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PUBLIC PROTECTOR SOUTH AFRICA

FILE REF NO:

In the complaint of:-

MR FLOYD SHIVAMBU AND


ANONYMOUS Complainant

Against

THE SOUTH AFRICAN REVENUE SERVICES Respondent

AFFIDAVIT OF VISVANATHAN (IVAN) PILLAY IN RESPONSE TO SUBPOENA


ISSUED IN TERMS OF SECTION 7(4)(a) OF THE PUBLIC PROTECTOR
ACT 23 OF 1994

DATED AT SANDTON ON THIS THE 23RD DAY OF APRIL 2(

WERKSMANS
Attorneys for Mr Pillay
96 Rivonia Road
The Central
11th Floor
Sandown
Sandton
Tel: 011 535 8106
Fax: 011 535 8606
E-mail:
Reference: Mr B HotzIPILL38396.1

TO:
THIS THE 23RD DAY OF APRIL
PUBLIC PROTECTOR SOUTH AFRICA 2019.
Public Protector House
Hillcrest Office Park TIME:J[•
175 Lunnon Road
Hillcrest
Pretoria
BY HAND
PUBLiC PROTECTOR OF SOUTH AFRICA

FILE REF NO:


In the complaint of:

MR FLOYD SHWAMBO AND


ANONYMOUS Complainant

Against

THE SOUTH AFRICAN REVENUE SERVICE Respondent

AFFIDAVIT

I, the undersigned

VISVANATHAN (IVAN) PILLAY

make oath and say:

I The contents of this affidavit are, unless the context indicates otherwise,

within my personal knowledge and are, to the best of my belief, true and

correct.

2 Where I make submissions of law I do so on the advice of my legal

representatives, whose advice I accept.


2

3 I depose to this affidavit in response to a subpoena dated 8 April 2019, which

was only served on me on 10 April 2019, issued in terms of section 7(4)(a) of

the Public Protector Act, 23 of 1994 ("the Public Protector Act"). A copy of the

subpoena is attached, marked "A".

PREUMINARY MATTERS

4 Before I deal with the substance of the complaint of the 'Complainanr', stated

to be "Mr Floyd Shivambu and Anonymous", I intend to raise certain

preliminary matters in response to the subpoena. I set out these preliminary

matters below.

Unreasonably short period to respond to the subpoena

5 In terms of paragraph I of the subpoena I have been directed to submit an

affidavit to the Public Protector at 12h00 on 23 April 2019. I have been further

directed that my affidavit must have "supporting evidence" or have attached to

it "any document(s) in [my] possession or under [my] control which has a

bearing on the matter being investigated as investigated as referred to in

paragraph 7 belot'V'.

6 Paragraph 7 of the subpoena, headed "COMPLAINT", refers to twelve

allegations. The allegations are wide-ranging and it is clear — notwithstanding

the vagueness with which the allegations are cast — that not only do they

cover a lengthy period of time but also that they refer to events that, in the

main, occurred between 10 and 20 years ago.


3

7 As a consequence of the public holidays in this month, the period between

10 April 2019 and 23 April 2019 contains only six business days.

8 This period is wholly inadequate to enable me to obtain legal advice and to

properly safeguard my rights in the face of the allegations contained in the

subpoena — allegations made by a politician and by someone hidden behind a

cloak of anonymity. In this regard:

8.1 The file reference number reflected on the subpoena indicates that the

complaint was taken up by the Public Protector during 2018. It is not at

all apparent why there should be any justification for demanding an

affidavit from me with such unseemly urgency given that the complaint

has in the first place been the subject of investigation by the Public

Protector since last year and, second, relates to allegations that have

their provenance in decades' old events.

'provide an
8.2 It is specifically demanded of me that I must, in my affidavit,

explanation, give evidence and produce any relevant documentation

which may be in [my] possession and/or under [my] control which may

have a bearing on the investigation, including but not limited to the

extent of [my] involvement and participation relating to the matters


am thus required, unreasonably in my
under investigation". I

submission, to respond in a comprehensive and detailed manner to a

plethora of disparate allegations in the space of a mere six business

days.
4

8.3 Paragraph 3 of the subpoena threatens me with criminal sanction

should I fail to comply with the demands made in the subpoena.

