanted to interrogate the issue. He would give an opportunity to Adv Molele to respond on the matter. However, there were three things that should be made clear: There was a forfeiture process, a preservation process and a criminal prosecutorial process. The AFU and SCCU were working closely on the matter. He had not yet been briefed on the matter of Estina, which had been postponed. In the upcoming meeting, they would be discussing the fast tracking of these investigations. He would then know what was outstanding.

Adv Knorx Molelle said that, on the Estina matter, the AFU had obtained a preservation of R220 million. The issue under reconsideration related to the bank account. The court was satisfied that they had made a proper case. The investigation on the Estina matter was not fully investigated. It was a matter of time to show the Committee that amount to be recovered was beyond R40 million.

Mr Abrahams said that he had not seen the Eskom report, but the National Director did not peruse evidence. He was rather briefed on the status of investigations and precautions, and the timeframe involved. He could not tell the Committee whether Mr Singh and Mr Koko were subjects of investigation or not. If made a disclosure, this would have an impact on the investigations. He would be setting a wrong precedent. What he could say was that the NPA would look at everything. They had prioritised Eskom matter. Although he could not disclose their names, there were many people who were subject to criminal investigation. Many people would be held accountable.

He said that on the Zuma matter, Mr Ross had been quite correct. He was in a position to take the decision. However, the decision would be first irelayed to Jacob Zuma and he would then inform the nation about his decision.

Mr E Kekana (ANC) said that the had Committee engaged with various departments that had spoken about mismanagement, and they would say that matters had been referred to the NPA. He was surprised to see that the NPA were talking about fewer cases than expected. He noted that there were seven officials who were under investigation, but there were no further details like the department they came from and their provinces. Referring to the investigation of the PRASA, he said that they seemed to have a problem. The Committee had been briefed by the Chairperson of PRASA, who had said he had given the NPA a file for it to take matter over, and that nothing was happening. He asked what the relationship with SITA was, and whether the entity was helping in terms of information technology (IT). What was the role of SITA in the work of the NPA? He recommended that the Committee should go back to the departments and request a list of cases, so that they could check whether the cases really were with the NPA. He also asked who engaged with the NPA from the departments. Was it the Directors General, or other senior officials?

Mr Abrahams said that the NPA received reports from departments on consequence management, and these were some of cases that the NPA was directing its investigations towards.

SITA provided assistance to the NPA with regard to the IT services.

In the departments, the NPA engaged with the people at the highest level in the departments. Given that the DG was the accounting authority of the department, not only he could be consulted or engaged with. It was important to involve others.

On the question of PRASA, Adv Govender responded that there were still a substantial amount of information needed, and the NPA was engaging with the new leadership of PRASA to get it.

Ms T Chiloane (ANC) asked how money could be recovered, given that many departments had suffered from fruitless expenditure. Department officials were paying money for fruitless contracts that had been there since before 1994. They would claim that there hands were tied if they were asked to terminate these contracts. There were a lot of these contracts at state-owned entities (SOEs) that had been concluded before 1994. There were deviations and expansions of contracts, and this was a terrain that was scary. Referring to the SIU cases, she expressed her concern that there were so many cases that were being left unattended, despite the fact that departments were saying that there were forensic investigations. Despite such assertions, no reports were being provided on these investigations. Of concern was that the NPA could not do anything unless the forensic investigations were finalised.

Ms Mente said it was frustrating, as the Committee could not get documents when and if they were required. The culture of the Committee was that presentations ought to be submitted on time so that Members could study them and the accompanying documents. This allowed them to do their research on the information they contained with a view to raising their concerns. How could they engage with the NPA’s document that had been received an hour prior to the meeting? Referring to the 99 cases submitted by the SIU, she remarked that it was good news to hear that something was happening. However, it was not clear what these cases entailed and what the timeframe to finalise the cases was. These details were crucially needed.

Referring to the illicit money flows, she asked how many cases had been identified, how many multinational companies were involved, how many had been prosecuted so far and how much money was involved? Regarding the success of forfeitures, what assets had been taken, and from whom? She commented that each and every leg of the state capture investigations had a particular case, and asked if there were more than one docket, and what the numbers were. She said that the ACTT was not a convincing body, describing it as more than dysfunctional, and asked whether it was helping. The ICTT did not provide discomfort in the fight against corruption. When the Independent Police Investigative Directive (IPID) had briefed the Committee, they made a request for intervention in the cases they were investigating, including the Lt Gen Phalane case. Was the IPID being assisted?

Mr Abrahams responded that this was the NPA’s first engagement with the Committee at which it had to speak about what it was doing with regard to handling cases of fraud, corruption, mismanagement and money laundering. The NPA was before the Committee to account, and it had not been their intention to come without certain information. Although the SIU had submitted 99 cases, there were no longer 99 because cases which wrongdoers reappeared had been joined. A full report on joined cases had to be submitted to the Committee. Similarly, the NPA had to provide feedback to the Presidency in terms of being transparent. On the question of illicit flows, he was not sure whether all the matters were related to mining. The NPA was happy to provide more information that was not available at their disposal in writing, including responses to questions on state capture.

