On the Brink. Claire Bisseker
His second legal defeat was the North Gauteng High Court’s finding on 29 April 2016 that the National Prosecuting Authority’s (NPA) decision to drop 783 fraud and corruption charges against him in April 2009 was irrational. This had happened two weeks before the 2009 general election, which had paved the way for Zuma to become South Africa’s president. The same court denied Zuma and the NPA leave to appeal against its judgment.
For a while it seemed as if Zuma had been immeasurably weakened, but those who had expected real reform to ensue had underestimated the bare-knuckled resolve of those ranged against it – and Zuma’s staying power.
In a failure-to-cross-the-Rubicon moment, Zuma apologised for the Nkandla scandal on television but refused to resign, maintaining that he had always intended to pay back some of the money. His delay in doing so, he claimed, was merely because his lawyers held a different legal interpretation of the extent of the Public Protector’s powers. The country was in an uproar. Opposition parties succeeded in getting Parliament to hold a vote of no confidence in the president but, lacking the required two-thirds majority, were inevitably trumped by a united ANC.
Civil society staged mass protests and even ANC struggle stalwarts, like the late Ahmed Kathrada, church-based organisations and ANC leaders, including former finance minister Trevor Manuel, called for Zuma to resign for the good of the country. But Zuma dug in, supported by a network of patronage that depended for its lifeblood on his remaining in power until his exit could be carefully managed and a successor of similar ilk anointed.
The Hawks swoop on Gordhan
Gordhan, meanwhile, had been fighting battles of his own. On 30 March 2016, he revealed in the first of a series of remarkably candid press statements that he was being subjected to harassment and intimidation by the Hawks, South Africa’s special investigative unit for priority crimes.
The Hawks’ first salvo had been fired just days before Gordhan’s presentation of the 2016 budget, when it sent him a list of 27 questions, demanding answers by a deadline that disregarded the budgetary process under way.
Their aggressive questioning related mainly to a special investigative tax unit – subsequently dubbed ‘the rogue spy unit’ – which Gordhan had established at the South African Revenue Service (SARS) to investigate major tax fraud in 2007. At issue was whether SARS had exceeded its legal mandate in establishing such a unit, and whether the unit had engaged in illegal surveillance of other government agencies, including the NPA.
By revealing the details of the Hawks’ interrogation – and his responses – Gordhan took the public into his confidence. This had the effect of forcing the clandestine issue of state capture out into the open and turned his running battle with the Hawks into South Africa’s hottest news story day after day.
The row between Gordhan and the Hawks flared up again in the run-up to S&P’s visit to the country to finalise its 2016 mid-year ratings assessment. This followed an extraordinary exposé in the Sunday Times on 15 May 2016 that Gordhan faced imminent arrest by the Hawks for espionage related to the so-called rogue unit.
Two days later, Gordhan hit back at his accusers in a press statement for ‘manipulation of the law’ and for acting with ‘ulterior motives’. He accused individuals in government of conspiring to ‘intimidate and harass’ him, and made an impassioned plea for all South Africans to rally behind the National Treasury to protect the integrity of this world-class institution.
Gordhan even revealed the personal toll the Hawks campaign was taking on him, stating that media reports about his possible arrest had been ‘extremely distressing’ for him and his family. ‘I cannot believe that I am being investigated and could possibly be charged for something I am completely innocent of,’ he added. ‘It is indeed true that no one is above the law. But no one should be subjected to the manipulation of the law and agencies for ulterior motives.’16
Unlike the president, who dismissed claims of state capture out of hand, Gordhan warned that ‘millions of people will pay the price (there will be less money to relieve poverty and support job-creation programmes) if this subversion of democracy is left unrestrained and unchallenged’.
Economists warned that the rand could hit R20/$ and a junk rating would be inevitable should Gordhan be arrested or quit his post, because, despite the Presidency’s denial that Gordhan’s post was under threat, rumours persisted that he would be ousted in one way or another, possibly in a cabinet reshuffle, which would see him replaced with Brian Molefe, then CEO of Eskom.
It was clear that any further interference around Gordhan and the Treasury would be perceived even more negatively by financial markets than 9/12 had been. For one thing, it would imply that the government hadn’t learnt anything from Nenegate. It would also suggest that the government didn’t care about the reaction of the markets or the economic fallout that such meddling would cause.
‘South Africa’s very future is at risk,’ said Michael Spicer, former head of Business Leadership South Africa (BLSA). ‘The stakes are enormously high. My worry is that South Africa is heading towards a Putin-type authoritarian state – one that is enormously corrupt, riddled with patronage and an undermining of all the key institutions.’17
Gordhan’s view, that the campaign against him by the Hawks was part of a bigger attack on the integrity of the Treasury, was bolstered by the demand by 27 former director-generals for an urgent independent public inquiry into the alleged capture of the state by the Gupta family. ‘Unless these challenges are attended to urgently, our country may be plunged into a crisis of governance and [it could] lead to the collapse of public services in general,’ they warned in a press statement.18
What the director-generals wanted flushed into the open was the way cronyism and patronage had metastasised right through South Africa’s body politic. For years this cancer had been allowed to spread almost unchecked, hollowing out the morale and management of key South African institutions, and rendering several parastatals a severe drag on the public purse and on economic productivity.
Key institutions, including SARS, the Hawks, the NPA, the Independent Police Investigative Directorate (IPID), Denel, the State Security Agency, and crime intelligence in the South African Police Service have all had senior leaders removed on tenuous grounds over the past few years.
In a press statement on 17 May 2016, Robert McBride, the IPID’s suspended executive director, Ivan Pillay, former SARS deputy commissioner, and Anwa Dramat, former head of the Hawks, contended that this purge of the leadership of South Africa’s criminal-justice system was aimed at undermining the fight against corruption.
They attached a list of names to their statement of 14 other top IPID, Hawks and SARS officials who had been removed through a very similar pattern of ‘questionable administrative processes’. Gordhan, they alleged, was just the latest in a long line of dominoes to be targeted.
In an interview with BizNews’s Alec Hogg in London, forensic consultant Paul O’Sullivan, who has found himself at the wrong end of battles with South Africa’s security establishment on several occasions, warned that Zuma was appointing ‘what can best be described as criminals’ to run the criminal-justice system. ‘If it goes unchecked,’ said O’Sullivan, ‘we’re going to see a police state in South Africa and I think that’s what scares a lot of people.’19
Ann Bernstein, executive director of the Centre for Development and Enterprise (CDE), agreed that the country was in a precarious position: ‘There is an enormous battle going on between those who want to build on South Africa’s reputation for world-class fiscal management and those who want a system of crony capitalism and tenderpreneurship.’20
Several commentators urged business to act in public with the same robustness it had shown behind the scenes on 9/12 when it had managed to persuade Zuma to retract Van Rooyen’s appointment. ‘The last time the business sector stood up to a president like that and started pleading the issues was in 1985 when they said, “Enough is enough!” to P.W. Botha after he failed to cross the Rubicon,’ recalled Chamber of Mines CEO Roger Baxter.21
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