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EDINBURGH — Judges are supposed to be impartial figures in an independent judiciary designed to hold the powerful to account, yet Justice Frank Kroon played a key role in aiding and abetting the Gupta and Zuma families in their state capture strategy. The role of the judge in eviscerating the South African Revenue Service and ensuring that well-intentioned, hard-working citizens were removed from their jobs is made clear at the Nugent Commission. In an astonishing turn of events, Kroon has admitted to proactively assisting the corrupt and the captured in developing the fake rogue unit narrative used to oust Pravin Gordhan from his role as a finance minister – a move that played into the devaluation of the rand and negative investor sentiment. Top investigative journalist Jacques Pauw, whose book The President’s Keepers pulled the state capture scandal together, unpicks how Kroon played his part in damaging South Africa. This article is republished here with the kind permission of Daily Maverick. – Jackie Cameron
By Jacques Pauw
While South Africans were being duped that a small investigations unit at the tax collector was unlawfully established, had spied on the president and ran a brothel, a High Court judge went rogue by making a finding that he knew was erroneous and baseless.
It took the good judge more than three years to retract his mistake – by which time the SA Revenue Service (SARS) had been eviscerated. Dedicated and skilled civil servants were publicly humiliated, driven out of the institution or left in disgust, the fiscus had lost tens of billions of rand and tax investigations against the former president and his cronies and organised crime syndicates had ground to a halt.
This is akin to a judge convicting an accused and sentencing him to prison without considering the accused’s defence or taking any evidence contradicting the guilty verdict into account. And then sitting back, watching the “guilty one” dithering away under the strain of life behind bars for the next three years. By the time the judge somehow wakes up and admits his mistakes, the convict had already long been broken and crushed.
It is an understatement of a certain magnitude to say that such behaviour by a judge is a disgrace to his profession and that he has betrayed the trust of a nation that reveres their legal elders on the Bench.
The evidence of Justice Frank Kroon at the Nugent Commission of Inquiry into SARS on Friday last week was much more than just a bombshell. It was the first time ever that a judge had admitted under oath that he had made wrong findings and made no attempt to interrogate any contradictory evidence or hear any of the accused upon which he ultimately pronounced guilt.
It is also true to say that very few judicial findings have ever had a greater impact than Kroon’s finding that a SARS investigations unit had been illegally established and was therefore “rogue”.
It was the final straw that handed the tax collector – once the jewel in the civil service crown – to Jacob Zuma’s crony, Tom Moyane, to break. In the three years that followed Moyane’s appointment, SARS reported a R93-billion shortfall in revenue collections.
The SARS “rogue unit” saga is a convoluted story; the cast is vast, the agendas numerous, there’s another twist virtually every day and skeletons keep tumbling from Moyane and his cronies’ cupboards at the speed of light.
Let us look at how Kroon came to make his extraordinary error.
In our recent history, judges have been the bulwark against state capture and the scourge of corruption. They have been leading lights while our criminal justice system, our tax agency, government departments and state-owned enterprises collapsed and were captured and looted.
Our judges have seldom been found to have faltered, bar the instance of Nkola Motata who lost his “lordship” title following a drunken driving spree and being found racist and lacking integrity.
Mabel Jansen resigned as judge following indiscreet racist remarks on Facebook, while the embattled Judge John Hlophe is still entangled in a legal battle for allegedly trying to influence Constitutional Court judges to favour Jacob Zuma’s case.
Kroon joined this club of disgraced judges on Friday, when he took to the witness stand and went under oath before another retired judge, Robert Nugent, at the Commission of Inquiry into Governance and Administration at SARS.
Judges are appointed for life. Their salary and perks are paid for by the taxpayer for their entire lives. For this reason, retired judges are often called upon by government to serve as the chairpersons of judicial commissions of inquiry, important panels or similar type duties.
This happened to Kroon when in March 2015 then finance minister Nhlanhla Nene appointed him in terms of the SARS Act to chair a board to oversee governance issues at SARS.