Mr M Hlengwa (IFP) said the reality was that the brief had laid a foundation for future engagements. He applauded the level of work of the NPA, which had won the trust of the public. However, he felt that the positive view of the NPA’s work had been due to the change of leadership. Why had there been no such prosecutions before the change? He would like to see people arrested in terms of the consequence management, and would like to see successful prosecutions. Successful prosecutions were, in his opinion, seeing the NPA winning cases and wrongdoers being sentenced. There was also a need to ensure uniformity and consistency in the sentencing of criminals who committed similar crimes.

Mr Abrahams responded that the public should know that Jacob Zuma had applied to the NPA through his legal representation. The application had been allowed, and this had not been a matter of preferential treatment. The communication of the decision of the NPA would be communicated through Jacob Zuma’s legal representation.

He said that there was no instability in the NPA. The only instability was caused by the news which the mainstream media used against him, claiming that he had failed in his duties to achieve the mandate of the NPA. The media failed to play the ball, and was playing the person. The question was whether the media should only focus on him. Some matters took a quite a long time because they needed enough time to be investigated. The public overlooked the investigation process. It was wrong to state that there had been a change in the prosecution because there had been a political change. These cases were not opened in 2018, but had been opened for investigation years back. A decision to prosecute had been taken based on the facts, and the decision to prosecute was taken by the provincial prosecutor or special prosecutor.

Ms Chiloane said that she had a list of cases whose investigations were concluded in 2013 and 2014. Among them was a case referred to the office of the NPA in 2014, worth R63 million. There had been no reaction from the NPA. She asked what the reason could be for non-prosecution.

Mr Abrahams responded that these cases were featured in the presentation in one way or another. In order to give a full response, he would have to go back and speak to people handling those cases, and report back on their progress.

The Chairperson urged Members to focus on the specific cases mentioned in the presentation.

Mr Brauteseth referred to instability in the NPA, and said that there had been a court ruling about his position as head of the NPA. Mr Ramaphosa, when he was vice president, had been directed to replace him. This was part of the instability. He asked whether Mr Abrahams’ conduct in informing Mr Zuma about his decision would make the decision of the court fall away. His feeling was that Mr Abrahams was lying, and he warned him to be careful with information he was giving Parliament, because these words could be used against him.

Mr Kekana indicated that he was not happy with the responses on PRASA, and a report on the PRASA matters should be prepared and submitted to the Committee.

Mr Ross sought clarity on the curator of the Estina matter. Who was the curator, who had appointed him, and what procedure had been followed? The Committee should look at how the NPA should be adequately funded to ensure all matters were prosecuted.

Mr Hlengwe commented that the day before the NPA’s briefing, the Committee had received a briefing from the Hawks, which had indicated that there was a high rate of cases in KwaZulu-Natal. All government departments were said to be under investigation. He added that the citizenship of the Guptas was of concern, and asked what the understanding of the NPA on the citizenship of the Guptas was.

The Chairperson said that the NPA should prepare a response in writing.

Mr Abrahams responded that there would be no legal implications with regard to the decision he would take, as his decision would not be affected by the ruling of the Constitutional Court. He gave the example of Adv Menzi Simelane, noting that his decision had not been declared null and void due to his controversial position.

Responded on the Kwazulu-Natal cases, he said there was a special focus on the political violence matters. Work had been done in collaboration with the provincial government.

Regarding the Guptas’ citizenship, he had been speaking to the Director General of Home Affairs when the meeting started. They had agreed that they would meet to discuss the matter. He was therefore not going to comment on what he believed the situation was. He would comment on their position after the meeting with the DG.

On the Estina curator query, he responded that the tender for curators was issued in 2016. These curators could be deployed. Once a matter was closed, the complexity of the case would be indicated and this would determine who the curator to be appointed was. The curator was appointed by the court, and the account of the curator was approved by the Master of the Court.

Adv Govender said that it was true that the NPA had historical problems or challenges. The reports received from the SIU would require further investigation. However, there had been an improvement in the quality of investigations concluded by the SIU. This was due to numerous engagements between the NPA and the SIU.

In his concluding remarks, the Chairperson said that the Committee would expect written responses within two weeks. The day before, the Hawks had given a different story, so next time both the Hawks and NPA would present when they were together. Members needed to sit and discuss the issues of investigations and prosecutions, because they were critical. The SIU was another issue to discuss. The SIU was not meeting its targets. It was not clear what problem it could be facing. Then there was the Anti-Corruption Task Team (ACTT). It was another institution that was providing sub-standard work.

How could the loopholes in the prosecutions be closed? Members were neither lawyers nor prosecutors. They should be made to understand all the legal technicalities. For example, if the NPA said that seven officials were under investigations or being prosecuted, they should state which departments they were coming from, which provinces they belonged to and how much money was involved. He asked how NPA officials were monitored to make sure that they were doing the right thing. They could be bought. The ethics policy was therefore very important. He agreed that the presentation had laid a solid foundation from which the Committee would continue to engage with the NPA.

The meeting was adjourned.

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