8.4 I shall deal later in this affidavit with the fact that a number of the

allegations now made were previously considered by the Public

Protector almost five years ago.

9 I place on record that I regard the timing of the subpoena as being an affront

to my entitlement to fair administrative process. My rights in this regard are

reserved in their entirety.

The ever changing nature of the allegations

10 I wish to point out that variations of certain of the allegations contained in the

subpoena had been made on several prior occasions and in a variety of

forums over the past 10 years. Allegations have been made, from time to

time, which have been thoroughly refuted. However, as soon as the

allegations have been refuted they simple re-emerge in adapted guises.

11 What is contained in the present subpoena is, once again, a manifestation of

these ever changing allegations.

Legal restrictions on my ability to provide information and documents

12 The complaint is made against the South African Revenue Service ('SARS"). I

was previously an official in the employ of SARS, commencing in April 1999,


5

and I held various senior positions within SARS over the period covered by

the allegations that make up the complaint. Those positions include:

12.1 Chief Manager Special Investigations;

12.2 Chief Officer Enforcements;

12.3 Chief Officer Strategy and Enablement and Deputy Commissioner.

12.4 Acting Commissioner.

I am no longer employed by SARS, having left its employ in May 2015.


I

13

therefore do not have access to records, information and witnesses at SARS.

14 Moreover:

14.1 Chapter 6 of the Tax Administration Act 28 of 2011 imposes on me

regard to the disclosure of confidential


stringent limitations in

information in relation to SARS to any party not in the employ of SARS.

was
Furthermore, in the course of my employment with SARS
I
14.2

required to bind myself to SARS' Oath of Secrecy. I attach, marked

"B", a specimen of the form of the Oath of Secrecy that I would have

deposed to during my tenure at SARS. I do not have the document that

was signed and deposed by me in my possession.

14.3 On 15 April 2019 my attorneys formally requested the co-operation of

SARS in providing me with documents that would assist me in


6

responding to the subpoena. That formal request was made

subsequent to a meeting that I attended with various SARS officials on

12 April 2019 when I informed SARS of the subpoena . On 17 April

2019 the Acting Commissioner of SARS responded to the request as

follows:

"3. Kindly be advised that / have considered your request and

the contents of the PP's subpoena dated 8 April 2019 and

wish to advise you that SARS is not in a position to accede

to your request pending counsel's opinion which I intend to

obtain urgently. It is our preliminary view that the requested

records contain, inter a/ia:

3.1 personal information of third parties, the disclosure

of which will be in contravention of legislation aimed

at safeguarding data privacy and/or SARS

confidential in formation and/or taxpayer in formation

respectively; and

3.2 information about internal operations at SARS, the

disclosure of which is likely to jeopardise the

effectiveness of SARS operations and/or

procedures."

15 I am, accordingly, extremely restricted in the information that I may lawfully

provide to the Public Protector. As far as documentation is concerned, I am


7

similarly restricted. However, I shall, where necessary, refer to certain

documents that are already in the public domain and documents which I have

possession of and which, I have been advised, I am within my rights to

disclose to the Public Protector in order to put paid to certain of the allegations

contained in the complaint.

My constitutionally guaranteed rights as an accused person

16 I have been charged with the commission of certain alleged offences, which

charges remain pending against me. Whilst the charges are wholly unfounded

and vexatious, they remain hanging over my head. In respect of the matters

that I have been charged with I have the rights set out in section 35 of the

Constitution.

17 I
attach, marked "C", a copy of the indictment that was served on me. It is

plain that the allegations set out in paragraphs 7.1.3 to 7.1.8 of the complaint

to the Public Protector are either directly or indirectly related to the charges

traversed in the indictment.

18 In the circumstances, and save to the extent that I wish to provide the Public

Protector with information that plainly demonstrates the fatally flawed nature

of the allegations in the complaint, I intend to stand on my rights as enshrined

in section 35 of the Constitution in relation to the charges that I face.


8

The Public Protector has previously dealt with various matters covered by the

present complaint

19 During August 2014, when I was the Acting Commissioner of SARS, the

Public Protector addressed correspondence to SARS in which she stated that

a complaint had been made to her office that SARS had established an

allegedly surreptitious investigative unit, known as the National Research

Group, to conduct clandestine specialised investigations against unsuspecting

civilians, politicians and prominent businessmen for possible tax evasion. The

Public Protector informed SARS that she had elected not to investigate these

allegations and set out her reasons for making that decision.

