PP Inquiry day 72: Evidence Leaders

Meeting report

Chairperson: Good morning. Welcome back colleagues after a brief break. Let me welcome all Members on the virtual platform on this day 14 April. Welcome the invited Evidence Leaders to this Committee, Adv Bawa and Mayosi. Welcome all of you members of the media, our entire support staff in your various duties, members of the public – who probably would have had time in the break to go through the documents. I'm sure you yourself could have started analysing the work that we do. We want to welcome you in your different platforms, 408 and YouTube. We're resuming our meeting. Just to indicate, I think for today we're continuing where we left as the Committee meeting. And perhaps later on when we adjourn, we will indicate how far we are to the Enquiry, with the resumption of the Enquiry. And so, I don’t want to waste time now to go there. I'm going to ask Adv Bawa perhaps to just remind us and recap us and tell us where we are now in the unpacking of the evidence that have been placed in front of us over those six days, because that’s what we want to conclude and complete in the remaining time before the resumption of the Enquiry. Adv Bawa?

Adv Nazreen Bawa, SC (Evidence Leader): Chair... Good morning to the Members and the public. We took the Committee largely through the substantial part of the record in the CR17/Bosasa matter. We dealt with the issue of the references in the affidavits in so far as it related to the IGI report and I indicated that I would come back to the issue of the judgment, as there was something missing that I needed to check. I will come back to that at some point. For today’s purposes I'm going to look at what is contained in the judgment, with reference to the reports which are referred to in the PP SARS Unit report – we'll call it the SARS Unit or the Gordhan report. And we do so with reference to the affidavits that was filed with the PP prior to the litigation, what was filed and served at court and what was said in the judgment about it; so that one understands the judgment in the context of that. What I don’t look at for these purposes is argument that prevailed in it before the court. But I will take you to essentially the legal argument in respect of in particular intelligent services in the judgment, to get an understanding of that in the context of affidavits. And I do so not because I am buying into this notion that the judgment isn’t binding – the judgments are binding. And I say this as a preface so that you can understand where I’m coming from. But this is to give the Committee an understanding of the affidavit evidence which is serving before the Committee in the context of the judgment. So as a starting point there must be an understanding, and I’m not making a closing argument. I just want to put the affidavits into context – that the High Court had ruled the existence of the unit was lawful and that finding stands. So to the issue of whether Minister Gordhan had played a role in establishing of the unit is of little moment in the light of the finding by the High Court, that that was lawful. I'm simply doing a trolling through the evidence to give you an understanding of that. And so when I start with that, I'm going to start with saying is that what the judgment finds in paragraph 88, and I'm just going to read it, we don’t need to go there for the moment, is that “in determining whether the Public Protector’s findings were rational, it was therefore important to ascertain what process she followed in coming to the findings and what evidence was available to her when she made her findings”. The reports own evidence is then discussed in the judgment. And that’s important, because it’s a particular point in time that the court looks at what is before it and what was put before it as saying this was before the Public Protector. And she obviously on affidavit tells the court her version of it, and we will deal with that.

Right... So if we turn to the first thing, which will deal with the Sikhakhane report and Nugent Commission report. And I'm also going to preface by saying this, in some cases there are quotes taken from the report that are repeated in the affidavit. So to not repeat quotes to the Committee, I will simply indicate those as we go along and not read those out to you. And I want to start with... and Tshepo, you must open up Bundle E. Right, the Committee can follow as we go along... go to Bundle E, and it will be the first one of the record... volume 10. It’s Bundle E, number 7 and it will be volume 4, number 4. And I'm going to try where I can to give you the PDF numbers, so that you can find it easily. Alright, where we can do that for the most part, I've tried to do that. So if you go to PDF 387. So before the report is issued, Mr Pillay provides the Public Protector with two affidavits. And this is the first of those two affidavits that we’re going to go through. Maybe just go to the top of it, so that the Committee can see which affidavit we’re in... Right to the top... So there’s a complaint, and Mr Pillay makes this complaint to do that. And I'm not going to read the entire thing to you, but if we start and you can follow as I take you through it. Just hold on a second, let me start at paragraph 6. At the time this affidavit is made, and he tells you this later in the affidavit. He had already left the employ of SARS in May 2015. And although there’s a subpoena asking him to provide records, information et cetera, he’s not in possession of this, and he says this later in the affidavit. Right, but if we start with paragraph 6, right, he identifies that there are 12 allegations that are “wide-ranging and it is clear - notwithstanding the vagueness with which the allegations are cast – that not only do they cover lengthy period of time but also that they refer to events that, in the main, occurred between 10 and 20 years ago”. Right. He then says in paragraph 7 that he was effectively provided with six business days, between the 10 April and the 23rd of April to respond thereto. And then he goes in paragraph 8, he complains of a lack of a fair administrative process and in particular the inadequacy of it, because in this matter there seem to have been allegations by Mr Shivambu, but there’s also an anonymous complaint which is not revealed. And in paragraph 8.3, he specifically states that paragraph 3 of the subpoena “threatens me with criminal sanction should I fail to comply with the demands made in the subpoena”. And paragraph 4, he says “I shall deal later in this affidavit with the fact that a number of the allegations now made were previously considered by the Public Protector almost five years ago”. And then if we move on, just go to paragraph 13. He makes the point that he’s not in the employ of SARS and he doesn’t have access to records, information and witnesses. And then he says in paragraph 14, that under chapter 6 of the Tax Administration Act, he has limitations in respect of the disclosure of confidential information in relation to SARS to any party not in the employ of SARS. He then goes on; he points out that his attorneys had requested the cooperation in paragraph 14 – that his attorneys had requested the cooperation of SARS in providing documentation to assist him to respond to the subpoena following a meeting with SARS officials, but that they had declined to provide the information, indicating that they pertain to personal information of third parties and internal operations of SARS. So at the time he answers this, he doesn’t have documentation, since that would be in the possession of SARS. He further makes the point in paragraph 16, that at this stage he has been charged with the commission of certain alleged offences, which charges remain pending against him. And although they are unfounded and vexatious, they hang over his head. And he does not wave effectively his rights under section 35 of the Constitution to do that. So he stands by those rights and it’s against that background that he answers the affidavit. In paragraph 19, he points out that effectively that in August 2014, when he was Acting Commissioner of SARS, the Public Protector addressed correspondence to SARS in which she stated – and this is Adv Madonsela, in which she stated that “a complaint had been made to her office that SARS had established an allegedly surreptitious investigative unit, known as the National Research Group, to conduct clandestine specialised investigations against unsuspecting civilians, politicians and prominent businessmen for possible tax evasion. The Public Protector informs SARS that she had elected not to investigate these allegations and set out her reasons for making that decision”. So effectively, there had been a decision by the Public Protector not to investigate. Further, “In as much as such allegations suggested unlawful or illegal activity on the part of SARS or its officials, this was and remains denied by me”. Further, he says that “The Public Protector went on to inform SARS that her investigation would, in the circumstances, be limited to issues relating to allegations concerning irregular recruitment processes in the appointment of National Research Group officials and two other issues which are presently irrelevant. The Public Protector sought pertinent details and responses from SARS regarding the alleged irregularities in the appointment of National Research Group employees”. And SARS, when Pillay was still the Acting Commissioner, delivered a detailed response including supporting documents to the Public Protector, which dealt with those requests. So then if you go to the... I’m not going to go into further details on this affidavit. He then deals with certain answers. There's then a subpoena issued against him... it starts at page 216, PDF 383, go to that. And he then files an affidavit in respect of this subpoena, right... And I'm going to deal with the averments in the affidavit, that deal with essentially the Sikhakhane panel report and the other report. So go to paragraph 31.7 of this affidavit... He says “The Sikhakhane panel report is fatally flawed in fact and in law”. And he then points out the documentation in which it was such recorded in. He says, first he starts with his... “My submissions to the Sikhakhane panel in August and September 2014”; “My submission in December 2014, which I prepared after the Sikhakhane panel report had been delivered, which I addressed to the then SARS Commissioner, Mr Tom Moyane”; “The legal opinion obtained by SARS in January 2007”; “A legal opinion obtained by the then National Intelligence Agency in 2007”; “A legal opinion obtained by SARS in May 2007”; “A legal opinion obtained by the then SARS Commissioner, Mr Moyane, in September 2015”; “A legal opinion obtained by Mr Pravin Gordhan in March 2016”. Then he says, “Testimony deposed to under oath by retired Judge Frank Kroon, who had chaired the SARS Advisory Board, before the Commission of Inquiry into Tax Administration and Governance” – that’s the Nugent Commission – “in September 2018. In this regard I drew attention to the main report of the Commission, delivered in December 2019, where the following was recorded by Judge Nugent in regard to that testimony”. “The SARS Advisory Board chaired by Judge Kroon, reported to the Minister, and issued a media statement saying the unit was unlawful, but in evidence he told the Commission that was not a conclusion reached independently by the Board, but had been adopted by the Sikhakhane panel, and he had come to realise it was wrong. Indeed, he supported the re-establishment of capacity to investigate the illicit trades, which we recommended”. And then the final report of the Commission, where the following was stated by Judge Nugent, “Why such a unit was considered to be unlawful is not clear to me. While the National Strategic Intelligence Act prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state...”. So Judge Nugent says the Act “prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state, which hardly applies to intelligence relevant to collecting tax. The members of the unit might at times have acted unlawfully, that SARS employment policies might have been breached, that members might unlawfully have acquired and used equipment, all of which came later to be alleged. I see no reason why SARS was and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits. Indeed, that was the view expressed to SARS in late 2015, which seems not to have been made public by SARS. An opinion was furnished to the former Commissioner of SARS on about 1 September 2015, in response to the findings of a panel chaired by Adv Sikhakhane SC, by Adv Trengove SC and Adv Nxumalo”. And “It was said to be unlawful by a panel chaired by Adv Sikhakhane SC, but I find nothing in its report to persuade me why that was so. Adv Sikhakhane was asked if he could elaborate but his reply took it no further than what was said in the report”.

So I want to digress for a moment to take you to the Nugent report in a little bit more detail, so that there’s some understanding of what the Nugent report was about and what it said. And if we go to Bundle E.... it would be PDF, it could be the same document. Go to 706, yeah, right. There are two reports by Judge Nugent, one is the interim report dated 27 September and then a final report that he comes out with at 11 December 2018. And the gist of the first report was an advice effectively saying you need to appoint a new Commissioner of SARS. But in the course of that he deals with this issue in a few paragraphs on 35 onwards. Alright, and I'm going to come to the status of this commission before we deal with the final report but let me just deal with what’s in the interim report first. Paragraph 35 he says, “An account of what brought SARS to its present condition must start with the extraordinary consequences of reports in the Sunday Times that an unlawful ‘rogue unit’ existed within SARS. The unit concerned was a unit that had come into existence in about 2008 under the name ‘Special Operations’, to investigate the illicit trades in tobacco, liquor, counterfeit goods, and so on. It later changed its name to the ‘National Research Group’ and again metamorphosed into the ‘High Risk Intelligence Unit’, which comprised six members”.  Go down, going to paragraph 40. “I have not yet found why the creation and existence of the unit was said to have been unlawful, which is how it was consistently and uncritically depicted. I find no reason why the establishment and existence of the unit was indeed unlawful, and I am supported in that by an opinion given to Mr Moyane by leading senior counsel in late 2015. As far as I am aware that opinion has never been publicly disclosed. It might be that some of the activities of one or more of its six members was unlawful but that is something else. If that was indeed the case, it is nonetheless incredible that unlawful acts of one or more of six men led to millions of rands being spent, and the holding of repeated inquiries, with continuing damage to the reputation of SARS”. “What sparked this off was a report in the Sunday Times on 12 October 2014, some two weeks after Mr Moyane took office on 27 September 2014. It was reported that an unlawful ‘rogue unit’ existed within SARS, whose members had planted listening devices in the home of former President Zuma. That report, and others that followed in similar vein, was to do immeasurable damage to SARS, and to the lives of many people”. “Mr Adrian Lackay, who was then the spokesperson for SARS, had got wind of the allegations shortly before the report was published, through questions that were being posed to him by journalists, and he urged Mr Moyane to take steps to deal with the allegations, but Mr Moyane ignored him, contending that the allegations would come to nought, in stark contrast to his conduct when the allegations were published”. “Once having read the report in the Sunday Times on 12 October 2014 Mr Moyane called together the members of EXCO that afternoon and demanded to know what they knew about the allegations, and all the members disavowed any knowledge. On Monday the members of EXCO were summoned once again, on this occasion with their subordinates, and were asked once again what they knew, and the members of EXCO once again disavowed any knowledge, whereupon Mr Moyane promptly announced he had no confidence in the members of EXCO and that it was disbanded”. “That response is extraordinary in any rational terms. Mr Moyane had barely arrived at SARS, with no experience of revenue collection, yet almost immediately he denounced and humiliated senior management, with vast knowledge and experience, and dissolved the body through which SARS was being managed. All that on the basis of no more than a newspaper report, and moreover, a report on events of which at least most of the Chief Officers could not be expected to have had any knowledge”. Go to paragraph 43, “Meanwhile, in October 2014, Mr Moyane ordered the disbandment of the High Risk Investigation Unit, and the termination of surveillance of those who were under investigation by the unit. No new capacity was created to continue its functions. It can be inferred from analytical evidence we have heard that there is at present a material and ongoing loss of revenue from tobacco related taxes for want of investigation and vastly diminished regulation of the illicit economy”. Paragraph 44, “December 2014 was a busy month for Mr Moyane. Following on a decision to do so in October 2014, a consulting firm called KPMG was appointed by Mr Moyane to investigate the ‘rogue unit’ allegations, particularly so far as they might implicate Mr Pillay, Mr Richer and two others, at an ultimate cost to the taxpayer of about R24 million (the money has since been returned to SARS). Computers were seized and a mountain of correspondence and other documents were trawled through until a preliminary report was prepared in about June 2015 making damning allegations against Mr Pillay in particular, consequent upon which criminal proceedings were initiated against him and others by Mr Moyane. That was to be followed by criminal charges being brought against Mr Pillay, Mr Magashula and Mr Gordhan, in circumstances still unclear to me, which were later withdrawn”.