Nobody seems to know exactly why the 78-year-old Kroon was selected, but he appears to be a rather undistinguished former judge from the Eastern Cape who served for 16 years on the Bench.
The Kroon Board wasn’t just a sideshow in the SARS “rogue unit” saga but was a full-blown legal board with the powers to subpoena, investigate and hear evidence under oath.
A few days after Kroon was appointed, the rest of the board members were appointed, among them disgraced former SARS number two, money laundering suspect Jonas Makwakwa, and former SARS official Rudolf Mastenbroek.
We would come to learn later how, at the very time that Makwakwa was a member of the Kroon panel, he was caught stuffing wads of questionable cash into ATM machines at night. With him was his lover and fellow SARS official Kelly-Ann Elskie.
Makwakwa and Elskie were reported to the Financial Intelligence Centre, who in turn reported them to Moyane. Moyane made a hash of this investigation and shielded Makwakwa and Elskie.
It has been an open secret at SARS that Makwakwa was always at odds with former acting commissioner Ivan Pillay, chief officer of enforcement, Gene Ravele, investigations head Johann van Loggerenberg and his boss of the time, former CEO Barry Hore. It is widely known that he was once reprimanded by former SARS commissioner Oupa Magashula for spreading fake dossiers and false rumours within the institution.
But it is Rudolf Mastenbroek that calls for even closer scrutiny. According to Kroon’s testimony before the commission, Mastenbroek was the drafter of the Kroon statement that labelled the unit as having been “unlawfully established”. The statement was released with great fanfare on 28 April 2015, with all media in attendance, Mastenbroek directing who may ask questions and who not.
A former head of criminal investigations at SARS, Mastenbroek has had an unhappy relationship with both Pillay and Van Loggerenberg.
The fall-out between Pillay and Mastenbroek has its roots in sensitive cases which he believed should have been handled differently.
Mastenbroek was also upset when Van Loggerenberg was promoted as the group executive of tax and customs enforcement investigations to the extent that he wrote an e-mail to Pillay, bemoaning his lot for having been overlooked for the job. He ultimately requested a transfer to the taxman’s law division and then left SARS at the end of 2013 to join the Johannesburg Bar Council as an advocate.
Joubert, who cut her teeth on the anti-apartheid newspaper Vrye Weekblad in the late ‘80s and early ‘90s and worked for international broadcasters like Sky News, met Mastenbroek and made notes of the meeting.
Kroon knew that Mastenbroek was heavily conflicted and not fit to serve on the panel. This was because Joubert wrote to Kroon in an impassioned plea, informing him that Mastenbroek falsely claimed that Pillay and then finance minister Pravin Gordhan were corrupt and wanted these smears to be published in the Sunday Times. He falsely branded Van Loggerenberg as a former “security branch man” that loved “Bantustan cops”.
Later, in August 2014, Oppelt allegedly inserted a line in a Sunday Times article, branding Van Loggerenberg as a former apartheid spy.
Mastenbroek’s first attempt to slander his former colleagues failed, but in early 2014 he once again called upon Joubert to publicly smear them via the Sunday Times. This time, he seemed perturbed by SARS’ widely-publicised settlement with Julius Malema and a few other cases. He said Van Loggerenberg was Pillay’s hatchet man. Joubert once again rejected the claims.
It was when Mastenbroek joined the Kroon Panel in June 2015, and upon learning of this, that Joubert wrote letters and deposed to an affidavit that she sent to the Ministry of Finance and Kroon personally. She laid out in detail why she thought Mastenbroek to be conflicted and why he shouldn’t have served on the board.
What did Kroon do? Nothing. The Board didn’t even bother to hear the people that they cast judgement on. During testimony before the Nugent Commission, Kroon conceded that the board should have afforded those affected by the Kroon statement a hearing.
Kroon also said nothing about the fact that the former SARS officials did make several attempts to get Kroon to hear them and allow them to make representations. He ignored the requests and reportedly replied to Van Loggerenberg only, saying that he would “revert if necessary”. He never did.
