Johannesburg - Far from being a “covert” or “rogue” unit, the SA Revenue Service (Sars) national research group was approved at the highest levels of government and established in partnership with the National Intelligence Agency (NIA).
This emerges from documents in the possession of The Sunday Independent and brings into question statements by Sars commissioner Tom Moyane citing investigations into claims of illegal spying brought against the unit – along with other more lurid (though as yet unsubstantiated) irregularities like running a brothel.
In the fallout from that probe, deputy commissioner Ivan Pillay, investigations chief Johan van Loggerenberg and group head of strategic planning and risk Pete Richer were suspended. Richer’s suspensions was subsequently lifted and that of Pillay overturned by the Labour Court.
The documents in The Sunday Independent’s possession also show the allegations made against the unit’s management have been in circulation for some years and were discredited in earlier investigations.
The first of these documents is the 2007 request signed off by the then-Sars commissioner Pravin Gordhan seeking approval to fund a special capability within the NIA to partner with the revenue service and law enforcement agencies in addressing the illicit economy.
It is stated in Gordhan’s communiqué that on its own Sars lacked both the mandate and capability to perform such functions. Specific attention is drawn in this regard to managing clandestine activities and penetrating and intercepting the communications of organised criminal syndicates.
It refers to discussions within the NIA to supplement Sars’ intelligence capability.
The document places on record the NIA’s willingness to create a “ring-fenced capability” to help Sars provided funds were made available to cover the personnel costs for this. All other costs were to be covered by the NIA.
The request is addressed to the finance minister at the time, Trevor Manuel, and is signed by both him and the-then deputy finance minister, Jabu Moleketi. A formal proposal, dated February 8, 2007, pursues the matter further, making reference to a proposal for a specialised capability within Sars aimed at investigating the illicit economy.
Initially the unit was to fall within the Custom Border Control Unit established in 2006.
The special projects unit was then formed in 2007 and later changed its name to the National Research Group (NRG).
Another document records discussions with both the NIA and the South African Police. Documentats in The Sunday Independent’s possession covers meetings between Sars and the NIA over four years, from 1999 to 2003, and details discussions on areas of co-operation between the two entities.
At the time Pillay, for Sars, and Richer, for the NIA, signed the agreement between the two entities and the unit was to function as a partnership between the two agencies in the light of their respective mandates. There were no “cost implications” for either department – indicating no secret slush funds were used to fund the project.
The documents outline the work and genesis of the NRG and details a meeting on November 5, 2010 between Sars and representatives of the State Security Agency’s (SSA) domestic branch following the leaking of an “intelligence dossier, “which makes claims, dismissed as “spurious”, against the unit.
At the meeting Sars confirmed the following to the SSA representatives:
* That Sars had as early as 2010 provided information on this matter to an NIA official;
* That no further queries had resulted from that interaction; and
* The NIA had not responded to requests or updates as requested in writing from Sars.
It goes on to say that Sars had by the time of this meeting already provided responses to the allegations contained in the dossier to the office of President Jacob Zuma, the deputy finance minister, the Standing Committee on Public Accounts, the auditor-general and DA MP Dion George.
At the meeting the SSA confirmed it had not uncovered any information that would suggest the revenue service had a unit carrying out “covert activities” but outlined concerns that previous members, with skills in conducting covert or clandestine work, were behind the rumours contained in the dossier.
State security said these activities could have been carried out – but without Sars’ knowledge.
The Sunday Independent saw correspondence between Van Loggerenberg and Pillay.
In one correspondence, Van Loggerenberg details legal opinion he had sought on the work of the NRG.
The legal opinion made reference to the SA Revenue Service Act 34 of 2007.
In term of the legislation, Sars’ objectives are defined as the efficient and effective collection of revenue and control over the import, export, manufacture, movement, storage or use of certain goods.
In its obligation to achieve the secure efficient, effective and widest possible enforcement, Sars may among others:
* Perform any specific act or function within its competence on behalf of any other person, including state department, functionary or institution;
* Engage in any activity, whether alone or together with other organisations in the Republic or elsewhere, to promote proper tax administration including customs and excise duty administration; and
* Do anything that is incidental to the exercise of any of its powers.
