Travelgate big fish off the hook

Claims of R6-million against MPs involved in the Travelgate scam will be dropped if the legislature’s presiding officers get their way. Taxpayers might also have to foot a substantial legal bill.

In an apparent bid to ensure that the liquidation of Bathong Travel is quietly dropped, sparing senior ANC MPs expense and embarrassment, Parliament has asked other creditors of the agency, including South African Airways and Avis, to stop trying to recover their money.

The liquidator who led the effort to unravel the scandal, Pricewaterhouse-Cooper’s Eileen Fey, has been forced out of the process entirely.

The Mail & Guardian has obtained the most up-to-date figures available in Parliament’s records of the Bathong liquidation. They cite a total outstanding debt of R5,4-million and legal costs totalling R550 000, with individual MPs owing close to R300 000 in the most extreme cases and as little as R35 in others.

The records show that as recently as November last year Minister of Home Affairs Nosiviwe Mapisa-Nqakula was negotiating on an apparent debt of R43 708, Land Affairs and Agriculture Minister Lulu Xingwana was on the hook for R54 867, sports committee chair Butana Khompela had not paid back a cent of a R48 720 judgement against him and Free State Premier Beatrice Marshoff had yet to return R64 000.

None of them, or their spokespeople, were available for comment when the M&G went to press.

Limpopo MP Pietos Mathebe, with the biggest bill, R300 000, told the M&G he had settled with the liquidators and was paying the sum back in monthly instalments. More than 100 other MPs still owe money.

Last week Parliament published a notice in the Government Gazette that it would ask creditors of Bathong to instruct liquidators ‘not to pursue any action as against the various members of Parliament in relation to the un-invoiced tickets, levies and/or services … liquidators are hereby directed to cease all other litigation as against the members of parliament in relation to all ‘vouchers’ that may have been utilised by Bathong Travel or its directors or shareholders”.

Liquidator Jonathan Jacobs, of audit firm SAB&T, confirmed that the total value of claims that would be dropped was ‘roughly R6-million”, but insisted that the pursuit of clear cases of fraud would continue — despite the fact that the wording of the resolution suggests otherwise.

But sources who have seen the resolutions and have insight into Parliament’s thinking said that the implication was clearly that all action against MPs should cease.

One potential consequence of dropping litigation midstream is that MPs who have defended claims against them will ask courts to award them costs. If that happens, Parliament is promising to pick up the bill.

‘The major creditor [Parliament] hereby indemnifies the liquidators in relation to any further costs from date of this resolution,” the notice reads.

Jacobs said the resolution was motivated by legal opinions suggesting that the remaining claims fell into a ‘grey area”. ‘The cost of pursuing them would outweigh the benefit,” he claimed. As for the R6-million, ‘we are passing it on to Parliament”, he said. Asked whether Parliament would recover the money and pay out the remaining creditors he said: ‘I hope so.”

But SAA is not giving up so easily on the R116 000 owed to it. Spokesperson Robyn Chalmers said that ‘following the decision by Parliament SAA is considering all options to recover our money. We will be present at the creditors’ meeting and will vote accordingly.”

Representatives of Avis’s parent company, Barloworld, had not responded to queries when the M&G went to press.

Meanwhile, Fey was told to have nothing further to do with the case. She was the liquidator of the four other travel agencies involved in the scam and acted as an agent for Jacobs and her Pricewaterhouse colleague, Karin Holgate, in the Bathong case.

Parliamentary sources told the M&G that Fey, who played a crucial role in reconstructing Bathong’s accounts, was told in December to have nothing more to do with the matter. The auditing company’s managing partner, Trevor Petersen, confirmed this.

Legislature staff said Fey’s insistence on pursuing the claims irked secretary to Parliament Zingile Dingani, who insisted she be removed.

‘Eileen Fey has been quarantined.She is not being given any assignments, in fact, she is being pushed out [of Pricewaterhouse] in a disgraceful fashion,” a source close to the parliamentary service told the M&G.

Jacobs and Pricewaterhouse managing partner Trevor Petersen disputed this. ‘We are winding down our liquidations business,” Petersen told the M&G. ‘Eileen has been told that. There has been significant progress made by [Holgate and Jacobs], so the need for continued work is diminished — The Master of the Court did not appoint Eileen”, he said.

Sources at the legislature, and others who have followed the saga closely, see in Fey’s removal a repe-tition of the axing of parliamentary finance chief Harry Charlton, who tried to push for more vigorous action against Bathong since 2005.

The M&G reported that Charlton told the secretary to Parliament the agency could be involved in fraud totalling R36-million, but his efforts to pursue the money were frustrated and he was ultimately dismissed in a blaze of publicity.

Now living in Australia, Charlton continues to fight for compensation in the Labour Court, arguing that the charges against him were trumped up because senior parliamentary managers were angered by his aggressive pursuit of the money.

Dingani appears to have taken extraordinary steps to slow down or prevent action against Bathong, including ignoring advice from Parliament’s lawyers that the company should be liquidated over 10 months.

By the time he finally gave the go-ahead most of the company’s records had been destroyed and Fey’s team had to spend hundreds of hours reconstructing its accounts.

The implications for the case of MP and ANC national executive committee member Mnyamezile Booi are unclear. Booi is fighting Travelgate-related charges in the Cape High Court.

He told the M&G on Thursday that he already had a copy of the Government Gazette and would use it as evidence that the case against him was weak and unfair.

Alone among the MPs charged with criminal misconduct he refused to accept a plea bargain and argues, among other things, that the prosecution of MPs was selective.

Among the MPs who pleaded guilty, five were compelled to resign, while another 23 paid fines and were reprimanded in the National Assembly by Speaker Baleka Mbete. Five whips were demoted.

Several of them told the M&G that they always believed they were being hung out to dry while more senior colleagues were protected. Said one of those who pleaded guilty: ‘We are still paying back. I don’t understand how they came to that decision.”