Lieutenant-general Berning Ntlemeza’s Hawks unit has shown its hand against finance minister Pravin Gordhan — and if this were poker, it would be clear that the Hawks have been bluffing.
The Hawks demanded that Gordhan report to their offices on Thursday to receive a “warning statement”, along with four other Sars officials — a precursor to possible criminal charges. Gordhan refused, saying he was under no obligation to do so and that the Hawks’ claims were “wholly unfounded”.
The fracas has caused a ruction in the markets. The rand tumbled 5% since the news broke earlier this week, undoing the currency’s recent recovery. Banking and property stocks were also hammered on the JSE over fears that president Jacob Zuma would use the trumped-up charges to oust Gordhan.
However, the letter to Gordhan from the Hawks has now emerged — and, remarkably, it suggests they’re trying to nail SA’s finance minister on a little-used technicality under the Public Finance Management Act (PFMA).
The letter from major-general MS Ledwaba says Gordhan broke the PFMA and the Prevention of Corrupt Activities Act by approving the early retirement of former Sars deputy commissioner Ivan Pillay, at the age of 56, “with full retirement benefits” in August 2010.
Ledwaba says Gordhan then re-appointed Pillay for three years on a contract.
This, the Hawks say, amounts to “fruitless and wasteful expenditure”.
These brittle claims hint at Ntlemeza’s deeper desperation to pin anything on Gordhan after it became clear the allegation he was involved in a “rogue unit” at Sars wouldn’t stick.
It comes at a time when some in the ANC are seeking to claw back control over treasury, demanding that government “reprioritise” the budget. Gordhan, who acted as a bulwark against efforts by state-companies like SAA to splurge cash, has resisted profligacy.
What makes the latest developments all the more surprising is that the Hawks told Gordhan in writing “in no uncertain terms” in May that he was not a suspect in the “rogue unit” case.
Gordhan has already explained why that particular investigative unit at Sars was established legally, and why it broke no rules.
His lawyers reiterated that “very many public bodies engage in the covert gathering of crime intelligence — such as most metropolitan local authorities, SAA, Eskom and Prasa, to name but a few.”
This is a crucial argument, as it also provides the legal basis for why there’s no reason for charges to be brought against Pillay, former Sars investigations head Johann Van Loggerenberg and former Sars executive Peter Richer.
The other official given a “warning statement” earlier in the week was Andries “Skollie” van Rensburg, who was the first head of the Sars intelligence unit.
In response to the claims of corruption, Gordhan’s lawyers said he “did not give or agree to give gratification to anybody”.
“He merely gave official approval to the proposal to the commissioner that Sars allow Mr Pillay to take early retirement and be re-appointed,” they wrote.
In legal terms, Gordhan had no intention to do anything unlawful.
On Thursday morning, Pillay and Van Loggerenberg reported to the Hawks’ offices for questioning about the so-called “rogue unit”.
Speaking outside the Hawks offices, Judge Johann Kriegler described the Hawks’ campaign as a politically-motivated witch-hunt.
Others have also spoken out, dubbing the campaign against Gordhan and his colleagues as intimidation tactics by factions close to Zuma, aimed at driving him out of office.
Trevor Manuel, Gordhan’s predecessor as finance minister, says firing Gordhan “will destroy this economy”.
“The next move is actually up to the head of state to call them [the Hawks] in and say: ‘If you have compelling evidence let’s see what it is’,” says Manuel.
Even the business sector, which is often too mute a voice in public affairs, has raised the ante.
Business Leadership SA, led by Bobby Godsell and Saki Macozoma, says the country’s plans to avoid a downgrade are being “insidiously subverted”, which means that SA now stands “on [the] edge of an abyss”.
It says the case against Gordhan “lacks any legitimacy or credibility”.
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