ANALYSIS
In 2011 Paul Hoffman, a Cape Town-based advocate and activist, asked the then Public Protector, Thuli Madonsela, to investigate why a contract between the South African government and a British firm to recover "stolen apartheid billions" was cancelled.
"I'm overjoyed that she has decided to pursue the investigation," Hoffman said when, on 6 July 2011, she decided to accede to his request.
Now the public protector's preliminary report, signed by Madonsela's successor, Busisiwe Mkhwebane, recommends that Absa must pay back an amount of R2,25 billion to the South African Reserve Bank (SARB), according to the Mail and Guardian (M&G). This because of an illegal and improper loan, donation or "lifeboat" made to a now-defunct bank which Absa acquired in the early 1990's.
A very chuffed Hoffman on Friday told HuffPost SA he is happy that the issue, which has dragged on for years, is finally coming to a head.
It's quite complicated, but hold on and read further.
The M&G's reporting on Friday seems to indicate that the public protector relies quite heavily, almost exclusively, on the so-called Ciex Report, and not on a similar investigation headed by Judge Dennis Davis.
Why is this important? Because the Ciex report targets Absa for recovery, while the Davis investigation lets the bank off the hook.
Ciex was a British company founded by ex-British spies, that approached the South African government in August 1997 and said it can help the democratic government recover "billions" looted from state coffers during apartheid.
It sold an operation called "Spear" to government, which claimed it can recover an amount of R3,2 billion from Absa, between R3 billion and R6 billion from Sanlam and the then-Rembrandt Cigarette Company and up to R5,5 billion from Aerospatiale/Daimler-Chrysler.
Ciex would only have been paid if it recovered money.
In a document, drawn up by Ciex and titled "Operations on behalf of the South African government, August 1997 to December 1999", Ciex sets out details of all its investigations into various entities, including Absa, Sanlam, Armscor, the infamous Pagad (People Against Gangsterism and Drugs) and a rogue minister identified as "Gnome".
It even alleges that the Dutch Reformed Church and KWV, the Paarl-based wine co-operative, illegally benefited from the apartheid government.
It even alleges that the Dutch Reformed Church and KWV, the Paarl-based wine co-operative, illegally benefited from the apartheid government.
This document (which includes references to the Rupert family) says the banking and financial systems were under control of the Broederbond – the shady Afrikaner brotherhood of the Vorster era – and served the interests of the "old era".
It also sets out three strategic objectives: to "bring the SARB under control" and replace the then-governor, Chris Stals; to leverage Swiss banks to establish a "new relationship" with the government and to entice big business to be "more supportive" of government's objectives.
So, we have British spies saying to government they can help recover "stolen apartheid money" and help government to assert its influence over the apartheid business sector. All this in exchange for a hefty payday.
Ciex was adamant that the SARB's "lifeboat" to Bankorp – eventually absorbed by Absa – was illegal and could be recovered. It also assisted the Heath investigation, that came to the same conclusion. They even included a "blueprint for recovery", including the conditions necessary to force Absa to pay and the method which could be used to force the bank and its leadership to pay back the money.
Government never followed-through on the Ciex recommendations.
The other major investigation was the Davis inquiry, officially called "the SARB Governor's panel of experts to investigate the SARB's role with regards to the financial assistance package to Bankorp Limited".
The panel included three chartered accountants, an academic and a financial sector advisor from the International Monetary Fund.
In its report of more than 150 pages, including annexures and a list of source documents, the panel found the loan or donation by the SARB to Absa/Bankorp was improper and illegal. It also specifically says the conclusions drawn by Heath are mistaken. It found Absa and its shareholders weren't beneficiaries and that although recovery is theoretically possible, it would be difficult and costly.
The report doesn't mention systemic risks to the banking system should the recovery operation go ahead, merely that the Bankorp intervention by the SARB was justified to prevent systemic contagion.
In its report of more than 150 pages, including annexures and a list of source documents, the panel found the loan or donation by the SARB to Absa/Bankorp was improper and illegal. It also specifically says the conclusions drawn by Heath are mistaken.
The contrast between the two reports is stark.
One report compiled is by a private company of British spies, the other was drawn up by a judge of the high court in conjunction with financial experts.
One report references the Broederbond and the Ruperts, the other refers to the SARB Act and the Basel Committee on Bank Supervision.
One report says the recovery should be pursued because corruption is portrayed as a "uniquely black problem". The other says "notwithstanding allegations in the public domain about conspiracies, the panel did not find any evidence which would have justified such a conclusion."
Tito Mboweni, who was SARB governor at the time, did not want to comment to the M&G. Neither did Trevor Manuel, who was minister of finance at the time of Ciex's involvement. Billy Masetlha, who signed the Ciex contract on behalf of government, was unavailable for comment.
"I don't know which report is correct, the Ciex Report or the panel's, but I want to know why government didn't want to take a shot at recovering billions," Hoffman said on Friday.
Mkhwebane has seemingly decided to pin the credibility of her office on an almost 20-year-old report compiled by British spies looking for a payday.
The final report has yet to be released, but what's been leaked to the M&G doesn't paint a pretty picture.