20 In as much as such allegations suggested unlawful or illegal activity on the

part of SARS or its officials, this was and remains denied by me.

The Public Protector went on to inform SARS that her investigation would, in
21

the circumstances, be limited to issues relating to allegations concerning

irregular recruitment processes in the appointment of National Research

Group officials and two other issues which are presently irrelevant. The Public

Protector sought pertinent details and responses from SARS regarding the

alleged irregularities in the appointment of National Research Group

employees.

22 SARS delivered a detailed response, including supporting documents, to the

Public Protector which dealt comprehensively with her requests.


9

23 Upon receipt of that response the Public Protector informed SARS that she

would consider the response and she would revert should the need arise.

There was no further communication from the Public Protector in this regard.

It is accordingly clear that the Public Protector was satisfied with the

responses given by SARS and that the investigation was closed.

24 I am not in a position to provide this correspondence to the Public Protector,

but it will be found in the Public Protector's own records as well as the records

of SARS.

demonstrate that:
25 I draw this to the attention of the Public Protector in order to

25.1 The Public Protector has already determined that the allegations now

regurgitated in paragraphs 7.1.3, 7.1.4, 7.1.5, 7.1.6 and 7.1.8 of the

subpoena fall outside the remit and competency of the office of the

Public Protector. The Public Protector's decision in this regard is final

and, I have been advised, she is accordingly functus officio in this

regard.

25.2 The Public Protector has previously investigated the allegation

contained in paragraph 7.1 .7 of the subpoena and the investigation has

been concluded. The Public Protector is, similarly, functus officio in this

regard
10

Absence of circumstances

26 In paragraph 4 of the subpoena the Public Protector purports to record the

existence of "special circumstances" which she contends entitled her to

exercise her discretion to entertain a complaint about matters which occurred

more than two years prior to being reported to her. I reiterate that the events

to which the allegations pertain span a period of between ten and twenty

years ago.

27 I
respectfully submit that none of the circumstances disclosed by the Public

Protector in paragraph 4 of the subpoena amount to special circumstances as

contemplated in section 6(9) of the Public Protector Act and the purported

exercise of a discretion by the Public Protector, on the ground of any of the

circumstances set out in paragraph 4 of the subpoena, is manifestly unsound.

I accordingly submit that the Public Protector is precluded from entertaining

the present complaint. My rights in this regard are fully reserved.

SERIATIM RESPONSE TO THE ALLEGATIONS MAKING UP THE COMPLAINT

28 I now deal with paragraphs 7.1.1 to 7.1.12 as set out in the subpoena to the

extent I am able to.

29 Ad paragraph 7.1.1

29.1 I was the Acting Commissioner for SARS for the period July 2013 to

23 September 2014.
11

29.2 I deny that, as "Commissioner for SARS", I "failed to follow proper

recruitment procedures in the appointment of Mr Yolisa Pikie and Mr

Johann van Loggerenberg".

29.3 To the best of my knowledge, Mr van Loggerenberg was employed by

SARS in or about November 1998. The Commissioner for SARS at that

time was Mr Trevor van Heerden.

I was not in the employ of SARS at that time and I could not have
29.4

appointed Mr van Loggerenberg.

29.5 Mr van Loggerenberg resigned from SARS in about February 2015.

29.6 To the best of my knowledge, Mr Pikie was employed by SARS in or

about April 2002. The Commissioner for SARS at that time was

Mr Pravin Cord han. I did not appoint Mr Pikie.

29.7 Mr Pikie resigned from SARS in or about August 2010 and was again

employed by SARS in and around May 2011. The Commissioner for

SARS at that time was Mr Oupa Magashula. I did not re-appoint

Mr Pikie.

29.8 Mr Pikie subsequently resigned from SARS in or about March 2015.

29.9 The circumstances' surrounding the resignations of Messrs Van

Loggerenberg and Pikie, as well as other affected officials, are a matter

of public record. I attach marked "D" a whistleblower report addressed

to the Parliamentary Standing Committee on Finance and Joint


12

Standing Committee on Intelligence dated March 2015 which was

leaked to the media by a Member of Parliament in April 2015.

