Close to R1m in taxpayer money used to resurrect evidence on ‘rogue unit’

A South African Revenue Service’s (Sars) official spent close to R1-million of taxpayer money on legal services to prepare him to testify at the Nugent commission so that he could “clear his name”.

This was revealed by evidence leader Advocate Carol Steinberg at the commission of inquiry into tax administration and governance at Sars from the year 2014 to 2018 when Tom Moyane was commissioner. He was suspended in March this year.

READ MORE: Moyane’s failings laid bare

The Sars commission chaired by retired Judge Robert Nugent is investigating issues of tax administration and governance from 2014 to 2018.

Sars employment relation group executive Luther Lebelo appeared before the commission in September to, he said at the time, “clear his name”. He also wanted to explain the reasons why he instituted disciplinary action which led to the suspension of former deputy commissioner Ivan Pillay.

READ MORE: Sars official struggles to answer why Pillay was purged

He repeatedly told the commission that he was not part of a purge.

Pillay was suspended twice — the first time on December 5 2014 — a decision he challenged and secured his reinstatement, and again on January 21 2015. The allegation was that he was instrumental in setting up the “rogue unit”. The unit was ostensibly an intelligence gathering outfit that allegedly executed high-level investigations including spying on former president Jacob Zuma.

Steinberg said, that on July 9, before appearing before the commission Lebelo applied to get external legal services to prepare him to appear before the commission. This request was approved by the recently suspended chief officer of legal Refiloe Mokoena. Lebelo received the services of lawyer David Maphakela a partner at Mashiane, Moodley & Monama Inc to the tune of R759 000, for one month’s services.

According to acting commissioner Mark Kingon, who appeared before the inquiry on Friday, this was despite the fact that Sars had given officials an option to use internal legal services if they were appearing before the commission.

“Do you think it is appropriate,” asked Steinberg.

“No,” replied Kingon.

However, he said that he would have to engage Lebelo before deciding on any disciplinary action.

“If I look at the extent of the costs involved and where I am in the current climate of our organisation, to be charged R750 000 including VAT for one month’s work there is something wrong,” Kingon said.

Lebelo had asked Maphakela to gather and prepare the rogue unit documents which were used to discipline former Sars officials Pillay, enforcement head Johann van Loggerenberg, and spokesperson Adrian Lackay.

“We are particularly disturbed because Mr Lebelo repeatedly said that the reason he wanted to give evidence was to clear his own name and it seems to us that an amount of R750 000 of taxpayer money was spent in an attempt to help him clear his own name,” said Steinberg.

Steinberg noted that on August 22, Nugent was copied in email correspondence between Lebelo and Maphakela, accusing the commission of being biased because Sars had supposedly not been given an opportunity to make a public rebuttal to Pillay’s testimony. She said the invoice for this letter was not included in Maphakela’s R759 000 fee, because it was written a month later.

“So R759 000 is the minimum. I have seen another invoice for R65 000 from another month so frankly, we are approaching one million rands for Mr Lebelo’s appearance here in order to reawaken the rogue unit issue,” Steinberg said.

Kingon distanced himself and Sars from the letter’s assertions that the commission was biased, adding that the bill for Lebelo’s legal services was “unnecessary” and warranted further investigation.

Nugent noted: “You can investigate as much as you like but spending three-quarters of a million of taxpayers money to resurrect the rogue unit and to resurrect evidence against these people is to my mind outrageous”.

Lebelo and Maphakela will appear before the commission on Monday. 

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Tebogo Tshwane
Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University. 

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