Khulubuse Zuma and his uncle, President Jacob Zuma. Photo: Bongani Mbatha

Events that have unfolded in the week we commemorated the brutal murder of our freedom fighter Chris Hani suggest that our democratic project may have been hijacked, as Hani warned us, by elites. The mischievous opinion piece penned by Rhodes University lecturer Wesley Seale (“Accomplices to financial murder”, IOL News, April 12) confirms this narrative.

It is a bleak moment in our country when some academics have decided to deploy themselves and their considerable research skills as mercenaries in the service of ANC factions and corruption networks. A former policy co-ordinator in the ANC, Seale is famous for laying a charge of assault against the ANC Western Cape provincial secretary, which he lost in the Cape Town Magistrate's Court.

Seale’s argument is that billions of rand are moved illicitly out of the South African economy and that former finance minister Pravin Gordhan is to blame. He alleges that under Gordhan, Treasury has focused its attention on the R7 billion of alleged suspicious financial transactions by the Gupta family businesses, while allowing billions to be moved illicitly by others out of our economy.

We can ignore Seale’s argument for the obvious fact that it lacks merit. But unfortunately in this year of the ANC’s 54th national conference, he has a captive audience that is ready to lap up propaganda that purports to expose the shortcomings of ANC leaders perceived to be on the other side of the factional divide. So we have to deal with these allegations systematically.

Illicit financial flows have many components: commercial activity, crime and corruption. The commercial component refers to evasion or aggressively avoiding tax, dodging custom duties and domestic levies, as well as base erosion and profit shifting (BEPS).

BEPS is a global phenomenon and more countries are collaborating to implement measures to tackle it. Since these are criminal activities, nobody knows with certainty how much money is actually moved. The recently leaked Panama papers for instance named Khulubuse Zuma as the only South African who apparently has secret offshore bank accounts in that tax haven.

Seale cites three sources – FIC director Murray Mitchell, Riah Phiyega and the Mail & Guardian – to present three different amounts R10.8bn, R58.49bn and R147bn respectively that apparently flow out of our economy annually.

He favours R147bn, which he claims is equal to the amount needed to fund higher education. As an academic, Seale ought to know that in research you cannot choose arbitrarily which sources of information on which to rely.

According to Seale, Gordhan was complicit in facilitating the illicit flows.

To substantiate this bizarre allegation, Seale relies on the completely unrelated claim that Mitchell has not signed a performance agreement since 2002 when Trevor Manuel was finance minister and that Gordhan has approved performance bonus payouts to Mitchell.

Seale’s attack on Gordhan is actually an attack on the institution of parliament. Contrary to his allegation that Treasury and FIC have done “nothing” to stem the tide of illicit flows, Parliament has twice passed unanimously the Financial Intelligence Centre Amendment (Fica) Amendment Bill – aimed at aligning South Africa with international anti-money laundering standards. Since June 2016 President Jacob Zuma has refused to sign the bill into law, citing some minor concerns.

It was the Gupta surrogates such as Mzwanele Manyi who were also opposed to its signing and even threatened to take the president to court if he dared to sign it. A couple of other pieces of legislation and regulations are before parliament for approval. These include Financial Sector Regulation and the Market Conduct Policy Framework that are part of the Twin Peaks model.

Seale contradicts himself when on the one hand he claims that the FIC is doing nothing about the problem, but also quotes Mitchell’s report to Parliament that 9 million suspicious transactions were reported to FIC in the last financial year. Instead of giving credit to FIC and National Treasury, Seale uses this information to single out Mitchell and Gordhan for blame without adducing a single shred of evidence!

It seems that Seale is attempting to ingratiate himself to the Gupta-owned business empire by suggesting that their alleged suspicious financial transactions are relatively minor. This may be true; but in this instance Seale uses it to project the Guptas as victims of a conspiracy without providing any evidence.

The facts are, contrary to the narrative that has become popular in Gupta news networks, where Treasury and ANC member Gordhan are bashed daily. Those of us who work in the institution know that Parliament has done a lot of work over the past two decades to build one of the most robust financial sector regulation systems in the world.

The efforts to further tighten the system have been delayed by Zuma, who has not signed the Fica amendment bill into law after Parliament adopted it twice. It is also the Gupta hired guns and not “monopoly capital” who have objected publicly to the bill.

Nogcinisa is a researcher: ANC parliamentary caucus, Parliament of the Republic of South Africa