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Public protector’s errors swamp any merits of Bankorp investigation

Ordered to pay 15% legal costs at attorney-client scale.

The Constitutional Court, in a majority judgment, upheld the High Court of South Afica’s order that Public Prosecutor (PP) Busisiwe Mkhwebane must pay the SA Reserve Bank’s costs on a punitive attorney-client scale.

The high court reasoned that these costs were warranted for circumstances that include:

  • Not fully understanding her constitutional duty to be impartial and perform her functions without fear, favour or prejudice;
  • Her failure to disclose her meetings with the presidency in her final report;
  • Pretending that she had acted on the advice of economic experts in compiling her final report (dated June 19, 2017).

The PP’s final report “caused severe harm to the South African economy. This included a significant depreciation in the rand and a sell-off by non-resident investors of R1.3 billion worth of South African government bonds”. The Reserve Bank had to launch an urgent action to set aside the remedial action insofar as it related to the amendment of section 224 of the Constitution.

The PP “must be impartial and exercise her powers and perform her functions without fear, favour or prejudice”, and provide effective and accountable government for the country.  

None of her meetings with the presidency were disclosed in her final report. In normal times, this would be bad enough. But these are abnormal times; coming to grips with the depth and extent of state capture is a work in progress.

‘Highly contradictory’

The Constitutional Court found that the PP’s explanations in regard to the meetings with the presidency were highly contradictory – on the one hand “they had nothing to do with the substance” of her report, on the other, her handwritten notes set out “what was discussed at the meeting”. The handwritten notes indicate that the PP and the presidency “had discussed amending the constitution to strip the Reserve Bank of its central function”.

It is for this reason the high court found that she had acted in “bad faith and in a grossly unreasonable manner”.

The dissenting judgment, written by chief justice Mogoeng Mogoeng, with acting justice Patricia Goliath concurring, makes for essential reading. It not only contains gems of insight, there are also a couple of red flags.

The dissenting decision weighed up the need to have a PP who will confront perceived or alleged wrongdoing, and not be fearful of incurring personal costs, against the requirement to guard against the abuse of state power, gross negligence and bad faith. The overriding concern is that the Office of the Public Protector is vital if the state is to have the “undiluted capacity to investigate and expose unethical conduct or improprieties”.

The dissenting judgment did not find that the PP was “grossly negligent” nor that she acted in “bad faith”, although she didn’t receive five stars for her conduct either.

Acting in a grossly negligent manner or in bad faith is important in that it is relevant in terms of whether she should be charged for 15% legal costs at the punitively high attorney-client scale – which is sure to bankrupt her.

(The ConCourt judgment stated that the personal costs order of the high court “must stand”, but made no order as to costs “in this court”.)

But this does not mean that her conduct was something to be proud of either. Nor how one would expect a public official to conduct themselves, particularly the public protector, who should be the guardian of social justice fighting for our protection from evil miscreants.

The dissenting judgment held that:

  • The PP “got the law completely wrong” by acting as though she could direct Parliament to amend the Constitution. But she got it so wrong that no one should have taken her seriously – “it was a known or predictable non-starter in legal circles”. Thus, no damage was, or could have been caused. The PPs “ill-advised or over-zealous proposal” never posed any real threat.
  • The PP handled some of the issues relating to her investigation and reporting in an incongruous manner.
  • Did the PP “hope to get away with a surreptitious connivance to harm the unsuspecting other”? In short, no.
  • Consulting the presidency cannot be seen to be sinister or lacking impartiality, for the reason that the presidency has a “material interest in matters concerning the possible disregard for the law or impropriety” of an institution such as the Reserve Bank.
  • The PP lied about consulting two economists, but was this done in bad faith? “…who was sought to be deceived or disadvantaged, how and for what conceivable purpose?”
  • Legal costs on an attorney client-scale should be granted against a litigant “whose claim is frivolous, vexatious or manifestly inappropriate”. It is not clear which of these requirements the high court relied on, if any. The dissident judgment held that the punitive costs order against the PP in her personal capacity was not just and equitable – “Instead, the institution would, bear all the costs on the ordinary scale”.
  • The high court found that the PP “does not fully understand her constitutional duty” and thus dealt with her harshly. (In a country where some in high office do not appear to understand their constitutional duty, there is no reason for us, the public, to quibble with this.)

But what I found particularly concerning is that:

“The brightly highlighted apparent corruption, fraud, illegality or impropriety involving the R1.125 billion bailout of Bankorp by the Reserve Bank has virtually disappeared into thin air”.

