Where criminal (in)justice rules
A flurry of criminal cases related to state capture has been referred to the Directorate for Priority Crime Investigation (the Hawks), but the apparent absence of any outcomes — as well as claims of a two-year delay by the National Prosecuting Authority (NPA) in prosecuting the Nkandla case — have led to a widespread perception that the country’s criminal justice system is broken.
Not so, insists Hawks spokesperson Hangwani Mulaudzi, who says these cases are progressing well “with some even at various stages of completion”.
Meanwhile, nongovernmental organisations such as Corruption Watch have all but given up on the criminal justice system and are even seeking out offshore options to bring criminals to book. The alleged involvement of global corporations in state capture, as was recently exposed through thousands of leaked emails, has presented alternatives (See story below).
This week, there was a fresh call to remove NPA head Shaun Abrahams for his seeming inaction on high-profile cases. The Democratic Alliance accused him of sitting on President Jacob Zuma’s Nkandla docket for two years.
Former NPA head Vusi Pikoli told the Mail & Guardian that if the delay in taking a decision on the Nkandla matter did, in fact, date back to 2015, there would be “an element of unreasonableness” to it.
Priority crimes, including those involving state capture, now go through a two-stage process — first at the Hawks and then at the NPA — since the Scorpions were disbanded in 2009.
Even when case dockets are finally handed from the Hawks to the NPA, they are at risk of further delays. Many of the state capture cases — which involve the Gupta family, Zuma, his son Duduzane, and parastatals such as Eskom and Transnet — are sitting with the Hawks, and as time marches on concern is growing that the directorate has been hamstrung by politicisation.
However, Mulaudzi said the perception that all high-profile cases are gathering dust is not true.
He said the directorate is currently busy with a number of such investigations, adding that all cases within its domain are progressing well and others are already in court.
He said, however, that the directorate was not in a position to discuss the progress of all the cases with a view to protecting the rights of the accused, and observing the need for due process and the right to privacy.
As far as delays go, “the public often accuses the [Hawks] of being a slow-moving organisation, but in the high-profile world of enforcement, that image is not altogether accurate,” Mulaudzi said. “Lengthy cases are not a rarity. Good investigation takes time. Investigation done properly is as much an art as a science. It takes experience, perseverance, good awareness and good time management.”
He said investigators are committed to being fair and thorough, but expediency is also a goal. Some cases may take longer than others and it is not uncommon for a corruption investigation to take years. However, Mulaudzi said: “The [directorate] is dedicated to its purpose and we should be afforded the space to prevent, combat and investigate national priority offences as mandated.”
So far, few state capture cases have made their way to the NPA but cases involving Zuma that have been handed over to the authority have faced extraordinary delays.
This week, DA leader Mmusi Maimane publicly called on Zuma to remove Abrahams from his post for his inaction on cases involving the Guptas and Zuma himself. For example, Maimane said, Abrahams had been sitting on the case docket relating to Zuma’s Nkandla homestead since August 2015 and but had not yet taken a decision on whether or not to prosecute.
Pikoli’s comment suggested this could be seen as unreasonable. The NPA, however, said in a statement that it was highly mischievous for Maimane to assert that the national director was biased or had taken no action on the Nkandla matter, as he had referred all matters relating to the investigation to the acting head of the specialised commercial crime unit, advocate Malini Govender. The NPA said Maimane had been updated every time he had written asking for such information.
“It is only the NPA that can pronounce on issues relating to sufficiency of any evidence contained in a docket and therefore the assertion by the DA that the investigation was finalised in 2015 is not correct,” the statement said. “The national director does not take prosecutorial decisions, unless when requested to review the decision of a director of public prosecution or special director in terms of section 179(5) of the Constitution.”
The NPA said that contrary to the “peddled narrative”, it had achieved a “remarkable” overall 93.8% conviction rate in the past two years under the stewardship of Abrahams.
NPA spokesperson Luvuyo Mfaku further told the M&G that the NPA had the funding resources to deal with the matters at hand and highly experienced prosecutors to boot. It did not, however, have investigative powers and could not encroach on the Hawks’s work.
Pikoli said the NPA had, indeed, lost its investigative powers when the Scorpions were disbanded in 2009 and that prosecutors’ hands were tied until case dockets were handed over to them. They could only guide investigators if required.
Mfaku said that on cases pertaining to state capture, NPA investigators were working closely with the prosecuting authorities.
Overseas law may rush in where SA fears to tread
Global audit giant KPMG is one of the prominent corporates with egg on its face following investigative reports, based on leaked emails, that suggest the firm aided and benefited from an allegedly corrupt relationship between the Gupta family and the state.
According to Paul Hoffman, advocate and director of Accountability Now, KPMG looks like it has the makings of an Arthur Andersen redux — one of the world’s “big five” auditing firms that fell from grace following the Enron scandal, during which it shredded the company’s audit documents.
“There is a seriously onerous duty on the accountants’ profession to take the matter in hand properly. Investor confidence in the new South Africa has to be restored if job creation, poverty reduction and the achievement of equality are to be anything more than a pipe dream,” said Hoffman.
“Trust in the professional and regulatory environments is at the core of confidence in the supremacy of the rule of law. Without these the investment environment, both local and FDI [foreign direct investment], remains toxic.”
Former KPMG director Moses Kgosana resigned from a post at Alexander Forbes following reports that questioned KPMG’s audit of a Gupta company’s financials. The Independent Regulatory Board for Auditors has announced it will conduct an investigation into the KPMG audit in question.
This week it became known that McKinsey & Company had suspended its South Africa director, Vikas Sagar, after it emerged the company had benefited from an allegedly corrupt agreement between Gupta-linked Trillian Capital Partners and Eskom.
Nongovernmental organisation Corruption Watch said it would seek legal advice on what action could be taken against McKinsey and KPMG, locally and abroad.
This would include the potential use of the Foreign Corrupt Practices Act to bring United States-based corporates to book, said Corruption Watch managing director David Lewis. It was not the only tool available, he said, but may be the most appropriate one, particularly in the case of McKinsey.
“Certainly, the McKinsey/Trillian matter is criminal in our prima facie view,” Lewis said.
Although Eskom is not subject to US jurisdiction, if action were to be taken against the private sector, one could expect action to be taken against the public sector, he said.
On Tuesday, it was reported that software giant SAP had allegedly agreed to pay a “kickback” to a Gupta-controlled company to secure a deal with Transnet. SAP, Business Day reported, could be subject to legal action instituted by the US Securities and Exchange Commission, which can act against listed firms for violating the antibribery provisions of the Foreign Corrupt Practices Act.
On Wednesday, news broke that SAP had put four senior managers in South Africa on leave pending the outcomes of two investigations — one internal and one external.
“If you are creative enough about these things, there are endless avenues … but they are resource- and time-consuming … All of these matters are criminal,” said Lewis.
“But we have been always seeking alternative sanctions, because of the nature of the South African criminal justice system.”