ANALYSIS
SA Revenue Service (SARS) boss Tom Moyane's breathtaking press conference in Pretoria on Monday illustrated exactly how much trouble this country is in.
The SARS commissioner not only doubled down on his sworn contention that the taxman's now-defunct High-Risk Investigations Unit (HRIU) was "rogue", but he publicly restated his intention to rubbish anybody who dared to challenge this well-established narrative.
Moyane told the media he was satisfied that KPMG's findings about the so-called "rogue unit" were above board and that he would not be swayed from its findings. This after KPMG issued a long and confusing statement on Friday seemingly disavowing the report. It is now, however, unclear which parts KPMG believes still stands and which parts must be scuppered.
Moyane publicly restated his intention to rubbish anyone and anybody that dared challenge this well-established narrative.
When asked whether he agreed that KPMG's statement meant it had retracted the whole of the report, KMPG spokesperson Nqubeko Sibiya replied: "I cannot agree with that."
When asked whether it was only the parts of the report referencing the "rogue unit", he said: "I cannot confirm or deny it. Please refer this question to SARS."
The damage wrought on SARS since the Sunday Times' first publication of the "rogue unit" stories in October 2014 is widely known. These reports were printed shortly after President Jacob Zuma appointed Moyane to SARS in September 2014 and led to the dissolution of the HRIU, the almost immediate resignation of a number of senior officials and, by the beginning of 2016, led to the departure of more than 55 group executives and other senior staff members. Since then SARS has recorded a tax revenue shortage of R28-billion, its tax refund payments have come under the scrutiny of the tax ombudsman and tax compliance has taken a nosedive.
The damage wrought on SARS since the Sunday Times' first publication of the "rogue unit" stories in October 2014 is widely known.
And, there seems to be no appetite whatsoever by anybody in authority to get to the bottom of the disemboweling of SARS. Parliament's standing committee on finance, led by Yunus Carrim (ANC), has never sunk its teeth into the matter, while there has been no inclination by Finance Minister Malusi Gigaba, appointed after Zuma fired Pravin Gordhan, to sort out the hot mess at SARS HQ in Brooklyn, Pretoria.
Moyane clearly needs to keep the narrative of the rogue unit alive. This enables him to discredit Trevor Manuel (former minister of finance) and Pravin Gordhan (Manuel's successor and a former SARS commissioner) under whose watch the HRIU (in all its different guises) was established, as well as anybody even remotely resisting the growing cancer of state capture.
The HRIU was seemingly enormously successful, with a reputation of making inroads into the illicit economy and recovering billions of rands in lost taxes owed to government. Coincidentally, this meant that family and friends of President Jacob Zuma came into its crosshairs, including his son Edward, nephew Khulubuse, Taiwanese businessman (and Zuma benefactor) Robert Huang as well the Guptas themselves.
Moyane clearly needs to keep the narrative of the rogue unit alive.
On Monday, Moyane reiterated that there was nothing wrong with the KPMG report and that he would not be swayed by the firm's retraction of the whole report or parts of it.
What is clear though is that Moyane is relying on a lot of flawed and questionable information, much of which has been publicly debunked and never challenged by the powers that be. The KMPG report is one of three investigations used by Moyane to purge SARS and the HRIU:
The Sikhakane Panel of Investigation
- This panel was established in September 2014 by Ivan Pillay when he was acting commissioner of SARS and led by advocate Muzi Sikhakhane.
- Its mandate was to determine whether allegations made against Johann van Loggerenberg, a senior SARS executive and manager of the HRIU, by Belinda Walter -- with whom Van Loggerenberg was in a relationship while she was working in the tobacco industry -- held water.
- The allegations by Walter were unrelated to the unit. It only came into play after The Sunday Times published reports about it in October 2014.
- Nobody was interviewed under oath and the panel did not interview Van Loggerenberg about the "rogue unit" allegations.
- Various persons relevant to the "rogue unit", like Pete Richer, who was the unit's first manager, or Manuel and Gordhan, weren't called or asked to make representations.
- Pillay, when he was deputy commissioner, wrote to Moyane and argued the report contained numerous procedural, substantive and general deficiencies.
- According to Pillay "the report poses a significant and unwarranted risk for SARS if the report was to published in its present form".
- It was finalised in November 2014.
The Kroon Advisory Board
- The Kroon Board was chaired by retired Judge Frank Kroon and was established by then-finance minister Nhlanhla Nene in January 2015 after Moyane took receipt of the Sikhakhane report.
- The panel conducted no new independent investigation and interviewed no new witnesses.
- The panel released its findings –- which basically entailed affirming the Sikhakhane report -– on 28 April 2015.
- It said in a statement it "studied and discussed" the Sikhakhane report and had "satisfied" itself that the unit's establishment "was unlawful".
KPMG
- The audit firm was contracted in December 2014 to enquire further into the detail around the rogue unit.
- In October 2015, a version of the report was leaked to The Sunday Times that made extensive "findings" and "recommendations" about the unit as well as Pillay, Van Loggerenberg and others.
- The report found the unit was "covert", "rogue" and illegal.
- It also found that the unit illegally intercepted communications on Pillay's instructions.
- It recommended that disciplinary and civil proceedings be instituted against a number of people, including against Pillay and Van Loggerenberg.
- KPMG's investigation entailed a documentary review and no formal interviews were conducted or representations received.
- The report was finalised in January 2016. The parts of the report about the "rogue unit" was, however, disavowed by KPMG on 15 September 2017.
In addition to Pillay's critique of the Sikhakhane Panel, Adrian Lackay, a former SARS spokesperson, sent a detailed memorandum to Parliament setting out the chain of events around the "rogue unit".
Both Pillay and Lackay's documents sank without trace.
But Sikhakhane, Kroon and KPMG still stand.