What does a declassified British security service's report have to do with the South African government's utter lack of political will to pursue corruption proceeds? Many onlookers are saying it is indicative of an endemic problem experienced by those who try to recover assets on behalf of the country. Meanwhile, billions of dollars in potential restitution hang in the balance.
Investigating corruption? Get ready to be investigated yourself.
That is the unspoken message sent to fraud fighters in South Africa whose investigations lead them to politically unseemly targets; and those who have failed to heed the warning have found themselves in the crosshairs of government agencies with their own agendas.
The latest and clearest example of this comes on the heels of a recently-declassified report by a high-level corporate investigations contractor detailing systemic governmental lethargy and the lack of political will to go after billions of dollars in apartheid-era corruption proceeds.
The report was authored in 1999 by UK-based Ciex – operated by former-MI6 chief Michael Oatley. It charted a smorgasbord of corruption and looting of public coffers in the final years of the oppressive apartheid regime, but despite 26 billion rand (about $3.8 billion) located and an investigation that has led directly to the doorsteps of the largest beneficiaries of the corruption – some of whom have already made preparations to pay – neither the resources nor political will existed to go after the assets, one of the country's top lawyers said last week.
What a difference a week makes.
On Monday, South African public protector Thuli Madonsela announced she would probe the case after all. As Public Protector, an appointed position similar to a public ombudsman or internal government affairs officer, it is within Madonsela's purview to investigate cases where public figures are implicated in wide ranging corruption.
Corruption fighter under the microscope
"The sheer magnitude warrants a close look, we have decided," she said.
But Madonsela, an outspoken fighter of corruption since well before her appointment in Nov. 2009, has been dogged by her own legal problems. Rumors of pending fraud charges stemming from her outside employment with a government contracted law office found their way to front pages in South Africa in the past week, undermining her work. Denouncing the "charges" – which to this point are completely unsubstantiated and have been discredited by police commanders – Madonsela called a press conference Monday to assert her innocence and label the attack false.
A person involved in South African law enforcement who did not want to be identified said the spurious investigation originated in the offices of national police commissioner Bheki Cele. Madonsela has been investigating Cele and others in the national police over a dubious 1.1 billion rand ($160 million) office lease deal in Pretoria since as early as 2010. At some point between then and July, Cele's office initiated the counter-investigation of Madonsela. The national police are the lessees to a Pretoria office building owned by Roux Shabangu, a shrewd and powerful South African property tycoon. Politically connected, several of the government's land deals with Shabangu have been scrutinized as one-sided and poorly-procured, to say the least.
On Friday, just days after defending herself before the press, Madonsela released a report titled "Against the Rules Too" calling the government's Shabangu lease deals "unlawful," "reckless" and "improper." The scathing report showed that if Madonsela was shaken by the unfounded allegations of the previous week, she wasn't letting it deter her. Madonsela also fired back by saying her office planned to probe the Ciex report fully.
"This is a common tactic here in [South Africa] when someone tries to fight powers in charge," said someone with Chapter 9, the division of public agencies that provides oversight for government activity. "But the police have made a mistake: this time, they are dealing with someone with no skeletons in her closet."
'Investigations of investigations'
The role of the dice, it would appear, has backfired. Days after rumors circulated that her arrest was imminent, an outraged public supporting Madonsela demanded answers from police, and a newly empowered Madonsela held Monday's conference to categorically refute the charges, furnishing documentation from the government clearing her of any conflicts. Justice Minister Jeff Radebe pronounced that he had determined Madonsela had not broken any laws. Madonsela demanded to know who in the police department had initiated the investigation, although she said she already had an idea.
"It's disappointing because I really thought I had the support of the government in achieving changes and halting [corruption]," Madonsela said later. "Clearly, someone is trying to scandalize me, and we know why."
"What you have are investigations of investigations," said South African law enforcement source. "Someone gets too close to someone's stash, and so they have that person investigated to allay suspicion. And soon none of them are doing their jobs, they're just investigating each other."
No sooner was she exonerated than it came to light that Madonsela was being investigated behind the scenes as early as 2008. Identified as a potential threat because of her history combating fraud and public sector waste, "they had been trying to marginalize me for some time," she said.
The case of Willie Hofmeyr
In a similar position to Madonsela is Special Investigating Unit (SIU) head Willie Hofmeyr, a leading asset recovery* expert from South Africa who has brought huge cases to court and wrested back millions from fraudsters during his career. This week, the National Prosecuting Authority said it had received a docket from the Serious Economic Offences Unit on the investigation into his activities and handling of assets.
According to many who are familiar with the situation, Hofmeyr is at most guilty of operating unchecked – his position had until recently flouted oversight from the NPA. In asset recovery* cases, Hofmeyr held the final word. He decided whose assets to chase, and which corrupt officials of the many to choose from in South Africa to target.
Colonel Danie Kriel of the SEO, or "Hawks," unit signed the information note used to investigate Hofmeyr, although there were no detailed charges. The Hofmeyr investigation, according to someone directly familiar with it, was "a fishing expedition" from the start.
It is rumored that a meeting will take place soon between Hofmeyr and Menzi Simelane, national director of the NPA and Hofmeyr's chief antogonist. The meeting will be at the request of Radebe, according to a source. Simelane and Hofmeyr have been at odds over the latter's alleged contravention of asset forfeiture* procedures.
Not the first times asset recovery* thwarted
But this is far from the first time that someone who has shown interest in battling corruption has been investigated, leading many experts to conclude that the political will in South Africa is more than lacking – it is contrary. Madonsela and several other officials in positions to take back assets from current former regime members
In April 2009, an investigation against then-African National Congress president Jacob Zuma for fraud, corruption, money laundering and racketeering was derailed when acting National Director of Public Prosecutions Mokotedi Mpshe dropped the case due to alleged "manipulation and abuse" by the police. Again, a potentially high-yielding investigation against a high profile public figure was tamped down. Today, Jacob Zuma is the president of South Africa. The investigator in charge of the case? Willie Hofmeyr.
The repeated pattern has raised suspicion among experts.
"It is hard to believe that the investigations into the public protector and the SIU head are announced within days of each other merely by coincidence," said Derek Luyt, head of public service at the non-governmental organization Parliamentary Services Accountability Monitor. "To cast doubt over their integrity can only weaken them and further the interests of political-economic cabals, acting in their own interests and to the detriment of the society at large."
While Hofmeyr has been publicly mum, Madonsela said of the investigation into the SIU chief: “After what I have experienced, it no longer surprises me.
"Although we are Chapter 9s, we are different kinds of watchdogs. We are placed in a situation where we have to make specific persons uncomfortable."
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