Public Protector Busisiwe Mkhwebane did significant damage to the economy with an investigation “conducted in a grossly incompetent and fundamentally unfair manner,” Absa chief executive Maria Ramos said in an affidavit filed on Thursday.
Ramos said documents show Mkhwebane had an “ulterior purpose” when she, in June, said R1.125-billion in apartheid-era government funds should be recovered from Absa and that the South African Reserve Bank’s mandate should be changed.
On Tuesday, in a similar filing, the Reserve Bank accused Mkhwebane of an “ulterior purpose” in what it painted as a conspiracy involving the presidency and the State Security Agency.
Absa and the Reserve Bank are simultaneously challenging Mkhwebane’s findings before the high court as irrational and unfair.
After the two institutions received various documents from Mkhwebane under discovery rules in that legal challenge, each intensified their criticism of her conduct.
Documents released by her, and now public after she dropped claims of confidentiality, showed Mkhwebane discussed the Reserve Bank’s “vulnerability” with the spy agency, the bank’s general counsel Johann de Jager said on Tuesday. “The fact that this topic was even discussed with the State Security Agency indicates that the public protector’s investigation was aimed at undermining the Reserve Bank.”
Ramos said Mkhwebane had been unable to produce crucial evidence, such as transcripts with key witnesses and a long list of letters. This, Ramos said, showed that Mkhwebane never saw them, and so reached a decision while disregarding crucial facts.
Mkhwebane’s predecessor Thuli Madonsela conducted many interviews during a stop-start investigation spanning five years, including with former Reserve Bank governors, ministers and former president Thabo Mbeki.
Mkhwebane issued a final report within eight months of taking office, after what she at the time said were only two meetings.
On Tuesday De Jager complained that Mkhwebane’s record of her decision was “woefully incomplete, confused and indecipherable in parts”. Both he and Ramos have demanded specific documents and clarifications they say are crucial to their cases.
In response to the Reserve Bank’s filing on Tuesday, but before the Absa affidavit, Mkhwebane lashed out in extraordinary fashion in a statement released on Thursday.
There are “several allegations orchestrated by a certain group of people with ulterior motives”, Mkhwebane said. “Their aim is to discredit the reputation of the public protector and her independence.”
She promised to respond in more detail with her own legal filing.
When Black First Land First said ‘boo’, Mkhwebane jumped
On February 28 the controversial Black First Land First movement (BLF) wrote to public protector Busisiwe Mkhwebane in what it described as an official submission towards her investigation into the apartheid-era bailout of Bankorp, later acquired by Absa.
“No tax had been required for the gift to Bankorp/Absa, which in turn suggests that a considerable loss in tax revenue has been incurred — as huge as the gift itself,” wrote BLF convener Andile Mngxitama.
Within hours, Mkhwebane asked a member of staff to “get us some information on the tax implications of the gift to Bankorp”.
Documents now in the public domain thanks to legal action against her suggest this was not the first time the public protector had reacted to the BLF with unseemly haste.
Mkhwebane met the BLF on January 12 about the Absa matter, a meeting she did not disclose in her report. What happened during that meeting is not known; it is among the meetings for which she has not provided any records. However, it is safe to assume that the matter of criminal charges came up. “BLF recommends that, where applicable, those implicated in wrongdoing be subjected to criminal prosecutions,” Mngxitama wrote in February.
The next day, handwritten notes show, Mkhwebane met with a “warrant officer” of the South African Police Service, who declined to tell the Mail & Guardian what branch of the police he works for. “Open a case,” reads one line of the notes.
Mkhwebane’s approach to and relationship with the BLF is in sharp contrast to that of her predecessor, Thuli Madonsela, who once pointed out to the BLF that, as it was neither a complainant in the matter nor represented in Parliament, she was dealing with it only “out of courtesy”. The BLF later invaded Madonsela’s offices in Pretoria and took staff members hostage.
The treatment of the BLF is also very different from that meted out to the Reserve Bank (the constitutional mandate of which Mkhwebane ordered changed) and Absa (which she found had illegally received R1.125-billion in misappropriated funds). Both banks have told the high court in Pretoria that Mkhwebane did not give them a fair hearing during her investigation.
Absa chief executive Maria Ramos said in an affidavit that she had spoken to Mkhwebane by phone, also on January 12. “I specifically invited her to continue engaging with Absa in relation to her investigation,” Ramos said. “The public protector did not take up this invitation.”
The State Security Agency (SSA) also seemed to have made an unusual — and previously undisclosed —amount of input into Mkhwebane’s work. In a statement on Thursday, her office said she had met the spy agency to inquire about its contract with British private intelligence company Ciex and “the management process of that contract by SSA”, referring to a meeting on March 3.
But a one-page handwritten note from a meeting on June 6 is headed: “Meeting with SSA — Economist”. The note refers to “independence” and aligning “with constitutional obligations”.
Mkhwebane met with the presidency the following day. Two weeks later, she ordered Parliament to change the Constitution to make “socioeconomic wellbeing” rather than inflation targeting the main task of the Reserve Bank.
Mkhwebane’s office on Thursday responded to detailed questions with a short statement. It read, in full: “Regarding the contents of the record, this forms part of the matter still pending in court and is therefore sub judice. The public protector does not intend to litigate through the media and will address all issues raised by [the Reserve Bank] in her answering affidavit due to be filed on October 23.” — Phillip de Wet
Zuma denies ‘stolen cash’ promise
In 1997 former British spy Michael Oatley signed an agreement with the South African government that entitled him to a 10% commission on any illicit apartheid-era funds his company, Ciex, managed to recover.
If that agreement was applied to public protector Busisiwe Mkhwebane’s finding that Absa received such funds, Oatley’s cut would come to R112.5-million — a cut he was apparently told came with the personal guarantee of President Jacob Zuma, according to newly emerged documents.
Among documents released by Mkhwebane is a 2014 letter from Oatley to former intelligence chief Billy Masetlha, who signed the 1997 agreement with Oatley. In it, Oatley records what he says Masetlha told him: “At your meeting with the president on the evening of April 14, President Zuma indicated his intention to appoint a panel to advise him on the government’s claim against Absa/Barclays and the potential for recovering the monies stolen in the so-called Absa ‘lifeboat’ conspiracy.”
Zuma had promised to take action soon after the 2014 election, just weeks away, the letter reflects, and “he confirmed recognition of the continuing Ciex entitlement to commission”.
That assurance would stand Oatley in good stead in any future claim for money — and would also represent eye-popping interference in what was then a long-dragging investigation by the public protector.
But Zuma on Thursday flatly rubbished the letter. “The president was not involved in the meeting in question,” his spokesperson, Bongani Ngqulunga, said. Masetlha did not respond to efforts to reach him. Oatley has previously refused to speak to the Mail & Guardian without “guarantees of confidentiality and non-attributability”. — Phillip de Wet