Reserve Bank asks police to probe secrecy breach

The Reserve Bank has asked the police to investigate a former director of the bank for violating the secrecy provisions of the Reserve Bank Act in his book. (Alet Pretorius, Gallo)

The Reserve Bank has asked the police to investigate a former director of the bank for violating the secrecy provisions of the Reserve Bank Act in his book. (Alet Pretorius, Gallo)

The South Africa Reserve Bank has asked the police to investigate a former director of the bank for violating the secrecy provisions of the Reserve Bank Act in his book, Inside the South African Reserve Bank – Its Origins and Secrets Exposed.

Stephen Goodson, a former independent nonexecutive director, served on the board of the bank for nine years. 

In April 2012, the Mail & Guardian reported on his contentious views, which include an admiration for the economic policies pursued by Hitler in Nazi Germany, a belief that international bankers financed and manipulated the war against Hitler because they saw his model of state capitalism as a threat to their usurious ways, and that the Holocaust was a “huge lie” invented to extract vast amounts of compensation from the defeated Germans.

‘Ill-considered’ statements
The Reserve Bank distanced itself from what it described as his “ill-considered” comments and Goodson resigned in June 2012, a month before his directorship expired.

More than two years later, in September 2014, he published an account of his time at the Reserve Bank in which he lambasted its “ineptitude, corruption, careerism, ignorance and scandal”.

Goodson claims in his book that, because he became too troublesome for the status quo, he was removed, smeared, and attempts were made to legally silence him.

In his book, he alleges that:

  • Three hundred tonnes of gold worth more than R300-billion was stolen from the Reserve Bank with the help of insiders as part of a bigger looting exercise valued at R2.25-trillion;
  • 90% of South Africa’s gold reserves are kept at the Bank of England;
  • A third of South Africa’s foreign currency reserves are looked after by JP Morgan, the multinational banking and financial services holding company; and
  • Former Reserve Bank governor, Gill Marcus, secretly allowed a Swedish company to print South Africa’s banknotes, while the local printing facility stood idle resulting in R800-billion worth of banknotes being put into circulation that did not meet the required printing standards. Thereafter, R360-million worth of banknotes had to be destroyed because they were printed with the same serial numbers.

Support for book
When approached by the M&G for a response about Goodson’s allegations late last year, Hlengani Mathebula, head of group strategy and communications at the Reserve Bank, said Goodson’s “scurrilous allegations” were without substance and were denied. 

The bank did not propose to engage with the allegations because “to do so would be to treat them with far more importance than they merit”, Mathebula said, adding that it would also subvert the purpose of section 33 of the South African Reserve Bank Act – “a provision which Mr Goodson repeatedly violates in his book”.

The New Economic Rights Alliance (New ERA), which describes itself as a community of people seeking transparency in the banking and corporate sector, has expressed support for Goodson’s book, although it distanced itself from the chapter devoted to the Holocaust.

Last week, New ERA reported that Goodson had been visited by the Hawks, which is investigating him for breaching section 33 of the Reserve Bank Act.

Police to investigate
Section 33 of the Act refers to the preservation of secrecy and requires that no director, officer or employee of the bank, and no officer in the department of finance, shall disclose to any person, except to the minister or the director general of finance, any information relating to the affairs of the bank, a shareholder of the bank or a client of the bank that was acquired in the performance of his or her duties or the exercise of his or her functions; or any other information acquired by him or her in the course of his or her participation in the activities of the bank. 

In the case of an offence in this regard a transgressor could face a fine not exceeding R4 000 and/or imprisonment for a period not exceeding one year.

Mathebula confirmed last week that the Reserve Bank asked the police to investigate Goodson. “The [bank] is concerned that ...
Goodson, a former director of the bank, may have contravened section 33 of the South African Reserve Bank Act, 1989,” Mathebula said. “The matter is now in the realm of the [police] and, ultimately, the National Prosecuting Authority (NPA) ... The NPA will determine whether the matter merits any criminal prosecution.”

‘Secretive organisation’
Speaking to Independent Media on Saturday, Goodson reportedly said the bank had no case against him.

“They have no grounds to make that claim; they are just using state resources to get back at me for disclosing the truth about the criminal organisation that the bank has become,” he said.

“The Reserve Bank is supposed to work in the public interest, but that is not the case currently. It is a very secretive organisation; that is why they find it absolutely despicable that I dared to reveal the truth about the things they do there.”

New ERA in an earlier statement said Goodson had left the bank because of claims that he was a “holocaust denier”. “[The chapter dedicated to this] topic ... does not interest New ERA at all. We are far more interested in the research and insight behind the banking system. It is greatly sad that such a topic [the Holocaust] is brought up, as we feel it is completely unnecessary and inconsequential to the real message behind the book.”

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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