The president faces investigations from the South African Revenue Service and the Reserve Bank on top of charges laid by former spy boss Arthur Fraser, himself subject of the Zondo inquiry into state capture and an ally of Jacob Zuma.
President Cyril Ramaphosa and his advisers appear to have decided to tough it out with regard to the case opened against him for money laundering, kidnapping and corruption over the theft of $4-million at his game farm in February 2020.
The presidency has merely acknowledged that the robbery took place while Ramaphosa was out of the country and that it was reported to the Presidential Protection Services, failing to explain how much was stolen, who it came from and whether it was declared to the South African Revenue Service (Sars) and the South African Reserve Bank.
It has also pointed to the source of the charges — former spy boss and prisons head Arthur Fraser, whose conduct as head of the State Security Agency (SSA) is the subject of the Zondo commission report on state capture to be release later this month — and the contestation in the ANC to try to deflect from the content of his charges.
Fraser is a close ally of former president Jacob Zuma. His release of the former head of state on medical parole after he was jailed for contempt of court has since been declared unlawful by the high court and Fraser’s contract as national commissioner of correctional services was not renewed earlier this year.
Former spy boss Arthur Fraser. Photo: Felix Dlangamandla/Netwerk24
Fraser allegedly looted the SSA’s coffers to enrich himself and to divert resources to fighting the ANC’s factional battles ahead of its 2017 Nasrec conference, at which Ramaphosa was elected as the party’s president.
On Friday, presidential spokesperson Vincent Magwenya declined to shed any further light on the robbery — and the president’s failure to report it — beyond explaining that the money had come from the sale of stock at the president’s farm to local and international buyers.
“The stolen proceeds from the sale of game were not from an auction. Sales of varying volumes take place all the time at the farm,” Magwenya said.
He declined to disclose who the buyers were, how much was stolen and whether the money was recovered, saying these issues were the subject of a police investigation.
“Buyers often include a mix of local and international buyers. In the normal course, all the cash that is received through game sales is reported and banked accordingly. With respect to the robbery, the cash was stolen before it could be reported and banked,” he said.
Magwenya also declined to provide a case number and to comment on whether the revenue from the game sales had been reported to Sars for collection because “these questions are now going to be a subject of a police investigation”.
Magwenya added that Ramaphosa would abide by the ANC’s step-aside rule if he was charged and arrested.
“Should President Ramaphosa be charged, he will certainly step aside. The president believes that the goal behind the step-aside rule is to achieve the renewal of the governing party and applies to all its members equally, including him as the president,” he said.
The ANC has itself kept quiet on the matter, with spokesperson Pule Mabe ignoring requests from the Mail & Guardian for clarity on its stance on Fraser’s charges.
Ramaphosa’s opponents in the party are likely to exploit the charges and attempt to have the step-aside clause — which has been used against “radical economic transformation” (RET) faction leaders including suspended secretary general Ace Magashule — invoked against him.
The rule, adopted at the Nasrec conference, stipulates that leaders who are charged with corruption have to “step aside” from their party and government posts. It has been used to effectively suspend a number of other leaders, including eThekwini chairperson and former mayor Zandile Gumede.
Gumede defied the rule and contested the chair’s position in April, but may still be stripped of her post and ordered to step aside again by the ANC’s national executive committee (NEC) at its next meeting.
Dirty Durban: Zandile Gumede, a staunch ally of former president Jacob Zuma, marches to court in support of him in 2019. (AFP)
Ramaphosa’s enemies have previously tried to have it applied to him over corruption allegations, but were defeated at the NEC, which confirmed that only those who had been arrested and appeared in court should step aside.
They are likely to try to use the rule to either stop Ramaphosa from running for party president in December or, if this fails, use it to allow leaders such as Gumede and Magashule to stand for positions.
A leader of the RET faction in KwaZulu-Natal, who asked not to be named, said the charges should “definitely” see the step-aside rule enforced against Ramaphosa, but that “fear” in the organisation because of the ongoing conference cycle would delay this being raised.
“He has been charged, but because of fear and of wanting to be elected people will not speak up now,” he said. “It’s the same thing, but you won’t see anybody talking about it now.”
Ramaphosa will also face pressure from opposition parties over both his relationship with mining house Glencore and Fraser’s money laundering allegations.
United Democratic Movement leader Bantu Holomisa this week called for a “thorough” investigation into Glencore’s role in South Africa in light of the more than $1.1-billion it will pay for bribery and market manipulation in the United States, United Kingdom and Brazil for corruption.