29.10 I have been advised that the records relating to employees of SARS fall

within the ambit of Chapter 6 of the Tax Administration Act, 28 of 2011.

I believe the relevant records regarding the recruitment and

employment of Messrs Van Loggerenberg and Pikie will be in the

possession of SARS.

30 Ad paragraph 7.1.2

30.1 This allegation is one of those allegations that are ever changing in

their nature.

30.2 I am aware that various and varying allegations have been made about

Mr van Loggerenberg'S involvement in raising funds for charitable

organisations. What has been alleged is that his involvement was

corrupt in some or other manner.

30.3 Now it is alleged in the subpoena that Mr van Loggerenberg "unlawfully

received cash deposits paid directly into his personal First National

Bank (FNB) account from taxpayers and/or representatives, under

investigation by SARS, during 19 November2012 and 28 May 2014".

To the best of my knowledge no allegation in these terms has been

made previously.
13

30.4 To the best of my knowledge there is no truth whatsoever in this latest

allegation. I set out below what I am aware of in relation to the

allegations that have been previously made against Mr van

Loggerenberg.

30.5 I understand that Mr van Loggerenberg was, amongst many other

SARS officials, involved in fund raising efforts for charitable

organisations.

30.6 I am aware that Mr van Loggerenberg declared his involvement in fund

raising for charity annually by way of the SARS official declaration of

interests policy from 2012 to 2014.

30.7 I personally donated towards some of the charitable organisations that

Mr van Loggerenberg raised funds for and I received section 18A

certificates from those charitable organisations.

30.8 I am advised that the records relating to employees of SARS fall within

the ambit of Chapter 6 of the Tax Administration. I believe the relevant

records relating to Mr van Loggerenberg will be in the possession of

SARS.

31 Ad paragraphs 7.1.3, 7.1.4, 7.1.5, 7.1.6 and 7.1.8

31.1 I refer to what I have stated above in relation to these allegations. In

particular, I reiterate that the office of the Public Protector is functus

officio in this regard in the circumstances set out above.


14

31.2 These allegations, like the allegation in paragraph 7.1.2 of the

subpoena, are also ever changing.

31 .3 At the outset I wish to make it clear that I specifically decline to respond

to the allegation contained in paragraph 7.1.8 of the subpoena. The

Public Protector is well aware that this particular allegation is the

precise subject of one of the charges that I presently face. Whilst there

is no merit whatsoever to the charge, I am entitled to the rights

contained in section 35 of the Constitution and I choose to invoke those

rights in the face of the Public Protector's demand. I have been advised

that, in these circumstances, I have just cause, as contemplated in

section 11(3) of the Public Protector Act, to decline to respond to the

allegation contained in paragraph 7.1.8 of the subpoena.

31.4 I
wish, moreover, to state that the allegations in paragraphs 7.1.3,

7.1.4, 71.5 and 7.1.6 are entirely devoid of merit. I shall demonstrate

that in detail below.

31.5 I note that the allegation in paragraph 71.3 does not identify the

impugned "intelligence unif' nor does it specify the so-called "South

African Intelligence prescripts" that have been "violated". I have been

advised that the allegation in paragraph 7.1.4 adds nothing to the

allegation in paragraph 7.1.3 and merely reiterates the demonstrably

false contention that SARS established an unlawful intelligence unit.

31 .6 I assume that the allegations are intended to refer to the erstwhile

SARS Special Projects Unit, which was later renamed the National
/
15

Research Group and finally known as the High-risk Investigations Unit.

This unit was the unit referred to in the "report compiled by Advocate

Sikhakhane". I shall refer to that report as "the Sikhakane Panel

report".

31.7 The Sikhakhane Panel report is fatally flawed in fact and law as

recorded in:

My submissions to the Sikhakhane panel in August and


31.7.1

September 2014.

My submission in December 2014, which I prepared after the


31.7.2

Sikhakane Panel report had been delivered, which I addressed

to the then SARS Commissioner, Mr Tom Moyane.

31.7.3 A legal opinion obtained by SARS in January 2007.

31.7.4 A legal opinion obtained by the then National Intelligence

Agency in 2007.

