PAUL HOFFMAN: Getting off the greylist requires mindset shift

by | Oct 16, 2024 | Chapter 9, General | 0 comments

The leaders of big business who have involved themselves in the three “workstreams” with government to get energy supply, logistics and combating crime and corruption out of the doldrums have been vocal lately about the urgency of getting SA off the Financial Action Task Force (FATF) greylist of countries that are not up to standard regarding combating money-laundering and terrorism financing.

SA is not yet ticking all the boxes the FATF sets up for those countries that have avoided blacklisting but have the ignominious status of being greylisted.

While terrorism financing is not endemic in SA, the incidence of money-laundering is a by-product of the grand corruption that bedevils the nation’s progress. It is a huge, unaddressed problem that hinders being removed from the greylist. Habitually, those involved in hiding the proceeds of their corrupt activities find ways of exporting the loot to hide it offshore in jurisdictions that are lax on the control of the flow of funds out of SA. Investments in numbered bank accounts, real estate, yachts and other toys for the rich are the favoured ways of concealing the loot of state capture, which is still ongoing, “tenderpreneurism”, and all other forms of grand corruption that afflict the country.

Greylisted status is uncomfortable for business or for anyone interested in peace, progress and prosperity for all in SA. The cost of borrowing is increased, new investment is stunted, and the prospects of creating much-needed jobs for the unemployed are thwarted. The urgency of getting off the greylist is therefore obvious, yet government is slow to do what is required to beef up the capacity of the state to counter the corrupt in our midst.

Big business seems to think throwing money at the problem is the way forward. Though anticorruption efforts are underfunded, it is not the core issue. The actual problem is that very little has been done to implement the binding decisions taken by the Constitutional Court in the Glenister litigation in 2011 and 2014.

Grand corruption

The court identified the absence of an anticorruption entity in SA that is free of executive control. It set the criteria by which to recognise such an entity and required government to make the reasonable decision of a reasonable decisionmaker in the circumstances when establishing the anticorruption entity that is required to bring the corrupt to book. These criteria have become known as the STIRS criteria: specialised, trained, independent, resourced in guaranteed fashion, and secure in tenure of office.

The ANC-dominated parliament of 2012 chose instead to pay lip service to the criteria and merely tweaked the Hawks and National Prosecuting Authority (NPA) architecture it had put in place after the demise of the Scorpions, a body within the NPA that was all too easily closed down because of its lack of secure tenure of office. It is now common cause that the Hawks investigating and the NPA prosecuting grand corruption is a combination that does not work effectively and efficiently. Grand corruption with impunity remains the order of the day.

The Hawks are a police unit set up to deal with “priority crimes” (including corruption). But according to the provisions of section 206 of the constitution, the minister of police “must be responsible for policing and must determine national policing policy after consulting with provincial governments”. The Hawks are therefore manifestly not outside executive control as required by the court decisions.

The NPA in turn is run as a programme within the department of justice; its accounting officer is the director-general of justice. It falls under the leadership of the minister of justice, who has “final responsibility over” it with the power to concur in all prosecution policy under section 179 of the constitution. The NPA is also clearly not outside executive control.

Executive control

In the dying moments of ANC hegemony, in May shortly before the elections that spawned the government of national unity (GNU), the president signed into law the creation of the Investigating Directorate Against Corruption (Idac). But this too is part of the NPA and is legally indistinguishable from the Scorpions of old. It is not a body that is constitutionally compliant, not least because it can be closed down summarily just as the Scorpions were in 2009. Idac lacks independence in the same way as its parent body, the NPA, does.

State capture and all the horrors of money-laundering that go with it have clearly been facilitated by executive control of the NPA and Hawks. The president himself called the ANC “accused number one” in state capture, and the Zondo commission found it guilty as charged. Throwing funding at the NPA and Hawks is not a helpful exercise in these circumstances. While it is true that their anticorruption efforts are puny for want of funding, the problem lies deeper in the architecture of an anticorruption entity cobbled together somewhat haphazardly and without regard to the Glenister criteria.

What is actually required is a long, hard look at the failure of government to put in place a STIRS-compliant entity that is free of executive control. Until this failure is addressed, SA is likely to languish on the FAFT greylist.

There is light at the end of the tunnel though. Two bills are in the works in parliament, one to establish the chapter 9 anticorruption commission envisaged by the DA, and the other to enable it.

Court required

By locating this envisaged new anticorruption entity within the ambit of the constitution’s chapter 9, two of the criteria set in the Glenister litigation are directly addressed. All chapter 9 institutions enjoy constitutionally entrenched independence — the “I” in STIRS. Their personnel enjoy secure tenure of office too — the last “S” in STIRS.

Most importantly, the reporting line of the envisaged anti-corruption commission is to parliament, not to cabinet or any member of cabinet, as is the case for the NPA and the Hawks. This renders it free of executive control, which is exactly what the court required in 2011 but has not been achieved due to the ANC’s unwillingness to let go due to its desire for hegemonic control of all the levers of power in society.

The shortest route to getting off the FATF greylist is through the adoption of the two bills now pending and the establishment of the anticorruption commission they envisage. Any opposition to the bills must be perceived as backsliding on the binding court decisions and an unwillingness to be real about the commitment of the country to address the outstanding and hitherto unaddressed requirements of the FATF. Should the two bills not become law, public interest litigation assailing the constitutionality of the Idac and attacking the failure of government to properly implement the Glenister decisions will follow.

There is little hope of the FATF being impressed by Idac, nor will it countenance the failure of government to regard the Glenister decisions as binding on it and to implement that which is required: a single anticorruption entity that is STIRS compliant. Big business would do well to throw its weight behind the bills that will establish a permanent chapter 9 anticorruption commission.

• Hoffman, a director of Accountability Now, was lead counsel in the Glenister litigation.

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