He then issues a final report... Tshepo, if you go to the bookmark, it will be the very next report. I think it’s PDF 796. The other paragraphs in the interim report does not relate specifically to the SARS Unit, which is why I'm not going there. Maybe just go to the top of the report first paragraph... Now I want to take you to the beginning of it, so that you understand what is the difference between the Nugent Commission and the Sikhakhane report. Go down... go to the paragraph one on the first page. Right. So “The former Minister of Finance, Mr Gigaba, who first decided a commission of inquiry should be established in connection with SARS, gave evidence before the Commission. He said he had formed the view that an inquiry was required because the integrity of SARS was being questioned, domestically and abroad. He concluded that a process was needed to look into the affairs of SARS, from which recommendations could emerge addressing issues of governance and integrity that were of concern to investors, the rating agencies, the international financial institutions, and the taxpaying public” ... The commission was then what commonly became known as the Nugent Commission. There were terms of reference. Go down... and he then provided this report. If you see at paragraph six, he then says “There are many elements to good governance. Principally, in any organisation, it is the oversight role of senior management structures, that are able to put a brake on abuse of authority, but senior management was driven out or marginalised at SARS, and we have seen no evidence that senior management appointed by Mr Moyane was anything but compliant. In a tax collecting agency, oversight at every step in the tax collecting process is also vital, but the development of its sophisticated information technology, which has inbuilt checks, was summarily stopped, and the organisational structure of SARS, that provided oversight, was pulled apart. Dissent was stamped out by instilling distrust and fear. Accountability to other state authorities was defied. Capacity for investigating corruption was disabled. On the eve of his suspension Mr Moyane was about to dismantle governance over the settlement of major tax disputes”. “To report on each question posed by the extensive terms of reference in isolation would trivialise what has happened at SARS. I have reported instead in broader terms on what happened at SARS over the period under inquiry. Within that will be found as many answers to the questions posed by the terms of reference as we have found. But when integrity and governance has failed, as happened at SARS, it has probably manifested itself in many ways that are yet to be found”. “The hallmark of good governance in an institution is the existence of a culture of healthy dissent. Mr Moyane substituted instead a culture of fear and intimidation. What is most needed, and what is being looked for by employees at SARS, is an end to its present debilitating uncertainty, through a new Commissioner with integrity and managerial capacity, to restore that culture of healthy dissent”. And it’s against that background that this Commission looked at matters. Go to paragraph 27... and there’s a context that’s coming to this detail, but I want to detail the interaction that Mr Luther Lebelo had with the Nugent Commission, because his affidavit before the Nugent Commission is one of the documents that had been provided to the Evidence Leaders by the Public Protector’s office, as being one of the documents to which regard was had. Members will recall that this issue was raised during the evidence that was being led with Mr Mataboge. “Mr Luther Lebelo, Group Executive for Employee Relations at SARS, approached the Commission on more than one occasion, and I afforded him considerable time. He asked to give evidence and it was agreed that he could do so. He said, too, that he wanted to furnish documents to the Commission in support of his evidence, and in due course he delivered documents in five lever arch files to the offices of the Commission. It turned out that the documents had been compiled by Mr Maphakela”. “As it turned out, what Mr Lebelo wanted was a platform to ventilate what he says was wrongdoing on the part of Mr Pillay, Mr Richer and Mr van Loggerenberg, which I come to presently, on the pretext of demonstrating that there were grounds for disciplinary steps that were taken against them”. “Mr Lebelo duly gave evidence twice at public hearings. Interspersed with that, he submitted an affidavit. The common thread through all he said before, and submitted to, the Commission, was his wish to demonstrate that there was evidence that the persons I have mentioned were guilty of the wrongdoing he alleged”. “At the outset of his oral evidence he said that by giving evidence he would be compelled to ‘continue to do what I hated for the last four years which is to keep on saying these things I am going to say today which does not only hurt the integrity of the people that we are talking about but it hurts also their families and their futures’. He felt compelled to do so, he said, because the alternative was that ‘the stigma of being a suspension hit and a purger will continue for the rest of my life’”. “Fortunately, we were able to spare Mr Lebelo the pain of hurting those people once again, and of hurting their families. It was not necessary to take up the time of the Commission by reading out aloud what he contended was proof of wrongdoing on the part of the persons concerned, which is what Mr Lebelo had in mind doing. Mr Lebelo was told on more than one occasion that we accept that counsel who drafted the charge sheets against them would not have drafted charges had he not believed, on the material placed before him at the time, that there was a case to meet, which was the ostensible purpose of reading the documents out aloud”. “Whether the cases brought against them would have been met is not the concern of this Commission. There are forums for putting people on trial and the Commission is not one of them. Moreover, clearing Mr Lebelo of ‘the stigma of being a suspension hit and a purger’ is not the purpose of this inquiry. If Mr Lebelo considers he bears such a stigma, it is best he approaches those whom he considers to have attached that stigma and clears it up with them”. “That notwithstanding, Mr Lebelo persisted. In response to an invitation from the Commission to furnish submissions on why certain findings affecting him should not be made, he forwarded to the Commission an affidavit of some 135 pages, excluding its voluminous annexures, almost of all which was devoted to airing yet again what he claimed to be proof of wrongdoing on the part of Mr Pillay, Mr Richer and Mr van Loggerenberg, which he appears to have disseminated to a section of the media. He complained as well that an affidavit he had earlier submitted to the Commission had not been placed on the Commission’s website”. “Certainly his affidavits and his documents have not been placed on the website of the Commission, nor will they be. The website of the Commission was established to facilitate access to evidence that is material to its findings. It is not a medium for disseminating whatever might be dumped at its door. If Mr Lebelo wants to disseminate his material, which is not confidential, he is perfectly free to do so, but the Commission will not disseminate it for him”. “The Commission does not accept whatever might be foisted upon it. It has invited anyone to place evidence before it, and has considered everything that has been submitted, but that does not mean everything placed before it is material evidence. It accepts what is material to the inquiry, which Mr Lebelo’s documents and affidavits are in large part not, as he was told so many times, and it is for the Commission, not Mr Lebelo, to determine what is material. So far as his affidavits contain relevant material, the relevant parts have been considered and taken account of, but the Commission will not be party to disseminating what is no more than malice”. “I might add that Mr Lebelo is not the only one who has sought to use the inquiry as a platform to advance his or her own cause. Others have also walked into the offices of the Commission with their documents, or imposed them on the Commission electronically, on various subjects they want disseminated to the world, and their material has been treated just the same”. And he also added that “early in the inquiry Mr van Loggerenberg submitted a lengthy affidavit dealing with, and exonerating himself of, the allegations that had been made against him. In the same way Mr van Loggerenberg was told the allegations are not material to the inquiry, and he quite properly did not persist”.” There is a related matter I ought to dispose of briefly. Mr Lebelo’s documents were gathered together by Mr Maphakela, whose firm had represented SARS in the disciplinary proceedings, apparently at a charge to SARS of about R1 million, later reduced to about R750 000. It appears from his invoice that much of his time had been taken up with attempting to ‘link’ the contents of the documents to alleged transgressions of the persons concerned. In due course Mr Maphakela wrote to Mr Lebelo on 22 August 2018, and sent a copy to me – I am not quite sure why – purporting to prove, from extracts from the documents, the alleged transgressions. Mr Maphakela also said that SARS must be given a ‘platform’ to provide its ‘version of events around 2014, particularly as to what led to the initiation of disciplinary proceedings against Mr Pillay including his suspension.’ He said his suspicion that the Commission had decided to ‘avoid the allegations’ was ‘based on the ongoing lobbing to bring Mr Pillay back into the SARS’”. “Mr Maphakela was also invited to furnish submissions on why certain findings should not be made concerning his instructions, particularly on what authority he purported to speak for SARS, and he, too, responded with an affidavit. Amongst other things he said the Commission is not authorised by its terms of reference to make such findings, which is not correct. Nonetheless, it appears from his affidavit that the acting Commissioner has already taken the matter up, and no doubt he will also consider whether Mr Lebelo’s conduct is befitting a senior employee of SARS, in which case no findings or recommendations are required”. “The acting Commissioner rightly renounced the letter as not representing the views of SARS. We have been told that Mr Lebelo’s delegated authority to dismiss employees has also been removed. We are gratified by both. It is time that dignity and decency return to SARS”. Paragraph 41, "We have become acutely aware as the inquiry has progressed that the Commission has been sought to be drawn into an onslaught upon those who managed SARS before Mr Moyane arrived, founded upon allegations once peddled by the Sunday Times to a beguiled public for a year and more, about a ‘rogue’ unit that was alleged to have existed within SARS, which is what Mr Lebelo’s documents were all about. An inkling that that was in store appeared soon after the Commission was established and it became increasingly apparent as the inquiry progressed”. “The Sunday Times withdrew its allegations and apologised some two years later, but meanwhile, a vast amount of taxpayers’ money was splurged by SARS to trawl through documents going as far back as eleven years, in search of evidence of wrongdoing; the allegations were fuelled by leakages of information; and lest the public should be minded to forget, the allegations have been opportunistically repeated, even in an official SARS media release I come to later in this report”. “When revenue collection is compromised the consequences are one or more of three. Government programmes must be curtailed, or taxes must be raised, or money must be borrowed, all of which prejudice the country. That is what this Commission is about, and it will not be diverted from inquiring into what is wrong at SARS, and how it can be righted, by attempts to use it for other ends. If there was wrongdoing on the part of those who managed SARS before the period with which we are concerned, then the proper course is for it to be reported to the authorities. The Sunday Times did great damage to SARS and the people of South Africa and the Commission will not now pick up where it left off”. And then I want to go to page 796 of the report, where it picks up the issue of the alleged “rogue” SARS Unit again. “The most senior employees of SARS are the Commissioner and its Chief Officers, who report direct to the Commissioner”, and then it points out “Immediately before Mr Moyane took office they were Mr Ivan Pillay, who was acting Commissioner...”. The Committee will know that there was a complaint in respect of two issues. One was his pension pay-out before the Public Protector. And the other one which is linked to the SARS report, related to his qualifications. The second one was "Mr Barry Hore (Chief Officer: Operations)”, and we had seen from the complaints that had been raised that he’s implicated in the complaints which had not yet been investigated by the Public Protector by the time this report that we’re dealing with has come out. “... Mr Kosie Louw (Chief Officer: Legal and Policy), Mr Gene Ravele (Chief Officer: Tax and Customs Enforcement Investigations), Ms Elizabeth Kumalo (Chief Officer: Human Relations), Mr Bob Head (acting Chief Officer: Finance), and Mr Peter Richer (acting Chief Officer: Strategy, Enablement and Communications)”. Right, go down. Then he repeats the two paragraphs that I had read to you earlier from the interim report. So go further down...paragraph four is also a repeat, about the meeting that Mr Moyane has with his EXCO and his disbanding. Paragraph five... he makes an inference at the bottom. I read you the part about him disbanding and asking the Chief Officers... and he said that “the Chief Officers could not be expected to have had knowledge”. And then Judge Nugent draws the conclusion “the inference is inescapable that this was the first step in ‘neutralising’ possible detractors as foreshadowed in Bain’s ‘TM100 days’ presentation”. “In short order Mr Hore resigned, Mr Pillay and Mr Richer were suspended and later resigned, and Mr Ravele resigned. Why that occurred so far as Mr Pillay and Mr Richer are concerned requires explanation”. Then he comes to the “so-called Rogue Unit”. “The unit concerned was the successor to a unit that had been established in about 2008 to counter the illicit trades in commodities such as liquor, cigarettes, and counterfeit goods. It started in about 2007 when a proposal was considered for funding staff within the National Intelligence Agency to address organised crime and the illicit economy. Mr Pillay was then General Manager: Enforcement”. “Mr Pillay and Mr Gordhan, who was Commissioner of SARS, addressed a memorandum to the Minister of Finance, requesting approval ‘to fund a special capability within NIA to supply SARS and law enforcement with the necessary information to address the illicit economy.’ Approval was granted by the Minister but negotiations with the NIA came to nought and a unit within SARS was established instead. Known initially, so it seems, as Special Operations it was then called the National Research Group, which was later disbanded, but six members were retained as the High Risk Investigation Unit (HRIU). It reported to Mr Johann van Loggerenberg who reported, in turn, to Mr Ravele”. “Why such a unit was considered to be unlawful is not clear to me” - and that’s the paragraph I read to you earlier on, and it’s the one quoted in the affidavit and in the report. And then it goes on. Maybe I must just read it again so that we can see the context of paragraph ten. “Why such a unit was considered to be unlawful is not clear to me. While the National Strategic Intelligence Act prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state, which hardly applies to intelligence relevant to collecting tax. That members of the unit might at times have acted unlawfully, that SARS employment policies might have been breached, that members might unlawfully have acquired and used equipment, all of which came later to be alleged, I see no reason why SARS was and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits”. “While the National Strategic Intelligence Act prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state, which hardly applies to intelligence relevant to collecting tax. That members of the unit might at times have acted unlawfully, that SARS employment policies might have been breached, that members might unlawfully have acquired and used equipment, all of which came later to be alleged, I see no reason why SARS was and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits”. “Indeed, that was the view expressed to SARS in late 2015, which seems not to have been made public by SARS. An opinion was furnished to the former Commissioner of SARS on about 1 September 2015, in response to the findings of a panel chaired by Adv Sikhakhane SC, by Adv Trengove SC and Adv Nxumalo, who advised that SARS: may keep people under surveillance in the public domain but not in private; may follow a person or vehicle in the public domain but not in private; probably may place an electronic tracking device on property to trace its movements. It may however not place an electronic tracking device on a vehicle to follow the movements of its driver because it impinges on his or her privacy; may watch a person or property such as business premises, residences, containers, etcetera but only in the public domain; may take photographs or videos of people or property in the public domain but not in private; may not listen to or record private conversations unless a SARS official is a party to the conversation; may not electronically record third party conversations by using listening devices; may record conversations between SARS officials and third parties; may accept information from informers on the basis that their identities will not be revealed; may accept information from a person even if it knows that the information was unlawfully obtained. It may however not accept stolen property”. “It was said to be unlawful by a panel chaired by Adv Sikhakhane SC, but I find nothing in its report to persuade me why that was so. Adv Sikhakhane was asked if he could elaborate but his reply took it no further than what was said in the report. The SARS Advisory Board chaired by Judge Kroon, reported to the Minister, and issued a media statement, saying the unit was unlawful, but in evidence he told the Commission that was not a conclusion reached independently by the Board, but had been adopted from the Sikhakhane panel, and he had come to realise it was wrong. Indeed, he supported the re-establishment of capacity to investigate the illicit trades, which we recommend”. The Panel Chaired by Adv Sikhakhane SC - “In early 2014 Mr Johan van Loggerenberg was engaged in what appears to have been a turbulent romantic relationship with Ms Belinda Walter. In about May 2014, in an apparent fit of pique for a breakdown of the relationship, Ms Walter lodged a complaint against Mr van Loggerenberg with SARS. She alleged, amongst other things, that in the course of the relationship Mr van Loggerenberg had unlawfully disclosed taxpayer information to her. The allegations came to the knowledge of the media, which reported on it sensationally”. “Mr Pillay was the Acting Commissioner at the time. He appointed a panel to investigate the complaint. In August 2014 the panel produced a three-page report that was inconclusive”. We will argue there’s a difference in status of the Nugent Commission report - the Nugent Commission being a commission that was appointed with subpoena powers; in other words, the exercise of a reviewable function as opposed to a panel comprising of three advocates essentially rendering an advice to SARS. The former being what is reviewable and the latter not. And that’s why I said I’ll draw the distinction between the two. So even if you had any inkling of you wanting to review the Sikhakhane Commission report, given the nature of the report, it’s not a document that’s an exercise of a public power or the performance of a public function that one can review. And so we will argue that later. You will recall many months ago, Mr van Loggerenberg had actually testified that they had sought legal advice on whether they could in fact review the report on the advice provided to them, was that it wasn’t a reviewable report. I'm just interjecting that to put a context into why I draw the distinction between the two reports. And we will deal with the relevant law if asked to do so in final argument, in closing argument. “In September 2014 Mr Pillay appointed another panel, comprising Adv Muzi Sikhakhane SC, Adv Nasreen Rajab-Budlender and Adv Patrick Ramano, with terms of reference arising from the complaint against Mr van Loggerenberg. Before its investigation was complete the allegations in the Sunday Times were published, which it then investigated. The reason for doing so was expressed in the report as follows: ‘The existence of the NRG was not volunteered to the panel until it was revealed in the media. The panel independently found sources that had been part of this unit since its inception. To the extent that the existence of this unit has been at the centre of the complaints against Mr. Van Loggerenberg, we investigated its origins. We also investigated its origins simply because our terms of reference included the investigation of any other matter that we deemed deserving of such investigation’ and ‘Shortly after the panel was appointed and commenced its work, the media reports escalated and alleged the existence of a covert unit that had been operating at SARS. By this time, we had already interviewed some SARS officials, including Mr. Van Loggerenberg. It must be stated that the existence of such a unit in any form was not specifically part of the terms of reference. However, the terms of reference extend, in our view, to the consideration of the existence and operations of a covert unit, to the extent that had we not considered such issues once they became apparent, we would have failed in our obligation to fully respond to our mandate’”. Judge Nugent just says “In a report dated 5 November 2014, the panel reported, amongst others things, that the HRIU and its predecessors had been established unlawfully, that the recruitment, funding and practices of the units might have violated SARS’s human resources policy, and that the HRIU should be disbanded (it had already been disbanded in October)”. And then he goes on and he says “I dealt in the introduction to this report with the repeated attempts, in various ways, to resuscitate the alleged ‘rogue unit’ before this Commission. I have said as well that what members of the unit might or might not have got up to is not the concern of the Commission, and if unlawful acts were committed the remedy is to report them to the authorities. The alleged ‘rogue unit’ is relevant to this Commission only so far as it explains the consequences of the revelations in the Sunday Times”. And then it goes on and he deals with the resignation of Mr Pillay. And he says “One of the early steps taken by Mr Moyane, which must have been in about mid October 2014, was to cause Ms Kumalo, the Chief Officer for Human Relations, to obtain an opinion from SARS’ attorneys on the lawfulness of a payment received by Mr Pillay from the pension fund upon taking early retirement, and his subsequent reappointment under contract. In essence, in the event of early retirement, a member is entitled to the benefits that have accrued to him or her, less a penalty calculated according to a formula. If the member retires with the full benefit that has accrued, the employer must make up the penalty to avoid an actuarial shortfall in the fund. That is what occurred in his case”. “Mr Magashula was the Commissioner of SARS at the time and Mr Gordhan was the Minister of Finance. Mr Vlok Symington, a lawyer employed by SARS, with particular knowledge of pension rights, expressed his opinion that the arrangement was lawful. Mr Magashula approved and recommended the arrangement for approval of the Minister of Finance, who was Mr Gordhan, saying that a similar arrangement had been made with other employees many times. According to an affidavit deposed to by Ms Minee Hendricks, who had been seconded to assist Mr Gordhan in his position as Minister of Finance, she brought the request to his attention, and he asked for more information. Mr Gordhan raised the matter with a number of people over the next three months, including the chairperson of the SARS Remuneration Committee, before he granted the request. The opinion furnished by SARS’ attorney on 5 November 2014 was that the arrangement was indeed lawful”. “Also by what must have been about mid-October 2014, Mr Moyane had decided to appoint a firm of forensic consultants, KPMG Services (Pty) Ltd, to carry out investigations for SARS. The contract for the provision of its services was first signed for SARS on 27 October 2014, and was signed for KPMG on 29 December 2014. Also on 29 December 2014, a service request was issued by SARS, specifying the scope of the investigation to be undertaken, which was to perform independent investigative tasks that were required to be ‘focused on the conduct of’ Mr Pillay, Mr Richer, Mr van Loggerenberg and Mr Pikie’ (who was subsequently dismissed on unrelated grounds) referred to particularly, but not exclusively, in the report of the Sikhakhane panel”. “According to the report produced by KPMG, its investigation entailed an average of 20 to 30 professionals, who together reviewed 860 000 emails imaged from 23 computers that had been seized, and considered in excess of 1.36 million documents, going back as far as 2003, at a cost to the taxpayer of about R24 million (which has since been repaid to SARS). The cost to the taxpayer for the lawyers who participated in the process can be assumed to have been some millions more. We do not consider it helpful for achieving the purpose of this inquiry to delve into questions that arise concerning the preparation of that report”.” Meanwhile, on about 11 November 2014, Adv Brassey SC recorded in a memorandum for SARS that he had been instructed, based upon reports that had appeared in the media, that Mr Pillay may be implicated in acts of malfeasance, and he was asked ‘as a matter of extreme urgency to consider whether there is potentially any substance in the suspicion currently entertained and, if there is, make recommendations (of a very preliminary nature) on how the matter can best be investigated and ultimately brought to finality’. I think it is clear that by then the Sikhakhane panel had not yet delivered its report to SARS. Having been furnished with a ‘handful of documents’, and having had a short consultation, Adv Brassey said: ‘In the course of the consultation that I had with my instructing attorneys, they explained that it might be necessary to suspend Mr Pillay pending the outcome of these investigations. I can see little basis for taking so drastic a step at this juncture. If suspension is ultimately invoked, it should only be at the stage when Mr Pillay demonstrates an obdurate refusal to cooperate or when, following the requisite interviews with him and others, it appears that there is indeed a case to answer. In deciding whether to suspend, my consultant should appreciate that suspension is typically required, in circumstances such as the present, only if there is some reason to suspect that evidence or witnesses will be corrupted. Before Mr Pillay is suspended, I hasten to add, he should be told of the substance of the possible charges against him, and of the reason why suspension is being contemplated. He should be invited to respond to these statements by explaining why suspension would be inappropriate in the circumstances’”. “The report of the Sikhakhane panel, signed on 5 November 2014, was later furnished to Mr Moyane, who handed it to Mr Pillay. Mr Pillay responded to the report on 3 December 2014 with a 34 page ‘critique’, taking issue with various findings of fact and of law in the report. He sent the critique to Mr Moyane and requested permission to circulate the critique amongst senior members of management. Mr Moyane’s response the following day was extraordinary: ‘I acknowledge receipt of your envelope with two sets of documents. I have not read the 34 page document. I cannot approve your request to circulate the report to the Chief Officers. At this stage I do not consider it appropriate that you share your views with the chief officers as this could be construed as an attempt to influence or impose your own views on them’”. “Disregarding the advice that Mr Pillay could be suspended only if there was reason to suspect that evidence or witnesses would be corrupted, and that he must be given the opportunity to respond to why he was being suspended, Mr Moyane called Mr Pillay to his office on 5 December 2014 and handed him a notice of suspension. Mr Pillay told him he had responded to the allegations in his 34 page critique, to which Mr Moyane replied that he had not read the critique, and did not intend reading it, as it was no more than Mr Pillay’s opinion”. “Mr Pillay challenged the suspension in the Labour Court, which ordered SARS to withdraw it on 18 December 2014, on the following grounds: ‘On the facts of this matter as they have been presented in the papers it appears that the applicant has not been afforded any opportunity to make representations before the decision to suspend him was made. I draw this conclusion despite the Commissioner’s averment that he invited the applicant to make submissions’”. “The following day Mr Pillay was invited to make submissions ‘as to why you should not be placed on precautionary suspension pending investigations into various allegations against you’, and given reasons for the proposed suspension to which he was invited to respond. I think it can be taken that this was no more than a formality. Mr Moyane had earlier declined to read Mr Pillay’s critique and there is no reason to think he had now changed his mind. Mr Pillay responded on 14 January 2014...” - I think it should be 2015. “On 21 January 2015 Mr Moyane wrote to Mr Pillay rejecting his submissions and advising that ‘I have decided to place you on precautionary suspension pending an ongoing investigation (including a forensic investigation conducted by KPMG into allegations of unlawful conduct within SARS in which you have been implicated)’”. “Thus within weeks of Mr Moyane’s arrival at SARS three things had happened. He had suspended EXCO for reasons not explicable on any rational grounds. He had asked for an opinion on the lawfulness of Mr Pillay’s pension arrangement. He had decided to employ KPMG to conduct investigations, which turned out to be concentrated on Mr Pillay and others. A month or so later, he refused even to read Mr Pillay’s response, but yet suspended him”. “There is no apparent reason why Mr Moyane would be asking for an opinion on the lawfulness of Mr Pillay’s pension arrangement, when no issue had arisen around it, from which I think it can be inferred that one of the first things he did was to call for Mr Pillay’s employment file. Why would he then ask for an opinion on the lawfulness of an arrangement long in the past when no issue had arisen around it? Which employer would spend what must have been R30 million or more to investigate an alleged transgression or transgressions on the part of four employees? An employer who genuinely wanted to know whether proper procedures had been followed in appointing staff seven years previously might just as well have asked the employment division. If the employer wanted to know who had bought equipment one might expect the relevant accounts department to be asked. If he or she had wanted to know what the staff had been up to one might expect the head of the division to have been asked to investigate and report. None of that called for KPMG to be the first port of call, at a cost of millions. Mr Lebelo suggested that Adv Brassey had advised on 11 November that a forensic investigation was called for, which is correct, but that was after SARS had already signed the KPMG agreement. And if an employer wanted to know what had happened in 2007, why would its investigators trawl through documents going back to 2003? And which employer acting bona fide would refuse to read the employee’s explanation for his alleged conduct before suspending him?” “Then add the case of Mr Richter. He, too, was served a notice of suspension on 5 December 2014, by Ms Kumalo, in the presence of Mr Lebelo, but they were unable to furnish reasons for his suspension, as Mr Richter recorded on the notice of suspension”. “Put together those facts and in our view the inference is inescapable that Mr Moyane was bent from the start on getting rid of them and set about finding a basis for doing so, on whatever grounds that could be found. He had, after all, been advised by Bain that he should neutralise those he thought might hamper him, and Mr Pillay was certainly considered to be one”. “On 5 February 2015 notice was given of disciplinary steps against Mr Pillay on ten charges. Nine charges related directly or indirectly to the ‘rogue unit’. The tenth charge related to the pension arrangement. The proceedings were to take place before retired Chief Justice Ngcobo”. “On 29 April 2015 Adv Brassey and his two juniors addressed a memorandum to their instructing attorney, not included in the files produced by Mr Lebelo, recording a consultation the previous day: ‘Yesterday we recommended to our client, SARS, that of the three sets of charges currently being pressed against Mr Pillay SARS, Deputy Commissioner [it is not clear in which categories each of the charges had been placed], the charges concerned with the so-called rogue unit should be held in abeyance. Our advice was premised on the fact that the evidence, so far as we have been able to gather it, is far from conclusive on these charges and that witnesses who might be called to substantiate the case were proving to be uncooperative. In response our client, represented by Mr Luther Lebelo, has instructed us that all three charges should be pressed together, and we happily submit to such instructions. Furthermore, the documentary evidence on the activities of the rogue unit is as presently advised thoroughly unsatisfactory. All we really have are the ‘dashboard’ reports that were made by the unit from time to time to SARS top management’”. “The documentary evidence on the activities of the rogue unit is as presently advised thoroughly unsatisfactory. All we really have are the ‘dashboard’ reports that were made by the unit from time to time to SARS top management”. “Meanwhile, Mr Pillay had wanted to resign, and there had been discussions, mediated by an intermediary, of the terms upon which he could do so, but they had been inconclusive. By 6 May 2014 however, soon before the disciplinary proceedings, agreement was reached, and Mr Pillay resigned. A ‘separation and settlement agreement’ was signed by him and SARS in which he agreed to resign with immediate effect. Included in the agreement was what was a called a ‘restraint of trade’, in exchange for which he received payment of a sum equivalent to 18 months’ salary”. “Mr Peter Richer was employed by SARS from August 2003 to July 2006 and then again from July 2009 until he resigned in May 2015. He was Group Executive: Strategic Planning and Risk. From July 2014 to October 2014 he was Acting Chief Officer: Strategy, Enablement and Communications”. “Much the same happened to him as to Mr Pillay. The report of the Sikhakhane panel had made no suggestion that Mr Richer might have been implicated in any wrongdoing. Yet on 5 December 2014 Mr Richer was served a notice of suspension at the offices of Ms Kumalo, in the presence of Mr Lebelo, albeit that no reasons could be given for his suspension, as Mr Richer recorded on the notice: ‘unable to provide reasons at this time’”. “He, too, approached the Labour Court, and his suspension was withdrawn, only to be imposed again in January 2015. On that occasion allegations were put to him relating to the ‘rogue unit’ and he was invited to make representations, which he did, but they were rejected. Disciplinary proceedings were also commenced against him. Mr Richer resigned at the same time as Mr Pillay and on the same terms. Asked by the Commission to explain his resignation he said that it was ‘in order to remain sane and to proceed with my life’”. The resignation of Mr Ravele. “In November 2014, said Mr Ravele in evidence, he was summoned to Mr Moyane’s office, where Mr Moyane ‘came down on me like a ton of bricks’, accusing him of being a weak leader, and saying he must choose where he stood, either with Mr Pillay or with Mr Moyane”. “For a while his relationship with Mr Moyane appeared cordial, but in early 2015, said Mr Ravele, he realised he was ‘on his way out’, when he attended a presentation, where he disputed some of the material that was presented. Sometime later he was summoned by Mr Moyane who said alleged criminal activity on his part was being investigated. A few days later a criminal complaint against him was laid at the instance of Mr Moyane”. “On 19 May he was called to the office of Mr Moyane and presented with a letter from the Hawks confirming that a criminal complaint had been laid against him, and he was told the investigation might take months, and that further charges might be made. Mr Moyane said he should expect to be suspended. The following day he was again called to the office of Mr Moyane, where he was presented with a letter of suspension, and he resigned. He was asked to sign a restraint in return for which he was paid six months’ remuneration”. Mr van Loggerenberg, “Mr van Loggerenberg was at one time Group Executive: Enforcement Investigations. The HRIU reported to him, and he reported in turn to Mr Ravele. I have related the circumstances in which he found himself being investigated, first by the panel chaired by Mr Kanyile, and then by the Sikhakhane panel, which made findings against him”. I’m not taken to the Committee to the investigation of Mr Khanyile, whose findings were inconclusive. “Mr van Loggerenberg was suspended on 12 November 2014. On 15 January 2015 disciplinary proceedings were commenced against him. Meanwhile Mr van Loggerenberg had had to contend with relentless media articles humiliating him and advancing allegations to which his terms of employment prevented him from responding”. “By then he was considering resigning, and he conveyed that to Mr Moyane. He was asked to present a proposal in writing, which he did. He met once again with Mr Moyane, who insisted that he delete parts of the letter he had written, in which he had protested his innocence. He duly resigned on 4 February 2015, at the office of Mr Moyane, receiving the equivalent of six months’ remuneration in return for signing a restraint. Mr Moyane insisted on a photograph being taken of the two shaking hands and smiling, and the resignation was cynically announced as amicable”. I'm going to skip Mr Hore, because it doesn’t fall within the context of this report. Go to paragraph 50. “The evidence of what occurred at that time, both the oral evidence and that contained in many documents, of which the above is only a stark summary, has a distinct atmosphere of frenzy about the so-called rogue unit, in which even parliamentarians might have got caught up, much like the frenzy at the ‘beast’ in William Golding’s ‘Lord of the Flies’”. “Mr Lebelo calls it a ‘media narrative’ that Mr Pillay, Mr Richer, Mr van Loggerenberg and Mr Ravele were driven out of SARS. He says they all resigned because they feared the disciplinary proceedings they were facing, as he wanted to prove with his files and his affidavits. Perhaps that is correct, and for present purposes we will assume that to be so, but it misses the point. It is clear there was an intention at the outset to drive them out of SARS. That disciplinary proceedings might ultimately have achieved that purpose is neither here nor there. Of one thing they could all be sure from the start – there was no place for them at SARS”. And that was the gist of Judge Nugent’s consideration of aspects dealing with the unit and the subject matter that was before the Public Protector, and the relevant parts. There is an extensive conclusion in the Nugent report of general recommendations, which isn’t material for what this Committee needs to consider...

