Parliament officials fight collusion claims

Parliamentary officials and their legal team are fighting claims that they improperly conspired with liquidators to stop the recovery of money from MPs involved in the Travelgate affair.

‘We think they don’t have a case,” Anthea Gordon, legal adviser to the secretary to Parliament, Zingile Dingani, told the Mail & Guardian.

Gordon said there were sound reasons for halting moves against MPs to recover some of the missing R6-million in the Travelgate scandal.

She said that there was a conflict of interest on the part of both the liquidators and their agent, Eileen Fey of PricewaterhouseCoopers (PwC).

Other Bathong creditors, however, believe their interests are being prejudiced to protect politicians.

They have a legal opinion from prominent advocate Owen Rogers that the claims are sound and have asked the Cape High Court to stop a creditors’ meeting from blocking the further pursuit of MPs.

Crucial to Parliament’s case is the contention that MPs cannot be held responsible for ‘uninvoiced” air tickets issued in MPs’ names and charged against their parliamentary vouchers, where no invoice can be found. MPs could have been negligent and tricked by, or have colluded with the travel agents.

Gordon said that last year Fey pointed out that there may have been fraud in some uninvoiced tickets, which could undermine MPs’ financial liability for them.

She asked: ‘These tickets are the thrust of more than 100 court cases. What are the prospects of success? And how much of what might be collected will go into legal costs?”

To answer this question, she said, Parliament called a meeting on November 15 last year, with the Speaker of the National Assembly, Baleka Mbete, Dingani and PwC managing partner Trevor Petersen.

‘We engaged the liquidators because we want to be informed creditors,” Gordon said.

Fey was excluded from the meeting because Parliament wanted to raise concerns about her perceived conflict of interest. She is the agent of Bathong’s official liquidators, PwC’s Corrin Holgate and Jonathan Jacobs, and was effectively in control of the entire process. She also knew vastly more than either Holgate or Jacobs about the issues.

But Fey was also the liquidator of another travel agency owed money by Bathong. Gordon said this meant she was, in effect, a creditor and should not have acted for Bathong.

In Fey’s absence Jacobs and Holgate could not satisfy the parliamentary team that they had a sound basis for their claims, Gordon said.

It was agreed that any action would be delayed until both sides had procured legal opinion on the likelihood of success of claims against MPs. ‘Of course Parliament wants its money back, but we must proceed correctly,” Gordon said.

But Parliament’s attorney, Derek Wille, said the November 15 meeting agreed to withdraw all action against MPs, rather than merely delay it.

Wille said Petersen offered to resolve the debate about the uninvoiced tickets and left the room with Holgate and Jacobs to discuss it. When he returned he offered to ‘withdraw all the outstanding action in respect of the uninvoiced tickets”.

Wille reaffirmed this version in a letter to representatives of other creditors, saying ‘we confirm this undertaking was given in the presence of a number of witnesses”.

But in their court application the other creditors say any such deal would have no legal standing, because it was not agreed to at a formal creditors’ meeting.

Wille countered that he always offered the liquidators either a formal or informal meeting of creditors to follow up to give effect to the November agreement. He gave the M&G the May 7 letter, which does just that — as well as threatening to proceed without further reference to the liquidators if necessary. ‘We can call our own meeting of creditors if we want; we didn’t need some secret deal,” he said.

He argued that Corrin Holgate also had a conflict of interest because of her working relationship with Frey.

Asked why it had taken two years to discern these problems, both Gordon and Wille said they had become involved only belatedly.

It is not clear what Petersen’s authority for involvement was, but Wille said he was concerned about the apparent conflict of interest at PwC and was trying to solve the problem. That undercuts Petersen’s previous claims to the M&G that Parliament’s view of Fey had nothing to do with her removal from the case.

Others argue that Fey in fact had the same interests as a creditor and liquidator and that it was only because of her work that any money was recovered. It was her persistence Parliament objected to, these people suggest.

Parliament has somehow obtained a copy of the privileged legal opinion Rogers wrote for the liquidators and now has its own opinion, from Ismael Jamie, effectively saying the opposite.

Where does that leave the many MPs who have already repaid or are repaying money? Angry and confused.

Albert Swartz is an attorney for an MP making monthly repayments, who claims parliamentary officials have told him he can stop paying. ‘I don’t know if it’s true,” Swartz said. ‘I’m trying to find out.”