FIC: No conclusive indication that CR17 laundered money



There was no conclusive indication of money laundering in the financial documents provided by the Financial Intelligence Centre (FIC) to the public protector in her Bosasa donation investigation, the centre has said in court papers.

The FIC on Friday applied to join the court dispute between President Cyril Ramaphosa and Public Protector Busisiwe Mkhwebane over her Bosasa report. The FIC’s application followed Ramaphosa’s accusation that it acted unlawfully when it provided Mkhwebane with much more information than she had asked for when she was investigating the R500 000 donation from Bosasa’s Gavin Watson to the Ramaphosa’s CR17 campaign.

In her report, Mkhwebane found that Ramaphosa had deliberately misled Parliament when he answered a parliamentary question about a donation from Watson to the CR17 campaign, the campaign supporting his bid for presidency of the ANC at the party’s Nasrec elective congress in 2017.

Mkhwebane also revealed that the CR17 campaign had received tens of millions of rands in donations. However, the exact number is unclear as many of the amounts detailed in her report were disputed by Ramaphosa.

Mkhwebane added there was “merit” in the suspicion of money laundering, because the payment passed through “several intermediaries, instead of a straight donation towards the CR17 campaign”.

Her revelations were based on documents provided by the FIC. In his application to review and set aside Mkhwebane’s report, Ramaphosa said the centre had acted unlawfully by giving Mkhwebane more information than she requested.

In court papers, the FIC’s director Xolisile Khanyile disputed this. She said that — by looking into a number of bank accounts and over a longer period than Mkhwebane had asked — the FIC was merely “following the money”.

“Follow the money … is the principle applied across the globe by financial intelligence units,” she said.

However, Khanyile also said that the FIC analyst who had looked at the accounts had told the office of the public protector that “he could find no indication of money laundering as he could not identify any predicate offences”.

To be convicted of money laundering, the money in question must be the proceeds of crime. A “predicate offence” refers to the suspected crime from which the money was sourced.

Khanyile said the FIC did not have investigative powers — “it collects information, interprets and analyses it” to assist those bodies that do have the power to conduct investigations.

“In this regard, the FIC’s findings on the existence or not of the predicate offence are not conclusive as it did not investigate whether or not such predicate offence existed. The conclusion was solely based on the fact that the amount of R500 000 came from sources that appeared to be lawful.”

Khanyile said that once the FIC report had been received by Mkhwebane, “she was duty-bound to conduct her own investigations and analysis”. The FIC information could also not be used as evidence, she said.

However, in her report Mkhwebane made only observations about money laundering, instead directing the National Prosecuting Authority to investigate further. Ramaphosa said in his supplementary affidavit that, because no findings of money laundering were made, including all the FIC information into the court case was “abusive and serves no legitimate purpose under the Constitution or the Public Protector Act.”

Mkhwebane is yet to file her own court papers, in which she is expected to address the allegation.

In her affidavit, Khanyile sets out why her team looked further than what was requested by Mkhwebane.

She said Mkhwebane had asked for the “source” of the donation and “where it ended”. Because the donation was “commingled” with other monies as it moved through the three accounts associated with CR17, the FIC then looked at those bank accounts in turn.

There had also been reports of suspicious and unusual transactions on the accounts, she said.

“The FIC denies that it acted unlawfully in providing the information it provided to the Public Protector,” Khanyile said.

Franny Rabkin
Franny Rabkin
Franny is the legal reporter at the Mail & Guardian

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