Chairperson: Well, on that point, we’ll take a ten-minute break – tea break. We'll be back after ten minutes. Just for tea break. Thank you.

[Break]

Adv Bawa: I want to go back to where I was in the affidavit of Mr Pillay, in response to the subpoena. And we had read the excerpt, the one paragraph from paragraph 31.7.9. Put it on the screen, of the Nugent Commission report, go to 31.7.10. So we’ve contextualised the Nugent Commission report in the context of the subject matter of the Public Protector’s report. And Mr Pillay’s affidavit in response to the subpoena to him, had only encapsulated the one paragraph in that affidavit. He then in paragraph 31.7.10, says to the Public Protector “A subsequent admission by retired Judge Kroon, under oath, in March 2019 that all the members of the so-called ‘Kroon Advisory Board’ had deliberated the statement (between May to June 2015) that the ‘unit was unlawfully established’ as put forth by the so-called ‘Sikhakhane panel’. The Kroon Advisory Board then concluded that it was indeed wrong to have concluded this”. So what is recorded by Mr Pillay, under oath, to the Public Protector is not simply the apology but it went further than that. It then said, “These facts can be determined from retired Judge Kroon and the members of that board directly”. And at 31.9 it says “However, public records exist that set out in detail the legality of the unit, its establishment, mandate and that its existence had been public knowledge for years and explained in detail”. And then he sets out “Annexure ‘D’, and in particular paragraph 5.2.1 thereof. In this regard, I personally participated in briefing Members of Parliament, the Presidency, the State Security Agency and Parliamentary Committees on these matters since 2010”; “My submissions to the Sikhakhane panel”; “My submission on the Sikhakhane report, addressed to Mr Moyane”; “The so-called ‘Snowman/Broken Arrow’ bundle which I attach marked ‘F’”; “Various letters and minutes of meetings and documents provided to the Presidency, South African Police Service, State Security Agency, various Members of Parliament, Ministry of Finance, and Parliamentary Committees between February 2010 to 2014”; “A best-selling book, entitled ‘Killing for Profit: Exposing the illegal Rhino Horn Trade’ in the chapter ‘Juju and the Poacher’ published in 2012 names the unit, openly associates it with SARS and explained its mandate. The book has, to my knowledge, been republished 6 times since then”. Then he also provides a charge sheet... and which he has been criminally charged. And that is to be found at PDF 427. Actually, don’t go down, I just want to show that it’s annexed. The reason why we’re not going down is because the address of those who are charged, which include Mr Pillay... Mr van Loggerenberg at that time is provided, and this submission was made to the Public Protector in April 2019. So by that stage now, I don’t want to... the addresses are not blanked out, to do that. So if we go to page 445. Mr Pillay is then served with a section 7(9) notice. And this is then the affidavit which he then provides the Public Protector in response to the section 7(9) notice. This was also annexed to his founding... to his papers before, to the affidavit of Mr Gordhan – the founding papers before the High Court. And I want to draw your attention to a few of those paragraphs. Let's go to paragraph nine. Where he draws particular attention that “to the fact that in paragraph 14.4.33 of the notice the Public Protector concludes on the strength of ‘the evidence’ before her that Mr Andries Janse van Rensburg and I are guilty of the very charge that we have been indicted for, the trail of which is presently pending in the High Court, Gauteng Division. The Public Protector impermissibly seeks to pre-empt the outcome of the trail. In doing so she tramples on my constitutionally guaranteed rights to a fair trial. I wish to point out that the National Director of Public Prosecutions has embarked upon the process set out in section 179(5) of the Constitution to review the decision of the prosecute. It appears that the Public Protector seeks to influence that process to my detriment, and to the detriment of Mr Janse van Rensburg, by pre-determining and proclaiming our supposed guilt in her intended report”. Mr Pillay then makes certain “in general” comments, which he starts at paragraph 15. Some of the other paragraphs of background which have appeared in the affidavit I previously brought to the Committee’s attention. He says, “I place on record that I do not agree with what the Public Protector describes in the notice as her ‘intended’, ‘likely’, ‘provisional’ or ‘preliminary’ findings (which terms are used interchangeably in the notice) in their totality. I shall simply refer to them in this affidavit as ‘findings’. In my view, the findings amount to misrepresentations and distortions of the truth, to the actual and potential prejudice and detriment of me and others, SARS and the country as a whole”. “The notice is replete with loosely used terms, specifically the terms ‘covert’ and ‘intelligence’, that are not defined in law, and are also not defined or explained in the notice. In this regard I record that: neither covert and discreet investigations, nor the practice of collecting intelligence, nor the practices of collecting actual or potential evidence, finding information that would guide investigations, investigating, identifying witnesses and whistle-blowers and determining the location of actual or potential evidence discreetly, covertly or under protection of SARS confidentiality legislation, directly related to serious offences against SARS (inter alia, tax evasion, customs evasion, excise evasion, fraud, smuggling, racketeering, money laundering and corruption) can remotely be considered as improper, unlawful, illegal or questionable in any manner or form; the only limitation in law in this regard relates specifically to conducting ‘covert intelligence’ specifically in relation to ‘national security’ matters which are both terms defined in law; the Public Protector, in determining what she repeatedly refers to as the ‘rogue unit’ as being unlawful, has effectively neutered the entire enforcement capability of SARS, a result which is clearly legally untenable and patently irrational”. “I further place on record that what the Public Protector has set out in the notice as constituting the reasons and basis for her findings, demonstrate that: the findings are neither rational nor reasonable; the findings are as a result from errors of fact and law; the Public Protector has failed in her investigation to be pro-active, impartial and determined in her investigations, and to retain an open and enquiring mind in the course thereof; the Public Protector has approached the investigation in a biased manner; the Public Protector relies on false representations made by various parties and accepts and presents these as if fact; several statements contained in the notice of the Public Protector are patently false and defamatory; and the Public Protector omits material facts and evidence at her disposal or accessible to her or available in the public domain, a proper consideration of which would have resulted in her findings being completely different”. “Furthermore, the Public Protector has deliberately omitted to reflect, detail and consider materially relevant factual evidence and facts which demonstrates organised and coordinated efforts by various parties and groupings to (i) ‘disrupt and cause chaos’ at SARS, (ii) ‘hound people out of SARS, and humiliate them so that they can never find work again’, (iii) unlawfully and illegally spy on and attack and discredit SARS and its officials and audits and investigations (including then Finance Minister Mr Pravin Gordhan, Mr Johann van Loggerenberg and others at SARS, including me), (iv) ‘replace the leadership of SARS and remove the Minister of Finance’, (v) facilitate the ultimate State Capture of SARS as institution and (vi) commit serious offences against SARS, inter alia, tax evasion, customs evasion, excise evasion, fraud, smuggling, racketeering, money laundering and corruption”. “These omissions by the Public Protector pertain in the main to a deliberate and false propaganda campaign in relation to what has notoriously been referred to as the ‘SARS rogue unit’. This campaign of disinformation commenced in earnest in the popular media on 12 October 2014 and has continued ever since with the assistance of inter alia, current and former SARS officials, state intelligence operatives and law enforcement officials, taxpayers in dispute with SARS and politically connected individuals and select persons in the media”. “The Public Protector has failed to properly investigate the matters in their totality”. “The notice contains intentional, unlawful misrepresentations to my actual and potential prejudice”. “The findings, as well as a public statement by way of video distributed on social media issued by the Public Protector on 3 June 2019 when she revealed that she was serving a section 7(9) notice on Minister Gordhan, and the Public Protector’s further utterances at public speaking venues in her official capacity, serve to advance the ‘rogue unit’ propaganda campaign. In her 3 June 2019 communication, the Public Protector has already announced to the public her findings by referring to the existence of a ‘rogue unit’. In that statement the Public Protector (amongst numerous other false and defamatory utterances) falsely, and in a defamatory manner, cast me and others involved in the same light as murderers. In this regard: my attorneys addressed a letter on 14 June 2019 to the Public Protector on my behalf, a copy of which is annexed... on 17 June 2019 the Public Protector’s attorneys sent a dismissive, emotional and threatening response, a copy of which is annexed... The Public Protector appears to have adopted a position that will brook no disagreement with her, which assumes that any challenge to her utterances, whether on social media, in public addresses or in her reports, amounts to interference with her work. There was no ‘rogue unit’. The Public Protector, as evidenced by the content of the letter of her attorneys dated 17 June 2019, appears to believe that this loaded appellation is perfectly proper because it is ‘commonly coined and publicly known' and, in the absence of a court order prohibiting its use, the appellation ‘remains usable by all South Africans’ including the Public Protector. I submit that, contrary to that belief, the stubborn and deliberate use of the term ‘rogue unit’ by the Public Protector in circumstances where the very issue that she is investigating is whether or not the unit was lawful, demonstrates her bias and the closure of her mind to any outcome to her investigation other than one which upholds and confirms the ‘rogue unit narrative’”. “The notice issued by the Public Protector indicates that her findings are dealt with in a ‘first part’ which will be followed by a ‘second volume’. The notice then relates to the ‘first part’ as set out in her paragraphs 8.1 to 8.6. I do not intend to refer to any of the matters that the Public Protector has decided to ‘defer’ to her intended ‘second volume’. I merely remark that this is a strange way of conducting an investigation – and appears aimed at involving those likely to be implicated in the ‘second volume’ in additional cost and effort. It seems clear, however, that the Public Protector wishes to expedite the publication of her contribution to the ‘rogue unit narrative’”. At paragraph 28, he then starts dealing with evidence. “The notice uses the term ‘evidence’ loosely throughout the content. In this regard I have been advised that: Evidence is not simply allegation, but factual material which might prove or disprove the allegation in question. The notice is replete with conjecture and speculation described as ‘evidence, and apparently relied on by the Public Protector as if it was actual evidence. Evidence not given under oath generally carries little weight. It is also well established that the existence of a document or recording does not constitute proof of the correctness of the content of the document or recording. Courts of law and tribunals such as the Public Protector which investigate and report on allegations, make findings of fact based on evidence, and draw conclusions based on those factual findings and the law. A statement or allegation made by someone that certain evidence exists or that certain events occurred is neither a finding of fact not a final conclusion. Prima facie evidence is generally accepted by courts and fact-finding tribunals to mean evidence which, in the absence of rebutting or contrary evidence...” And then he refers to the case of Sarmcol. The citation is there, where the SCA had stated “that primary facts are facts which are directly established by evidence, whereas secondary facts are facts which are established by inference from the primary facts, and that the drawing of an inference for the purposes of establishing a secondary fact is also a ‘finding of fact’; with regard to the drawing of inferences, our courts have repeatedly quoted with approval the following statement made by the House of Lords: ‘Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture’; South African courts have also consistently affirmed that in considering reports by the Public Protector, the court will interfere with and overturn a finding and recommended remedial action if there is not a rational objective basis which justifies them”. “The notice is replete with speculation and conjecture. It is extremely difficult to follow and make sense of because of its clearly rushed completion, exhibiting scant, if any, regard for facts and evidence relevant to the complaints”. And then he says he’s going to set out issues that he deals with, “facts, references, evidence, the location of such evidence and witnesses and records – many drawn from the public domain – and all of which are material to the matters raised in the notice. Without exception, they have all clearly been ignored by the Public Protector during her investigation”. If you go to paragraph 32 and following, it deals with the establishment of the unit as explained. And he says, “I wish to record that the notice demonstrates a complete lack of understanding (or even an attempt at understanding) SARS as institution, its various enforcement and investigative units over the years 1998 to 2014, the legal and policy framework within which these units operated, their mandates and how they functioned as set out in my submission. In the result, the notice reflects cardinal factual errors and untruths which I will deal with specifically later in this affidavit”. “For instance, the notice confuses separate SARS business units that reported to completely different divisions and sub-divisions under completely different management structures with completely different budgets, oversight controls, organisational attributes, functions and purposes”. And he gives one example as an elementary example, “the notice confuses the CBCU, which resorted under Custom Operations, with the National Research Group (NRG) which reported to the sub-division which in turn resorted under the Enforcement and Risk division; in turn a further confusion is added by confusing the ACAS, which was a standalone division reporting to the General Manager: Risk and Enforcement and later to the SARS Commissioner; similarly, at inception, the Special Projects Unit was a small sub-unit under the CBCU division and shortly after transferred to an entirely different division named Enforcement and Risk”. And so he goes on, and he explains a legal opinion, some of which we have already read to you. And I want to take you specifically to paragraph 82. “It has been stated on record, wrongly so, by SARS spokesperson, in particular Mr Luther Lebelo, at various times, that I, as acting SARS Commissioner, had initiated investigations into allegations of a ‘rogue unit’ at SARS. This is false”. “I wish to record certain key aspects regarding these processes: Former SARS Commissioner Tom Moyane started at SARS on 1 October 2014 after his appointment was announced... The Sikhakhane panel concluded its report on 5 November 2014. The notion of a ‘rogue unit’ in the scope of the panel’s report was introduced by the panel itself, sometime later in October 2014. The Sikhakhane panel states this in their report. Their paragraph 57 states in no uncertain terms: ‘...it must be stated that the existence of such a unit in any form was not specifically part of the terms of reference. However, the terms of reference extend, in our view, to the consideration of the existence and operations of a covert unit, to the extent that had we not considered such issues once they became apparent, we would have failed in our obligation to fully respond to our mandate’”. If you then go to paragraph 83.6, “The Sikhakhane panel’s paragraph 57 also admits that by the time the panel had decided to extend its mandate to include allegations of the ‘unit’, they had already interviewed SARS officials and therefore did not hear them on any of these allegations. The report states that ‘By this time, we had already interviewed some SARS officials, including Mr van Loggerenberg’”. “Therefore, contrary to what some would want the public to believe, the Sikhakhane panel was not instituted by me to investigate allegations of a ‘rogue unit’ or any SARS Unit and clearly, by their own account, the members of the panel took this upon themselves on a date around 12 October 2014 without hearing multiple persons on these allegations, without informing me and in particular, not hearing Messrs Johann van Loggerenberg, Andries Janse van Rensburg or Peter Richer”. “Not only do I take issue with the factually flawed and contradictory nature of the content of the Sikhakhane panel report as set out in my critique, but also with what the report ignores and omits. In this regard: Here I am specifically referring to the serious criminality and the motives of those behind the allegations against SARS and its officials. I also specifically refer to the obligation which rested on the panel to report evidence placed before it in terms of section 34 of the Prevention and Combating of Corrupt Activities Act 12 of 2004 as amended and the failure to do so being a criminal offence. In addition, despite what some would want the public to believe, the Sikhakhane panel made no adverse findings against me or Mr Richer. This was confirmed publicly by the instructing attorney of the panel, Mr Imraan Mohamed, who stated that the panel had made ‘no findings against Pillay or Richer’. He stated that ‘No such findings were made against any third party. So no findings were made against the deputy commissioner Mr Ivan Pillay or Mr Richer’”. “The Sikhakhane panel report is profoundly flawed in fact and law. I have already provided the Public Protector with my critique, but this has not been reflected on in the notice”. “I wish to quote two paragraphs from my critique: Based on the procedural, substantive and general deficiencies in the report as detailed above, I am of the view that the report poses a significant and unwarranted risk for SARS if the report were to be published in its present form. The report also has the potential to tarnish, not only the reputation of SARS, but also the reputation of those who are implicated by the unfounded opinions and recommendations of the report... In light of the above, I recommend that the report, together with this response and all other relevant material be referred to a retired judge from the Supreme Court of Appeal. Every party that is affected by the issues in the report should be allowed to make representations to the judge. The judge would then make factual findings available to the Commissioner so that he can decide on the best course forward”... “I am aware that the Sikhakhane panel report was challenged by Mr van Loggerenberg, both to SARS and the so-called Kroon Advisory Board, parts of such which had been published in the public domain and which the Public Protector has had no regard to in this notice” “Having regard to what is stated in support of its ‘findings’ and ‘recommendations’, it is clear that the report is materially flawed in fact and law”. “Any reliance by the Public Protector for any purpose on the Sikhakhane panel report is irrational and ill-placed. This is especially so in circumstances where it has been challenged and rebutted formally by several persons, including me, and in as much as these challenges have not been considered and reflected in the notice”. “This is further compounded by the fact that the very complainant who led to the original allegations that caused the institution of the Sikhakhane panel, Ms Walter, has pointed out significant and fatal flaws in the Sikhakhane panel report under oath before the High Court as pointed out by Mr van Loggerenberg”. And then it goes to the KPMG report that I'm coming back to. Go to paragraph 97.4... “What is contained in the notice is, one again, a manifestation of these ever-changing allegations. By way of example...”, and then you go to 97.4: “the allegation again changed, with the introduction of the vague and unexplained ‘finding’ by the Sikhakhane panel, that the unit was unlawfully established. The Sikhakhane panel paid scant regard to the unit’s activities over the seven years of its existence to inform this view. To the limited extent that the Sikhakhane panel did reflect on the work of the unit, it said the following: Negotiations were commenced between SARS and NIA but did not progress to a point where the plan became a reality. As fate would have it, when the negotiations failed SARS had already started gathering the required personnel experienced in intelligence work and had already started conducting limited intelligence work against organised crime. It is generally accepted that the unit never progressed to conduct anything more than the limited intelligence it did when it started. This limited intelligence work entailed desk-top research and physical surveillance and tracking (following), with the use of borrowed vehicle tracking devices in two or three cases in its entire life-span. It is also generally accepted that the efforts of this intelligence team had impressive returns against organised crime throughout most of its existence. Through its work, the unit has been able to contribute immensely to the creation of the best revenue service in the continent and one of the best in the world. Notably, all of those we interviewed, who knew about the NRG/HRIU and/or who were part of it remained adamant that the unit did not have the capacity to intercept communication. In fact, all the unit’s operatives, both in respect of the old NRG and the new HRIU, either asserted that the unit did not have equipment to carry-out electronic surveillance and/or interception of communication or were uncertain about whether such surveillance and/or interception of communication had occurred or not. However, as a general rule, it was accepted that the unit did not have the required equipment to carry out such electronic surveillance or interceptions”. “Ms Walters makes various allegations of other confidential taxpayer information having been disclosed to her by Mr van Loggerenberg which is expressly disputed by Mr van Loggerenberg. The same applies in relation to alleged interceptions made by SARS”. “Although he was indeed intimately involved in the functioning and later management of the NRG, there is no direct evidence linking him to any illegal interception of conversations of Ms Walter or any other taxpayer”. And then go to paragraph 141, he says, “The allegations contained in the Sikhakhane panel report as quoted are emphatically denied. The Sikhakhane panel proffered no substantiation, rationale or evidence whatsoever in support of these allegations. To the contrary, where evidence was provided to the Sikhakhane panel of serious efforts by members of other government agencies (including those tasked with investigating organised crime and collection of intelligence) to undermine SARS, its work and its officials, this was ignored and not reflected in their report”. Paragraph 142, he says “It is noted that the Sikhakhane panel report made such a recommendation”, and this was for a further investigation to be conducted. Mr Pillay says, “It is denied however that this recommendation was ever seen through. In fact, the Inspector General of Intelligence has no jurisdiction over SARS in law. I have dealt with the purported report of the Inspector General of Intelligence and SARS-related responses thereto. I have also already dealt with the fact that the SARS Unit’s existence has never been denied by SARS. The facts of the matter are simple enough and public knowledge”. And then... so he’s put in an extensive submission in respect to the section 7(9) notice. The report then comes out and the Committee is familiar with parts of the report.

