Court losses keep piling up for suspended Public Protector

Suspended Public Protector Busisiwe Mkhwebane has received a direct hit on the nose for the umpteenth time.

The Pretoria High Court declared her final report into allegations of maladministration related to an information technology (IT) contract at the South African Revenue Service (Sars) invalid and unlawful. The report was set aside.

Read: Public apology and financial compensation for former Sars employees

Sars said in a statement on Friday it is delighted the court upheld its contention that the findings and remedial action in the report were “irrational, unlawful, unreasonable and unfair”.

The report, published earlier this year, stems from a complaint her office received in 2016 about the appointment in 2006 of Barone, Budge & Dominick to provide strategic projects and related services within the Sars modernisation programme.

The tender

The complainant was none other than Mzwanele Manyi, spokesperson for the Jacob Zuma Foundation at the time.

Manyi complained that Sars did not follow the normal tender procedure in the appointment of the IT firm. The contract amounted to R100 million, which the Public Protector says then escalated to R1.4 billion.

Mkhwebane found the conduct of then Sars commissioner Pravin Gordhan in the appointment “improper” and that it amounted to maladministration.

Gordhan, now Minister of Public Enterprises, argued that her investigation related to events that took place 15 years ago and that she had to advance substantial “special” reasons to justify the investigation of an “uncontroversial event” that took place so long ago.

Mkhwebane “noted” his arguments but stated in her April 2022 report that the Public Protector is the ultimate decision-maker in the exercise of the discretion of her office and the mere fact that parties did not attribute a particular matter as “extraordinary” does not preclude her from exercising such discretion.

Read:
Ramaphosa suspends Public Protector Busisiwe Mkhwebane
Ramaphosa begins process to remove SA graft ombudsman
Public Protector dealt a crushing ConCourt blow

She found there were no compelling reasons for Sars to deviate from the normal procurement process, and listed a range of remedial actions against the former minister of finance, the current commissioner of Sars as well as former commissioners, National Treasury and several others.

One of her recommendations was that the Directorate for Priority Crime Investigation should consider investigating possible criminal conduct by Barry Hore, former chief operations officer at Sars.

After considering all the documents filed and hearing counsel, the high court on Friday declared Mkhwebane’s report unlawful and invalid, and set it aside.

The Public Protector was ordered to pay Gordhan’s legal costs, including the cost of two counsel.

Sars Commissioner Edward Kieswetter said in the statement following Friday’s ruling that Barone, Budge & Dominick played a pivotal role in Sars’s modernisation programme.

He said the Nugent Commission of Inquiry, set up to investigate administration and governance at the tax authority, found that in 2014 Sars had an effective and world-class IT division with well-documented successes.

Read:
Sars ‘rogue unit’ narrative consigned to trash heap
Public Protector takes another costly punch
Public protector’s errors swamp any merits of Bankorp investigation

The programme, initiated by Gordhan in 2004, enabled Sars’s transformation from an “archaic institution dependent on cumbersome manual processes, outdated computer systems, and enormous volumes of paper documents, to one that uses cutting-edge technology and electronic information to enhance its productivity, efficiency and effectiveness”.

Kieswetter said the Public Protector sought to find Sars guilty of wrongdoing when, like public entities in other jurisdictions, Sars was endeavouring to procure the cutting-edge technology it required using procurement regulations designed for another purpose.

“If there is indeed a problem, it is not the conduct of the public entity and officials who succeeded in modernising Sars; it is the traditional procurement regime, which has not kept up with the IT needs of digital entities in the 21st Century,” he said.

Procurement corruption

Kieswetter said current procurement policies and National Treasury regulations have done little to prevent large-scale procurement corruption, and have instead “constrained the dynamic and agile procurement requirements of a modern data and technology enabled business model that Sars is pursuing”.

He said he is “heartened” by Finance Minister Enoch Godongwana’s recent announcement that the Public Procurement Bill will be tabled in the course of 2023.

“It is foreseen that the new bill will abandon the complicated and stifling rules that constrain IT procurement procedures and unleash the potential of public procurement so that commercial suppliers can tailor their procedure to meet the needs of the market.”

Read:
SA readying new anti-graft laws, Godongwana says
No change to BEE or localisation procurement objectives, says Godongwana
SA’s procurement regulatory regime finds itself in muddy waters
Bain, Zuma and Moyane colluded to seize and restructure Sars

Mkhwebane is currently facing the Section 194 Enquiry Committee in Parliament, which is looking at her fitness to hold office. Her term officially ends in October 2023.

Last week Daily Maverick reported that the Office of the Public Protector will no longer pay rent to the Department of Public Works and Infrastructure for Mkhwebane’s accommodation in the exclusive Bryntirion ministerial estate in Pretoria.

The house is reportedly is costing taxpayers R60 000 per month.