The PP’s errors swamped any merits in the investigation initiated by her predecessor Thuli Madonsela.

Now perhaps this was a crusade against the ‘innocent and squeaky-clean’ Reserve Bank”. But, handled with more professionalism and skill, may it not have turned into a ground-breaking investigation? We will never know, and that is the pity.

With the rampant level of corruption in this country, we require public officials with the requisite skills and the ability to go head to head with powerful institutions and corrupt persons without losing track of their impartiality or independence, without resorting to apparently secretive meetings with a puppet master, and following due legal process at all times.

No one is untouchable. Unless the one attempting to poke them is a newbie with little understanding of the principles that govern their office.

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The dissenting judgement is bothersome if we have our senior judiciary saying that it’s OK for the PP to lie aa long as it isn’t “done in bad faith”.

In my world a lie is a lie and liars aren’t to be trusted – simple as that.

The moment that, immediately on becoming a PP, Busiswe Mkhwebane switched all the TVs in the PP offices to the Gupta channel, she nailed her colours to the mast. Now the chickens (and the cows of Estina) are coming home to roost. She is going down, and plenty more of her ilk to follow.

It is HUGELY concerning that Moegoeng has dissented. What is he up to? Is he trying to make a case for lying as long as it “doesn’t cause harm”? If that is what he is trying to say, then the questions are:
1) How will it be determined if a lie is harmful or not, or to what degree?
2) Who is going to act as the national adjudicator to determine which lies are harmful and which are not? A newly appointed Chief Lie Detector which is more powerful than the courts itself? What if that person is captured?
Moegoeng’s agenda on this matter is questionable; it is very worrysome; it calls into question his reputation as an independent CJ; in my view a set back for the reputation of our judiciary.

Mogoeng’s findings are not much different to those of his colleagues in the main judgment. He differs mainly in whether the PP’s conduct should haved triggered a personal costs order or not. He felt they shouldn’t; the majority differed.

Since such a case of a public official blatantly lying and deceiving has never come before the CC in the past, the Justices were feeling their way and it’s clear from both judgments that the novelty of the case required a lot of pondering. I, like many, happen to agree with the majority view, but I can’t take issue with the CJ and his colleague dissenting. At least now we know what the triggering standard is in future, and as such, the judgments answer the questions you pose.

If the head of the office of the Public Protector is found to be of so much bad faith, dishonest and biased (not once but a few times now) then how can she in all honesty head up this critical public office?

I do not understand the issue with the implied illegality of the bailout of Bankorp. Firstly, it was the closing of the Gupta bank accounts by Absa that motivated this PP stooge to attack Absa and the Central Bank. This attack on the independence of the Reserve Bank is nothing but an amateurish attempt by the entire Zuma faction to keep their bank accounts open and to stay out of jail. The Reserve Bank is the trench in this warfare and this trench has to be conquered for the Zuma faction to have a chance of survival. The main issue here is the oversight role of the Reserve Bank over compliance with the FICA act by the banks. Those who make a living by laundering money, want to destroy this obstacle called “Reserve Bank independence”.

The Absa/Bankorp issue is merely used as leverage in an attempt to insert a Zuma cadre as governor and to clear the lines for the looting of state funds.

The other issue the actual means by which any Reserve Bank bails out any bank that is in distress. This is where the PP accused the Reserve Bank and Absa of fraud. For his case to come before the courts, and for the courts to consider all the relevant facts, the entire monetary system will have to be scrutinised. The court will have to subpoena the head of the IMF in the process. The Reserve Bank has a mandate, under the constitution, to support the banking system.

On what grounds can this process be illegal then?

would like to know in terms of the term “Bailout” – keep in mind, this is something done by government on a continuous basis obo eskom, s.a.l. & how many other semi government entities,(directly due to the entities’ management incompetance) so bailing out a bank (as an once off action), although in the private sector, it was to save it on a long term basis plus lots of jobs(one the things that the anc is currently so much concerned about when it comes to all overstaffed government entities and reducing of staff). wonder if she would have had the same attitude towards something like eskom, etc????