I want to now go to the affidavits that have been filed in the litigation. Tshepo, if you can go back to the note, evidence from the different reports. And what we’ve done is similar to what I did last week, is a table reflecting the allegations... So what we have as a start is Mr Gordhan brings an application, which he does in part A and part B. Part A being to interdict the report and part B to have it reviewed and set aside, and he files a founding affidavit. The Public Protector then files an answer and Minister Gordhan then files a reply. Mr Pillay comes in as an intervening party and he files and affidavit, to support effectively the relief sought by Minister Gordhan. And the Public Protector then files an answer to Mr Pillay. And so, in the first part this only deals with the issues relating to Sikhakhane report and the averments in contrast. Very similar to what we did last week, where I took out the allegations relating to the IGI report so one could see what was before the court and what had been alleged. And so, Minister Gordhan states that “The Public Protector relies heavily on the discredited report by the Sikhakhane panel in reaching her findings”. The Public Protector merely “lists this issue as one of the allegations made by the applicant. No response to the relevant paragraphs of the founding affidavit”. And she states that she will for purposes of the interdict confine her response to the allegations appearing from paragraph 158 of the applicant's founding affidavit. And in the replying affidavit, the Minister says, “In addition, the main ‘source’ relied on for the Public Protector’s finding and the EFF’s case is the now hopelessly and irredeemably tainted and can only be rejected: The discredited Sikhakhane panel reached an incorrect legal conclusion when it found the establishment of the SARS investigative unit contravened section 3 of the National Strategic Intelligence Act 39 of 1994”. Mr Pillay’s affidavit, which comes later says, “I wish to make it clear at the outset that I do not oppose the relief sought by Minister Gordhan in either Part A or Part B of the application. Indeed, I fully support the relief sought by him”. The Public Protector says, “I have addressed the allegations made in the Applicant’s affidavit which are largely repeated in the Eighth Respondent’s (‘Mr Pillay’) affidavit. When I deal with Part B of the application, which relates to the prayer for the review and setting aside of my report, I intend to deal with the allegations in Mr Pillay’s affidavit that relates to the review application”, and she’s rather going to deal with part A. So that’s the landscape against which the Public Protector’s initial answering affidavit must be considered. So only dealing with the interim interdict. So I preface that, because whilst there are certain allegations which are not answered for part A, the Public Protector makes it very clear that she’s going to deal with it in part B. So one cannot take the view that the allegation is made undisputed... The Minister says, “The Sikhakhane panel rendered a report to Mr Moyane... that misapplied the law and erroneously concluded that the SARS investigative unit was unlawfully established”. And again, Mr Pillay associates himself with the relief. “Mr Moyane used the Sikhakhane report to remove several SARS officials and reorganise SARS, thereby gutting its enforcement capability and undermining its ability to ensure tax compliance by prominent political and underworld figures. This action on the basis of the Sikhakhane panel’s report enabled, in large part, the recent capture of SARS, as detailed by...the Nugent Commission. In its interim and final reports”. And then Mr Pillay says “Minister Gordhan has annexed to his founding affidavit, and had made various references to, two affidavits that I submitted to the Public Protector in the course of her investigation” - and those are the two affidavits which I’ve just taken the Committee through. So that’s before the court. And then Mr Pillay says “I set out in considerable detail in these two affidavits the facts and evidence at my disposal that are relevant first, to the Public Protector’s investigation (to the extent that she revealed the extent of her investigation to me in her subpoena; and second, contained in her section 7(9) notice to me”. And then it says, “The Public Protector seems to parrot the conclusion of the Sikhakhane report that the establishment of the SARS investigative unit had contravened section 3 of the NSI Act which, it said, ‘prohibits the conducting of covert intelligence gathering by structures other than that the National Defence Force, the SAPS or the State Security Agency”. Pillay merely confirmed the contents of his affidavit... These affidavits don’t necessarily run parallel. I'm just for ease of convenience dealing with it, but they don’t necessarily correspond in paragraph numbers. Mr Gordhan says that he was advised that the conclusions were clearly wrong in law, that the establishment of the SARS investigative unit did not contravene section 3 of the NSI Act. Its activities were not subject to the provisions of section 3 at all. Mr Pillay complains about the fact that the Public Protector sought to rely on selective extracts of the discredited and contested so-called Sikhakhane panel report, which had been addressed in his affidavit dated 18 June 2019; and he points out that “paragraph 75.3 of the Sikhakhane panel report details the nature and extent of the ‘limited intelligence work’ that was carried out. Paragraph 82 then states that as a general rule, it was accepted that the unit did not have the required equipment to carry out such electronic surveillance or interceptions. The Public Protector simply ignores these inconvenient parts of the report”. Mr Gordhan simply complains about the reliance on the Sikhakhane report, and then he refers to the Nugent Commission report and he quotes the one paragraph that has been referred to the Committee now more than one occasion, in respect of the Sikhakhane panel report. And I've read it out to you earlier; I’m not going to do it again. And, “the Public Protector ignores this finding of the Nugent Commission and instead clings tenaciously to the discredited conclusion reached by the Sikhakhane panel”. There is then a further affidavit dealing with part B, which is not dealt with by the Public Protector at all, when it comes to what the Public Protector deals with. And in this regard the... Sorry, my apologies, I'm saying this incorrectly. The reference above is the date on which the Pillay intervention application affidavit was filed, 1 August 2019. Now we come to part B, that is the part in which by then the Public Protector is now answering the substantive allegations dealing with the review application and the allegations which are related to the allegations found in Gordhan’s founding affidavit to do that. And so, in that regard... by the time the Public Protector answers these allegations, we have already had the judgment in respect of part A, and Potterill J has reached certain conclusions in that judgment. And so part of what the Public Protector answers in the answering affidavit also addresses what Potterill J had concluded in her judgment in that regard. So the PP says, “The High Court misdirected itself when it ruled that the ‘Public Protector relied on the Sikhakhane panel’s finding that the SARS investigative unit was unlawful because it contravened section 3 of the... NSI Act prior to its amendment in 2013... Mr Gordhan submits that this section was not contravened because it applied only to those departments of state that were by law required to perform functions ‘with regard to the security of the Republic or the combatting of any threat to the security of the Republic'. SARS was clearly not such a department. Furthermore section 3(1) did not ‘prohibit all covert intelligence gathering, only covert... departmental intelligence’. ‘Departmental intelligence’ is defined in the NSI Act as: ‘intelligence about any threat or potential threat to the national security and stability of the Republic’”. She then explains, “I found that the ‘establishment of the SARS’ unit ‘was in breach of section 209 of the Constitution in terms of which only the President may establish such covert information gathering unit’”. And then she quotes section 209 of the Constitution and submits that SARS was not an intelligence service and the definition of ‘intelligence’ in the Act is in fact: ‘for purposes of informing any government decision or policy-making process carried out in order to protect or advance the national security’. “SARS is thus not affected by section 209 as its application is confined to the establishment of intelligence services dedicated to the protection of national security”. That's effectively the argument that was made there. And then, the allegations that is made by Mr Gordhan... and I'm going to take it from 85 to 96, and then come back up to see what the Public Protector says in respect of those allegations. So Mr Gordhan says, “The Public Protector relies heavily on the discredited report by the Sikhakhane panel in reaching her erroneous findings”. He then says that they rendered this report to Mr Moyane – and we’ve dealt with that. “Mr Moyane used the Sikhakhane report to remove several SARS officials” - we’ve dealt with that. And he pointed out to the Nugent Commission thing. And then it says “The Public Protector seems to parrot the conclusions of the Sikhakhane report that the establishment of the SARS investigative unit had contravened section 3 of the NSI Act which it said ‘prohibits’ the conducting of covert intelligence gathering by structures other than the National Defence Force, the SAPS or the State Security Agency”. And then “I am, however, advised by my legal representations that this conclusion was clearly wrong in law. The establishment of the SARS investigative unit did not contravene section 3 of the NSI Act... Therefore, the Public Protector’s reliance on the discredited and erroneous Sikhakhane panel’s report in reaching any finding or imposing any remedial action is wholly misplaced and erroneous”. Now let’s see what the response was to those allegations - “Mr Gordhan’s views are not necessarily shared by many lawyers. I was entitled to have regards to the many legal opinions expressed by different lawyers that she could access... It is denied, as will be shown, at the hearing of this matter, that the Nugent Commission did not make an authoritative finding on the issue. At best it was non-committal even if it expressed some doubt. Further legal submissions will be made at the hearing of this matter; Mr Gordhan has never sought to review and set aside the Sikhakhane panel report – so it is not clear on what legal basis he concludes that this report by an eminent senior counsel should be discarded as ‘discredited’. The fact that some people or even Mr Gordhan differ with Sikhakhane SC does not make the report ‘discredited’”. Go down... go to paragraph 101. “These allegations were similarly found to be baseless in the final report of the Nugent Commission, dated 11 December 2018...”, and then it reads the other paragraph from the Nugent Commission report, to which I had referred you to. And the PP responds by saying, “The Nugent Commission simply offered no legal analysis of the legal issues that Sikhakhane panel dealt with. Of interest is its view that it is relevant for its view on the legal position that Advocate Sikhakhane SC did not respond to it to offer support to the position in his report. The Nugent Commission does not commit itself to a legal analysis that helps to appreciate the doubts it has on the conclusions of the Sikhakhane panel report... In any event, I am not bound by the findings of the Nugent Commission or recanted position of Judge Kroon”. Go down... in 102, it simply says “the Public Protector ignores this finding of the Nugent Commission and instead clings tenaciously to the discredited conclusion reached by the Sikhakhane panel”. Minister Gordhan, after the Rule 53 record, he files a supplementary founding affidavit. And then there’s a response from the Public Protector to that. And he sets out the list of peoples and bodies that have investigated the same issues.

And I think we would need to go to page 929 of the document, the PDF document... So then in the affidavit before court there’s the investigation... “During the investigation, the Public Protector was made aware that Mr Keletso Manyike, a former SARS employee, had filed a complaint against SARS to the Public Protector in February 2012. His complaint related to, amongst others, the existence, recruitment of members and operations...”. And then it says that Mr Pillay had provided a comprehensive response – I had taken you to that earlier on... “In paragraph 123 of his affidavit in response to the section 7(9) notice issued to him, Mr Pillay attests that upon receipt of his response, the former Public Protector ‘informed SARS that she would consider the response and she would revert should the need arise. There was no further communication from the Public Protector in this regard’... Then he deals with it. And then he says in paragraph 27.4 “The establishment of the unit has been investigated from 16 May 2015 to date by both the National Prosecuting Authority and the Directorate: Priority Crimes Investigation. Despite the lengthy investigation and considerable expenditure of state resources, no one has to date been charged for the establishment of the unit... This must be reviewed in conjunction with the recanted findings of both the Kroon Advisory Panel and the KPMG report... Both bodies have renounced their initial statements that the unit was unlawful and have publicly apologised to those affected”. And then they say, “It is evident that these facts, were ignored by the Public Protector since they do not appear in the record, and that her entire legal reasoning is based on the opinion of the Sikhakhane Panel on the lawfulness of the establishment of the SARS investigative unit, which is widely considered to be incorrect”.

Then go back to the document that we were on... It stated that “The allegations that the Public Protector relied entirely on the opinion of Sikhakhane Panel is not borne out by the facts. The Report of the Public Protector had regards to a number of opinions including those of Mr Gordhan who sought to persuade the Public Protector that there was nothing wrong with establishing a spying unit within SARS. The Public Protector found the Sikhakhane Panel opinion persuasive but exercised her independent views on the true legal position. The narrative that the Sikhakhane Panel Report is widely considered to be incorrect is not binding on the Public Protector. It is in any event not correct that the Sikhakhane Panel Report is widely considered to be incorrect. Mr Gordhan and those implicated in the Report of the Public Protector do not like the conclusion of the Sikhakhane Panel report. The fact that they do not like the conclusions of the Sikhakhane Panel Report does not make it widely regarded as incorrect”. Go down... Further, “The Public Protector was not bound by the Nugent findings. In fact, the Nugent Commission did not make conclusive findings that the establishment of the spying unit was permitted by law. The evidence of Judge Kroon was not binding on the Public Protector and given his flip-flopping attitude to the issue, the Public Protector was correct to place no reliance on Judge Kroon”. “There is no evidence to support the allegation that the Public Protector did not consider legal opinions and unnamed forensic reports. The Report lists the documents that the Public Protector considered for purposes of her investigation. The Sikhakhane Panel report made findings on the lawfulness of the spying unit within SARS that made sense. The Public Protector however exercised independent reasoning on the matter which aligned with that of Sikhakhane”. And then she basically again says that “Nugent Commission was not binding”; “Mr Gordhan does not identify the evidence in the Nugent Commission that was necessary for the Public Protector to have regards to... the Nugent Commission’s mandate is not the same as that of the Public Protector... The Nugent Commission was established by the President who determined its terms of reference. The terms of reference for the Public Protector is the Constitution while that of the Nugent Commission is the President... a Public Protector... should not be bound by the findings or evidence in the Nugent Commission”. And then it sets out its view on what the interim report is about. And then refers to what the Nugent Commission has said on the findings – which I've taken you to already. Go down... and then it deals with a comparison between the status of a leading senior counsel and a retired judge. “In any event, even the Nugent Commission was not prepared to give this spying unit a clean bill of health in so far as that related to its activities. The Nugent Commission leaves open the question whether the spying unit was involved in illegal activities. The Public Protector did not leave that question unanswered. The OIGI also made a definitive finding on the illegal activities that this spying unit was involved in”. “In the final Nugent Commission report, the issue of the lawfulness of this spying unit was not definitively settled by a careful analysis of the law and the Constitution. On the lawfulness of the spying unit, the Nugent Commission said the following remarks...” - and it then deals with paragraph nine, which I had read earlier. “This view does not definitively answer the question of whether SARS was entitled to establish the spying unit in question. No effort is made by the Nugent Commission to analyse any provisions of the law including the Constitution and the National Strategic Intelligence Act to reach a definitive finding on whether SARS is entitled to establish a spying unit. The Nugent Commission’s opinion was not definitive on the question”. Its comment was simply what it had stated, that there was nothing in the report to persuade it, why the Sikhakhane report was not good. Go down... “There’s nothing in this paragraph that helps to understanding the Nugent Commission’s reasoning for disagreeing with Adv Sikhakhane. He makes no reference to the content of the panel’s finding and opinion and how it reasoned its way to its conclusions on the lawfulness of the spying unit”. “There is nothing but unsubstantiated views of the Nugent Commission that could assist an independent assessment of the true legal position relating to the establishment of the spying unit in its recommendations on the establishment of a unit within SARS with the capacity to investigate illicit trades, the Nugent Commission makes it clear that such unit would have to be established ‘under proper governance’. More importantly, the Nugent Commission made no recommendation to re-establish the spying unit which the OIGI had found to have been established illegally. He makes no recommendation, with reference to the law, how that unit should be re-established and leaves it a broad recommendation”. “The allegation that the Public Protector could have learnt something useful for her analysis of the law from the Nugent Commission report is belied by the contents of the Report itself. It provides no analysis of the law that could have assisted the Public Protector’s constitutional work”. It then repeats the allegations in respect of the Nugent Commission. And it goes further and says, “The Public Protector and the OIGI did not. As statutory body involved in investigating the activities of intelligence organisations, the OIGI’s report must be believed than the Nugent Commission. The Public Protector was entitled to believe and rely on the findings made by the appropriate body with a constitutional mandate to oversee the work of intelligence agencies as set out in the report of the OIGI”.

