RYK VAN NIEKERK: Over the past few years we have read of very disconcerting allegations of severe misconduct at the South African Revenue Service in various national newspapers. Now, this included that a rogue unit operated within Sars and that this unit ran a brothel, conducted covert operations and even bugged the office of Jacob Zuma. These allegations are extremely serious, one of the key individuals who was involved is Johann van Loggerenberg, he was the chief investigator at Sars at the time, van Loggerenberg, as well as Adrian Lackay, the previous Sars spokesperson, have penned a new book called Rogue: The Inside Story of Sars’s Elite Crime-busting Unit, and they wrote this book to tell their side of the story. Both Johann and Adrian are in studio with me, good afternoon, gentlemen, and thanks for joining me. I’ve read the book and your version of events differs significantly from what we read in the media over the past few years. Adrian, I would also go as far as to say if only 20% of what is stated in your book is true, South Africa is really in deep, deep trouble.
ADRIAN LACKAY: Good afternoon, Ryk, thank you very much for the opportunity to discuss our work on this programme. We thought that we should take the opportunity given to us by the publishers to put certain facts in the form of this book to the public, to taxpayers in this country, and really to explain to people that since around October 2014 when Tom Moyane became commissioner of Sars, specific events unfolded. Many people lost their jobs in the process, many people’s reputations were severely tarnished, many people were hounded out of the institution and many people – or some of them – today face the real prospect of criminal charges by the Hawks. And all of this was based on a story line that was advanced in some media of a supposed rogue illegal unit that operated within Sars, that spied on the President, that ran brothels, that was funded by slush funds. And multiple investigations then followed these headlines. Of course, what we argue here is that those people mostly affected, like Johann van Loggerenberg as the head of investigations, and Ivan Pillay, the deputy commissioner at Sars, were never given a proper opportunity to answer the charges against them, to defend themselves publicly and to inform the public this is what’s happening to your institution, this very vital fiscal institution. So we tried to be as factual as possible. I hope more than 20% of the content can be substantiated or comes across to the reader as based on fact. That is the story that we wanted to put into the public domain.
RYK VAN NIEKERK: Let’s talk about Tom Moyane, He is a key individual in the story, as he was the commissioner at Sars at the time. He is also currently involved in a fight with Pravin Gordhan, the current minister of finance, and a commissioner at the revenue service when this rogue unit was supposedly set up. Johann, you make several insinuations that he or somebody close to him may have leaked sensitive information to, among others, the Sunday Times. He also didn’t respond publicly or defend Sars publicly when these allegations first made headlines. What role did he play?
JOHANN VAN LOGGERENBERG: I’ve been asked this question before. When I left Sars I shook hands with Mr Moyane as a gentleman, and I walked out of the door – and I don’t think I’d like to say anything beyond what I’ve said in the book, with respect to Mr Moyane.
RYK VAN NIEKERK: But the allegations you make in the book are extremely serious, and it suggests improper conduct at the highest level at Sars, and it begs the obvious question: Has Sars been captured?
JOHANN VAN LOGGERENBERG: Well, let me say this to you, Ryk. Last week and this week I noted certain public statements by the South African Revenue Service with respect to media publications that are perceived to reflect negatively on Sars. And a lot of efforts and lot of time appear to be put into trying to dispel and deal with this perceived negative publicity. One has to question why over 30 articles over two calendar years that attacked the essence of the revenue service, which was known for its efficiency, which was known as an upstanding state institution that people were proud of – not once was any effort made whatsoever to (a) deal with the salacious content of the allegations that were stated as if fact, which we now know were not fact, and (b) determine who were the people behind those leaks and pushing the narrative. It’s a big question mark. I can’t answer that, but it’s certainly something that I do believe needs to be looked into, and that question needs to be posed.
ADRIAN LACKAY: I think it’s at best untenable in a constitutional democracy, like ours, where government has a Cabinet, which oversees the functioning of government institutions in this country and where within that Cabinet structure you have a Finance Minister, to whom a commissioner for Sars is supposed to report, practically and operationally. In our situation, based on this rogue unit nonsense, you have a commissioner for Sars who is actually the complainant in the criminal investigation by the Hawks against the Minister of Finance. That should be a serious concern in any democracy or in any government that functions as ours functions, where it cannot be a healthy working relationship, where the Sars commissioner is the criminal complainant against the Minister of Finance, based on a rogue unit story that was allowed to mutate, persist, for over two years and when people like myself and others have officially asked this commissioner for the sake of this important fiscal institution, Sars, can you please investigate how leaks of taxpayer information find their way to the Sunday Times. Can you please for the sake of this institution investigate how confidential Sars information, week after week, finds themselves in headlines of the Sunday Times. Do it for the sake of the institution because as the accounting officer you are duty-bound to do that, you must protect taxpayer information, you must protect the institution, you must promote public trust in Sars. Absolutely nothing was done to those requests.