31.7.5 A legal opinion obtained by SARS in May 2007.

31.7.6 A legal opinion obtained by the then SARS Commissioner,

Mr Moyane, in September 2015.

31.7.7 A legal opinion obtained by Mr Pravin Gordhan in March 2016.


16

31.7.8 Testimony deposed to under oath by retired Judge Frank Kroon,

who had chaired the SARS Advisory Board, before the


Commission of Inquiry into Tax Administration and Governance

("the Commission") in September 2018. In this regard I draw

attention to the main report of the Commission, delivered in

December 2018, where the following was recorded by Judge

Nugent in regard to that testimony:

'The SARS Advisory Board chaired by Judge Kroon,

reported to the Minister, and issued a media statement,

saying the unit was unlawful, but in evidence he told the

Commission that was not a conclusion reached

independently by the Board, but had been adopted from

the Sikhakhane panel, and he had come to realise it was

wrong. Indeed, he supported the re-establishment of

capacity to investigate the illicit trades, which we

recommend."

31.7.9 The final report of the Commission where the following was

stated by Judge Nugent:

"Why such a unit was considered to be unlawful is not

clear to me. While the National Strategic Intelligence Act

prohibits the covert gathering of certain intelligence, that

applies to intelligence concerning threats to the safety of

the state, which hardly applies to intelligence relevant to

a
17

collecting tax. That members of the unit might at times

have acted unlawfully, that SARS employment policies

might have been breached, that members might

unlawfully have acquired and used equipment, all of

which came later to be alleged, I see no reason why

SARS was and is not entitled to establish and operate a

unit to gather intelligence on the illicit trades, even

covertly, within limits. Indeed, that was the view

expressed to SARS in late 2015, which seems not to

have been made public by SARS. An opinion was

furnished to the former Commissioner of SARS on about

1 September 2015, in response to the findings of a panel

chaired by Adv Sikhakhane SC, by Adv Trengove SC and

AdvNxumalo..."

and also

"It was said to be unlawful by a panel chaired by Adv

Sikhakhane SC, but I find nothing in its report to

persuade me why that was so. Adv Sikhakhane was

asked if he could elaborate but his reply took it no further

than what was said in the report. .

31 .7.10 A subsequent admission by retired Judge Kroon, under oath, in

March 2019 that all the members of the so-called "Kroon

Advisory Board" had deliberated the statement (between May to

4
18

June 2015) that the "unit was unlawfully established' as put forth

by the so-called "Sikhakhane panel'. The Kroon Advisory Board

then concluded that it was indeed wrong to have concluded this.

These facts can be determined from retired Judge Kroon and

the members of that board directly.

31.8 I have been advised that certain of the documents that I have referred

to in paragraph 31.7 above, fall within the ambit of Chapter 6 of the Tax

Administration Act. The relevant documents are in the possession of

SARS.

31.9 However, public records exist that set out in detail the legality of the

unit, its establishment, mandate and that its existence has been public

knowledge for years and explained in detail, I refer inter a/ia to:

31.9.1 Annexure "D", and in particular paragraph 5.2.1 thereof. In this

regard, I personally participated in briefing Members of

Parliament, the Presidency, the State Security Agency and

Parliamentary Committees on these matters since 2010.

31 .9.2 My submissions to the Sikhakane panel.

My submission on the Sikhakane report, addressed to


31.9.3

Mr Moyane. I attach a copy marked "E".

The so-called "Snowman/Broken Arrot'V' bundle which I attach,


31.9.4

marked "F".
19

31.9.5 Various letters and minutes of meetings and documents

provided to the Presidency, South African Police Service, State

Security Agency, various Members of Parliament, Ministry of

Finance, and Parliamentary Committees between February

2010 to 2014.

31.9.6 A best-selling book, entitled "Killing for Pro fit: Exposing the

Illegal Rhino Horn Trade" in the chapter "Juju and the Poacher"

published in 2012 names the unit, openly associates it with

SARS and explained its mandate. The book has, to my

knowledge, been republished 6 times since then.