In the correspondence, Van Loggerenberg says the National Strategic Intelligence Act in fact assumes that other government departments will have the need for and would create intelligence capability for their own purposes.
According to legal opinion obtained by Van Loggerenberg, the relevant national legislation does not preclude Sars from creating an intelligence capability – the NRG – but instead specifically provided for it. The legislation does, however, preclude other departments from collecting intelligence pertaining to national security in a covert manner.
However, the NRG’s purpose was confined to Sars’ mandate that it should look at a subject of investigation as a taxpayer or customs client and not as a national security matter.
“The fact that what Sars looks at may relate to illegal activities or matters of national security should always be secondary,” stated the lawyers who drafted the legal opinion.
Some of the ‘big guns’ probed by Sars’ special unit
Robert Huang: 2010-2013...continuing
Documents accessed by The Sunday Independent show that the suspensions of Sars Deputy Commissioner Ivan Pillay and top investigations officials Johan van Loggerenberg and Pete Richer came in the midst of a probe into the affairs of politically connected Taiwanese businessman and convicted murderer Robert Huang.
Huang, an associate and the would-be saviour of President Jacob Zuma’s nephew Khulubuse Zuma – by mobilising Chinese capital – and his ill-fated Aurora Empowerment Systems, was also the focus of a bitter stand-off with Pillay when the Sars deputy commissioner reportedly stopped the importation of a multimillion-rand consignment of ANC election T-shirts facilitated by Huang before the general elections in May. Despite alleged intervention by prominent individuals, Pillay refused to release the T-shirts until levies and taxes had been paid.
The revenue service’s interest in Huang, the documents show, grewout of a 2010 investigation relatingto the activities of a former Sars employee.
Soon, however, the purview of the investigation grew as it became clear that Huang was emerging as the probe’s primary focus, including connections with a range of “influential citizens”, suspected criminals and companies used for criminal activities.
Last year, Sars began investigating the Mpisi group, in which Khulubuse Zuma was found to have interests.
Huang, through his business entities and assets and those of his wife, was found to be owing R500 000 in back taxes.
Despite this, it has been learnt, he was on the fringes of the business delegation who accompanied the president to China earlier this month. According to the Mail & Guardian, he has been represented by Zuma’s legal adviser, Michael Hulley, in his tax troubles with Sars. Last week, when asked about the trip, Huang said he could not talk as he was driving.
Two subsequent attempts were made to reach him, but he did not answer the calls.
Leonard Radebe, Dave King and Glen Agliotti: 2008
Investigations into billionaire Dave King’s tax affairs brought to light the activities of a network of “fixers” around businessman and convicted drug dealer Glenn Agliotti.
Agliotti and some of his associates, Sars alleges, had allegedly been “defrauding” taxpayers by presenting themselves as being able to solve “tax problems”. One case involved a close associate of Agliotti – former policeman Jacques Nel. Nel played a role in introducing King, from whom Sars initially wanted R3.2bn in unpaid taxes, to the then-general manager of Sars, Leonard Radebe.
In defending himself, King insisted he had negotiated a deal with Radebe and a private tax practitioner, Delville Whatley, to reduce his R2.4bn tax bill to R300m. Sars found the agreement and supporting documents to be fraudulent. Radebe quit Sars before a planned disciplinary hearing.
The King debacle was only one of a range of alleged tax frauds involving Agliotti. In another, Roger Kebble, the father of slain mining figure Brett Kebble, was found to have paid at least R8 million to Agliotti to make his tax troubles go away.
It also emerged that Kebble jr had coughed up R39m through Agliotti’s special purpose company called Spring Lights. Sars eventually found the mining boss’s tax bill to be R183m. Kebble jr was shot dead in 2005.
Radovan Krejcir: 2011...continuing
More recently, according to the documents, Sars’ investigations unit has turned its attentions to fugitive Czech underworld figure Radovan Krejcir, who owes R114m in taxes, and to the estate of late sleaze boss Lolly Jackson, which owes about R100m.
Other underworld figures probed in recent years have included Cape Town gangster Colin Stansfield, former Civil Co-operation Bureau hitman Calla Botha, as well as an unnamed Cape Town businessman linked to Jerome Booysen, leader of the Sexy Boys gang.
Several billion rand have been uncovered by Sars’ national research group and its successor units.
Sunday Independent