By Paul Hoffman
06 Mar 2023
Paul Hoffman SC is a director of Accountability Now.
The government’s failure to comply with court rulings on the establishment of a single law enforcement entity that meets the so-called stirs criteria from both the Constitutional Court and similar instructions from the NEC of the ANC itself lies behind the FATF greylisting – and until this is addressed, the listing will remain in place.
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Dear Mr President,
Your letter to the nation, dated 27 February, refers. It calls for a reply.
Mr President, the Financial Action Task Force (FATF) process that has led to SA’s greylisting has been years in the making. SA has been warned that your government is far short of the standards set when it comes to the enforcement of anti-corruption laws already on the statute book.
The deliberate and pernicious dissolution of the Scorpions saw to that.
Closing down that well-functioning unit in the National Prosecuting Authority (NPA) was a deliberate stratagem of the Zuma administration designed to keep him and others like him out of the dock in our criminal courts. The puny Hawks and the underfunded NPA are clearly not up to the task of countering serious corruption.
The fundamentals needed to address the shortcomings identified by the FATF, to which you refer, have been loudly and clearly spelt out by the Constitutional Court in the Glenister litigation that followed the disbandment of the Scorpions.
The stirs criteria (specialised, trained, independent, resourced in guaranteed fashion and secure in tenure) are honoured in the breach by your administration. You have no plans that will see them put in place.
The notion of making the Investigative Directorate in the NPA what you call “permanent” will not pass constitutional muster because it cannot, by any stretch of the imagination, be regarded as implementation of the stirs criteria.
You once promised an entity that will report to parliament, but you have reversed away from that promise and now behave without due regard for the law and the Constitution and the applicable judge-made law in announcing the grossly inadequate plans to reform the ID, plans that will not satisfy the binding Glenister stirs criteria.
While you say that since the dawn of democracy South Africa has sought to build credible institutions to deal with complex financial crimes, the unpalatable truth is that SA does not have any stirs-compliant entity of the kind required by the Constitutional Court.
There are no properly independent institutions; the NPA is under the “final responsibility” of the minister of justice and the Hawks are a mere police unit with inadequate safeguards for its independence and security of tenure.
When its first head sought to gain access to the Nkandla dockets, he was suspended and forced out of office with a golden handshake; the Hawks have not investigated the malfeasance in the renovations at Nkandla and no one has been brought to justice for the misappropriation of public funds that took place there.
Closing down the Scorpions is the antithesis of “building credible institutions” and you should know that the Constitutional Court requires a single specialised institution to counter the corrupt.
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You suggest the FATF evaluation in 2019 should be understood as coming at a time when the country was emerging from the State Capture era. But you have been the leader of the ANC since 2017, and five years earlier you became its deputy leader. Jacob Zuma resigned as president of SA in February 2018. You have been well placed for many years to diagnose the “deficiencies” to which you refer and to address them with the alacrity the situation demands.
Instead, you have dithered endlessly.
You have chosen to ignore the suggestions made for constitutionally compliant reforms and have not responded in any way, shape or form to the drafts of remedial legislation supplied by Accountability Now as long ago as August 2021.
Your Cabinet has also ignored an explicit and sensible instruction given to it in August 2020 by the NEC of the ANC to urgently establish a stand-alone, permanent and independent anti-corruption entity.
Had you done so, the chances are that the greylisting would not have occurred.
You owe the NEC and the nation an explanation for the unresponsiveness of your Cabinet to the explicit instruction given it by the highest decision-making body in the ANC between conferences.
You say the country has addressed all but eight “strategic deficiencies” identified by the FATF evaluation. These are where the tyres hit the tar when it comes to countering corruption.
You are on an unconstitutional path when it comes to much-needed and long-overdue reform of the criminal justice administration so as to better capacitate it to address serious corruption.
The desire of your administration to retain control of anti-corruption machinery of state is apparently behind the unconstitutionality of your plans.
The NDR aims at “hegemonic control of all levers of power in society”, hence the reluctance to comply with the law as laid down by the courts in the Glenister litigation. The law and the Constitution are supreme and the tenets of the NDR have to bow before them.
You refer to amendments to legislation introduced to address weaknesses in the legal framework. While the new laws do address some weaknesses, they are useless if no steps are taken to put in place a stirs-compliant entity. Tinkering with the ID will not pass constitutional muster.