Mr Pillay then, in his founding affidavit submitted that the Sikhakhane Panel report is “fatally flawed”. And he then refers to a number of documents which sets this out. And those allegations are not dealt with from that paragraph onwards in the report – in the Public Protector’s affidavit. So these allegations in Mr Pillay’s founding affidavit are not disputed in any answering papers. Go on... and he deals with allegations about the Kroon apology paragraph in the Nugent enquiry. Go down... he says it again. And he makes the point on affidavit that “The Kroon Advisory Board then concluded that it was indeed wrong to have concluded this. I informed the Public Protector that these facts can be determined from retired judge Kroon and the members of the board directly”. He then referred to the public records that existed that set out in detail the legality of the unit. He then deals with the Sikhakhane panel’s paragraph that explains how they expanded their mandate... and had not interviewed Mr van Loggerenberg – we've dealt with that. Mr Pillay confirms again that he didn't institute the Sikhakhane panel to investigate a ‘rogue unit’, and that multiple persons had not been given a hearing. Go down... then he says, “Not only do I take issue with this factually flawed and contradictory nature of the content of the Sikhakhane panel report as set out in my critique, but also with what the report ignores and omits. In this regard...”, and then he sets out what I've already read to you as having been contained in his previous affidavit, that which had been ignored... allegations, vis a vis PRECCA, what the attorney had said... And he says that his critique was not dealt with by the Public Protector. And then he points out that the report had been challenged by Mr van Loggerenberg in the public domain, and that the Public Protector had no regard to it in the notice. He then makes certain allegations that it’s irrational and ill-placed. And he repeats his allegations, that “Ms Walter had pointed out significant and fatal flaws in the Sikhakhane panel report under oath before the High Court...” in another matter. And that “The allegation again changed, with the introduction of the vague and unexplained ‘finding’ by the Sikhakhane panel that the unit was unlawfully established”; and that “The Sikhakhane panel paid scant regard to the unit’s activities...”. He then quotes what he had previously stated about the abort negotiations with the NIA. And then he points out to what the Sikhakhane panel said in respect of that... we’ve already dealt with that... And “The Public Protector seeks also to rely in selective extracts of the discredited and contested so-called ‘Sikhakhane panel report’ which I had already addressed in my affidavit...”. And then he points out that during September 2014, Mr van Loggerenberg “placed the Sikhakhane panel in possession of direct allegations and evidence in support of threats to SARS, demonstrating various attacks on SARS as an institution and undermining of its officials. This was never mentioned in the report. Johann van Loggerenberg was never afforded a hearing by Sikhakhane panel or right of reply despite a request to do so”. And we know that before the Public Protector, Mr van Loggerenberg also was not consulted. Chair, it’s one o’clock. Should we... it’s a convenient place to stop, and then I will deal with what the court judgment says about the Sikhakhane report against the background of the evidence.

Chairperson: Thank you. Thank you, Adv Bawa. Yes, we will pause for lunch and take 45 minutes for lunch. We'll be back after 45 minutes, quarter to two. Thank you.

[Lunch break]

Chairperson: We’re going to proceed with Adv Bawa. Over to you.

Adv Bawa: Thank you, Chair. I want to go to the judgment... paragraph 89, right. And it basically says, “In the executive summary of the Report, it is recorded that Minister Gordhan, during his tenure as the former Commissioner of SARS, established an intelligence unit in violation of South African prescripts. Reliance for this conclusion is specifically made with reference to the fact that the ‘intelligence unit was confirmed by a SARS investigation report compiled by Advocate Sikhakhane’”. “The panel in the Sikhakhane investigation concluded that the unit was established unlawfully primarily on the basis that it was in breach of section 3 of the NSI Act”. And then what the court does is... there is an amendment to the Act, and it looks at the provision that would have been applicable at the time prior to the amendment. So in other words, at the time when the unit was alleged to have been established. And it basically says, “If any law expressly or by implication requires any department of State, other than the NIA or SASS, to perform any function with regard to the security of the Republic or the combatting of any threat to the security of the Republic, such law shall be deemed to empower such department to gather departmental intelligence, and to evaluate, correlate and interpret such intelligence for the purpose of discharging such function: provided that such department of State... shall not gather departmental intelligence within the Republic in a covert manner”. And the court in interpreting the law... and this is one of the areas in which we will argue the courts judgments are in binding, is when they interpret the laws. “From a reading of this section, we are not persuaded that the unit contravened the provisions of the NSI Act for the following reasons: Firstly, section 3(1) did not impose a general prohibition on the gathering of intelligence. The prohibition only applied to those departments of the State that were required by law to perform functions ‘with regard to the security of the Republic or the combatting of any threat to the security of the Republic’. SARS was not such a department and was not required by law to perform any functions with regard to state security. SARS was therefore not subject to the prohibition in section 3(1). Secondly, section 3(1) did not prohibit all covert intelligence gathering. It only prohibited the gathering of ‘departmental intelligence’ in a covert manner. ‘Departmental intelligence’ is defined in section 1 of the NSI Act as ‘intelligence about any threat or potential threat to the national security and stability of the Republic’. The unit housed in SARS was never engaged in the gathering of intelligence of this kind and its activities fell well beyond the scope of the prohibition contained in section 3(1) of the NSI because it was not in the business of gathering intelligence about threats or potential threats to the national security and stability of the Republic”. “The findings identified in the Sikhakhane report and the panel’s interpretation of section 3(1) of the NSI Act has since its publication been widely repudiated. Judge Nugent, who chaired the Commission of Enquiry into Tax Administration and Governance by SARS (‘the Nugent Commission’) in 2018 criticised the view of the Sikhakhane report (namely that the unit was considered to be unlawful) …". And then the same paragraphs of the Nugent report is there, and specifically paragraph nine which we looked at earlier. Judge Nugent sets out why, “While the National Strategic Intelligence Act prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state, which hardly applies to intelligence relevant to collecting tax...”. So Judge Nugent is on all fours with what the full bench is now saying. “In this regard Judge Nugent referred to the legal opinion furnished by Adv Trengove SC and Adv Nxumalo on 1 September 2015 to the former Commissioner of SARS...”, and then the same list of items which I referred earlier is set out in paragraph 93... “Judge Nugent, with reference to the legal opinion and to the Sikhakhane report, as well as the SARS Advisory Report chaired by Judge Kroon, concluded as follows regarding the lawfulness of the establishment of the unit...”. And then it quotes what he said in paragraph 11. “The Public Protector inexplicably ignored the report of the Nugent Commission in reaching her conclusions. The Public Protector similarly ignored the apology and retraction of the adoption of the Sikhakhane’s panel’s finding by the SARS Advisory Board headed by retired Judge Frank Kroon (and also referred to by Justice Nugent in the excerpt quoted above)”. And then it refers to a court judgment, where the court was likewise critical of the view adopted by the Sikhakhane report, with reference to the Nugent Commission. Quoting further from the Nugent Commission report, saying that there was “an onslaught upon those who managed SARS founded upon allegations once peddled by the Sunday Times to a beguiled public...”, and it quotes paragraph 28, which we’ve already gone to. And then it said, “The Sikhakhane report had dire consequences not only for existing activities at SARS, but also for those officials implicated by the report. Following this report, Mr Moyane (the then Commissioner of SARS) removed several SARS officials from their positions. On behalf of Minister Gordhan it was submitted that the report had the effect of ‘gutting’ SARS’ enforcement capabilities and that it undermined SARS’ capabilities to ensure tax compliance by prominent politicians and underworld figures and thus had the result of enabling, in a large part, the capture of SARS”. “It is clear from a careful reading of the Sikhakhane report that the authors deviated from their terms of reference and made ‘factual’ findings about allegations concerning the so-called “rogue unit” without affording any opportunity to those implicated in the report. The Sikhakhane report also relied upon and entertained allegations made by the Sunday Times newspaper which the Sunday Times later repudiated, admitting that it had reported fake news. The Sunday Times newspaper subsequently apologised to those that it had baselessly pilloried and defamed, including Minister Gordhan and Mr Pillay”. “There is no indication from the Report that the Public Protector considered the public apology published in the Sunday Times regarding its role in postulating what became the ‘rogue unit’ narrative. In fact, the Public Protector during a public interview on 31 January 2019, with Adv Jay Govender of the OIGI, referred to the unit as the ‘rogue unit’ and as a ‘monster’. She also publicly expressed her desire to ‘defeat the monster’. These comments, unfortunately, do little to allay the applicants’ allegation that the Public Protector is biased or at least subject to a reasonable perception of bias. We come back to this issue later in the judgment”. And so, those are the parts of the judgment... And then go to paragraph 100, which deals with the ACT. “The Public Protector’s stubborn reliance on an erroneous interpretation of section 3(1) of the NSI Act is not explained in the Report. She also does not engage with any of the legal arguments that are contrary to those expressed in the complaints and her own. At the very least, it was expected that the Public Protected would critically engage with views contrary to hers instead of simply repeating the conclusions reached in the Sikhakhane report in respect of the lawfulness of the unit”. “But, in addition to the fact that the Sikhakhane report has been widely discredited, we can likewise find no factual or legal basis upon which it can be concluded that the establishment of the unit was unlawful. In as far as the Public Protector has placed any reliance on a contravention of section 3(1) of the NSI Act in arriving at a finding that the unit was unlawfully established, her conclusions are clearly wrong in law and therefore irrational and unlawful”.” The Public Protector also concluded that the unit was established in violation of the NSI Act because it was set up without the involvement of the NIA. This conclusion is equally wrong in law. The NIA was not legally required to be involved in the establishment of the unit. The Public Protector’s conclusion in respect of the apparent lack of involvement of the NIA in the establishment of the unit is therefore wrong in law, irrational and unlawful”. “The Public Protector in addition argues in the Report that the establishment of the unit ‘is improper and in violation of section 209 of the Constitution and therefore amounts to maladministration as envisaged in section 182(1) of the Constitution and abuse of power as envisaged in section 6 (4)(ii) of the Public Protector Act’”. The court found that the interpretation of section 209 of the Constitution “is wrong in law and does not constitute a legal basis for her conclusion. On a plain reading of section 209 it is clear that this section does not deal with the establishment of “covert information gathering units” at all. Section 209(1) reads as follows: ‘Any intelligence service, other than any intelligence division of the defence force or police service, may be established only by the President, as head of the national executive, and only in terms of national legislation’”. The court said, “This section regulates the establishment of ‘intelligence services’ and is confined to the establishment of intelligence services dedicated to the protection of national security. It was, as already pointed out, never the aim of the unit to protect national security. The unit, in any event, was never an ‘intelligence service’ in the first place: The focus of the unit was to investigate tax evasion, illicit trade and organised crime with tax implications”. “The Public Protector’s finding that Minister Gordhan has acted improperly and in violation of section 209 of the Constitution and that his conduct consequently amounted to maladministration in terms of section 182(1) of the Constitution and an abuse of power in terms of section 6(4)(ii) of the Public Protector Act is therefore not only wrong in law but irrational and falls to be reviewed and set aside” ... Tshepo, just go back up to the quotation of the Act... the NSI Act, the 2013 Act. And so, the reason I'm taking you back to the Act, because it shows in the Act where the issue of national security comes about. And you see the Act very clearly says “If any law expressly or by implication requires any department of State, other than the NIA or SASS, to perform any function with regard to the security of the Republic...” - and so, that’s where the court's interpretation come into, that it’s involved with national security. If we then go to paragraph 205, “The Public Protector’s flawed reasoning goes even further. The Public Protector starts off on the premise that the unit was engaged in illegal intelligence gathering, namely spying, wire-tapping and generally doing the things that only an intelligence service such as the NIA/SSA was lawfully entitled to do. She finds that the unit was illegal from the outset by adopting the legally flawed finding of the Sikhakhane panel. Because the unit was illegally conceived (the Sikhakhane panel said so), it must have procured and used illegal, clandestine equipment in the course of its illegal activities. But even the Sikhakhane report did not find ‘equipment’ for wiretapping and interception. At paragraph 82 of this report it was found that: ‘However, as a general rule, it was accepted that the unit did not have the required equipment to carry out such electronic surveillance or interceptions’”. The go to 215, “The Public Protector dismisses the denial of Minister Gordhan on the basis that it is ‘improbable’...” - improbable that he could not have known about an illegal unit, “and relies on the Sikhakhane report and the Gene Ravele report that confirmed the participation of Minister Gordhan in the recruitment of employees”. “Apart from the fact, as already pointed out, that any reliance on the discredited Sikhakhane report is irrational, the Public Protector on the one hand relies on Mr Ravele’s evidence when it supports her findings on the employment issue, but on the 76 other hand states that his evidence before the Nugent Commission in relation to the lawfulness of the unit, which does not support her findings, was irrelevant and not binding on her. This is a clear example of the Public Protector fallacious approach to the evidence and is indicative of the mindset with which she approached the investigation”. Go to paragraph 290 – let me just read it, it’s a quick paragraph. One of the conclusions that the court reaches and takes into account and it contributes... in respect of its conclusion that the Public Protector could only have come to such conclusions, because she was biased, is the “reliance on the discredited KPMG report despite it having been disavowed and the Sikhakhane report despite it having been widely discredited. She also failed to engage with the findings made in the Nugent report” - and that’s at number three that you see that. And there’s a list of nine items on that list of bias that we will deal with at different times to show the Committee what the affidavit say and what the court says.

We then turn to the issue of the Kroon apology... go back to the affidavit in response to the subpoena at page... it starts at 216, volume three... Sorry, go to page 234. It's the Pillay affidavit, in volume three, number four... So you see at 21.7.8, they refer to the apology which was recorded in Judge Nugent’s testimony, to which I showed you earlier. Apart from the apology that was rendered, if you go to 31.7.10 – this is Mr Pillay’s submission about a subsequent admission by the retired Judge Kroon under oath, in March 2019, “that all the members of the so-called ‘Kroon Advisory Board’ had deliberated the statement (between May to June 2015) that the ‘unit was unlawfully established’ as put forth by the so-called ‘Sikhakhane panel’. The Kroon Advisory Board then concluded that it was indeed wrong to have concluded this”. He says to the Public Protector, “These facts can be determined from retired Judge Kroon and the members of that board directly”. Now when we deal with closing argument or when we question the Public Protector, we know that the Mail & Guardian route was not followed in respect of the Gordhan investigation, because we’ve had the evidence of Ms Mvuyana in that regard. We would need to confirm that indeed this was not followed up on.

If you go to page 318, go to the next document. Go to the bookmark... click on PG 10 in volume four, you must go to 324. 90, right. You see that again in his affidavit, Mr Pillay says the same thing. He refers to the testimony of Judge Kroon, the apology is rendered by Judge Kroon. And then 90.4, he refers to what he calls “the entire board reconsidering the notion that the unit was ‘unlawfully established’”. Then if you go to PDF 517. If you go further down to 126.1.3, he first looks at the Sikhakhane report and he then goes to the KPMG part, he goes to the Kroon part - and he says it again there in doing it. And if you look at what he said at page 624. 

Go back to volume 11, PG 31, and that is the affidavit in which Minister Gordhan responds to the section 7(9) notice served on him. If you go down to paragraph 43.2, you will see that Minister Gordhan in the same way, says to the Public Protector that “A SARS Advisory Board, chaired by Judge Kroon, also initially endorsed the Sikhakhane conclusion at the time. Judge Kroon, however, recently recanted this endorsement in his evidence before the Nugent Commission. He conceded that there was no reason to contend that the unit had been unlawfully established. Judge Kroon has also apologised to the former members of the unit for the injustice done to them. I refer in this regard to the media reports of Judge Kroon’s evidence and apology”. Whilst we there, you might as well just look at the next... He too refers to the Nugent Commission in paragraph 11 of that report. And then he concludes at paragraph 44, “The Public Protector does not engage at all with any of these views which are contrary to her own. She simply ignores them and makes a contrary finding for no cognisable reason. The inference is irresistible that she is wilfully blinded by her determination to make an adverse finding regardless of verifiable facts”.

We know that if you go to 256, which would be in the Public Protectors report... paragraph 5.2.5 is the only reference to Kroon, and in doing that it is the quotation that is taken from the Nugent Commission report. And if you go further up... you will see that it is quoted from the SARS response that is handed in. So it’s not part of the evaluation of evidence, it’s part of the submissions that come from SARS. And then if you go back to the document we were on. And let’s see what the litigation had to say about the... I think it’s page 37 – the evidence from different reports... Right so we go back to the affidavits we looked at under part A. And we again see that in respect of the Kroon averments, the Public Protector... in her affidavit said that she would not be dealing with these allegations as part of part A. And we see the allegations made at paragraph 97, that the Advisory Board, chaired by Judge Kroon had “initially endorsed the legally flawed interpretation by the Sikhakhane panel”; that “Judge Kroon, however recanted this endorsement in his evidence before the Nugent Commission” and he “conceded that there was no reason to do that. So that was said before the court. And then the apology is detailed in paragraph 99. And if you go across the column, then you see in paragraph 16 Mr Pillay refers to the affidavits that he had filed in the matter in which he raised that. And if you go down, you see that he confirms truth of his affidavits in every respect, and he stands by the contentions of law set out therein and he would amplify that in due regard. So now we come to part B. And we see that in respect of 86, you see in the reply, Minister Gordhan – we have already looked at the same averments earlier on in respect of the Public Protector’s answering affidavit. In reply, Minister Gordhan says “It is unclear how she could deem it unnecessary to interview both Mr Ravele and Judge Kroon when they were two key witnesses at the Nugent Commission on this very issue”. And that’s a response. If you go down... that was the point taken. The Public Protector simply denies that the SARS Advisory panel endorsed a legally flawed interpretation. And she expresses great concern that the judge would behave as Judge Kroon did, and the circumstances that forced him to recant are not yet known. It doesn’t appear if there was any endeavour to interview Judge Kroon in any way. If we go to paragraph 101, the Public Protector simply repeats... the averments is there, that she’s not bound by the findings of the Nugent Commission or the recanted position of Judge Kroon. When it comes to the supplementary affidavit, the point is taken, “This must be viewed in conjunction with the recanted findings of both the Kroon Advisory Panel and the KPMG report. Both bodies have renounced their initial statements that the unit was unlawful and have publicly apologised to those affected”. The Public Protector says, “To my knowledge it is only Justice Kroon who recanted. It was his view and not that of the panel. I am not aware of the panel having accepted the Kroon position on the findings of the Advisory panel”. The Minister says, “The record does not contain any evidence that the Public Protector: Took steps to interview Mr Ravele and Judge Kroon or assessed their evidence in full as given before the Nugent Commission”. And the answer is, “It is presumptuous to suggest that the Public Protector did not take steps to verify the authenticity of documents that she relied on. Mr Gordhan provides no evidence of any documents that turned out to be authentic” - I think, probably means not authentic. “His view that I should have considered newspaper articles and media commentaries and private individuals to perform my functions cannot be taken seriously”. “To the contrary the Public Protector verified the documents that she considered, accorded them the weight necessary to come to the findings and conclusions that she came to”. “There was no need to interview Mr Ravele and Judge Kroon for the purpose of deciding on the lawfulness of establishing a spying unit within SARS”. And then, I've already pointed out that in respect of the Pillay founding affidavit, the allegations that followed were not responded to. And if you go further down... “A subsequent admission by retired Judge Kroon, under oath... that all members of the so-called ‘Kroon Advisory Board’ had deliberated the statement (between May to June 2015) that the ‘unit was unlawfully established’ as put forward by the so-called Sikhakhane panel” - and that allegation is not disputed on the affidavit before the court. And then, the allegations that followed repeat very much the ones that have appeared in the previous affidavits. With respect to the apology... And you see if you go down to the bottom in 96.4, the same averment was made again, and it’s not challenged. And then at paragraph 108.5, it recorded what the board had previously done, et cetera. And if you go to the judgment, I think I've capsulated the two paragraphs... the three paragraphs of the judgment are there. This is what the court said, “The Public Protector inexplicably ignored the report of the Nugent Commission in reaching her conclusions. The Public Protector similarly ignored the apology and retraction of the adoption of the Sikhakhane’s panel’s finding by the SARS Advisory Board headed by retired Judge Frank Kroon (and also referred to by Justice Nugent in the excerpt quoted above)”. “Mr Pillay submitted that, in particular, the Sikhakhane panel (September 2014 to December 2014), the Kroon Advisory Board (2015), the KPMG process (2015), the processes conducted by Advocates Martin Brassey SC, Nadine Fourie and Mike van As and attorneys Mashiane, Moodley & Monama (2014 to 2015), as well as the multiple investigations conducted by the Hawks and NPA (since 2014 to date) as well as the OIGI report (August to October 2014), have all fallen victim to the perpetuation of the false rogue unit narrative to some extent or another. He submitted that this is particularly so because they all, as a rule, failed to hear those they pronounced upon meaningfully or at all, failed to provide any a right of reply before making ‘conclusions’ and ‘findings’ and ‘recommendations’, and cherry-picked or twisted little truths mixed with a great deal of fiction”. At 184, the court concluded, “The Public Protector had failed to reflect on material and relevant events, facts and evidence relating to the Kroon Advisory Board. Mr Pillay particularly referred to the testimony by Judge Kroon before the Nugent Commission in September 2018 which specifically impacted on the intended or provisional findings in the notice. He referred to the formal apology by Judge Kroon to Minister Pravin Gordhan in 2018 and the formal apology by Judge Kroon to various persons (current and former SARS officials and their families, including Mr Pillay) dated 19 May 2019 as issued by the Judicial Service Commission on his behalf. The Public Protector failed to consider the fact that soon after 28 April 2015, for the period May to June 2015, the entire board reconsidered the notion that the unit was unlawfully established and concluded that they should not have made this finding after all but never informed the public” – that was undisputed on the papers before the court, as I showed you earlier on. And the court concludes at 289, “We conclude that taking into account the following, a conclusion of bias is warranted: The Public Protector’s compete disregard of the Sunday Times apology and the Kroon apology”.