RYK VAN NIEKERK: Do you think he was involved in the leaking of those documents?
ADRIAN LACKAY: Look, I’m being sued by both Moyane and Sars for defamation already, there’s a R12 million lawsuit against me because I wrote a 28-page letter to Parliament in March 2015. I wouldn’t want to speculate further. I think readers who go through the text that we present in this book will be more than in a position to make up their own minds. But there was a trend of a series of events, as the one you refer to, where information that only a few people in the top executive of Sars would be privy to, finds its way into the Sunday Times, and is then presented to the public in a completely distorted manner. Those things were never investigated and no effort was made to safeguard the reputation of the institution.
RYK VAN NIEKERK: Just lastly on Sars, Jonas Makwakwa was mentioned once in the book, he was, of course, recently fingered for allegedly taking bribes, he was also part of the Sars Kroon board to investigate the allegations, is there a link between these latest allegations and the investigation into the unit?
ADRIAN LACKAY: I’ve been out of Sars since March 2015, I don’t know what Mr Makwakwa got up to or not. The news headlines I have read are certainly very concerning and even more concerning are the news reports that these things were reported to the Sars commissioner by a regulator of banks, an official statutory body, in May this year. For more than three months he lifted no finger to take any kind of action, again to protect the institution, he lives this individual, who is implicated by a very serious body of evidence by an official statutory body. So he does nothing. If I measure this against what Moyane did against Johann van Loggerenberg, Ivan Pillay, Piet Richer, he suspended them within a month of receiving the so-called findings of the Sikhakhane report of investigations, although, those suspensions were later overturned in the labour court. So no action taken in the Makwakwa matter for three months until there’s a headline in the newspaper that exposes some of the alleged shenanigans. If I measure against the 2014 experience of my former colleagues, there are grave inconsistencies and I think both Sars and Moyane have a lot to answer for to the public.
RYK VAN NIEKERK: Another theme of the book is the roll of the tobacco industry, especially the smuggling of tobacco and in the book you make the following statement: What we realised at the time was that we were up against people with influence and power way beyond our imagination. What did you mean by this?
JOHANN VAN LOGGERENBERG: It’s a loaded question but let me try and answer it. I give an example early on in the book of how we dealt with the electronics industry in the early 2000s, which was by and large a new kind of approach to address all levels of different role players along the value chain within a particular economic sector from a revenue and customs perspective. Towards 2013 we began to look to the tobacco industry along very similar lines, in other words we did not want to confine our investigations to only look at the so-called small local tobacco manufacturers but we wanted to look along the value chain, across the spectrum of the economic sector and that would include the multi-nationals. Something that certainly I didn’t realise at the time when I began to work through the existing cases, and pull them all together and start making the connections, was that there was this multi-agency task team that had come about late 2010, early 2011 and how closely connected they were to certain commercial interests within the tobacco industry. We discovered things as we went and in this particular case study, and to answer your question more specifically, one of the things that we came to discover around November 2013 was this network of private spies, if I can call them that, and handlers, and the placement of covert cameras and tracking devices, people being paid under the table for information, people being paid by way of anonymised cash passports, people with literally millions in secret funds being used to advance the agendas of some at the expense of others. These things began to unfold from around 2013, into the early months of 2014, and this is basically what that little unit stood accused of, there are key themes in what was advanced publicly for the two years that the public was fed the rogue unit narrative, that his unit had millions in slush funds, broke into homes and so forth.
RYK VAN NIEKERK: But you’re not talking about small operations, you are talking about British American Tobacco, one of the biggest tobacco companies in the world, it’s one of the biggest companies in South Africa and you clearly state in the book that they have bribed people and they have spied on competitors. Those are serious, serious allegations.
JOHANN VAN LOGGERENBERG: Well, I must choose my words carefully, let me not personally name any particular commercial enterprise. I will say this, I think it is as clear as we can put it in the book, the way I see how this came about was there were these private investigation firms and private investigators, who themselves had arrangements with multi-national tobacco companies, and together they then accessed this multi-agency task team, which comprised of representatives of all the different state agencies in the law enforcement environment. In doing so they began to direct their investigations towards predominantly smuggling. Smuggling is something that we can all understand, we all visualise it, we all go through customs, we all understand what that means but the dilemma in the tobacco industry is that the loss to the fiscus and the loss to economy and the loss to this country is not limited to smuggling. If you really want to look at a particular industry in the manner in which we did in the early 2000s, you have to go beyond simply looking at smuggling because you don’t really stop illicit outflows or dodgy outflows of big money by arresting the driver of a truck with cartons of cigarettes coming through a particular port of entry. If you want to make an impact in a particular sector you’ve got to look at all the role players, you’ve got to look at all the manifestations of how money flows out of this country.
