Bain, Zuma and Moyane colluded to seize and restructure Sars

Part 1, Volume 3, Chapter 3 of the Zondo State Capture Report deals with the South African Revenue Service (Sars).

The Zondo Commission found that Bain colluded with former president Jacob Zuma and designed “a planned and co-ordinated agenda to seize and restructure Sars”, well in advance of Tom Moyane being catapulted in as Commissioner of Sars.

The findings of the Nugent Commission and the Zondo Commission

The Nugent Commission was formed to examine irregularities at Sars, whereas the Zondo Commission was formed to investigate state capture in public entities.

Nevertheless, the Nugent Commission findings are dovetailed by Zondo Commission’s evidence:

• Massive “failure of integrity and governance at Sars”.
• Sars was recklessly mismanaged by Moyane as he “dismantled the elements of governance one by one”. Moyane seized “control of Sars as if it was his to have”.
• Senior management was “driven out or marginalised at Sars” and replaced by compliant officials who “neglected their oversight function”. Further, “capacity for investigating corruption was disabled”.
• Instead of fostering a culture of healthy dissent, Moyane engendered a culture of fear and intimidation.

Read:
Nugent loosens the final shackles
Saica will investigate all members implicated in state capture

The Zondo Commission further found that:

• The private sector colluded with the (state) executive, including president Zuma, to capture Sars and “render it ineffective”.
• Sars’s investigative and enforcement capacity was a target for those engaged in state capture.
• The media perpetuated “false narratives which discredited targeted people as well as providing grounds for their removal was a notable feature” of the evidence before the commission.
• Moyane was promised the (Sars) Commissioner position by Zuma.
• Bain met with Zuma and Moyane before they had been appointed as consultants by Sars, and commenced detailed planning.
• Specific individuals at Sars were identified before Moyane was appointed.
• Moyane dismantled the entire executive committee (of Sars) on the basis of the alleged unlawful (rogue) unit.
• Zuma and Moyane played critical roles in the capture and dismantling of Sars. Key units ensuring tax compliance were disbanded or restructured, and projects were put on hold or abandoned. The revenue collection function was fundamentally weakened.
• Bain was appointed in January 2015 to provide consultancy services via an irregular closed tender process, and thereafter “Bain just continued to do work at Sars.”

Read:
Bain’s role in dismantling Sars
The reign of Bain is on the wane
The looting of Eskom, Transnet and SAA by the Gupta media enterprise

Witnesses who gave evidence related to Sars at the Zondo Commission included:

Athol Williams – a former employee/independent consultant at Bain. He oversaw an investigation commissioned by Bain regarding its contract with Sars. He resigned due to Bain’s non-transparency with him, and the authorities.

According to Williams, Bain’s strategy comprised targeting an organisation, exerting control, and pursuing “financial enrichment through corrupt procurement and other means”.

The commission expressed its appreciation to Williams for the evidence presented concerning Bain, Moyane and Zuma in regard to the plans for the capture of Sars. Williams rejected attempts by Bain to buy his silence.

Vlok Symington – a senior employee of Sars and the victim in a hostage incident at the tax agency, which was described by the commission as an “extreme example of the culture of fear and bullying that characterised [Mr] Moyane’s tenure”.

Symington told the commission that “Minister [Pravin] Gordhan was allegedly seen as an obstacle to parties involved in state capture”.

Read: Cracking down on the professionals who enable financial crimes

Johann van Loggerenberg – a former Sars employee told the commission that there were dedicated units within Sars which were mandated to assist law enforcement agencies to control organised crime, from a revenue and customs and excise perspective.

Tom Moyane – the former Sars Commissioner who gave evidence at the commission under subpoena. The commission had received evidence that Moyane had been presented with a ‘First 100 Days Plan’ months before he joined Sars.

The plan proposed to “identify individuals to neutralise”. Moyane said that the use of the word “neutralise” was unfortunate.

Symington told the commission that Bain’s plan for Sars had been “presented to the executives of Sars as a fait accompli”. Moyane disagreed and told the commission that he ran a “consultative organisation in which everything was put before a team for discussion and approval”. He said that he never took a “dictatorial position”.

Minister Pravin Gordhan – who told the commission that when the Ministry of Finance advertised in 2013 for a commissioner, more than 120 applications were received.

The commission noted that Gordhan “observed first hand that [Mr] Moyane refused to answer to him as the responsible Minister, instead running Sars as he wished, would not reveal and discuss what changes he was making at Sars, refused to discuss his new operational model, and carved out some of the institutions most senior people as well as Sars’ compliance capacity”.

The commission held that Gordhan’s testimony “is important evidence of the capture of the institution”.

Read: Moyane’s Sars review was Gupta-linked – Gordhan

Moyane’s purging splurge

The commission observed that:

• Moyane’s era was “characterised by the purging of competent officials at Sars”.
• Many key officials resigned within weeks of Moyane’s arrival, including Barry Hore, the Chief Operating Officer of Sars, who had 70% of the staff reporting to him. Hore was replaced by Jonas Makwakwa – “the same individual who was allegedly feeding Bain sensitive, confidential information with which it was able to create its detailed plans for [Mr] Moyane”.
• Within two weeks of arriving at Sars, Moyane disbanded Sars’ entire executive committee on the “basis of an apparent Sunday Times exposé about a so called Rogue Unit”.
• The Projects and Evidence Management and Technical Support Division, which was under the leadership of Van Loggerenberg was “dismantled and its projects brought to a close” under Moyane.
• Under Moyane’s reign, “there was a 15% drop in the excise figures for tobacco. In addition, the illicit component of the industry increased to 30%”.

Read:
Sars ‘rogue unit’ narrative consigned to trash heap
‘Rogue unit’ propaganda slur finally put to bed

Zondo Commission Recommendations

The commission has recommended that:

• Bain’s contracts with state departments and organs of state be re-examined for compliance with the relevant statutory and constitutional provisions.
• The National Prosecuting Authority to decide whether or not to initiate prosecutions in connection with the award of the Bain contracts.
• The Sars Act be amended to provide for an open, transparent and competitive process for the appointment of the Commissioner of Sars.
• Moyane be charged with perjury in relation to his false evidence to Parliament.