So we turn to the KPMG. And we go back... PG 10... I just want to go to paragraph 24 of the document... This is, again, we’re back at Mr Pillay’s affidavit in response to the subpoena... So what we’re looking at is, go to paragraph 24. This is the response to the section 7(9) notice. And in paragraph 24, you see what Mr Pillay does, is he records that for purposes of the section 7(9) notice, “The Public Protector claims to have relied on and considered the following ‘evidence’: Information and documents provided by whistle-blowers and the complainants (but the notice does not reflect on the evidentiary value, authenticity, accuracy or context of these materials); documents previously provided by SARS which are not fully identified or listed; an undated and unidentified ‘document’ as set out in paragraph 14.2.19 of the notice; an undated and undescribed document entitled ‘Gene Ravele dossier’ which I have never been provided with; an undated and undescribed ‘submission’ as set out in paragraph 14.4.27 in the notice; undescribed purported ‘evidence’ pertaining to an application to an internal position in SARS by Mr Johann van Loggerenberg on 13 January 1999 (almost 20 years ago); a Memorandum of Understanding between SARS and the National Intelligence agency dated 2002; confirmations by the Inspector General of Intelligence dated 31 January 2019 of the existence of a unit at SARS and that it was investigated by the Inspector General of Intelligence as contained in a report dated 31 October 2014 of which the Public Protector is seeking a copy (I record, in this regard, that this report has never been provided to me and I never participated in the process as an interviewee); the SARS Recruitment and Selection Policy 2007; an internal SARS email dated 16 January 2007; a SARS memorandum dated 26 August 2002; a SARS memorandum dated 7 February 2007; a SARS memorandum dated 9 February 2007; a SARS memorandum dated 12 February 2007; a ‘submission’ to then Minister of Intelligence, Mr Ronnie Kastrils, dated 9 March 2007; undescribed purported ‘evidence’ pertaining to an application to an internal position in SARS by Mr Johann van Loggerenberg on 15 June 2007 and his appointment on this date; undescribed and undated purported ‘further evidence’ dated 2008 set out in paragraph 14.5.18 of the notice; an informal SARS document which the Public Protector claims to be dated 14 May 2008 entitled ‘Rules of Play’ (I point out that the correct date of the original is in fact 11 April 2008); SARS Bid Adjudication Committee minutes dated 16 May 2008 of a procurement request by the SARS Anti-Corruption and Security division (ACAS); a 23 February 2009 procurement request by ACAS; Cabinet approval dated 15 April 2009; a SARS letter dated 8 May 2009; internal SARS transfer forms dated 23 October 2009; a 6 October 2011 procurement request by the SARS CAS division; a complaint by Mr Keletso (Bizosky) Manyike to the Public Protector dated 21 February in which he claims to have been a member of SARS’ Customs Border Control Unit (CBCU) as well as the SPU/NRG/HRUI; a 5 May 2014 procurement request by ACAS; a SARS memorandum dated 24 August 2014; a SARS response to the previous Public Protector under my hand dated 26 August 2014 (I note that the Public Protector does not refer to the reply thereto); a 25 September 2014 procurement request by ACAS; SARS Bid Adjudication Committee minutes dated 3 December 2014 of a procurement request by ACAS; the so-called ‘Sikhakhane panel report’ (I have provided the Public Protector my legal critique dated December 2014 which had not been referred to, disputed or even mentioned in the notice); a KPMG report dated 4 December 2015 which has never formally been provided to me to date; another KPMG report dated 5 December 2015 which has never been formally provided to me to date; a 12 December 2014 procurement request by ACAS...”, and then he lists further documents, interviews. And in 24.39, you see that there’s “an alleged recording between the former SARS Commissioner, Mr Tom Moyane and Mr Andries van Rensburg which is undated”, which Mr Pillay says he’s never been provided with. A recording with Mr Moyane and Messrs Helgard Lombard and Johan de Waal which is undated. An undated ‘submission’ to the Public Protector by Mr Keletso Manyike... an affidavit by Mr Magashula... an affidavit by Mr Pillay... an affidavit by Mr Gordhan... And then, Mr Pillay, says “In regards to this ‘evidence’ relied upon by the Public Protector for her findings, I reiterate what I have stated in paragraph 8 above” - which I had taken you to earlier on, about the difference between evidence and information. “The process adopted by the Public Protector which involves me having to defend myself against what may or may not emerge out of this ‘evidence’, without any opportunity whatsoever to consider, contextualise or challenge it, is the epitome of unfairness”. And I want to take you to paragraph 73 of the affidavit. This is where, again, there is mention to the KPMG South Africa and Judge Frank Kroon “who have both later effectively repudiated their ‘findings’, none have ever responded to the factual, procedural and legal flaws in their work, nor their refusal of due process and the basic principle of audi alteram partem of those they pronounced upon in order to defend their work funded by taxpayers. Many involved in these processes have remained silent in the face of legitimate questions about their roles and participation and work at the time”. And then he says, “It was, at this time, that State Capture of state institutions was in full swing”. Go to paragraph 85, “Any reliance on the so-called ‘KPMG report’ is irrational and ill-placed. This is because: It was admitted by KPMG South Africa to be a mere ‘documentary review’ which included ‘limitations’. Neither I nor anybody else implicated was afforded a hearing or right of reply. The report has been contested as profoundly flawed in fact and in law in many ways by many people in many platforms, amongst others with KPMG South Africa, SARS, and Parliament. The report contains a disclaimer of a nature that states it can neither be referred to, nor used in any dispute or controversy. Its findings, conclusions and recommendations have been formally withdrawn. KPMG’s head of Forensics, Mr Roy Waligora, has testified before Parliament and under oath before a panel instituted by the South African Institute for Chartered Accountants that the person who compiled the report was ‘lazy’ and ‘unprofessional’ and that the report was influenced by outside parties and a result of ‘copy and paste’ work. The complete fee for services rendered to SARS of an amount of R23 million was repaid to SARS, effectively repudiating the entire report. KPMG South Africa and KPMG International on their behalf have publicly apologised to South Africa, inter alia, stating ‘sorry’ and ‘we know sorry will never be enough’”. “I, amongst others, have privately received an apology from KPMG South Africa in this regard. The report has no value whatsoever”. And then he says, “Furthermore, I place the following on record in regard to the KPMG report: The KPMG report seems, for reasons unknown to me, to only reflect upon me, Messrs Richer, Yolisa Pikie, van Loggerenberg and the unit described as ‘subjects of the investigation’. For some further unknown reason, the now withdrawn ‘findings and recommendations’ also sought to drag former Finance Minister, Mr Pravin Gordhan into the fray. One version of the report, again for unknown reasons, also appears to have sought to implicate former Minister of Intelligence, Mr Ronnie Kasrils. What exactly informed the specific focus on these particular individuals, and the scope and terms of reference, are unknown to me”. “In essence, the KPMG report: contains significant and material factual errors; omits material and relevant facts; makes misrepresentations of facts; makes facile comments and statements; shoehorns information to suit the narrative of a ‘rogue unit’; conceals or omits evidence and facts of serious criminality; seeks to rely on the Kanyane and Sikhakhane panel reports, but fails to reflect on their factual inaccuracies, contradictions, omissions and flaws, instead, seeking to rely on selective aspects thereof; is unfair and untruthful and lacks integrity; uses loose language and makes flawed assumptions that are unsubstantiated and unsupported by any evidence (in some cases false and defamatory and/or wrongly attributed), in cases using sweeping phrases such as ‘it may be’, ‘could be’, ‘possibly’, ‘we understand to be’, ‘may have’, ‘there is reason to believe’ and so forth; ignored exculpatory facts and evidence; ignored publicly available facts and evidence that contradicts the content; ignored basic facts which could have easily been obtained and which are material to the topics it expressed views on; and followed a legally questionable process to compile and publish the report”. “Further: I also specifically refer to the obligation which rested on KPMG South Africa to report evidence in terms of Section 34 of the Prevention and Combating of Corrupt Activities Act and the failure to do so being a criminal offence. KPMG not only failed to adhere to this, but in my view, concealed evidence or ignored it deliberately; KPMG did not declare their patent conflicts of interest in relation to the role of Ms Belinda Walter as service provider to them, both as attorney for Steyn Kinnear Inc and later in 2013 as Belinda Walter Attorneys, not her role as secret agent for British American Tobacco, of which KPMG is the external auditor, and in as much as this was most relevant to their brief; the report ignores the basic tenets of natural justice, the fundamental right of reply before being judged and does not reflect on the views and responses of those they pronounce judgment upon; I have always maintained, and stated so in writing, that had KPMG South Africa heard me and others they pronounced upon, they would not have made the adverse comments that they did; as with the Sikhakhane panel process, I do not only take issue with the content of the report, but also with what is not contained in the report. Even at a most basic level of simple facts, the report is factually wrong and does not reflect upon material and exculpatory facts and acts of serious criminality, the disruption of state institutions and actions and the manipulation of state officials and their offices; I am astounded as to how the allegations kept on morphing over time and how these were not dealt with by KPMG. The initial allegations against the SARS Unit which commenced in the media from 12 October 2014 onwards, were that they had broken into homes, conducted ‘house infiltrations’, broken into President Zuma’s home, planted listening devices there, were involved in the deaths of former SARS officials, used ‘secret funds’ of over R560 million, ‘bought new homes and cars’, conducted lifestyle audits on prominent politicians, infiltrated politicians as bodyguards, spied on ‘top cops’ and the late former National Police Commissioner Jackie Selebi, spied on President Zuma and another at the Beverly Hills hotel in Durban, entered into dodgy settlements with taxpayers, wanted to ‘swing elections’, owned and used a so-called ‘grabber’, operated a brothel as a front, used a fundraising initiative for charities as a front, operated front companies, were deployed to ‘destroy careers of SARS officials’, purchased sophisticated spying software and used this, intercepted taxpayers’ telecommunications and emails and so forth. I find it no coincidence that the report failed to reflect on most of these allegations in any meaningful way. Instead, only a few of these allegations are briefly mentioned but not properly dealt with; loose language again is used to refer to some aspects only, but none are dealt with in the manner one would expect of a firm such as KPMG. The report introduces concepts foreign to me, such as a ‘virtual unit’ and ‘unit by association’. These are simply figments of a creative imagination; I believe it would have been reasonable to expect of KPMG, in a process which cost the taxpayer R23 million, and with such serious consequences, to act independently, fairly and with integrity, to list all of the allegations, and then reflect upon each and every one, either confirming them or disproving them or expressing some sort of definitive view on them. Those not confirmed should then have caused KPMG to reflect upon what exactly led to these being bandied about with wanton abandon in the media. It begs the question: if none of these allegations are true, who were the people behind these allegations, why did they leak it to the media, for whose benefit and to what end? The KPMG report is silent on all of this”. “I believe firmly that the language and style of both the Sikhakhane panel report and KPMG report, notably their use of loose language, sweeping allegations and unsubstantiated conclusions and comments, is not dissimilar to the language and style of the notice”. “From the notice it is further apparent that the Public Protector has failed to reflect on material and relevant events, facts and evidence relating to the so-called Kroon Advisory Board”. Go to paragraph 98, “However, when this continually changing allegation and all the others up to this point were found to hold no water, the allegation morphed yet again in an even more vague fashion by way of the ‘leaked’ KPMG report which I have already dealt with above. In the KPMG report’s now repudiated and withdrawn ‘conclusions, findings and recommendations’ the statement was made that the ‘unit was established in contravention with the rule of law’ with no legal explanation or setting out as to why this was so”. Paragraph 126.1.2, “The KPMG report... is profoundly flawed in fact and law and cannot be relied upon for any purpose. Its findings have been repudiated and withdrawn, the full fees have been repaid to SARS, the ‘findings, conclusions and recommendations’ have been withdrawn and KPMG has apologised to the country and me and others. Furthermore, its disclaimer (as contained in the leaked version) renders it useless for the purposes for which the Public Protector seeks to use it. The disclaimer states in no uncertain terms that the KPMG report: may not be provided to any third party; may not be used in draft; may not be used in part; may not be used in final; may not be used in portion thereof; cannot be relied upon for resolution of any dispute; cannot be relied upon for disposition of any dispute; cannot be disclosed in whole; cannot be disclosed in part; cannot be quoted in whole; cannot be quoted in part; cannot be referenced in whole; cannot be referenced in part; cannot be disclosed unless written approval is obtained from KPMG for purposes not described; and was not intended for the express or implied benefit of any third party”. Go to paragraph 143, Mr Pillay then reiterates, “I have already set out why the KPMG report cannot be used for any purpose or relied on...” - and then he repeats all of that. And he doesn’t say anything different, other than that’s been many platforms in which it was raised. There... and then he reiterates at 143.2. He summarises up the disclaimer; the fact that its findings, conclusions and recommendations have been withdrawn; fees have been returned. And then go to paragraph 163.2 he says, “KPMG appears to seek to impute or suggest or allege that the specific unit in question acquired and/or used sophisticated surveillance equipment. The content of the leaked draft report however provides no evidence or substantiation or support of this convention. The heading and the content of the paragraph are incongruent of each other and misleading and deceiving of the reader. It is telling that the ‘finding’ in a block on page 104 of the draft report leaked to the media, states that ‘The unit and SARS, during the period made enquiries, acquired and were offered equipment regarded as listed equipment during the period 2006 and 2014’. From paragraphs 7.11.2 to 7.11.9 on pages 105 to 108, certain equipment is listed and described. But in no instance is there any substance or supporting evidence provided in the report that proves that the unit in question acquired such equipment and used it. KPMG does not say so and does not demonstrate how the equipment was supposed to have been used by the unit. The ‘equipment’ referred to was most likely that which was acquired by the SARS ACAS which is a completely different unit. The Public Protector has not considered purchase orders, order requisitions, asset registers and proof of payment and signatories to these documents, along with a cost centre analysis and determination showing which unit in SARS paid for and controlled the equipment. These documents are easily accessible by the Public Protector”. “To the reader of the leaked KPMG report, at first glance it would seem that the unit in question acquired surveillance equipment. On closer scrutiny through, the content of the leaked draft of the KPMG report does not state so as a fact. The KPMG report deceitfully uses the terms ‘the unit’ and ‘SARS’ interchangeably which is deliberately misleading. KPMG does not state, nor does KPMG emphatically provide evidence of any kind, that the unit in question obtained and used surveillance equipment in any manner or for any purpose, let alone unlawfully or illegally so”. “The reference to and reliance by the Public Protector in the notice to the statement by KPMG that ‘the possibility cannot be excluded that the equipment and software was availed to them’ is mischievous. No evidence has been provided, either by KPMG or the Public Protector to back up this entirely speculative conjecture”. He then, with reference to certain further paragraphs says, “The matters recorded in these paragraphs relate to a completely different unit that existed at SARS and have absolutely nothing to do with the unit in question in any manner or form”. And then at 164.3, he records, “that none of the equipment in relation to any of these documents listed are capable of ‘interception of communications’. All are commercially available and commonly used by multiple government departments and corporate companies as well as private investigators, companies and journalists. The purpose was solely intended to assist the unit overseen by Mr Clifford Collings, namely the ACAS, to safeguard SARS’ property, assets, officials, records, facilitate security at ports of entry and warehouses under control of SARS and conducting anti-corruption investigations within SARS. This has absolutely nothing to do with the by then disbanded unit”.

