Slippery SARS official frustrates Nugent panel
Moyane sidekick dodges questions on 'purge' of deputy commissioner Ivan Pillay and whether 'rogue unit' was unlawful
On what basis did the SA Revenue Service consider its now infamous “rogue unit” unlawful and why did it move to suspend its then deputy commissioner Ivan Pillay hastily without a hearing?
This was the main focus of retired judge Robert Nugent’s commission of inquiry into tax administration and governance at the revenue collector on Thursday when it heard the testimony of SARS’s group executive for employment relations, Luther Lebelo.
Lebelo, seen as one of former commissioner Tom Moyane’s right-hand men allegedly in part responsible for the purge of senior employees at the institution, was grilled for more than five hours – from which little headway was made.
Frustrating members of Nugent’s panel and evidence leader advocate Carol Steinberg, Lebelo dodged direct questions around Pillay’s suspension and instead offered drawn-out explanations, often contradicting himself.
One question in particular was on what basis the “rogue unit” was considered unlawful. Lebelo finally conceded that SARS did not seek any legal opinion which showed the unit was in fact conceived unlawfully. He also did not seem to have a plausible explanation for why Pillay was not given a fair hearing to explain his version of events before he was initially given the boot.
What made the unit unlawful?
Later dubbed the “rogue unit” after allegations surfaced that the team of SARS investigators had irregularly purchased high-grade monitoring equipment used to spy on politicians and business people in the tobacco industry, the National Research Group was first conceived in 2007 on the request of then commissioner Pravin Gordhan.
Gordhan sought approval from the Finance Ministry for about R50m to fund a special capability in the National Intelligence Agency to partner with SARS in combating the illicit economy because the revenue service admittedly, in a memorandum issued in 2007, did not have the mandate to conduct clandestine investigations.
The memo was issued on February 8 that year.
The commission heard earlier that Pillay had obtained legal advice from within SARS on whether it had a mandate to establish such a unit – which, according to the legal opinion, it did – and only continued to make provisions for the team thereafter.
Lebelo argued that because of the discrepancy between the memorandum and internal opinion from SARS, the unit’s activities were unlawful. He alleged Pillay had already begun setting up the unit before approval for funding from the ministry.
“SARS seems to acknowledge itself that they didn’t have a legislative mandate to establish a covert investigations unit. But Pillay had gotten internal legal advice days before it did ... There is a memo from before the minister approves the mandate that shows the unit is being formed and people are ready to accept jobs,” Lebelo said.
“This created a discrepancy for prima facie evidence that the memo was intended to mislead the minister. They were asking the minister for R49m to establish the unit but were already establishing the unit.”
Pillay gets the boot without a hearing
Lebelo referred to a number of reports when answering questions about why Pillay was suspended initially. He denied there was a plot to “purge” Pillay from his position, but admitted SARS could have followed disciplinary processes better.
From Lebelo’s testimony it appears SARS mostly relied on the findings of a report compiled by a panel led by advocate Muzi Sikhakhane in 2014. Commissioned by SARS to investigate allegations surrounding the “rogue unit”, the panel found the unit was unlawful and may have abused its power.
He said SARS further consulted its own lawyer, Advocate Martin Brassey, to double-check the findings of the panel.
“There were some factors that made us to feel that we needed another independent commission to test if Sikhakhane was correct,” Lebelo said.
Brassey made similar findings to Sikhakhane and drafted the charges Pillay would face, further advising that Moyane could lawfully suspend his deputy (Pillay) but would have to do so through proper processes.
However, Pillay was not initially afforded a hearing.
Pillay testified earlier that on notice of his impending suspension, he handed a 34-page document directly to Moyane which outlined his version of events. But Moyane allegedly refused to read it, and prohibited Pillay from handing it to any member of the SARS executive.
Lebelo said he received a call from Moyane a night before Pillay’s suspension telling him to proceed the next day.
“That decision not to read the document of Pillay was taken by Moyane. The suspension of Pillay was as per the advice of lawyers ... The way we treated Pillay on that day was the way we treated everybody else,” Lebelo said.
The Labour Court overturned the decision to suspend Pillay two weeks later, but he was suspended again on the same allegations in January 2015.
Asked what drove Pillay’s initial suspension without a hearing, Lebelo said “[he] wouldn’t know”.
“I don’t know why it was rushed; I was just following a process I would follow,” he said.
Pillay’s document to Moyane never surfaced again – not before the disciplinary committee nor during his hearing. Lebelo said it was never considered because there was no knowledge of it.