Former public protector Thuli Madonsela says intelligence agency opened documents couriered to her by the department of international relations. (Photo by Esa Alexander/Sunday Times/Gallo Images/Getty Images)
Former Public Protector Thuli Madonsela on Monday told the inquiry mulling the impeachment of her successor that she did not involve the intelligence services in the CIEX-Bankorp inquiry beyond a brief meeting with former National Intelligence Agency (NIA) boss Billy Masethla for historical information.
The purpose of the meeting was to inquire about the NIA’s interaction with CIEX, which recommended that Absa should pay interest on the lifeline to Bankorp.
However, subsequently, it appeared that the State Security Agency (SSA), which replaced the NIA, pried into documents availed to her by CIEX director Michael Oatley.
Madonsela raised this in a statement she read to the section 194 inquiry before facing questions from suspended public protector Busiswe Mkhwebane’s advocate, Dali Mpofu.
The committee investigating Mkhwebane for gross misconduct last year heard testimony to the effect that after she took office and took over the investigation from Madonsela, she allowed senior intelligence officials to dictate that the final report should recommend that the constitution be amended to alter the mandate of the South African Reserve Bank (SARB).
Advocate Tebogo Kekana, a former senior investigator in the public protector’s office who worked on the Bankorp-CIEX investigation, told the committee the preliminary report on the subject did not contain this recommendation.
It came about after two unusual meetings with members of the SSA, he told the committee.
The first, in May 2017, included SSA officials Arthur Fraser and James Ramabulane as well as state security minister at the time David Mahlobo.
Kekana said he was instructed by Mkhwebane shortly thereafter, while he was drafting the final report on the matter, to include a recommendation that the constitution be amended to allow the nationalisation of SARB, though there was no suggestion to this effect in the preliminary report.
“She did give me an instruction to do that.”
In 2018, the Pretoria high court set aside the report, following review applications by both SARB and Absa. The report recommended that Absa repay R1.125 billion for a lifeboat provided to Bankorp by the Reserve Bank during the apartheid era.
The court heard that Mkhwebane had refused to meet with Absa prior to the publication of the final report but had met with Black First Land First, a strong proponent of those compelling the bank to repay the sum. In his testimony to the committee, Kekana confirmed this meeting.
Mpofu has insisted that Madonsela be called to testify, who reiterated on Monday that she had been reluctant to do so.
“My reluctance to appear before this committee had nothing to do with lack of respect for this important pillar of democracy, it was because of apprehension that I will be in a situation where we are rehashing what the court said about this matter and also about the Vrede diary matter,” Madonsela said.
“On the two matters, all I can confirm is that I was the lead investigator at the commencement of the CIEX investigation. Talk about an attempt at rectitude being turned to look like turpitude, that is the classical case in the CIEX investigation.”
Madonsela, who now lectures in law at the University of Stellenbosch, also said she initiated the investigation after meeting advocate Paul Hofmann, the director of Accountability Now, during a chance encounter at the World Justice Forum.
“He convinced me that there was adequate information that showed that this is an easy matter and the bank concerned had admitted that it owes this money and that I didn’t need to investigate anything, and that there were documents.
“But as public protector, of course, any document that you are given, you still have to authenticate and you have to conduct your own investigation.”
Madonsela said she then took on the investigation, along with a trainee who subsequently joined the National Prosecuting Authority. She said she believed it was worthwhile if there was money owed to the state, which could be recovered and “could make a difference” to the state’s capacity to deliver social services such as housing.
Once the trainee left, Madonsela said the investigation lagged because she had little time and she could not delegate it to staff as it had previously been turned down for investigation, in part before the events took place before the chapter 9 watchdog came into being.
There was hence a view that it had prescribed.
Madonsela said she overcame this hurdle by inquiring whether the government had processed the initial CIEX report, and to what extent the fact that it had not was improper.
“So our focus therefore was not on the original loan, lifeboat or whatever people may call it. Our focus was on what happened after 1998 and of course it turned out that it was a very complex matter.”
From 1985 to 1992, the apartheid government, through the Reserve Bank, provided Bankorp with a series of bailouts to offset bad loans that threatened the bank’s survival. One of these was a payment of R225 million a year for five years. The money was paid out in a series of transactions, and several investigations into the matter were conducted after the end of apartheid.
According to one investigation, these were deliberately engineered for secrecy, in one case using what amounted to a front company.
In 1999, CIEX pushed for Absa, which took over Bankorp, to pay interest on the bailout.
Madonsela said her discussion with Masethla was confined to asking why the intelligence agency worked with CIEX and how the process unfolded.
After this meeting, she said something “strange” happened. Documents that were given to her by Michael Oatley, the director of CIEX, at a meeting on 15 September 2013, plus the minutes of their meeting, were left with a staff member at the South African high commission in London.
These were then meant to be sent to South Africa by the department of international relations and cooperation.
“The documents arrived opened and with a note from the State Security Agency, and with a note from the State Security Agency director-general.”
She did not immediately expand on the note.
Madonsela stressed that at no stage did the scope of her probe include the mandate of SARB, adding that she left office in 2017 without having drafted any report on the matter.
The Vrede dairy report began under Madonsela but was completed after Mkhwebane took office.
The report into the R280 million scandal included no findings against high-level politicians, contrary to the Zondo report which would later implicate former Free State premier Ace Magashule and former cabinet minister Mosebenzi Zwane.
It was taken on review by the DA and the Council for the Advancement of the South African Constitution and set aside in 2019.
Madonsela said she had objected to questions sent to her by Mpofu on the basis of relevance. His response, she said, was to send her more questions that seemed similarly irrelevant.
Their exchange immediately got off to a tetchy start, with Mpofu swiftly accusing her of acting unlawfully by correcting a spelling mistake in a copy of her affidavit by hand.
Madonsela said it was her understanding that the correction was properly attested to.
She also suggested Mpofu was wasting taxpayers’ money with trivial inquiries as he is “paid for every word” he spoke and cautioned that she would not answer irrelevant questions or tolerate being interrupted.
She eventually asked whether she had become an accused in the committee’s investigation, and said if so, she should have been granted legal representation.
Mpofu said that had not accused her of criminality “yet”.
After further to and fro, Madonsela said his line of enquiry was “low” even by his standards.
Mpofu retorted: “I do not need your snide remarks.”
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