Pearlie Joubert is one of the unsung heroes in this saga. Once part of the investigation unit at the Sunday Times, she resigned from the paper in disgust because of their SARS “rogue unit” series. She said she couldn’t live with the thought of being part of such deceit.
A single mother of two, she did not hesitate to give up her career as an investigative journalist, based on principle. Not only did she lose her job, but Oppelt would later use her mighty pen as Sunday Times editor, to cast aspersions on Joubert’s character after her letters and affidavits of Mastenbroek’s conflicted role became public.
I expect SARS to say that the @KPMG report was one of 3 documents. Others were the Sikhakhane and Kroon reports. Both heavily compromised.
— Khaya Sithole (@CoruscaKhaya) September 18, 2017
Joubert wasn’t alone in her plight as a journalist. The highly respected former editor of Business Day, Songezo Zibi, left the newspaper around the same time as these events unfolded.
He said that Business Day didn’t follow “the same narrative” as the Sunday Times on the SARS story.
“I therefore wanted to know at which point did the unit, which had evolved over time under different heads, suddenly become secret and illegal when its origins were so very public as to be announced in Parliament by the President and Finance Minister?”
He said he personally met over 20 sources and witnesses and asked for and received documents.
“Our interviews and expert opinion told us that there was no illegal spying. The allegation was a stretch.”
The Kroon board was born in infamy because among its tasks were to review the findings of another panel: that of senior advocate Muzi Sikhakhane, appointed by Pillay in September 2014 to investigate allegations made against Van Loggerenberg by Pretoria attorney and self-confessed State Security Agency (SSA) agent, Belinda Walter. Walter and Van Loggerenberg dated briefly from end 2013 to May 2014, after which she turned on him and laid a complaint at SARS. She would later confess doing so at the behest of law enforcement and intelligence officials in exchange for indemnity from prosecution.
Walter was the key figure in setting off a plot to remove Pillay, Van Loggerenberg and other SARS executives in order to protect Zuma, his family and his cronies, several organised crime figures, corrupt law enforcement officials and tobacco smugglers.
This provided the perfect opportunity for Zuma to make his move.
Pillay had gone on leave, and upon return found that Zuma had appointed his pal Moyane as the new commissioner by end September 2014.
In December 2014, Sikhakhane gave Moyane his panel’s report. Significantly, it didn’t reflect material facts and got basic things wrong, like names and surnames of SARS staff. It is flawed in fact and law.
Pillay provided Moyane with a lengthy critique, compiled by senior counsel, pulling apart Sikhakhane’s report. A significant part dealt with why the unit was not unlawful. Moyane’s response to this was to forbid Pillay from making it public adding that he did not want to read it.
The report made two adverse findings against Van Loggerenberg, and none against anybody else. One finding was that Van Loggerenberg had improperly met with Walter at their first meeting in September 2013. Sikhakhane said he had met her alone, in contravention of SARS policy.
Sikhakhane got it wrong. Van Loggerenberg was accompanied by another senior SARS official, Kumaren Moodley.
— Heidi Giokos (@Heidigiokos) September 28, 2018
The second negative finding suggested Van Loggerenberg’s breach of Section 7 of the Tax Administration Act by discussing confidential taxpayer’s affairs with Walter. The problem is that Section 7 has nothing to do with taxpayer confidentiality.
The most significant finding in Sikhakhane’s report was that a small investigative unit in SARS – dubbed the “rogue unit” by the Sunday Times – was established “unlawfully”.
It was this “finding” that would ultimately create the perfect environment for Moyane to act. The “rogue unit” propaganda was born on that day with Sunday Times relying on a leaked version of Sikhakhane’s report to claim “vindication” of their false stories.
Once in his hands, Moyane used the report as basis to suspend Pillay, risk executive Peter Richer and Van Loggerenberg within days.