“The Reserve Bank’s assistance conferred benefits on Sanlam’s policy holders and pension fund beneficiaries and on the minority shareholders of Bankorp. That is contrary to public perception published in the media, and contrary to the conclusions of the Heath Special Investigative Unit. Those perceptions and
conclusions have incorrectly asserted that major benefits were received by the
shareholders of ABSA……

Under the S A Reserve Bank Act of 1989 the Reserve Bank was obliged to consult
the Minister of Finance on certain matters, e.g. assistance to banks in distress. A
meeting to seek the approval of the then Minister for the review of assistance to
Bankorp was, in fact, held in 1990. That occasioned a further flaw in the design of
the assistance packages since the then Minister, Mr B J du Plessis, was the brother
of Mr A S du Plessis, a director of Sankorp, a subsidiary of the majority shareholder
(Sanlam) of Bankorp, and indeed of Bankorp itself. Owing to a possible conflict of
interests, the Minister should have recused himself from any such participation.”

https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/18/R-summary.pdf

Credit to WebSurfer

The “merits of the Bankorp investigation” is also peculiar – what were those. The whole business was done and dusted a decade ago.
Or was it just an eye catching head line?

No wonder that they recently launched into an investigation of the LLB standards at SA’s universities. Clearly this hopeless woman has only an extremely foggy grasp of the Constitution, law and her job. How on EARTH did she obtain her law degree, and exactly how low must the standards be for a substandard person like this to be admitted to the Bar?

Fort Hare my brother, Fort Hare….”Together in Excellence”

Seem to remember that she attended the Limpopo bush college (old University of the North).

Yip -and this is the tip of the iceberg. Soon these lawyers will be elevated to judges where the same kind reasoning will prevail.

The dissenting judgement — penned by Zuma’s choice for Chief Justice over the far more deserving and qualified D Moseneke — also expressed concern that the costs could bankrupt the ANC deployee.

If one does not have the moral compass to “do the right thing” perhaps a little bit of “fear” — being held personally responsible for one’s actions — anathema as it is to the ANC, might act as a deterrent against rogue state employees and favour them acting in the public interest.

The chief justice’s dissenting judgement was like a father admonishing his teenage daughter for being drunk in exam time.

Moegoeng’s stance on this is extremely concerning….I am smelling smoke, though I don’t see any yet…

The majority judgement has this gem about the fear to do your job because of punitive cost orders:
“The fears that the Public Protector has about the impact of a personal costs order on the institution of the Public Protector are unwarranted. Personal costs orders are not granted against public officials who conduct themselves appropriately. They are granted when public officials fall egregiously short of what is required of them. There can be no fear or danger of a personal costs award where a public official acts in accordance with the standard of conduct required of them by the law and the Constitution.”(Public Protector v South African Reserve Bank [2019] ZACC 29,at par 159)

The defenders of State Capture – both appointees of the despot Jacob Gupta!

What a stupid PP. Part of the Zuma and Ace faction. She is going to fall on her own sword. Her investigation into the Estina project not implication Ace and his bunch says it all. At least the Zondo commission is now hearing evidence.

Wally

I think she is just a scapegoat for the whole Zuma thing. He did so many illegal things, but has not been punished at all. She acted improperly around another person’s crimes but now there is a monetary punishment. Surely this punishment could have been laid on Zuma.

One cannot help but wonder how she will pay these fees and whether there will be financial assistance from some source and who this source will be.
Maybe this whole process was conducted by unhappy elements within the ANC.

There’s no way she would take on Cyril, Pravin and co unless she has powerful backing from other sources whose agenda she is implementing.

Her brazen confidence in all these actions in spite of what she must know are deeply flawed investigative processes suggests she will do the bidding of her masters, no matter the risk.

I’m pretty certain she is not going to have to foot these bills, they will be picked up by the state capture faction she protects.

when a person in such a high Profile Public Institution lies,she needs to be fired.
Her impartiality has been questioned numerous time ,by different High Court,and her report has been found wanting.

she needs to be replace as her conduct lack impartiality as proven by our Constitutional Court Majority.The Majority Judgement with Punitive Cost has send the Right message to all and Sundry

In the interest of transparency, the list of who benefited from how much debt write-offs in the Bankorp saga should be public reading as it was public money.

Why is the list secret?

We have to understand that the current parliamentary process to potentially remove her has very little chance of success. For this to happen ANC MP’s would need to vote with the DA to get two-thirds. Would never happen.(remember the Zuma votes) – a DA-led action against the PP is therefor doomed.

Cannot see how the ANC caucus would unite to have this done themselves considering CR’s own internal problems – and the EFF will most certainly not get rid of their political pawn in a sec 9 institution.

Only hope is resignation / or at the rate she is going with all the cost orders – liquidation of her as person – in which case she would have to resign.

Anyone with any ideas on how this plays out?

Where is Malema??. Is it coincidence that she wear red regularly. Dont they share the same dream regarding the reserve bank.

This will look like kindergarten once Cyril an Gordan is done.

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