Former Mozambican finance minister Manuel Chang. (Wikus de Wet/AFP)
Mozambique has filed papers to South Africa’s supreme court of appeal in its third bid to challenge a ruling that its former finance minister, Michael Chang, be extradited to the United States to face fraud charges stemming from the country’s Secret Debt scandal.
The application for leave to appeal may be the Maputo government’s last resort in seeking to have him surrendered to Mozambique instead, amid unresolved questions as to whether he will face trial if repatriated.
It has twice so far been denied leave to appeal a South Gauteng high court judgment handed down on 10 November last year in which Judge Margaret Victor overruled a decision by Justice Minister Ronald Lamola to extradite Chang to Mozambique.
Victor found that the minister’s decision, taken in the face of four legal opinions advising otherwise and objections from NGOs on both sides of the border, was irrational because he did not take into account that Chang may be a flight risk and the lack both of a valid Mozambican warrant for his arrest and proof that his past immunity had lapsed.
“In the absence of a rational explanation by the minister for ignoring or not giving sufficient weight to these undisputed concerns, the requisite threshold for rationality has not been reached,” the judge said.
Lamola’s decision had been all the more perplexing because it marked a reversal of his earlier readiness to heed the US request. He has chosen not to defend it further but to abide by the high court ruling. On 25 July, his office said that because the constitutional court had dismissed the application for leave to appeal, all litigation in the matter was at an end.
“Mr Chang will therefore have to be surrendered to the US authorities.”
A few hours later the statement was revised to say the South African government would have to wait for all legal processes to be exhausted. Days later, Victor dismissed the application, but on 23 August Maputo approached the appellate court, again suspending the implementation of her order and further protracting an international standoff that has lasted almost four years.
Chang was arrested at OR Tambo International Airport on 29 December 2018, ten days after he was indicted in a New York court on charges that include conspiracy to commit fraud, conspiracy to commit securities fraud and conspiracy to commit money-laundering, and an Interpol red notice issued.
The charges stem from an elaborate fraud scheme that triggered a sovereign default in Mozambique in 2016.
Some three years earlier, Chang signed off on state guarantees for €2-billion worth of loans extended to Mozambican parastatals by foreign banks, including Credit Suisse. The money, a fair share of which came from investors in the US, was ostensibly intended to support the development of Mozambique’s tuna fishing industry and pay for trawlers and coastal patrol vessels. But it flowed instead to Chang and his alleged co-conspirators, believed to include the son of former president Armando Guebuza.
As the high court put it: “None of the monies borrowed, except bribes, went to Mozambique.”
Chang’s decade-long tenure as finance minister ended in 2015 and he ceased to be a member of the Mozambican legislature in 2019, but much of the pleadings before South African courts were about whether he still enjoyed immunity from prosecution for prior decisions as a member of cabinet and parliament.
The US filed a formal extradition request in January 2019 and Mozambique followed suit in February that year. Faced with two competing requests, then justice minister Michael Masutha decided in May to surrender Chang to Mozambique.
At the end of that month, President Cyril Ramaphosa appointed a new cabinet in which Masutha was replaced by Lamola, who asked the high court to set aside the decision and refer the matter back to him. The minister opposed an application by Chang demanding that he either be returned to Mozambique or released.
The court held, in a ruling now known as Chang I, that it “would make no sense to extradite a person to a place where he cannot be prosecuted”, and hence the previous minister did not have an option to extradite him to Mozambique.
“He was faced with only one valid request — that of the USA,” it said, and sent the matter back to Lamola.
The justice department solicited independent legal opinion and was advised that Chang may still enjoy immunity and in mid-2020 Lamola signed a memorandum recommending his extradition to the US.
But Chang would spend another year in a Pretoria prison cell before Lamola, in August 2021, decided to extradite him to Mozambique after all.
Well-placed sources said the minister bowed to pressure to consider the realpolitik of relations with a neighbouring state. The Frelimo government risks embarrassment if Chang is tried on foreign soil, while South Africa has looked to Mozambique as a source of natural gas to alleviate its electricity crisis.
Lamola’s office denied this.
“The minister considered all of the legal opinions and believed the legal questions before him had been settled and that as such Mr Chang was extraditable to both the United States and Mozambique,” said his spokesperson, Chrispin Phiri. “The high court had a different interpretation and the minister will abide by the courts’ interpretations further.”
Lamola’s decision was taken on legal review by the Fórum de Monitoria do Orçamento, a Maputo-based umbrella body of civil society organisations, which argued that Chang’s immunity may not have been lifted, but even if it had, he may still be shielded by systemic corruption and largesse linked to his former role as a member of government.
The Helen Suzman Foundation was joined in the matter, and successfully attacked Lamola’s failure to submit a contemporaneous record of his decision-making, and to disclose the memorandum in which he resolved to extradite Chang to the US until prompted in court proceedings.
Both organisations earlier this month filed papers opposing Mozambique’s application to the appellate court, and in these they reiterate that the purpose of extradition, the prosecution of the accused, would not be served if the high court order were overturned.
In its founding affidavit, the government argued that Chang lost immunity from prosecution after the 2019 elections when a new parliament was elected, and that Lamola knew as much when he agreed to surrender him to Mozambique.
“Immunity from prosecution in terms of Mozambican law is enjoyed by members of parliament. Once one ceases to be a member of parliament, the immunity automatically ceases. Chang lost his immunity the moment he ceased to be a member of the parliament of Mozambique,” it said.
The high water mark of its case for leave to appeal is that the high court strayed impermissibly into the realm of the executive and further lacked the “requisite expertise” to substitute the minister’s decision to surrender Chang to Mozambique with one of its own.
The court was not competent to determine, in the case of competing extradition demands, which should take precedence, it said, and Victor erred not only on the law, but on the facts, including in finding that a Mozambican warrant of arrest for Chang was defective.
“The high court did not possess the necessary technical expertise which the minister and the department have. Nor is the high court an expert in making extradition decisions.”
Here, the government said, the court lost sight of the provisions of the Southern African Development Community (SADC) and the need, when faced with different extradition requests, to consider nationality and geographical proximity, going so far as to add that it would be “more cost effective” to surrender Chang to his country of origin.
In an affidavit submitted to the supreme court of appeal in early October, the Helen Suzman Foundation countered: “There is no magic in having two extradition requests.”
It added that the argument on the SADC protocol, which governs extradition matters between South Africa and Mozambique, was difficult to understand.
“The SADC protocol clearly provides that immunity in the receiving state of a person sought to be extradited is a ground for refusing the request.”
And it said that Mozambique’s plea for deference and non-interference with a policy-laden decision by a minister not only ignores legal precedent but “offends against South Africa’s international law duties in respect of corruption”.
As a signatory to various international treaties to combat corruption, the foundation added, South Africa must ensure that its obligations in this regard are understood and given effect extraterritorially. This would include ensuring that extradition does not equal immunity.
The papers filed will only serve before the judges of the appellate court some time next month.
It is moot whether, if denied leave to appeal, Maputo would again turn to the apex court. The court’s refusal in June to entertain the matter was not based on the merits but made on the grounds that it was not in the interests of justice to do so “at this stage”.
In the meanwhile, South Africa is seeking to ward off greylisting by the Financial Action Task Force and has until next month to prove that it proposes to better its efforts to combat crimes such as money-laundering.