Estimated reading time: 6 minutes
1st Papers released from Zondo Commission. SAA & SARS highlighted
This comes after Acting Chief Justice Raymond Zondo handed over the three-volume report on Tuesday, 4 January 2022, at the Union Buildings in Pretoria. It is important to note that the Zondo Commission has been in operation for nearly four years to date.
According to the President, the government will not make any pronouncements on the Commission’s findings or recommendations until all three parts have been received and considered.
“We will, however, commence with the consideration of the parts of the report as they are submitted to the Presidency, and will be putting in place appropriate mechanisms to effectively and thoroughly process the findings and recommendations,” said the President.
Furthermore, Ramaphosa told journalists that the report and implementation plan would be submitted to Parliament by the end of June 2022.
“While the terms of reference of the Commission require the submission of the Commission’s report and recommendation to the President, the reality is that the report of the Commission really belongs to the people of South Africa. It does not belong to the President,” he added.
The President thanked the Commission’s Chairperson, Acting Chief Justice Zondo, and his team for their extraordinary public service. “For close on four years, Justice Zondo has pursued this profound responsibility with dedication, with determination, also with a great deal of patience.”
He also praised the whistleblowers who came forward to expose some of these wrongdoings, often at the risk of their lives. “We need to thank them for their courage and service to the country.”
Meanwhile, Zondo called the handover a “very special day.”
“It’s been a gruelling four years of the Commission. In a few days, 9 January will be the complete four years the announcement of the establishment of the Commission and three years of their periods when the hearing of evidence by the Commission.”
The Acting Chief Justice explained that the first section is divided into three volumes, one for South African Airways, one for The New Age and advertising, and one for the South African Revenue Service and procurement.
The remaining parts of the report are expected to reach the President’s desk by 28 February 2022.
“This report enables us to up our tempo in the fights against State Capture, and if we work together, we will be able to rid our country of the gross actions of corruption we have seen in the past,” the President concluded.
While former President Jacob Zuma’s name appears several times throughout the report, here are two key findings:
South African Airways (SAA)
Despite the fact that SAA was not prominently featured in the Public Protector’s State Capture Report, the Commission conducted a thorough investigation. This is because the Commission’s Terms of Reference required the Commission to determine the extent to which state capture, corruption, and fraud were prevalent in the public sector.
The Commission’s investigation focused on the Board of SAA in order to properly understand SAA as an accountable institution within the public sector, as it is the accounting authority of SAA under the Public Finance Management Act 1 of 1999. (PFMA).
The Board bears ultimate responsibility for the regularity of SAA’s expenditure. The Board is required to procure goods and services according to the requirements of the Constitution.
Furthermore, the investigation focused on SAA and its associated companies’ procurement because, as the Commission’s work progressed, it became clear that acts of corruption and fraud within state-owned enterprises typically occurred in areas of procurement of goods and services.
The investigation also looked at the state of general governance at SAA over a ten-year period to see if deficiencies in the entity’s governance could have contributed to the acts of corruption and fraud that occurred within SAA.
It also investigated whether the usual watchdog institutions and functionaries, such as the independent non-executive members of SAA’s Board of Directors and the entity’s auditors, performed their duties adequately.
From 2012 onwards, the investigation revealed a steady decline in the quality and effectiveness of SAA governance.
This lack of quality and efficacy grew during the tenures of Duduzile Myeni as Chairperson of SAA and her co-Board member, Yakhe Kwinana, as Chairperson of SAAT.
Coming as no surprise to the average South African, the Commission’s investigations into SAA and SAAT revealed that fraud and corruption had taken root in these organisations.
Not only was there a complete failure of governance within the companies, but when companies are depleted of those who are responsible and accountable, the conditions for state capture take hold.
State capture thrived in these entities because they were eventually run not in the interests of the South African people for whom they were established but in the interests of a select few who wielded power both inside and outside of the entities.
According to the report, many people within SAA and government officials attempted to speak out against Myeni and stop her from wreaking havoc at the SOE when she was appointed Chair.
However, all attempts to criticise or remove her were met with staunch opposition at the highest levels. Shockingly, despite their best efforts, two successive finance ministers could not remove her from office.
In 2016, Minister Gordhan was forced to replace the entire SAA Board in order to “mitigate the harm” that the entity’s Chair had caused and would likely continue to cause.
South African Revenue Services (SARS)
According to Zondo, evidence relating to the tax agency established how the private sector conspired with the executive, including Zuma, to capture and render ineffective what was a highly regarded institution.
He discovered that SARS had been deliberately and systemically weakened through restructuring, strategic appointments, and the dismissal of key personnel. A pervasive fear and bullying culture also played a significant role.
Evidence was presented indicating that Zuma agreed to appoint Tom Moyane as the agency’s commissioner before his formal appointment.
Bain & Co also met with Zuma and Moyane before being hired as a consultant, and it was clear that it would be given a contract even before the tender process began, according to Zondo.
Building on this, Zondo stated that the purpose of these early ‘appointments’ was to ensure that the necessary pre-planning could be done to redirect the organisation’s resources and assume control of the organisation.
Zondo recommended that all of Bain’s contracts with state departments and organs of state be reviewed for statutory and constitutional compliance.
Zondo suggested that Moyane be charged with perjury for giving false testimony in Parliament. The legislation was changed to allow for an open, transparent, and competitive process for appointing the SARS commissioner.
Moyane, who testified in front of the Commission under subpoena on 26 May 2021, has consistently denied wrongdoing.
To read the full report, click here.
This is a significant step for South Africa’s future. The next few months will be memorable as these developments come to light.
Be sure to stay tuned and share your thoughts in the comment section below.
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