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CAPE TOWN — When it comes to lawyers at daggers drawn over their respective theories, one is inclined to take the view of a Senior Counsel. Here Accountability Director, Paul Hoffman, SC, debunks former colleague, Andrea Robertson’s fascinating recent Biznews contribution about our increasingly-suspect Public Protector’s motives. In impeccable bench-side manner, he outlines the structural and logical reasons why it’s unlikely Public Protector, Busisiwe Mkhwebane was motivated by protecting her Zuptoid ally, President Jacob Zuma, with her ABSA ‘pay-back the money’ prescription. Mkhwebane was in effect insisting that parliament change the Constitution to enable the Reserve Bank to amend its mandate, effectively removing its responsibility to protect the currency, but embracing the socio-economic wellbeing of its citizens. All in the name of ABSA repaying money that two probes say is now impractical. Robertson posited that the PP’s outrageously ambitious prescription was a deliberate misstep meant to force a court precedent that the PP’s rulings are not binding. This would torpedo the crucial current court application to have her predecessor Thuli Madonsela’s recommendation for a full judicial enquiry into State Capture carried out. Very clever thinking by Robertson…except that it’s not practical for a variety of reasons, as Hoffman outlines. The only party sullied in this enlightening exchange is Mkhwebane, whom Accountability Now are confronting, head on. – Chris Bateman
By Paul Hoffman*
Andrea Robertson has propounded an interesting theory regarding the motivation behind the new Public Protector’s remedial action which requires a constitutional amendment to the mandate of the SA Reserve Bank.
According to the theory’s line of reasoning, this misstep was taken deliberately in order to force a precedent for the setting aside of impugned remedial action by the Public Protector foreshadowed in the famous Nkandla judgment of the Constitutional Court.
There are a few problems with the theory.
Firstly, there is already judicial precedent for the setting aside of remedial action ordered by the Public Protector and the fact that the Nkandla judgment endorses this type of response is sufficient authority to support those attacking the remedial action taken in the “State of Capture” report which was Thuli Madonsela’s parting gift to the public she protected so well during her term of office.
Secondly, the litigation around the “State of Capture” report is likely to be completed long before the SARB application which impugns the purported constitutional amendment, only launched in the High Court this week, has wended its way through the courts to Braamfontein.
Thirdly, the Public Protector has let it be known in public that she made a mistake in the wording of her report. She only wanted and intended, so she says, to make a suggestion, not a binding finding, in relation to the constitutional amendment to the mandate of the SARB.
There is a question mark over the third reason: what if the Public Protector is dissembling, weakening her case and deflecting attention from allegations that she has a deliberate and evil “Zuptoid” agenda when she says she made a mistake?
There is a way of testing this question. Last week, the complainant in the matter which led to the issuing of the disputed report, Accountability Now, wrote to the Public Protector requesting that she consent to an application directly to the Constitutional Court to rectify the mistake she says she made in her report. This request would be manna from heaven for the Public Protector according to those who favour the “Zuptoid” theory propounded by Ms Robertson. A rapid and positive response to the request would be expected with urgent litigation to establish the desired precedent to follow in short order.
No such response has yet been received. The request by Accountability Now has been referred to the Legal Services departmental head within the OPP, a sure sign that the Public Protector is lawyering up and will reject the request. Although the rejection has not yet come, its arrival will put paid to the notion that a quick precedent is being sought in order to bolster the case of Zuma and others who are attacking the “State of Capture” report.
For the record: here is the full text of the request to the Public Protector:
Dear Advocate Mkhwebane,
RE: Your report numbered 8 of 2017/2018 concerning our Ciex Complaint.
- We thank you for responding promptly to our request for a copy of the report you released on Monday 19 June 2017 and acknowledge safe receipt of the report which we have perused and considered.
- You will be aware that your office has a constitutional mandate to take “appropriate remedial action” in terms of section 182(1)(c) of the Constitution. The notion “appropriate” has clearly been included to place constitutional limitations upon the remedial action that may be ordered by your office.
- In the Nkandla matter the Constitutional Court held that appropriate remedial action of this kind is binding and enforceable, unless set aside on judicial review.
- We have listened to your interview on Radio 702 on 20 June 2017 during which you described the proposed amendment to the Constitution set out in paragraph 7.2 of your report as a recommendation and then made it clear to the interviewer that you do not regard Parliament as being bound to effect the amendment to the Constitution you recommend.
- You are quite correct to so regard your report as it is crystal clear that your office has no power to order the amendment of the Constitution, a process, as you of course know, that is regulated by the provisions of the Constitution itself, particularly Section 44(1)(a)(i) which confers the power to amend the Constitution on the National Assembly alone. These provisions, read together with the content of the Constitution as a whole, do not afford any of the Chapter Nine Institutions, including your office, any law-making capacity. It would accordingly not be “appropriate remedial action” to order a constitutional amendment as you intended to merely recommend.
- The difficulty that has arisen is that most commentators, and certainly your interviewer on Radio 702, are reading your report to mean that you have, in a binding and enforceable fashion, ordered the Chair of the Justice Portfolio Committee to take steps to bring about the amendment you desire. From what you said in the interview, it appears that this was not your intention.