RYK VAN NIEKERK: But you allege in the book that the investigations by your unit of these smuggling kingpins may have triggered this whole process to discredit your unit and Sars.
JOHANN VAN LOGGERENBERG: Absolutely, in fact, I state that as a fact and I’m very happy to prove that.
RYK VAN NIEKERK: But are you not pulling punches in the book by not naming individuals who are responsible for this?
JOHANN VAN LOGGERENBERG: Well, I do name them. There was a particular “complaint” that landed at the revenue services on May 28 2014, that complaint suggested that I had discussed the tax affairs of two prominent politicians, there was no mention of a rogue unit, yet. The person who laid that complaint says and I quote: I was assisted by members of the illicit tobacco task team in my complaint against Johann van Loggerenberg and the South African Revenue Service. It’s a quote in the book.
RYK VAN NIEKERK: Who said that?
JOHANN VAN LOGGERENBERG: This is a person with whom I was in a short lived and very damaging romantic relationship.
RYK VAN NIEKERK: Adrian, what is your view on tobacco industry and the possible role they could have had in the developments at Sars?
ADRIAN LACKAY: I think they played an instrumental role but I don’t think that was the only compounding factor. I think people within state security, who may or may have not worked through this ant-illicit tobacco task team, played a crucial role. I think there are definite political interests that contributed to allow what happened at Sars to happen at Sars. The point, for example, that Judge Johann Kriegler makes in his foreword, is that there are remarkable similarities between the Sars rogue unit story and what happened at the Hawks with Anwa Dramat, Shadrack Sibiya and others relating to the alleged illegal renditions of Zimbabweans, what happened much earlier to Major General Johan Booysen at the Hawks in KwaZulu-Natal regarding the alleged Cato Manor death squad, what happened to Robert McBride and his subordinates in the Independent Police Investigative Directorate, where there seems to be driven by a political agenda firm efforts to weaken institutions who want to do their work independently and institutions that have withstood political pressure, where (1) there’s a headline against top leadership, (2) there’s an internal investigation, (3) the top leadership are suspended. There are then criminal charges that may or may not follow, people are hounded out of institutions and they are effectively replaced by a new brand of very complaint people. It has happened at the NPA, it has happened at the Hawks, it’s happened at IPID, at Sars and possibly at other state-owned enterprises. So that political agenda I think did also manifest itself at Sars, where an institution was seen to be too independent in executing its mandate, where it perhaps stepped on toes of those politically connected, where it shouldn’t have. We find ourselves then even when people like Ivan Pillay, van Loggerenberg, Piet Richer, Pravin Gordhan have long left the institution, they are now the subject of criminal investigations. So that formula, the judge argues, is quite pronounced and very visible in the individual experiences of those institutions. So in our case, yes, maybe the tobacco industry had a significant role but in my view there were other interests as well.
RYK VAN NIEKERK: Well, that begs the question, if there is political involvement here, who are the people or factions who are behind all of this?
ADRIAN LACKAY: Again, it’s difficult, I don’t want to speculate and attract more litigation to myself but Mr Moyane did not appoint himself, why he chose to get rid of his entire executive within six weeks of assuming the position at Sars as commissioner, I don’t know. Why he never acted to defend the institution against these public attacks, I also don’t know, and I wouldn’t want to speculate. But I think there is sufficient evidence, arguments based on fact, we believe, that we advance in this book to guide the reader without making definite conclusions as to who is responsible for what. But I think readers and the public when they look at what is happening and unfolding in government right now, they are not stupid, I think people are far more aware than we believe, I think they have a very big interest in what happens in state institutions and hopefully this book can serve as some sort of guide to guide people through this morass of complexity.
