PREMIUM: #JoiningTheDots: Gupta-linked KPMG in web of deceit at SARS

SARSEDINBURGH — South African Revenue Service (Sars) insiders have known for many years that the Zuma and Gupta families were friends for many years. So why didn’t Gupta auditor and Sars consultant KPMG know? And why didn't they step away from the work amid persistent rumours of corruption? Those are the big questions that loom large as former Sars employee Johann van Loggerenberg shares his story of how he was bullied at work after getting in the way of investigations into tax evasion and other irregularities. - Jackie Cameron

By Thulasizwe Sithole*

The Zuma and Gupta families have worked together for many years to put in place their puppets in state entities in order to establish control and suck funds out of state coffers.

At the South African Revenue Service (Sars), the plan was evidently to keep anti-corruption and tax evasion investigators out of the way to allow friends to continue to trade out of sight of the authorities.

SARS Wars : Gordhan vs Moyane. More cartoon magic available at www.zapiro.com.

The Zuma-Gupta puppets went as far as working on an evil misinformation campaign to discredit former finance minister Pravin Gordhan and others who stood in the way.

This has been brought home by Johann van Loggerenberg, whose personal account - published on BizNews this month - highlights the sinister lengths individuals in the Zuma-Gupta camp have gone to put enemies out of action.

However, none of this is new or secret, which in turn raises the question of how it is that KPMG didn't know it risked working with individuals tainted by corruption allegations at the Sars if, presumably, it undertakes some kind of due diligence before taking on work for entities. KPMG was a consultant for Sars and also an auditor of Gupta-linked companies. 

In his heartwrenching account of being victimised by Zupta operatives, published on BizNews, Van Loggerenberg points to an article published in 2015 by Beeld newspaper, part of netwerk24.

https://twitter.com/MaxduPreez/status/915889637524230144

At that time, the publication reported that the bitter fruits of a campaign, already six years under way at that time, were clear from the past few months' chaos at the South African Revenue Service.

Project Broken Arrow, an ‘organised effort’ by ousted Sars employees, involved the spreading of rumours of a "covert and surreptitious investigation unit" within Sars, documents seen by Beeld show.”

Gordhan, the former tax boss, was - falsely - accused of approving the establishment and running the “covert” unit.

“Broken Arrow's goal was to ‘destabilise and disorganise’ SARS ‘and to eventually create chaos to target the reputations and stability’ of certain officials,” said Beeld.

Allegations at the time included that:

  • Five disgruntled former Sars employees were identified to set up a dossier to discredit their colleagues;
  • The dossier was meant for the eyes of Zuma and former national police commissioner Bheki Cele;
  • The staff members aligned to Broken Arrow were "very dissatisfied" with the appointment of Gordhan as minister of finance; and
  • Broken Arrow was managed as a secret project with a budget, a "safe house", borrowed cars and equipment.

Van Loggerenberg’s lawyer told BizNews: “Our client has been on record to state that Sars as institution, he and others there, had been the subjects of deliberate disinformation campaigns and attacks for many years, most of them attributed to subjects that were under investigation by Sars, certain disaffected persons who had left Sars for a variety of reasons, certain state officials from other departments and Sars officials within the institution, sometimes as individuals, sometimes as groups, sometimes separately and sometimes in conjunction with each other.”

The most notable of these would be the attempts by former Sars official, Mr Michael Peega, in late November 2009 and February 2010, who had set out to “recruit” persons within SARS and some who had left SARS, to “implicate PG (Pravin Gordhan), IP (Ivan Pillay) and JvL (our client)” with the “Old Man” (President Zuma) under the code name “Broken Arrow”. This is public knowledge.

At the time, Peega’s (and others) intention was recorded in writing, by some of those he approached, as wanting to use former and current Sars officials, who were “willing to collaborate” and by using the then named National Research Group, as the focal point of this disinformation campaign. Mr Peega saw this process to fruition in November 2009 and February 2010 when he distributed a so-called “intelligence dossier” under the code name “Operation Snowman” to various media houses and politicians.

Our client has always held the view that what initially set off events at Sars in May 2014 arises from a combination of:

• Fears among persons associated with the tobacco industry (both private investigative firms, spies and a multi-agency Tobacco Task Team comprising of officials in the HawksState Security Agency, National Prosecuting Authority, South African Police Service Crime Intelligence and their own spies and informants) of what SARS had uncovered in their investigations and which implicated them in serious criminal offences;

• Persons who were being investigated by Sars;

• Persons who had axes to grind with our client and others;

• Persons who considered Sars as too independent.

The way our client and others were attacked over the years always took on typical formulas. Some attacks were in the form of “dossiers” and “intelligence reports” which always carried the same hallmarks of false and unsubstantiated allegations of our client (and others) being Apartheid-spies or remnants thereof, being racist, being “Anti-Zuma”, conspiring in some way or another against government and illegally intercepting taxpayers’ communications.

A variation of these attacks usually took the form of the verbal spreading of similar rumours to politicians and powerful people, who in turn would then confront Sars verbally.

Sars was always able to meaningfully defend itself against these sorts of attacks, such as in late 2009 and early 2010, when Mr Peega released his “dossier” (following “Broken Arrow” he authored a report entitled “Operation Snowman”), by releasing two very detailed line-by-line refutations, with annexures as proof, to the media, politicians and law enforcement agencies and briefing them thoroughly. In other instances, those attacking our client, others and Sars, either registered fake allegations and “complaints” with law enforcement agencies or Sars or infiltrated such agencies and directed their efforts to undermine Sars. In our client’s view, Sars was less effective in countering these sorts of attacks. Incidentally, our client points out, these documents acknowledged the existence of the unit known then as the Special Projects unit and later National Research Group, explained its approved mandates and operations (including work conducted in conjunction with other law enforcement agencies) and demonstrated the fallacies of the “Operation Snowman dossier”. Sars also allowed its members to be interviewed and provided whatever documents and explanations were requested by other agencies. Our client can therefore not understand how anybody (especially KPMG South Africa) can therefore claim the unit to have been “covert”, “unknown of” and “secret”. At the same time, our client must question, given this, why no law enforcement agency ever objected to the unit’s existence throughout the years, until late in 2014.

These “dossiers” all had the same characteristics as indicated, including:

• In most cases these were anonymous.

• All were unattributed to any state intelligence agency or official/s.

• Almost all had exotic names, such as “Broken Arrow”, “Snowman” and after our client and others had left Sars, the later “dossiers” which sought to continue the disinformation, such as “Check Mate” (sic) and “Spider Web” (sic).

• Poor grammar and spelling.

• Always conspiratorial in nature.

• Contained unsubstantiated, false and defamatory allegations that were vague and unsupported by any evidence.

• Always directed to high office.