- The difficulty in interpretation is probably attributable to the wording used in the report. The relevant passages are under the heading “REMEDIAL ACTION” and “MONITORING” and paragraphs 7.2 and 8 are of particular relevance to the content of this letter.
- The way in which these paragraphs are worded does not convey your intention to make a recommendation to the Chairman of the Justice and Correctional Services Portfolio committee nor is the language used anything less than the peremptory language of binding remedial action of the kind that is contemplated by the provisions of section 182(1)(c) of the Constitution, to which you refer expressly in the introductory second line of paragraph 7 of your report.
- To the serious detriment of the very people you are trying to help, the socio-economically disadvantaged, the publication of your report has had the effect of undermining the value of the Rand by disturbing confidence in the economy and bringing about the exacerbation of the junk status to which the country has been relegated through poor governance, allegations of state capture and failures of service delivery, all of which keep your office busy.
- It also seems to us that paragraph 188.8.131.52 of the report has been included in error during the process of the preparation of the report and that the remedial action set out in paragraph 184.108.40.206 suffices, given that ABSA disputes that it is indebted in any amount whatsoever, having, so it alleges, given value when it acquired Bankorp.
- Whether or not value was given in good faith by ABSA is not the subject matter of any finding by you and accordingly it is preferable, indeed sensible, that the SIU be required by you, subject to the imprimatur of the President, to investigate the circumstances of the ABSA lifeboat, as envisaged in paragraph 220.127.116.11, so that the viability of litigation to recover the proceeds of the “lifeboat” can be determined on the basis of that investigation. The investigators will have insight into due diligence reports, minutes of meetings and resolutions taken at the time of the acquisition of Bankorp by ABSA, especially as regards the possible consideration of any possible contingent liability arising from the lifeboat transactions. They will also be able to take advice on the thorny question of prescription and the possible applicability of section 12(2) of the Prescription Act based on ABSA’s denial of any liability. As Lord Denning famously said: “Fraud unravels everything”.
- If you agree with our analysis of your position, as set out above, there is a need to remediate the situation urgently in the public interest. Both ABSA and SARB are lawyering up to take your report on review in the High Court. While the reviews are pending there will be uncertainty which will simply exacerbate the negative impact of the unfortunate wording that does not correctly convey your intention as regards the amendment to the Constitution and which makes it seem in paragraph 18.104.22.168 that you have a “pay back the money” mind-set in respect of ABSA even though you have not been able to make the necessary mala fides finding against ABSA on the limited information available to you.
- You appear to us to be functus officio having published a final report on our complaint without giving any interested or affected party the opportunity of giving you input on the content of the report in general and particularly on the specific matters that we mention in this letter. This means that it is too late for you to amend the report in order to have it correctly reflect your intentions both as regards the amendment and as regards the disputed claim against ABSA. We have already criticised your modus operandi in previous correspondence collected at: http://accountabilitynow.org.za/ciex-public-protector-complaint/. It is not necessary to repeat our position. We record however that we have not heard from the Justice and Correctional Services Portfolio Committee in response to our email to it of 16 January 2017.
- The urgency of remediating the position in relation to the amendment to the Constitution is self-evident. You did not intend to harm the credit ratings, exchange rate and financial future of the country in your effort to create a more people friendly SARB. Yet this has happened and will continue to happen until the situation is corrected.
- It seems to us that the most effective way to put the matter right is for us to apply as a matter of urgency to the Constitutional Court for direct access in relation to your proposed constitutional amendment only, as it is the only aspect of the matter that requires urgent attention. The matter of the inclusion of paragraph 22.214.171.124 can be dealt with in due course in the ABSA High Court judicial review as it is one that does not attract the dire urgency of the necessary remedial litigation concerning the amendment of the Constitution.
- We have been advised that for us to succeed in an application for direct access in an application to set aside paragraph 7.2 of your report, your support in the application for direct access will enhance our prospects of success.
- We respectfully draw it to your attention that there is a Constitutional Review Committee in the National Assembly. This committee exists to consider proposals for the amendment of the Constitution such as that recommended by you. It is to this committee that your recommendation regarding the mandate of SARB ought to be addressed for the necessary consideration and processing in accordance with the Constitution and the rules of Parliament. You can do so without reference to our complaint on the basis of your convictions and the literature to which you refer. We did not complain to you about the mandate of the SARB.
- The purpose of this letter is to enquire as to your attitude to an urgent application to the Constitutional Court in which we ask for an order setting aside paragraphs 7.2 and 8.1 (insofar as it refers to the Chairman of the Portfolio Committee on Justice and Correctional Services) of your report number 8 of 2017/2018. If you are prepared to consent to the granting of direct access, please signify your consent in writing so that we can place it before the court with our founding papers.
- Once we know what your attitude is, we will then seek the consent of the other interested parties being ABSA, SARB and the Chairman of the Justice Portfolio Committee.
- Kindly let us have your response as soon as possible; every day that the confusion around the proposed amendment to the Constitution endures is a day that is deleterious to the economy of the country.
Yours in accountability,
When the Public Protector’s reply is received it will be made public in the interests of openness, accountability and responsiveness. Don’t hold your breath.
- Paul Hoffman SC is a director of Accountability Now and author of “Confronting the Corrupt”.
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