JOHANN VAN LOGGERENBERG: Ryk, I’d like to just add to what Adrian has said and perhaps refer to your earlier question, one of the things that I would caution the reader would be to not try and read between the lines. What we wrote there is based on fact, we’ve set out the facts and the sequence of events as they unfolded and it’s substantiated. Now, to deal with how matters unfolded, I think it would be perhaps a way to look at it and to visualise it would be to view it as phases. So the first phase was by and large an attack on me, as Johann van Loggerenberg, and allegations around me, and that emanated from people with vested interests in the tobacco industry. Phase two followed on the back of that, where you begin to see different role players from state agencies that approach me with a view to supposedly assist me and take care of my interests, and there is still no mention of a rogue unit. By August, when the first article relating to the allegations of May 2014 come out in the media, there is still no mention of a rogue unit. It’s only mid-stream in the second panel, the so-called Sikhakhane panel, that this panel takes it upon itself to also investigate what’s in the media and the very first reference in the media to a rogue unit at Sars is on October 13 2014, two weeks after the appointment of the new commissioner at Sars. Then things start happening rather quickly because they end their report and finalise it on November 5 and by mid-November a whole lot of people are suspended. So I think there’s a phased approach, I think there was opportunism, I think different people with different agendas saw opportunities and the strangest of bedfellows began to advance each other’s causes.
RYK VAN NIEKERK: It’s actually a fascinating tale. Adrian, one thing that really struck me was that it seems to be a very well organised and co-ordinated process against this so-called unit. There were tentacles into the Sunday Times and the journalists who wrote those stories were very experienced and well known journalists. You have people in Sars management who were compromised, you have people in the intelligence agencies who were compromised. There were several investigations into these allegations, the Sikhakhane panel, KPMG, it seems like it’s managed from a central position and it was very, very effective. Do you think it was managed from one area?
ADRIAN LACKAY: That’s one of the first questions we put to the reader in the book. It’s strange, if not unremarkable, this investigative unit was called the National Research Group at one point, it ended up with the name High Risk Investigations Unit in around 2010. But when it was started in its height in 2007 there were 26 individuals who did investigative work there. Now if you measure that against a broader Sars population over that period, which was anything between 14 000 and 15 000 people at any given time, this small unremarkable unit, relatively unknown publicly, goes about doing its work and then by 2014 becomes the subject of this sustained campaign, where one of the biggest newspapers in the country week after week would “expose” its activities, call it rogue, call it illegal, call it covert. But really within the whole of Sars it’s so minute, so that’s the one baffling aspect. We tried to put as much information as we have about who pulled what strings and who was responsible for what disinformation campaigns behind the scenes but we really want to leave that to the reader. Especially Johann felt compelled to tell the story is because many of those 26 people, some of them are still in the institution, they are under tremendous pressure right now, their identities were exposed by the Sunday Times, even though they did high risk investigations into organised crime. Some of them are suspended, there is pressure on some of them to turn state witness against the Minister of Finance and others, and until now they have had no opportunity to tell their story, to defend themselves publicly or to just say to people, this is actually what we did, we investigated organized crime, we did so in the interests of our economy, the fiscus and society in general. These people busted abalone syndicates, they busted rug syndicates as part of their work at Sars. They are now being called rogue, they are now being hung out to dry and there’s absolutely no protection for them. So if their little story and experiences can be documented somehow then I think we have achieved something with this book.
JOHANN VAN LOGGERENBERG: If I can add, I have to question in hindsight, why there were four so-called panels one after the other and not a single one of those panels thought it good, prior to bringing their findings out, come to me and say, look, Johann, this is what we have found. The natural law of justice says we must put this to you and you must respond because we may have found wrong, so here are our preliminary findings, tell us where we are wrong, let us fix that. So you’ve got to ask that question, why didn’t that happen? You’ve got to also ask the question, why the massive amount of corruption and money laundering, and other cases that I advanced, lay at the heart of at least the initial attacks on myself and the unit were not even referred to, not in the Sikhakhane report, not in the Kroon advisory board statement and not in the KPMG report, why not? Lastly, for some reason people want to drag Minister Gordhan into this unit. One of the things that I really wanted to put out there in the public is that Mr Gordhan’s role was nil in this unit, he played absolutely no role. There was once upon a time in 2007 a particular idea born in the minds of at the then National Intelligence Agency and the South African Revenue service, that concept was recommended by Mr Gordhan in his capacity as commissioner but never seen through. The National Intelligence Agency never came to the party, Sars stuck to its end of the bargain, it was left with these people and we had to make do best with what we had. Why did none of these panels reflect on what these units actually did? You’ve got to ask the question and I think if the reader can get from this story just that, then I think we would have succeeded in what we set out to do.
RYK VAN NIEKERK: Thank you, Johann. That was Johann van Loggerenberg, as well as Adrian Lackay, co-authors of the book Rogue: The Inside Story of Sars’s Elite Crime-busting Unit.