Sunday after Sunday, the investigation unit of the Sunday Times piled mud on Van Loggerenberg, Richer and Pillay. Later, former Finance Minister and SARS commissioner Pravin Gordhan and former Finance Minister Trevor Manuel were also dragged into the mess. None of the articles was true, but it didn’t matter any more. The rogue-label stuck. Moyane was free to use it as pretext to break SARS with impunity.
By early 2015, Pillay, Richer, Van Loggerenberg and a host of executives had resigned. Within the ensuing months, droves of experienced managers and staff also left the institution.
Which brings us to now not-so-honourable Justice Frank Kroon, then appointed to review Sikhakhane’s findings.
The so-called Kroon Advisory Board came and went within a calendar year, leaving behind the single legacy in the form of Mastenbroek’s April 2015 press statement that found the unit was “unlawfully” established and therefore “rogue”.
In the space of less than a month, Kroon’s board had simply rubber stamped Sikhakhane’s report and suggested it be made public by SARS, which was promptly done by Moyane. The board didn’t even pick up on the most elementary contradictions and mistakes in the report.
The die had been cast, and the “rogue unit” stories had to be confirmed, all in aid of justifying the ripping apart of SARS. South Africans will no doubt be paying the price for this mess for many years to come.
On Friday, Frank Kroon took the witness stand at the Nugent Commission and was duly sworn in. This was likely the first time in modern legal history that a judge appeared as a witness at such proceedings.
Everyone expected that he would now finally reveal the legal basis upon which his board made the finding of unlawfulness of the unit. But he did the opposite. In what must be one of the most astounding turn-arounds for a senior jurist, he confessed to misrepresentations by his board and admitted that they had incorrectly endorsed the finding that the unit was established unlawfully. He admitted that the decision to endorse Sikhakhane’s finding was not “thought through properly and in fact, were incorrect.”
Then he went on to admit that whilst the board did not do so, it should have investigated the question of unlawfulness and should have given those implicated an opportunity to respond.
The right to be heard, the so-called audi alteram partem rule in law, seemed to have been forgotten by Kroon and his eminent board members. He gave no explanations why this was the case.
Retired Judge Frank Kroon has formally apologized to Pravin Gordhan over remarks regarding the legitimacy of the so called SARS rogue unit.
— Sure Kamhunga (@sure_kamhunga) September 29, 2018
But the good judge wasn’t done yet. He also conceded that he had endorsed Bain & Co’s new operating model for SARS without understanding fully what would be changed.
As if this wasn’t enough, Kroon, still under oath, had the gall to conclude that he would now in fact, years later, be in favour of the unit being re-established at SARS and would “recommend” this.
Kroon and his Board had through their misrepresentations caused irreparable damage to the revenue collector, some of its most dedicated staff and the economy.
Imagine if Kroon and his board had done what he now suddenly admitted the board should have done? Moyane and the purge at SARS could well have been stopped or slowed down. Bain & Co’s “remodelling” may well have taken on a different form and our tax authority would possibly not have suffered the harms it ultimately did. Kroon and his board failed the nation.
But the more we stuck to the facts, the more sources at SARS grew, on both sides of the narrative. But then entered Judge Kroon, in my view a disgrace that should not be called a Judge. In his panel was one Rudolf Mastenbroek (sp). He played a dual role.
— Songezo Zibi (@SongezoZibi) September 29, 2018
Over the weekend, Zibi independently confirmed what Joubert had said all along, writing that Kroon was a “disgrace that should not be called a Judge. In his panel was one Rudolf Mastenbroek. He played a dual role. He was on the panel, on the one hand, but also pushed the ST (Sunday Times) narrative very strongly on the side.”
Constitutional law expert Prof Pierre de Vos wrote that it took him all of 10 minutes of research in 2016 to discover that the establishment of the unit was not unlawful.
Activist Zackie Achmat asked if the Judicial Services Commission would recommend that Kroon be removed as a judge and forfeit his pension. Said Achmat: “Kroon acted with intention to destroy the credibility of decent people doing an essential and critical public service.” DM