Go back to the document that says evidence from different reports. It would be roughly page 53... So again, as we did before, we looked at the part A of the affidavit in which the allegations we contained, and the references made to the KPMG report and the withdrawal of the report. And the point is made that in the KPMG report, stated that “neither the SARS Act nor the Tax Administration Act recognised SARS as a law enforcement agency and does not vest its employees with the powers of enforcement officers”. And at paragraph 12.1.2, “the KPMG report under headings ‘Executive findings and Conclusions’ records that under the guidance of Pillay, ‘a covert and rogue intelligence unit in contravention of the rule of law was established in SARS’”. So again, the approach of the Public Protector is – I'm only dealing with the allegations relating to part A, I’m not going to be able to deal with the allegations, I’m not dealing with the allegations relating to the substance of the review in dealing with that. In the replying affidavit from Minister Gordhan, there’s no mention of KPMG. And we know that Mr Pillay’s affidavit supports the relief sought by Minister Gordhan in that regard. So we know, if you go down... there’s reference and acknowledgement from what KPMG precisely did. And Mr Pillay dealt with it in these affidavits, effectively putting out the submissions from KPMG to which we referred. And then you see in annexure PG15 – which is out of place actually, because it deals with the Kroon report. I need to put it up... is the media articles, in which it stated that the panel had revisited it and discussed it, and it was concluded that “we should not have made the statement”. If you go down further to the document, you see the KPMG retraction, “SARS report refers to legal opinions illegal conclusions as if they are the opinions of KPMG South Africa. However, providing legal advice and expressing legal opinions was outside the mandate of KPMG South Africa and outside the professional expertise of those working on the engagement. KPMG South Africa acknowledges that such opinions should have been caveated as recommendations of legal advisors are not formulated in the manner contained in the report”. And then they say, “As a result it is possible to read sections 12.1.1, 12.1.2 and 12.1.3 of the executive findings and conclusions contained in the report in a way which suggests that Minister Gordhan knew, or ought to have known, of the establishment by SARS of an intelligence unit in contravention of the rule of law that was rogue in nature. This was not the intended interpretation of the report. To be clear the evidence in the documentation provided to KPMG South Africa does not support the interpretation that Mr Pravin Gordhan knew or to have known of the rogue nature of this unit”. If we then look at what the Public Protector answered to the Gordhan founding affidavit, and you see that in answering to the three paragraphs, it says, “The prevarication of an organisation on its work would be unhelpful to anyone serious about pursuing constitutional truths. The KPMG report is irrelevant as a source of Mr Gordhan’s review application. I was not bound by the positions of the KPMG. She acted independently, impartially, with dignity and effectively”. Alright, so that’s the response to 103 to 105 in total. And then if you go to the supplementary founding affidavit... The Public Protector says the “KPMG report is irrelevant as a source of Pravin Gordhan’s review application. I was not bound by the positions of KPMG”. And then, the Minister says “The following people and bodies have investigated the same issues...” and then he points out that KPMG had renounced their initial statements that the unit was unlawful and have publicly apologised to those affected. And the PP says, “The KPMG report raises issues that must concern any self-respecting institution of government. To simply accept their recantation without more is scandalous. It is for this reason that the Public Protector was entitled to investigate the complaints about SARS especially because it appeared that there was a cover-up by forensic investigators... Millions of rand were spent by the Justice Kroon and the KPMG to conduct work relevant to the functioning of SARS. Mr Gordhan does not appear perturbed by the astronomical financial and personal resources that were deployed by government to conduct investigations in which those who did so recanted on their findings. The clearest sign that there was a cause for concern to justify the Public Protector’s decision to conduct an investigation into these allegations involving SARS is this conduct of the Kroon Advisory Panel and the KPMG. It is simply opportunistic for Mr Gordhan to rely on the renunciation of these reports as proof that the Public Protector should not have investigated the issues. One would assume that the conduct of the Kroon Advisory Panel and KPMG should not concern anyone including the Public Protector”. Further, “In any event, the Public Protector was not bound by conduct apologies of the Kroon Advisory Panel and KPMG. The Public Protector is a constitutional body with the responsibility to the South African public to investigate and report on activities of government bodies. The Kroon Advisory Panel and KPMG have no constitutional mandate at all. Their work could never be binding on the Public Protector and the suggestion that they should have is naïve and irresponsible coming as they do from a member of cabinet with special constitutional duties”. Minister Gordhan then says, “It is evident that these facts, were ignored by the Public Protector since they do not appear in the record, and that her entire legal reasoning is based on the opinion of the Sikhakhane panel on the lawfulness of the establishment of the SARS investigative unit, which is widely considered to be incorrect”. And then the answer is “The Public Protector is not bound by the findings of the Kroon Advisory Panel and the Nugent Commission. The Public Protector has irrevocable constitutional qualities, which include being independent, performing its duties impartially, and exercising powers and functions without fear, favour or prejudice”. “Just to emphasise these constitutional characteristics...” - those things are then set out again. And then with reference to the Pillay founding affidavit, these allegations were again not responded to. And if you go down, you’ll see it largely repeats what I've already drawn your attention to and read to you from these affidavits. If you go down... and you go to the judgment at the bottom that says, “Full bench”. Yeah, now we’ve dealt with those averments earlier. “The second report relied upon by the Public Protector is a report compiled by the audit firm KPMG for the erstwhile SARS Commissioner Mr Moyane. In the Report the Public Protector relies on the findings made in the KPMG particularly with reference to the unit’s operations. Reference is made in the Report to the fact that the KPMG report had found that there was clear evidence that the unit intercepted private individual communication and that members of the unit were not employed by SARS, but that they were recruited outside of SARS’ acknowledged systems and processes. Apart from the findings in respect of the activities of the unit, a key finding in the KPMG report is that Minister Gordhan knew or ought to have known, not only that the establishment by SARS of an ‘intelligence unit’ was contravention of the law, but that the unit was ‘rogue’ in nature... What the Public Protector does not record in the Report is the fact that on 16 September 2017, long before the Public Protector delivered the Report, KPMG had disavowed its own report and particularly its conclusions regarding the lawfulness of the unit. Not only did KPMG tender an apology for its governance lapses, it refunded the fees it had received for its report. KPMG had since admitted that important quality controls were not performed to the standard of the firm. KPMG also acknowledged that insofar as the report ‘refers to legal opinions and legal conclusions as if they are the opinions of KPMG South Africa’ it was ‘outside the mandate of KPMG South Africa and outside the professional expertise of those working on the engagement’”. “KPMG then conceded that: ‘... the language used in sections of the report is unclear and results in certain findings being open to more than one interpretation. As a result, it is possible to read (certain sections) contained in the report in a way which suggests that Pravin Gordhan knew, or ought to have known, of the establishment by SARS of an intelligence unit in contravention of the law that was ‘rogue’ in nature. This was not the intended interpretation of the report. To be clear, the evidence in the documentation provided to KPMG South Africa does not support the interpretation that Mr Gordhan knew, or ought to have known, of the ‘rogue’ nature of this unit’. We recognise and regret the impact this has had. KPMG South Africa had no political motivation or intent to mislead... Given the failure to appropriately apply our own risk management and quality controls, that part of the report which refers to conclusions, recommendations and legal opinions should no longer be relied upon. KPMG South Africa has contacted SARS and offered to repay the R23 million fee received for the extensive work performed”. So the court says, “The KPMG report is flawed in fact and in law and its findings and conclusions had been formally withdrawn. Any reliance by the Public Protector on the KPMG report was, under the circumstances, irrational and ill-placed"; “Mr Pillay also warned the Public Protector that any reliance on the ‘KPMG report’ would be irrational and ill-placed, because it was admitted by KPMG South Africa to be a mere ‘documentary review’ which included ‘limitations’ and had no value whatsoever. Mr Pillay contended that in addition none of the people implicated in the KPMG report were afforded a hearing or right of reply and the report has been contested as profoundly flawed in fact and in law in many ways in many platforms, amongst others by KPMG South Africa, SARS, and Parliament. Moreover, its findings, conclusions and recommendations have been formally withdrawn. Mr Pillay stated that he had even privately received an apology from KPMG South Africa in this regard”; “Mr Pillay described how the rogue narrative was perpetuated by these reports, while those affected by these reports had never seen them, were never afforded a right of reply and were ‘banned’ by former SARS Commissioner Mr Tom Moyane from defending SARS, its officials and themselves from this ‘public onslaught’. He stated that, having read the notice, he was firmly of the view that the Public Protector was merely advancing this same false rogue unit narrative and the ever-changing, continuing attempt to make something stick to the unit was malicious and capricious, and clearly intended to keep the narrative alive for ulterior purposes”; “The KPMG report appears to suggest that the specific unit in question acquired and/or used sophisticated surveillance equipment. Mr Pillay sets out in his first affidavit why the KPMG report provides no evidence or substantiation for this contention. On closer inspection of the Report, (from paragraphs 7.11.2 to 7.11.9 on pages 105 to 108 of the KPMG report), certain equipment is listed and described, but no evidence is provided that it was the unit that acquired such equipment and used it. The reference to and reliance by the Public Protector in the notice to the statement by KPMG that ‘the possibility cannot be excluded that the equipment and software was availed to them’ is mischievous”; “We conclude that taking into account the following, a conclusion of bias is warranted: The reliance on the discredited KPMG report despite it having been disavowed and the Sikhakhane report despite it having been widely discredited. She also failed to engage with the findings made in the Nugent report”. Now we know that the full bench then found against the Public Protector and there was then an application for leave to appeal, which was lodged thereafter.

And Tshepo, go to Bundle E, 8.3... So this, you’ll see from page two is that the Public Protector seeks leave to appeal to the SCA against the whole of the judgment and order handed down by the full bench on 7 December 2020, save for those portions which are favourable to the applicants, including punitive and/or personal cost order(s). And the part that’s favourable is the application to strike out where the court found in favour of the Public Protector in relation to utterances made by Mr Gordhan. If you go to page 15 of the document. And you will know that last week I took you through... I actually want to go to paragraph 30... Last week we took you through the IGI report. And I haven’t taken you through to the judgment yet, but I do want to point to you that in the application for leave to appeal, and affidavit... the point that was made to the appeal court, and the only point in relation to the IGI report is the “subsequent or ex post facto setting aside of the OIGI report is irrelevant to the present proceedings. The court a quo’s rejection of the submission that the report had not been reviewed at the time of the issuing of the Public Protectors report as ‘meritless’ is, in the circumstances, a gross misdirection. There’s no such thing as prophetic mootness. The OIGI report has only been recently set aside, at the time it was relied upon, it had not yet been set aside”. So we now know from affidavit, that the Public Protector in her... application for leave to appeal said that the IGI report at the time it was relied upon had not yet been set aside. If you into the judgment... go to the PDF, page 140, and go to paragraph seven. So the bench hears argument on the application of leave to appeal and it then writes the judgment in which it refuses leave to appeal. And this is what it has to say then, “The respondents have not met this threshold...” - and this is the threshold as the test as to whether you must be granted leave to appeal. “... Whilst it is trite that an application for leave to appeal does not provide the parties with an opportunity to re-argue the matter, it is quite apparent from the heads of argument and submissions made by the respondents’ counsel that parts of the judgment they seek to appeal against have either misinterpreted or misunderstood”. Now I’m going to take you, having covered with you in respect of when we talked about the CR17 judgment, we spoke about the findings on the Executive Ethics Code in this judgment. We also spoke about the IGI and the costs. I want to, in one go, take you through what the court said in respect of all of them. So let’s go to paragraph 11 first. “The manner in which the first responded is capable of reaching conclusions which are unsupported by the facts and the law, a fact which supports the improper motive and biasness ground of review, is demonstrated when she deals with the applicable Executive Ethics Code in relation to the Ambani meeting. It is an irrefutable fact that the Executive Members Code 2000 does not punish inadvertent mistakes. Yet the first respondent states in her heads of argument that: ‘The finding that the applicable code does not punish advertent mistakes is incorrect’. To start with, that was not the finding of this court as explained above. Yet, the first respondent perpetuates the misunderstanding by stating: ‘The applicant is cognisance of the fact that unlike the 2000 version the 2007 version of The Executive Code reads thus: Members of the executive may not wilfully or inadvertently mislead the legislature to which they are accountable’”; “The fact is that there is no 2007 version of the Executive Ethics Code and this was conceded by counsel who represented the first respondent during the hearing of this matter, Mr Masuku SC. According to Mr Masuku the first respondent had based her findings in this regard on a Ministerial Handbook. The repetition of the misunderstanding in an application for leave to appeal can only be described as astounding. It bears mentioning that the misunderstanding was the basis on which the first respondent recommended remedial action with potentially far-reaching consequences against Minister Gordhan to the President”. Go to paragraph 14, which deals with the IGI, “In considering the establishment of the SARS Unit, the first responded relied on a number of reports produced by other institutions or public officials such as the Inspector General of Intelligence (OIGI). The prevarication and ambivalence of the first respondent regarding that part of the investigation raised serious concerns by the court. She was found to have been dishonest in that she claimed on the one hand that she had not seen the OIGI report but that she had relied on it in crafting the terms of remedial action. Later she conceded that she was in fact in possession of the classified OIGI report. That report has since set aside entirely”; “The first and tenth respondents are appealing the court’s findings that the first respondent’s findings were irrational to the extent that she relied on the OIGI report. They submit that the first respondent could not have possibly foreseen that the OIGI report would subsequently be set aside. The court found, inter alia, that had the first respondent considered the OIGI report properly and applied her mind diligently as she was called upon to do, she would have established that the OIGI report was a flawed document in that it was a product of ultra vires conduct on the part of the Inspector-General of Intelligence. It is also common cause that those implicated in the OIGI report were not afforded a hearing in terms of the audi alteram partem principle, yet the tenth respondent argues that this was merely a factor to be considered by the first respondent in assessing evidence and that it could not be fatal to her own report and that it was therefore rational for the first respondent to have relied on the OIGI report”; “In considering whether the first respondent had acted rationally regarding reliance on the OIGI report, the court referred to the case of Democratic Alliance v President of the Republic of South Africa wherein the Constitutional Court held as follows: ‘The conclusion that the process must also be rational in that it must be rationally related to the achievement of the purpose for which the power is conferred, is inescapable and an inevitable consequence of the understanding that rationality review is an evaluation of the relationship between means and ends. The means for achieving the purpose for which the power was conferred must include everything that is done to achieve the purpose. Not only the decision employed to achieve the purpose, but also everything done in the process of taking that decision, constitute means towards the attainment of the purpose for which the power was conferred’”. “The facts in the OIGI report were never tested in that the affected persons were not granted the audi and reliance on those untested facts which constituted the report is irrational”. And then on costs, “The court ordered the first and second respondents to pay the costs of the applicants on the scale between attorney and client and limited her personal liability to 15% of the total costs. It was also held that the first respondent had acted in total disregard of the values enshrined in sections 181(1)(a) and 182 of the Constitution which call upon the first respondent to be impartial and to exercise her powers and perform her functions without fear, favour or prejudice. The court found that this failure on her part warranted a personal and punitive cost order. The court found that the first respondent acted with blatant dishonesty and biasness in that she ignored hard facts and evidence thereby displaying a tendency to investigate with a pre-conceived notion. The court was however mindful of the previous decisions regarding the chilling effect of the costs order on the scale appealed against but was of the view that the facts of this case warranted such an order. It is trite that each case must be judged on its own facts and that the admonition against a laissez-faire approach to such punitive cost orders ought not to put a steel armour against deserving persons where such orders are called for and are justified”. And then it refers to the SARS judgment, which was the... Constitutional Court judgment... And then it says, “The fist respondent submits that there are other compelling reasons why the appeal should be heard such as the interpretation of sections 6(9), 7(9) and 9 of the Public Protector Act. There is a pending case between the President and the Public Protector before the Constitutional Court in which section 7(9) will be considered. For each of sections 6(9) and section 9 there are no less than two decisions of the full bench of this court which have made consistent findings on what these sections mean and how they operate. There is therefore no further clarification needed in that regard from the Appellate Courts and no public interest will be served by an appeal in respect of which there is no legal uncertainty”. “In the circumstances, I am not persuaded that another court would come to a different conclusion” - and then the full bench refuses application for leave to appeal, that is upheld by the SCA there. And then there’s an application for leave to appeal to the Constitutional Court... So we know that the leave to appeal was two judges of the SCA, Wallis and Mothle, in September 2001 refused leave to appeal. Reconsideration was then sought by the Judge President Maya on 28 January 2022, who then refused such reconsideration. And then they go to the Constitutional Court. And in paragraph 36 of the application, it says that, “It is in my view of the above that I submit, with respect, that I am constitutionally mandated to conduct investigations when I am confronted with a complaint, including a complaint that exceeds the prescribed two-year period in order to establish the presence of exceptional circumstances”. So the Public Protector tells the Constitutional Court that she must investigate in order to establish the presence of exceptional circumstances. In paragraph 39 to 45, she deals with the unlawful establishment of the so-called ‘rogue unit’, and says that, “It is common cause that the unit was established within SARS during Mr Gordhan’s tenure as SARS Commissioner around February 2007 despite the fact that neither the SARS Act 34 of 1997 nor the SARS Amendment Act refer to the objectives of SARS as a covert gathering of information or establishment of an intelligence unit”. And then there’s a jump that says, that “It is in view of the above that Mr Gordhan and SARS, correctly, deemed it necessary to conclude an MOU with the NIA and to request the then Minister of Finance to provide funds specifically for a unit which would be operated by NIA because SARS ‘did not have the legislative mandate’”. And then they rely on this memorandum that “demonstrates that at the time of establishing the ‘unit’, Mr Gordhan was cognisant of the fact that SARS did not have the legislative mandate for the establishment of the aforesaid unit within SARS and therefore required the cooperation of National Intelligence Agency for that”. Reliance is then placed on section 209 of the Constitution... And then they deal with “the memorandum concluded between the NIA and SARS was because of the statutory limitations...”, and she then says, “To the knowledge...”.  Let me rather read 43 out, before I misrepresent it. Sorry, let me do that. “It is therefore apparent that the memorandum concluded between the NIA and SARS was because of the statutory limitations of SARS against establishing its own intelligence unit and capacity of the kind which was envisaged. It is in view of the above that I submit, with respect that the Public Protector was justified in conducting the investigations which revealed that Mr Gordhan established the aforesaid unit in spite of being well aware of the fact that SARS did not have the competency to carry out the intended intelligence gathering activities, which is plainly unlawful”. “To the knowledge of the respondents the remedial action I issued was duly implemented to the extent that the Intelligence Agencies and SARS arranged for the delivery of the equipment used by the so-called rogue unit back to SSA with the participation of the Public Protector”. And this Committee received a letter from Commissioner Kieswetter, in respect of that equipment, which the Committee would be familiar with the contents. “I, therefore, submit with respect that the Court a quo erred in making a finding to the effect that there was no intelligence unit established by Mr Gordhan at SARS during his term as SARS Commissioner” ... In paragraphs 46 to 48, the Public Protector says that none of these reports, except for the OIGI report, have been set aside by a court of law. “The OIGI report was only set aside long after the Public Protector had published the report which is the subject matter of this case. Even then, the merits thereof were not considered during the setting aside of the same”. “It was therefore perfectly reasonable and rational for the Public Protector, having conducted her own independent investigation, to also rely on these reports in the circumstances”. “The court a quo erred in finding that the Public Protector took consideration irrelevant considerations and relied on discredited reports”. So that’s what the court said; what you don’t find and what you may want to ask the Public Protector when she comes and gives evidence, is where on appeal did she allege to the appeal courts that the High Court erred in any factual finding which it had made in its judgment, as has been raised before this Committee. Chair, I want to take you to two further documents...

Chairperson: Can we use that and take ten minutes break while she’s checking it? Okay, we’ll take ten minutes tea break. Thank you.

[Tea break]

Adv Bawa: We want to put up a document, which is a comparison of some of the paragraphs in the KPMG and the Sikhakhane report, versus some of the paragraphs in the PP report to show the Committee some similarities. And what I propose doing is... Tshepo, just put it up on the screen, the comparison document, right. It looks like this. And what I'm going to do is the second column deals with the KPMG report and the first column is what is in the PP report. So I'm going to ask Tshepo to put up on the screen the PP report and I'm going to read from the KPMG report; and Members could then see what the similarities are between the two. So if Tshepo goes to paragraph 5.2.11 of the PP report. And I will have on my screen the document that we’ve just shown you, and I'll read from there. So this is 5.2.11 of the PP report. And I’m reading from... it's got the case lines reference to it, so I'm going to use it at page 892. The KPMG report says, “For various reasons, the intended mechanism and relationship did not materialise as intended and SARS continued with developing its own capability, cause by lack of trust and co-operation between the entities”. I'm reading from the KPMG report. So what you can see on the screen is a similar paragraph to what’s in the KPMG report. Chair, would it be easier if I put the two up on the screen together so that that can be seen? Would that be an easier exercise – because it seems a bit more difficult to do it that way?

Chairperson: Yeah, that would be better.

Adv Bawa: And if I've misrepresented the paragraph in the PP report, it could be easily...

Chairperson: Just as you’re doing that, Hon Herron, I see your hand.

Mr B Herron (GOOD): Thank you, Chair. I just want to get clarity that the document that Adv Bawa has prepared with the two columns, if that document has been shared with us or will be shared with us as well.

Chairperson: Good point. Adv Bawa, can you just quickly respond to that?

Adv Bawa: Chair, it will be shared.

Chairperson: Okay, thank you. We will share that, Hon Herron, with everybody.

Adv Bawa: In doing this exercise it will also show you my page references are correct, because this wasn't initially prepared. It was initially prepared for purposes of asking questions et cetera.

Chairperson: Okay.

Adv Bawa: So I’ve done that.

Chairperson: Thank you.

Adv Bawa: Have you split screen and then shared it? Can you do it as a horizontal split, Tshepo? Then it won't reduce in size... Chair, we not going be able to do it in that way. So let’s put up on the screen this PP report. I will indicate clearly which paragraph is on the screen and I will then read from the KPMG report.

Chairperson: It’s okay. So I get that to be a difficulty here on the screen, but as you share the document to everybody, will it be able to be done in that way?

Adv Bawa: Will you prefer me sharing the document that’s got both versions on it?

Chairperson: Yes.

Adv Bawa: Okay, so put that version.

Chairperson: I thought that’s also what the Member wanted to check, the availability of it.