Democratic Alliance leader John Steenhuisen wrote to Sars commissioner Edward Kieswetter on Friday requesting that it investigate whether the stolen money was declared and with it has tax implications for Ramaphosa.
“It is critical for the Sars to probe this matter, to both determine if this amount was declared to Sars and if the transaction had tax implications, in terms of both the Income Tax Act and the Tax Administration Act,” Steenhuisen wrote.
Ramaphosa risks having the weapon he wielded against Magashule turned against him. (Photo: Delwyn Verasamy/M&G)
“Considering that the Sars has pursued taxpayers, issued fines and instituted criminal charges against many taxpayers for minor infringements … it is essential for the protection of the rule of law, and for tax morality, that taxpayers see that the law and regulations are applied equally to all citizens, and that there is no special treatment for those in power.”
In a letter to the Reserve Bank, Steenhuisen asked for an investigation into the foreign exchange transactions by the president and any violations of the legal limit on possession of foreign exchange.
Steenhuisen said the central bank had a legal obligation to “apply these regulations equally, and investigate all violations” and as such should investigate the president’s possession of the foreign currency.
Sars has declined to comment.
“SARS is a creature of statute and must always act within the prescripts of the law. According to Chapter 6 of the Tax Administration Act of 2011, Sars is prohibited by the aforesaid legislation from divulging the confidential information of taxpayers,” a spokesperson said.
Fraser’s charges also set back Ramaphosa’s anti-corruption agenda, on which he has hung his presidency, and raised questions about the president’s business dealings and their potential for creating cronyism.
Karam Singh, executive director of the nonprofit Corruption Watch, said Fraser’s allegations and any inquiry into Glencore’s role in South Africa had to be investigated thoroughly.
“We would want to see they would want to see commensurate investigations finalised in South Africa in relation to any issues that they have been sanctioned for internationally,” Singh said. “We need to see consequences follow from that.”
Singh said Glencore’s argument that corruption was committed by former executives who had left the corporation “doesn’t pass muster” and that the company — like Bain and KPMG — could not be absolved from facing the legal consequences of their actions.
On the case opened by Fraser, Singh said it was important to note the context of the charges and understand that “there are going to be a lot of allegations and skeletons being brought out of the closet between now and the party conference”.
It was also important to note that Fraser was a “highly implicated person” who “would have a direct interest in seeing this case come to light”.
“However, there was now a ‘set of facts’ that have been brought to our attention that we did not know about for the past two years.”
The presidency’s stance — that there was no cover-up and that the president had acted in a transparent manner — was “really a problem.”
The fact that the robbery was not something that the president or the presidency was prepared to have brought to public attention was a red flag, Singh said.
Democratic Alliance leader John Steenhuisen wrote to Sars commissioner Edward Kieswetter on Friday
“The second red flag is if the president engaged in regular commercial operations where the business relied on large sums of cash. If that is the case, there is a problem,” he added.
Any large cash sale needed to be reported to the Financial Intelligence Centre (FIC) by the seller, while there would also be obligations to Sars.
“Does any of that happen with regard to the president’s involvement in the cattle trade?” Singh asked. “If not, this raises the concern that this could be the space in which money laundering type of operations can take place.”
The allegations against the president needed to be tested and the presidency needed to be more transparent if confidence in the head of state were to be restored, he said.
“If they are acting in a transparent way and they believe that they are now being subjected to unfair attacks for being corrupt in the context of the political shenanigans taking place, they need to do a lot more to bring the public into their confidence and prove that this is not the case.”
Singh said that a “higher bar for all our public officials” was required with regard to their business interests, in particular the president.
“Imagine if all of the cabinet members were involved in different types of business? Livestock seems on the edge and exotic and because so much money is involved many give the president a nod that it’s okay that he is in that business,” Singh said.
There was also a danger that the people who did business with the president would come to expect preferential treatment from the state because of this, and that this could lead to cronyism.
“People that he would be transacting with commercially would fall under his political power and would think that if they are doing deals with the president, they would get favourable treatment at large. That is cronyism. That is why we don’t want our leaders doing business,” he said.
There needed to be a prohibition of government leaders doing business or a mechanism put in place which would allow the president to put his business interests “at arms length” so that he was above reproach when it comes to allegations of corruption and favouritism.
Singh added that although disclosures increased the “deep trust deficit” between Ramaphosa’s administration and the public, his appointments and approach in dealing with corruption “was still more legitimate than that of his predecessor”, Zuma.
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