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Probe into SARS ‘covert’ unit began in 2010

Wednesday, 11 February 2015   (0 Comments)
Posted by: Author: Natasha Marrian
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Author: Natasha Marrian (BDlive)

The State Security Agency (SSA) initiated an inquiry into the existence of a "covert" unit in the South African Revenue Service (SARS) in 2010, according to notes of a November 2010 meeting between high-ranking officials of both organisations.

The covert unit is at the centre of the ructions within the organisation that have led to the suspension and resignation of senior officials since November last year.

In his submissions to an independent panel led by Muzi Sikhakhane, an advocate who investigated the establishment and functioning of the covert unit, suspended SARS deputy commissioner Ivan Pillay said that the allegations were old and had previously been investigated by the SSA.

Business Day also understands that SARS wrote to then police commissioner Bheki Cele in 2010 to investigate the allegations.

Nothing is said to have materialised from that either, prompting opposition parties and those directly affected to ask: "Why now?"

SARS has based its action against Mr Pillay and strategic planning and risk executive Peter Richer on the findings and recommendations of a report by the Sikhakhane probe.

Weekend newspapers reported yesterday that SARS had instituted a R110m claim against Mr Pillay over the costing of the unit — which forms part of the disciplinary charges he is set to face.

According to documents provided to the panel on the establishment of the unit, SARS received no feedback on the outcome of the SSA investigation, which began more than three years ago.

SSA spokesman Brian Dube said on Friday the agency did not comment on its investigations.

According to the notes from the meeting, which took place between the domestic branch of the SSA, represented by Bob Mhlanga and James Ramabulana, and a number of SARS officials including then commissioner Oupa Magashula, Mr Pillay and Mr Richer, the gathering was scheduled to "provide further clarity" on allegations by former SARS members that emerged in the media and were reported to the presidential hotline, relating to an "intelligence dossier".

Concerns were also raised by Democratic Alliance finance spokesman Dion George, according to the notes. Mr George said all tax agencies required such a capacity and questioned the timing of the action being taken by SARS. "Why is everyone getting hysterical now when this was under the radar for years? It is hard to find out the truth unless those involved, such as Ivan Pillay, speak out," he said.

According to the notes, Mr Magashula told the SSA representatives that SARS welcomed any investigation, but in the interests of "upholding institutional integrity" it had to be resolved speedily.

Mr Magashula took over from Pravin Gordhan at SARS after the latter was appointed finance minister in 2009. It is understood that neither he nor Mr Gordhan was questioned by the Sikhakhane panel. If true, this suggests the investigation avoided some leaders at the centre of the covert unit.

During the meeting, Mr Magashula, according to the confidential notes, warned that individuals dismissed for corruption from government departments were engaged in activities to "manipulate others in order to gain leverage or an upper hand". He told the meeting that in some instances, "individuals" manipulated the situation, resulting in political pressure on the department from which these individuals had been dismissed.

Reports on the activities of the covert unit were based partly on an intelligence dossier by a former employee, Michael Peega, who was dismissed from SARS after he was arrested for rhino poaching in 2008. Mr Magashula reiterated that SARS would co-operate with the SSA "inquiry" into the intelligence dossier. Mr Peega had also alleged that President Jacob Zuma was under investigation by SARS.

According to the notes, the SSA’s Mr Mhlanga said the matter had been "formally registered" with the SSA via the presidential hotline and through letters and documents submitted to the then state security minister, Siyabonga Cwele.

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