31.10 With particular reference to the allegation in paragraph 7.1.5 that SARS

failed to respect the "constitutional status, power and functions of the

National Intelligence Agency' I wish to state that:

31.10.1 The National Intelligence Agency ceased to exist in 2009, when

it was replaced by the State Security Agency. I must assume

that the allegation refers to the period up to 2009 only.

31.10.2 The relationship between SARS and the National Intelligence

Agency was generally sound and managed in accordance with

the Constitution, mutual interests and joint subject matters. By

way of example I refer to:


20

31.10.2.1 the various interactions between SARS and the National

Intelligence Agency as referred to in my submissions to

the Sikhakhane panel;

31.10.2.2 the various joint activities between SARS and the

National Intelligence Agency, some of which are referred

to in my submissions to the Sikhakhane panel;

31.10.2.3 the various instances of support by SARS to the National

Intelligence Agency;

31.10.2.4 the various joint investigations between SARS and the

National Intelligence Agency;

31.10.2.5 various investigations and audits conducted by SARS at

the request of the National Intelligence Agency between

1999 to 2009;

31.10.2.6 various instances of support by the National Intelligence

Agency to SARS between 1999 to 2009;

various investigations conducted by the National


31.10.2.7
Intelligence Agency at the request of SARS between

1999 to 2009;
21

31.10.2.8 various training courses presented by SARS to the

National Intelligence Agency between 1999 to 2009;

31.10.2.9 various training courses presented by the National

Intelligence Agency to SARS between 1999 to 2009;

31.10.2.10 various conferences and workshops and joint meetings

between inter alia SARS and the National Intelligence

Agency between 1999 to 2009;

31.10.2.11 a Memorandum of Understanding between SARS and the

National Intelligence Agency dated 2002.

31.10.3 It would, however, be remiss of me to not raise within this

context that there were also various incidents where individual

operatives of the State Security Agency and erstwhile National

Intelligence Agency had unlawfully and illegally:

operations of SARS, cases, audits,


31.10.3.1 interfered in

investigations and projects; and

and unlawfully undermined SARS as an


31.10.3.2 illegally

institution and its officials.

31.10.4 These incidents were raised formally by SARS with the then

I
National Intelligence Agency, and later the State Security
22

the Presidency and the Inspector General of


Agency,

Intelligence on multiple occasions. None of these matters were

ever meaningfully investigated and resolved.

31.10.5 Records relevant to the above can be obtained from the State

Security Agency, the Presidency, the South African Police

Service, Parliament, relevant Members of Parliament and the

Inspector-General of Intelligence.

31.11 With particular reference to the allegation in paragraph 7.1.6 that SARS

costly intelligence equipment. which the


"irregularly procured

intelligence unit used for gathering" I wish to state that:

31.11.1 The allegation is cast in vague terms and no specifics are

provided to me that I can answer to.

31.11.2 I attach, marked "G", a statement issued by me on 2 March


date by
2016, following a presentation to the media on the same
and the
the then Minister of State Security, Mr David Mahiobo,

then Minister of Police, Mr Nathi Nhleko, which included a

PowerPoint presentation listing certain "equipment" which was

then attributed to the erstwhile SARS Special Projects Unit, later

renamed National Research Group and lastly known as the

High-risk Investigations Unit.

31.11.3 I attach, marked "H", the "equipment" list.


23

31.11.4 The unit that I have mentioned did not procure or utilise the listed

equipment throughout its existence in any of its investigations

between 2007 to 2014, when the High-risk Investigations Unit

was closed down by Mr Moyane.

31.11.5 My second submission to the Sikahakane panel includes a

report from the then Chief Financial Officer of SARS

categorically stating that no such procurements were made.

31.11.6 The records relating to operations of SARS fall within the ambit

of Chapter 6 of the Tax Administration Act. I believe the relevant

records will be in the possession of SARS;

32 Ad paragraph 7.1.7

"The Public Protector


32.1 I refer to what I have stated in the section headed

has previously dealt with various matters covered by the present

corn plaint'.

satisfied with
32.2 To the best of my knowledge, the Public Protector was

the response given by SARS during August 2014 in regard to her


involved
requests for information concerning the recruitment processes
Research Group.
in relation to employees who worked for the National

32.3 The Public Protector is invited to inspect her own records in this regard.

Records relating to operations and employees of SARS fall within the


24

ambit of Chapter 6 of the Tax Administration Act. I believe the relevant

records will be in the possession of SARS;

33 Ad paragraph 7.t9

33.1 SARS certainly did not act on the instructions of Mr Gordhan, as the

"then Minister of Finance in 2012" in investigating and pursuing the tax

affairs of Mr Malema. The investigation of Mr Malema's tax affairs

arose as a result of the research conducted by the risk analysis unit at

SARS which raised well founded suspicions that Mr Malema was not

tax compliant. Subsequent events demonstrated that Mr Malema did

indeed owe substantial taxes to SARS.