Adv Bawa: Alright, so take the first one in doing that... So in some cases, there’s a similarity in wording and in other cases it’s more exacting than that, but the sense is the same. Right, so the first paragraph we referred to was 5.2.11 of the report, and that fits under the heading which we see in the report that says, “memorandum requesting funding of an intelligence unit’. And it’s in the section of the report that says, “SARS’ response”, and it’s summarised there... I’m going to read the KPMG report, and the Committee can follow the PP report. “For various reasons, the intended mechanism and relationship did not materialise as intended and SARS continued with developing its own capability, cause by lack of trust and co-operation between the entities”. And we’re now at 5.2.12, “The purpose of the submission was to obtain approval from the Minister of Intelligence for the establishment of a ‘deep covert’ capability enabling the NIA and SARS to jointly embark on the ‘covert’ collection and surveillance of strategic priorities, relating to border intelligence. The capability was to be staffed with highly trained specialist, focusing on agreed priorities within the area of anti-smuggling and would provide the ability for SARS and NIA to carry out their respective mandates. It was stated that in order to have such a dedicated capability would be necessary to form a unit to be staffed with SARS personnel, under the command and employment of NIA”. So on the left column is the PP report, on the right column I’m reading from the KPMG report. So the next paragraph is 5.2.35.6, and that is under the heading that says, “KPMG report”, right. And the KPMG report says, “Each time when the name of the unit changed, it was marked by an event which resulted or possibly could have resulted in the damaging of especially the reputation of SARS. A pattern developed around the name changes being, it was either internally announced that the unit was disbanded, or externally in those instances where the media was aware and individual(s) departed under suspicious circumstances with financial settlements(s) and the justification being in the interest of SARS. Where-after it continued functioning but under a different guise and name”. So the next paragraph you’ll see is also attributed to KPMG under that heading, and it says, “The possibility exists that the ‘interceptions’ van Loggerenberg referred to in his WhatsApp communication with Walters, may also include third party interceptions on his behalf. The same applies to the mystery of unexplained instances of emails appearing on his allocated laptop in which he was not a recipient. These email correspondence clearly belong to other parties”. And then 5.5.5 was under the heading... “issues in dispute, information regarding the recordings of Mr Andries Janse van Rensburg...”, and it reads, in the KPMG version, “The installation was allegedly instigated by Nel and Leask and the purpose was to provide the ability to Nel and Leask to monitor activities and discussions, occurring in certain offices and general office space in the DSO and NPA. The office and office space selected and identified at least include that of Nel, Leask, Mngwengwe, Pikoli and a boardroom where meetings took place. The concerns were that information may or might be disappearing from the offices and the SAPS were suspected as the culprits”. Right, so that’s a more general statement that comes up. Then if you go to 5.5.7, “The equipment was installed in July 2007 and monitoring activities continued. The installation provided offsite access to the recordings for Nel and Leask and also Lombard, who claims to have been responsible for the maintenance thereof”. And then at 5.5.8, there’s the account of the phone call from Mr Pillay; “Soon after the installations were completed, it is alleged that Pillay requested Janse van Rensburg to provide him with records and reports on the discussions that took place and it is claimed that Nel and Leask were allegedly not aware of the request. This request came as Pillay was aware that Lombard also had access to the recordings, Pillay allegedly indicated that the request was authorised at higher levels and Janse van Rensburg claims that he believed the information was needed for the President...” – the recordings consisted primarily of discussions about the Selebi and Agliotti investigations. Then 5.5.36, which falls under the category of “the conclusion”, “The unit was established by Pillay at the time when Gordhan was Commissioner of SARS”, here the KPMG report says “We found no evidence that Gordhan was informed about the existence of the unit. However, considering his position as accounting officer it is reasonable to expect that he ought to have known of the existence of the unit”. The phraseology in the PP report is, “It is highly unfeasible that the unit's officials operated the unit in isolation of their principles”, right. And then we come to the Sikhakhane report. Just skip the first column, that’s just the background to the Sikhakhane report. Go down. I’m going to have to read the Sikhakhane report to you and then you go to 5.2.17 of the report... “Mr Pillay introduced Mr van Loggerenberg to the Commissioner of SARS, Mr Pravin Gordhan... Mr van Loggerenberg testified that Mr Gordhan told him that he sought to develop intelligence capacity in SARS within the context of tax and customs”. And then the next paragraph would be 5.2.18, which would be paragraph 43 of the Sikhakhane report. And it reads... there’s a bit of a text and then the relevant part says, “During this meeting, Mr Pillay explained how SARS sought to increase its capacity to investigate organised crime and illicit trading and the impact thereof on the tax and customs mandate of SARS”. And then, it’s linked to the next paragraph, it says “During 2004-2005, SARS set up study groups to understand the illicit economy and how it functioned. SARS also began official interactions with the South African Police Services, Military Defence and NIA. It had previously done something similar with the National Prosecuting Authority which resulted in the creation of special tax units. The plan was that a unit would be housed within NIA, which dealt specifically with SARS' tax and customs intelligence related issues”. The next one would be... 5.2.20. “In line with this plan, SARS, through its highest office, approved the creation of a group which was known by different names, including the Tiger Group, Special Projects Unit, the NRG and later, the High Risk Investigation Unit. As explained in greater detail below, the unit was staffed with members who came primarily from the intelligence structures with the requisite skills to conduct surveillance, investigate and monitor those involved in the illicit economy”- that’s 43.4 of the Sikhakhane report. The next one would be 43.5 and 43.6, and it would read “However, SARS... therefore found itself in the position...”. Hold on, just let me double check quickly. I don’t want to make a mistake; I've already read part of it out, right. Okay, 5.2.22, “On 12 February 2007 the then Commissioner of SARS, Mr Gordhan addressed a memorandum to the then Minister of Finance, Mr Trevor Manuel, seeking approval for funding of intelligence capability within NIA in support of SARS. A copy of this memorandum is attached”. Alright, and then it goes further, and it says, “It is clear ex facie this memorandum that SARS sought to establish within the NIA a unit for the collection of tactical intelligence, which implies inter alia "penetrating and intercepting" organised criminal syndicates”. And Chair, those are some of the paragraphs that I want to draw to your attention. We're going to deal with some of it in further argument, but those are the correlations. I'm going to put those paragraphs into the columns that aren’t there and then forward it on to Tshepo to forward that on.

Chair, that takes me to... We can either deal with the judgment part of the IGI. I’m in Chair’s hands, if you want to sit till five and we can deal with the judgment part of it?

Chairperson: We will push. Let's assess at half past how much you can do by then.

Adv Bawa: Because I want to finish it in one go, and that’s why I'm asking whether I should do it. But maybe I should just start and see.

Chairperson: Yeah, let’s see how you go.

Adv Bawa: Tshepo, go to the judgment paragraph a paragraph 112. And this is the third report relied upon by the Public Protector, which is the report which originated from the office of the IGI of intelligence. It is the report that was issued on 31 October 2014. And it is in respect of this report, that the Public Protector had stated in her report at paragraph 5.2.26, which you’ll see from the repeated, that she was “reliably informed”. The quote comes from 5.2.26 of the report, “... that it was in the custody of the former Minister of State Security, Ms Dipuo Letsatsi-Duba, from whom she tried to get a declassified copy of the report without success. She also states that she had requested the President’s assistance in making available the declassified report by the Minister of State Security but to no avail”. And here, “The Public Protector relies on this report despite explicitly stating that she has not seen the report” - this was the issue that Adv Mpofu had canvassed at great length with the Public Protector, and we will deal with it in questions. But I just want to take you through the argument and the judgment. “She relies on it because she has it ‘on good authority’ that it was found in the report”. And what she has on good authority that it was found in that report was that the SARS had “created a covert unit utilising covert and intrusive methods which was not in line with the SARS mandate and in violation of section 209(1) of the Constitution which empowers only the President to establish any intelligence service; and that the establishment of an intelligence capacity within SARS – a capability exclusive only to legislated intelligence service – was illegal”. Now we know now that comes directly from the IGI report. Paragraph 114, “The Public Protector further recites the remedial action proposed by the OIGI in its report namely that criminal charges be investigated against Minister Gordhan, Mr Pillay, Mr van Loggerenberg...”  - So, he is an implicated party, because the remedy is there, “and a of certain Mr Richer for the establishment and involvement in the ‘intelligence unit’ in SARS. You will recall that the argument was he was only... he only became relevant in the second half of the charges - in the second half of the complaint that was going to be the subject matter of another report. Paragraph 115, “Despite the fact that the Public Protector, according to the report, has never seen nor verified the contents and findings of the OIGI report, she ordered the Minister of State Security, to implement, within 90 days of the issuing of the report, and acting in line with the Intelligence Service Amendment Act, the OIGI report dated 31 October 2014 in its totality. The Minister of State Security was further ordered to ensure, within 30 days, that all intelligence equipment utilised by the unit is returned, audited and placed into the custody of the State Security Agency. Finally, the Minister of State Security was ordered to, within 14 days of the issuing of the Report, to avail a declassified copy of the OIGI report to the offices of the Public Protector”. This is the remedial action in 8.3.1 to 8.3.3 of the report. The court then says, “The Public Protector further makes her findings in respect of the OIGI report ostensibly in terms of the powers vested in her by section 181(2) and (3) of the Constitution. It is difficult to understand on what basis these sections of the Constitution can notionally grant the Public Protector the power to rely on a report that she herself has not seen - because this is what she says in the report. Although the Public Protector undoubtedly has wide investigative powers, it does not follow that she can blindly rely on evidence and facts that she is unable to verify independently, but only became aware of ‘on good authority’. As was said by the Supreme Court of Appeal in Public Protector v Mail & Guardian Ltd and Others: ‘The Public Protector must not only discover the truth, but must also inspire confidence that the truth... ‘”. So, the Committee’s very familiar with these paragraphs, I’m not going to read out of the whole paragraphs. So let’s go to 117, “Had the Public Protector, however, applied her mind to the OIGI report and ‘not relied on good authority’ she would have appreciated the shortcomings of the OIGI report and in turn would not have issued the impugned remedial action. Had she applied her mind she would have realised two important aspects: (i) the Inspector General acted ultra vires in investigating SARS’ officials and activities, and (ii) Mr Pillay and Minister Gordhan were not afforded a hearing as the audi alteram partem principle was not adhered to before coming to her findings”. Now we know, Chair, that apart from the affidavits before court, there were also heads of argument and oral submissions before the court. Now I can’t put before the Committee what oral submissions were made, other than what is recorded in the judgment, which we’re going to come to in a moment. There were three sets of heads of argument filed in this matter. And they are, Tshepo, if you go to Bundle E, seven... right, go to page ten... So what I’m taking you to is reflected in the second supplementary heads of argument. So maybe just go to the bookmark, so that the Committee can see. There’s the PP’s heads of argument, is the first supplementary set. And there’s a second supplementary set. So what we’re in now is actually under the heading... sorry, no, click on the second supplementary heads, and go to paragraph 37. And it says there that “The fifth respondent misapprehends the powers of the Public Protector by suggesting that there was anything wrong with how she obtained the IGI report. In fact, as demonstrated by the EFF, the IGI report was sufficiently alarming to the general public for its uncontested contents of the existence of this SARS Unit with intelligence gathering powers that it utilised to bug the NPA and DSO. The Public Protector on good authority became aware of the IGI report which was left at her offices by unknown persons. When the report came to her attention, she took steps to ensure that she could lawfully utilise it for her investigation. She sought the declassification of the IGI report. The Minister was not cooperative on that score – erecting unnecessary obstructions to the performance of her duties in contravention of the constitutional duty in section 181(2) and (3) of the Constitution. The submission that the Public Protector failed to uphold the Constitution by not disclosing the source of her access to the IGI report is a deeply flawed criticism that belies the true constitutional position” - Now that was the argument before the court in that regard, on the IGI report. Go back to the judgment, at paragraph 118, “Most alarming, however, and despite the fact that the Public Protector stated in the report that she did not have sight of the IOGI report before coming to her findings, counsel acting on behalf of the Public Protector asserts, in their third set of heads of argument, that: ‘…the Public Protector made an independent assessment of the legal and factual questions involved in her investigation on the SARS intelligence unit and made her own conclusions. This investigation included assessing the OIGI report for its factual and legal conclusions. Having carefully studied the OIGI report and conducted her own independent investigation on the issues covered in that report, she concluded that the findings and recommendations in the OIGI report be implemented”. In other words, she did an investigation of Pillay, van Loggerenberg and Gordhan, and concluded that the findings and recommendations in the OIGI report, that it be recommended that there be criminal action taken against them... Let me not phrase it wrongly – that criminal charges be investigated against them. “When she issued the remedial action on the OIGI report, she was satisfied that the OIGI had acted within its powers in conducting the investigation and was correct in its factual and legal conclusions’”. And then that was in the third set of heads of argument. Then it said, “During argument, when counsel for the Public Protector was confronted with the contradictory statements in the heads of argument, the debate regarding the OIGI report took a bizarre turn. Counsel on behalf of the Public Protector now conceded that, despite the explicit statement in the report that she has not had sight of the OIGI report in preparing the report, she had in fact had the OIGI report in her possession when she drafted the report. The Public Protector now claims that she subsequently received the OIGI report from an anonymous source who left it at her offices”. And if you go... We know that the Public Protector had the OIGI report from early January. And so, if you go to the heads of argument. Just go to the heads of argument again, you’ll see in paragraph seven, in the first set of heads of argument... you will see that the Public Protector says, “... The Public Protector started engaging with the SARS Acting Commissioner, Mark Kingon, by addressing a comprehensive inquiry dated 3 December 2018. She addressed further inquiries to the Office of the Inspector-General in a letter dated 14 January 2019...”  - And when that letter went off, she had already had the OIG report. “The Office of the Inspector-General immediately responded in a letter dated 15 January 2019 confirming having conducted an investigation into media allegations against the Special Operations Unit and/or other branches of the State Security Agency in 2014. The Inspector-General also confirmed the existence of a report on the investigation but declining to give it to the Public Protector. As a consequence of the Inspector-General's position on the report, the Public Protector issued a subpoena on 18 January 2019 against the Minister of State Security for the production of the report” - in fact, it was issued against both the Minister and the IGI. “The Inspector-General subsequently undertook to submit the report to the Public Protector after consultation with the Minister of State Security. The Public Protector subsequently received the report of the Inspector-General of Intelligence through an anonymous source who left it at the offices” – the chronology in the heads are not entirely accurate. “Given that the report had been obtained with its classification of Top Secret, there was a dispute over whether she could lawfully rely on it. The applicant makes a meal of this in his complaint against the Public Protector, although this must be water under the bridge. The Minister of State Security subsequently agreed to give the Public Protector a declassified version of the IGI report with redactions of sensitive information on it. There was some disagreement on the scope of the redactions with the consequence that the State Security Minister launched legal proceedings against the disclosure of the IGI report. At the time of drafting these submissions, there were two irreconcilable positions that had occurred". Paragraph eight, says, “While awaiting judgment on whether the IGI report could lawfully be declassified and published, the Minister conceded an application to review and set aside the classified IGI report whose disclosure she had contested in court and for which a judgment was outstanding. These events do not necessarily impact on the review application...” - and this is an important part, Chair, because it’s an important legal principle that is absolutely correct. And I don’t think it will be in dispute, but it’s an important legal principle, because it underscores the CR17 matter and the Gordhan matter. “... These events do not necessarily impact on the review application which must be decided on the basis of information that was before the Public Protector and in the review record”. And it has relevance for when we argue, as to how that impacts on the minority judgments when the erstwhile Chief Justice Mogoeng decides to consider the appeal from a review, with reference to information that arises after the decision and not based on what was before the Public Protector at the time. So I'm just pointing that out, that that appears to be a common cause legal principle adopted. "This means that the fact that the Minister has conceded an application by Mr Loggerenberg to review and set aside the IGI report does not bar this court from evaluating the merits of the review application on the basis of all the information that was before the Public Protector, including the IGI report. To the extent necessary, the status of the IGI report in these review proceedings will be addressed in supplementary heads of argument depending on the position of the applicants as to its relevance to evaluating the validity of the Public Protector’s report”. And then, let’s go back to the judgment. Right, so we know that the Public Protector had claimed that she subsequently received the OIGI report from an anonymous source who left it at the office. “This turn of events is disturbing to say the least and it is difficult to label the Public Protector’s conduct in this regard as anything else but dishonest’. “In her heads of argument, the Public Protector criticised Mr Gordhan for ‘making a meal of this in his complaint against the Public Protector’ and that it was ‘water under the bridge’ as the Minister of State Security subsequently agreed to give the Public Protector a declassified version of the OIGI report with redactions of sensitive information on it”. “This argument, unfortunately, does not cure the blatantly misleading statement made by the Public Protector in the report. The comments made by the court in South African Reserve Bank v Public Protector and Others, cannot be overemphasized”, and then it quotes a paragraph that we will come to in the SARS judgment when we deal with the CIEX matter. Go down, we can’t necessarily go there...or maybe we should, “… However, there is no getting away from the fact that the Public Protector is the constitutionally appointed custodian of legality and due process in the public administration. She risks the charge of hypocrisy and incompetence if she does not hold herself to an equal or higher standard than that to which she holds those subject to her writ. A dismissive and procedurally unfair approach by the Public Protector to important matters placed before her by prominent role players in the affairs of state will tarnish her reputation and damage the legitimacy of the office. She would do well to reflect more deeply on her conduct of this investigation and the criticism of her by the Governor of the Reserve Bank and the Speaker of Parliament”. “Statements such as this made by the Public Protector in her answering affidavit and heads of argument only serve to tarnish her reputation and damage the legitimacy of the office that she holds. Those who are and have been the subject of an investigation by the Public Protector, as well as the public at large, must have faith in the integrity of the office of the Public Protector and its incumbent. After all, the Public Protector is regarded as one of the most invaluable gifts to our nation in the fight against corruption, unlawful enrichment, prejudice and impropriety in state affairs, and for the betterment of good governance”. And then it goes to dealing with Mr van Loggerenberg having setting aside the report. And it says, “Any reliance thereon is (apart from the fact that the Public Protector’s reliance thereon has, in any event, been highly irregular) now moot, as the OIGI report is incapable of being implemented. Counsel on behalf of the Public Protector, in a last desperate attempt, submitted that her reliance on the OIGI report cannot be criticised as the OIGI report had not been reviewed at the time. Her own ambivalence regarding the OIGI report discussed above totally discredits her own report. There is no merit in this submission”. “To add insult to injury, the Public Protector never provided the OIGI report to Minister Gordhan and Mr Pillay to respond to during the Public Protector’s investigation. The procedural unfairness of the process that led to the Report is dealt with more fully elsewhere in the judgment”. “But probably the most egregious, is the Public Protector’s failure to consider the extensive body of evidence that Mr Pillay provided to the Public Protector”, and then he goes on to that. Chair, I just want to take you to one further reference in the heads, just to complete it. If you go to PDF page 140; go to the heads, the Bundle E document, we were there. Right, go down to paragraph 30. “The Minister of State Security has recently filed an affidavit wherein she alleges that ‘the Public Protector’s remedial against her are incompetent in law for the simple reason that they are incapable of being implemented. The erstwhile IG acted ultra vires’”. “She further alleges that the IGI report has been set aside by a court of law in an application that was launched by Mr van Loggerenberg. The IGI report was set aside, by way of consent order between the parties, in proceedings where the Public Protector, to the knowledge of the Minister, has a direct and substantial interest in the matter, was not joined as a necessary party. The consent order has the effect of rendering the remedial action of the Public Protector moot and unimplementable, in circumstances where it has not been set aside in proceedings where the Public Protector was involved”. So in the heads of argument, it is conceded that the order rendered the remedial action moot and unimplementable. “The Public Protector is considering launching an application to have the order setting aside the IGI report set aside and in the event that she does so, will seek the postponement of this application” - that never happened, Chair. And then just go to paragraph 37. I think we’ve dealt with it already, yes.

Chair, so those are the submissions on that aspect of dealing with at least three or four of the aspects that deals with bias in the judgment of that. There are one or two aspects that we want to deal with in relation to the equipment and one other aspect. If this is a convenient time for us to adjourn, because I’m not quite ready with the... to put it up on the screen... It’s like a last lesson on a Friday afternoon, Chair, during Ramadan, I’m reminded.

Chairperson: Well, whatever I was going to say, once you’ve mentioned that I respect that you have this energy. So I will not copy on that, you’ve just pushed me back once you’ve said that. Thank you, Adv Bawa. Yes, it’s a Friday. Just towards five, but I think we have to be grateful to the Members for their commitment to stay on their work, regardless of circumstances and the days. It therefore does look like we’ll pause there for the day. Perhaps also to indicate to Members, the approach now is that we... and hopefully we’ll be able to do that, Adv Bawa, that we can resume to kind of try and finish up and complete this. I would prefer we do that in a day and a half, we’re done with it. I think that resuming therefore, so that we allow Members to be able to do other things on Monday – it’s the end of their constituency week, which they have not necessarily been effectively doing, because of the work that we’ve been doing or maybe we should resume on Tuesday and finish up on that. And as part of that Members, just to indicate that we’re working very hard for the finality of the decision to get us closer to the resumption of the Enquiry. Maybe we can also use that Tuesday to indicate where we are on that point. If we’re not able to announce the finality then, we’ll indicate the process towards that. But as you leave, I think it’s important that you start putting this in your mind as part of budgeting your time, because we would not be issuing a revised programme pending us finalising that. So Thembinkosi is not able to do that, because we have to make sure that when we send that out, it is the kind of programme that takes us to the end, and it’s a realistic programme in terms of it not having any other off ramps, but also to take into account in your planning, even though we’ll put that firmly in detail when we do so. You know that we have at this stage, four days left, for completing that testimony with the legal team of the PP. We would have another six or so days with the evidence leaders. We would have about a day or so, two days or three days, for the Members, depending on how much time Members would need. And a day or so for the re-examination. Issues of closing arguments that would need to be there, which can take us to about three days or so. And then, we’re also factoring that into allowing some time for the written arguments, anything between six to ten days to do that. You are aware that there’s always a standing item of the audi, that we will provide once we have a draft report, of about ten days at this stage. I'm just giving you a sense that when we come back, when we resume, when we get to that finality, the programme will take those things into account towards the conclusion. But I don’t want now for us to get to that point. We’re working very hard, even if it means at some point pushing those role players and assisting them here and there and so on. But I'm very confident that in the manner we’re pushing, we will get to the point that we need to get to with our work, that you so diligently did. So on that, colleagues, perhaps that’s a point where we pause and adjourn our meeting for today, until we meet on Tuesday. Thank you very much.

Meeting adjourned.