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Creation of covert SARS intelligence unit ‘done with state approval’

12 December 2014   (0 Comments)
Posted by: Author: Natasha Marrian
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Author: Natasha Marrian (BDlive)

Suspended South African Revenue Service deputy commissioner Ivan Pillay has insisted the intention behind setting up an intelligence-gathering unit in partnership with the National Intelligence Agency (NIA) to probe economic crimes was above board, and sanctioned by the government in 2007.

But this planned cooperation between SARS and the NIA to uncover illicit trade and the movement of contraband within the country and across its borders never materialised, according to Mr Pillay. The cooperation between the tax agency and the intelligence agency was meant to regularise intelligence gathering.

Mr Pillay and SARS strategic planning executive Pete Richer were suspended last week pending a disciplinary process over their involvement with the National Research Group (NRG), as the SARS unit is known. The activities of NRG have been described as covert and illegal and include allegations of having run a brothel and of spying on President Jacob Zuma.

An investigation panel was set up by Mr Pillay after these allegations surfaced in media reports in October. Mr Pillay’s claims have been made in a submission to the panel.

There is speculation that further suspensions are on the cards at SARS linked to the investigation. The agency has enjoyed a reputation of exemplary management and tax collection.

The allegations have already led to the suspension of top officials and the resignation of chief operations officer Barry Hore, who had been with SARS since 2007. Insiders fear officials with allegiance to former commissioner Oupa Magashula — who left under a cloud more than a year ago — and former finance minister Pravin Gordhan are being purged.

Last week SARS commissioner Tom Moyane quoted from a report by the panel that expressed disappointment that the existence of a "covert" unit was "not volunteered" in the early stages of its investigation and that some SARS management had presented a "rehearsed narrative" to paint the unit in a "positive and lawful light".

This "narrative", the panel said, ignored that SARS was legally precluded from engaging in intelligence gathering or investigative functions residing in other state agencies.

Mr Pillay’s version of the story submitted to the panel, which Business Day has seen, explains the legal genesis of the "Special Operations Unit", which became the NRG.

Formal discussions towards this objective had taken place between 2006 and 2008. The team would be located within the NIA. A proposal for consideration detailing this plan was presented to then finance minister Trevor Manuel, who approved the plan in 2007.

The approved proposal "explicitly stated" that SARS did not have the capacity to conduct surveillance or to intercept or monitor communications. It said the unit would be "ringfenced" by the NIA — implying that it would provide dedicated support to SARS.

The unit’s budget was R12m in the first year, rising to R18m in the third year, according to the medium-term expenditure framework at the time. "None of the above was ultimately put in place due to several personnel changes at the NIA," according to Mr Pillay’s submission to the panel.

The establishment of the unit began degenerating early in 2007, when, according to Mr Pillay, it became clear the NIA was no longer prepared to accommodate the unit. Tension between state agencies stifled the unit’s creation.

According to Mr Pillay former special forces operative Mike Peega was employed as a specialist in the NRG in March 2007. But the unit barely survived two years before it was disbanded in 2009. Mr Peega was dismissed after being arrested for rhino poaching.

After his dismissal Mr Peega allegedly prepared a document suggesting the unit was created by a former SARS commissioner for "sinister purposes".

When SARS became aware of the document and its "slanderous content" it reported the matter to various law-enforcement agencies, including the police. SARS had availed itself of an investigation by the State Security Agency but had not been informed of its outcome despite numerous requests.

The State Security Agency on Thursday said it refused to be drawn into a "public debate about matters and documents that are the subject of an investigation in another government entity".

On Thursday SARS said no findings were made against Mr Pillay and Mr Richer and that suspension was not a finding of guilt but was to allow for a "proper investigation without the possibility of interference".

This article first appeared on bdlive.co.za.


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