While it is true that the Zuma administration (of which you were part, as deputy president, in his second term) took deliberate steps to cripple anti-corruption capacity in the respects to which you allude.
You have done nothing concrete to address the deficiencies created by the dissolution of the Scorpions, the inadequacies of the Hawks and the hollowing-out of our saboteur-infested NPA.
What is worse, is that you also have no plans to do so. Hence the exasperation of the FAFT and the consequent greylisting.
You cite restoring credibility of the SA Revenue Service (SARS) and the NPA as measures that address FATF concerns. But SARS is not an anti-corruption entity – it is a tax collection agency.
The NPA is thoroughly broken and lacking in the type of expertise required to take on the grizzled silks who represent those accused of serious corruption. It will take many years to rebuild the NPA. These are years SA does not have; not if there is any ambition to keep the period of greylisting to a minimum, as was achieved in Mauritius.
The allocation of additional funds to the SIU and FIC that you cite does not address the fact that these institutions do not conduct prosecutions of those suspected of serious corruption. The SIU is not even part of the criminal justice administration.
Throwing public money at fundamentally broken institutions will not suffice.
The Constitutional Court has spelt out what its requirements are for an effective and efficient anti-corruption entity. Until your administration complies, we will remain on the greylist and our GDP will shrink concomitantly, as it always does when any country is greylisted.
SA is in danger of moving into negative territory as regards GDP, which will be disastrous for the 55% of the population currently living in poverty.
The establishment of the Fusion Centre to bring together bodies like the NPA, SIU, SARS, the Hawks, Crime Intelligence, State Security Agency and the FIC is not what was envisaged by the courts – which have specified what is required: a single stirs-compliant entity able to counter corruption effectively and efficiently.
Multiple bodies is not what the law requires, nor, in international experience, is it indicated to approach corruption with anything other than the single entity that both the courts and the NEC of the ANC have prescribed for SA.
What the courts have prescribed is binding upon your administration. If you persist with your current plans, they will be struck down for want of compliance with the Constitution as interpreted in the Glenister litigation.
Your administration is already in breach of its obligations to implement the judgments of the Constitutional Court as they apply to reform of the criminal justice administration. This smacks of constitutional delinquency going back to the Zuma era.
The R1.75-billion preserved or recovered, of which you boast, is a tiny fraction of the actual loot of State Capture.
While it is true that the focus of the FATF has been on the failure of SA to prosecute those involved in corruption, rather than weaknesses in the financial sector itself, not money laundering and terrorist financing, the mere fact of greylisting will have a chilling effect on new investments that are sorely needed. It will increase the cost of doing business due to additional due diligence requirements while greylisting is in place.
The greylisting ought not to be played down, as you seek to do; it ought to be the occasion for a serious and swift rethink in relation to the efficiency and effectiveness of efforts to counter serious corruption. Tinkering with the ID won’t cut it.
The partnerships between government and the financial sector you mention are worthy endeavours, but again, they are no substitute for what the law requires in relation to investigating and prosecuting serious corruption.
It is the constitutionally mandated task of government to prevent, combat, investigate and prosecute the corrupt and all other criminals. The financial sector can blow the whistle on nefarious activity, but it cannot be a substitute for proper constitutionally compliant anti-corruption machinery of state. Currently, and for far too long, SA has been without any such machinery.
There would be no need for intensified FATF monitoring if your administration, in place since 2018, had taken steps to comply properly with the law as spelt out in the Glenister cases.
The plan to upgrade the ID is based on a misstatement of the law due to misplaced reliance in the ministry of justice on the minority judgment in the second Glenister case. This misstatement has been drawn to the attention of both the presidency and the minister of justice. No public correction of the misstatement has been forthcoming.
You cannot possibly have a successful action plan that is not based on the majority judgment in that case, and which does not envisage the establishment of a stirs-compliant entity to deal with the corrupt in a manner that so impresses the FATF that the greylisting of SA, a grave embarrassment to any self-respecting constitutional democracy under the rule of law, will be lifted.
Rest assured that the greylisting will continue until genuine reformation of the kind envisaged by our courts, and as proposed in the “best practice” drafts suggested by Accountability Now in the submission it has made to the National Assembly, is put in place.
Mr President, you are quite right that the rule of law must prevail. The patience of the electorate is being tested by your willingness to allow corruption to continue with impunity five years after what you call the “wasted years” of the Zuma era ended.
You are currently at risk of being the last ANC president of SA. DM