In one fell swoop German tax-fraud fugitive Jurgen Harksen implicated Western Cape Democratic Alliance leaders in a web of financial favours, illegal foreign currency contraventions and a high life of whisky, wine and good food.
After less than two hours of testimony before the commission of inquiry under Judge Siraj Desai, former finance MEC Leon Markowitz emerged at the centre of Harksen’s dealings with the province’s politicians, including former premier Gerald Morkel. And Harksen claimed national DA leader Tony Leon was aware of at least some aspects of these dealings.
Harksen told the commission he handed over DM105 000 to Markowitz in January last year following appeals for donations to the DA, to cover a R2,5-million overdraft and to prepare the 2004 election campaign.
He said the cash was kept in a safe at his Constantia home. Later Markowitz apparently complained the money was short of the R500 000 they had agreed on, and Harksen provided the difference.
As the political funding scandal unfolded, the former MEC, former premier and other DA officials consistently denied receiving cash from Harksen following claims that an envelope containing DM100 000 cash was kept in a safe at Markowitz’s office and later exchanged. Markowitz and Morkel, who both testified at Harksen’s in-camera sequestration hearings, only admitted their public relationship with the German, wanted in his home country for tax fraud of R1-billion, was ill-advised.
A senior Absa manager has been suspended pending an internal inquiry into possible exchange control contraventions; the Scorpion investigative unit is also probing possible fraud, corruption and money laundering charges.
Harksen also told the Desai commission he advanced Markowitz $20 000, to be repaid in rands, as expenses for an official overseas trip to the United States last year in return for the purchase of a designer suit. “But he forgot (about the money). He also forgot about the suit,” Harksen said.
The DA has lashed out, calling the commission “a kangaroo court which is being used by the ANC and Peter Marais to discredit the DA”. In reaction to Harksen’s startling testimony the DA said party political fundraising was “not subject to any specific restriction or legislation” and is beyond the parameters of the commission.
An internal DA inquiry last month failed to trace a single payment of the rand equivalent into its bank account. But Harksen’s testimony appeared to shed further light on this: after a fall-out with Markowitz over his failure to pay for wine ordered from a friend of the German, Harksen stopped a R250 000 cheque made out to the DA by a third party. According to Harksen, Markowitz then told him: “They [cheques] do not go to the DA directly. They will go into my account.”
Testimony by the German, who is to appeal against his extradition this Friday in the Cape High Court, seemingly contradicts what DA Western Cape deputy leader Hennie Bester told the commission on Tuesday. Although he admitted he, Morkel and Markowitz had discussed possible donations from Harksen, Bester said no decisions were taken.
Morkel, the former premier who is now Cape Town mayor, also appeared to have benefited in his personal and public capacity: Harksen paid the lawyer who set up the Morkel family trust and organised legal representatives for Morkel’s fight for political survival in the courts.
During the heady break-up of the DA last year, Morkel approached the Cape Town High Court to prevent his expulsion from the former alliance partner after publicly throwing his weight behind the DA.
On Thursday Harksen confirmed widespread rumours: he had organised the lawyers and “arranged finance” for Morkel and he had himself paid about R100 000 through a third party.
Harksen told the commission there was “no doubt” Leon had known of this. While briefing the advocates in chambers, Bester had telephoned Leon in front of him.
Describing the testimony as “of national importance”, Judge Desai postponed further testimony and cross-examination until Tuesday. As Harksen is appealing against his extradition, the judge also ordered that “you are not to be deported from this country pending the finalisation of your evidence before this commission” and instructed Harksen be kept in protective custody.
Harksen is not only fighting his extradition, he also faces fraud charges amounting to R60-million for a variety of unlawful transactions with South African investors and contravening his bail conditions. His wife, Jeanette, is charged as co-accused.
Harksen’s friendship with Western Cape DA politicians started at the end of 2000 over several glasses of wine and whisky in the provincial administration building. First he met Markowitz, then Morkel. Over time the relationships developed over braais, lunches, fundraising events and other social get-togethers.
Admitting the friendship with the DA proved expensive, Harksen claimed nothing was ever promised in return although he was offered diplomatic immunity.
“I really don’t know. If I arrange people and funds… this could mean I have a future in the country,” Harksen said, explaining his wish to obtain South African citizenship.