33.2 During October 2012 the Public Protector published a report entitled

"On the point of tenders" in which the following was found:

"Did the Ratanang Family Trust and/or Mr J Malema benefit

improperly from the tender that was awarded to On Point?

Due to the fact that the awarding of the contract to On-Point was

based on deliberate misrepresentation and non-compliance with

procurement prescripts, its shareholders, including the Ratanang

Family Trust and the Gwangwa Family Trust that eventually

became the shareholders of Guilder Investments (the sole

shareholder of On-Point), benefittedimproperly by means of


25

payments of "dividends" and other payments made to it by On-.

Point. As a Trustee of the Ratanang Family Trust, Mr J Malema

was therefore also put in an advantageous position as his family

was supposed to bene fitted (sic) from it."

meantime, SARS was engaged in its investigations of


33.3 In the

Mr Malema's tax affairs and was pursuing recovery from him.

Throughout this process Mr Malema made repeated public allegations

interference in SARS' conduct of its


that there was political

investigations and subsequent institution of legal proceedings against

him. At the outset of the process he contended that he was being

targeted by SARS because of his open and public support for the then

president, Mr Jacob Zuma. Later, when he was expelled from the

African National Congress (ANC), he contended that SARS was acting


had
on behalf of the "Zuma ANC" against him. At a point, Mr Malema
claimed that he
even, in yet another contradictory statement, publicly

had "invited' SARS to audit his tax affairs.

public
33.4 SARS dealt with Mr Malema's allegations openly by issuing a

statement on 2 August 2013 in terms of section 67(5) of the Tax

Administration Act which I attach marked "I". Of present relevance is

the following recordal in the statement:

"SARS considers the public comments made by Mr Malema and

reported on by the media as a serious threat to the integrity of

SARS, that it is necessary to respond.


26

SARS has therefore invoked Section 67(5) of the Tax


Administration Act which allows SARS to disclose taxpayer

information that would othe,wise be treated as confidential, in

order to disprove false allegations made against SARS and its

processes.

SARS is a state institution and subject to the Constitution and

the Bill of Rights. SARS seeks to apply the tax and customs laws

it administers with fairness, in a transparent and even-handed

manner without any external influence.

No single person in SARS can decide who to investigate, who to

audit, who to settle tax debts with and who not to. Case selection

for further investigation or audit is subject to oversight from

various mechanisms - committees with governance rules exist to

consider and execute certain activities. All these committees

exist by statute, policy or governance mechanism and have very

clear rules. They comprise of persons with the requisite

knowledge and expertise and are themselves subject to

oversight mechanisms.

SARS is a semi-autonomous public institution with specific

statutory obligations. SARS has consistently conducted its work

independently and in a non-partisan manner that does not allow

for external interference, It is an established principle that the

Minister of Finance, the Deputy Minister of Finance nor their

respective offices involve themselves in the affairs of any


27

taxpayer, particularly in instances where there is a dispute

between SARS and a taxpayer."

33.5 On 4 August 2013, Mr Malema published a statement in response to

annexure 1" entitled "A Fighter's Response to SARS the Leviathan". A

copy of Mr Malema's statement is attached marked "J". In

annexure "J" Mr Malema repeated his allegations against SARS

stating inter al/a that:

"I will fearlessly and without any fear of contradiction respond

and correct the distortions that SARS has made regarding my

dealings with them. / will show that they are merely furthering a

political agenda against me, and to that extent, through their

latest statement they have proved beyond any reasonable doubt

that they are a branch of ZANC."

against
33.6 In the same statement Mr Malema made several allegations

Mr Gordhan, including the following:

"I must add that the ANCYL, following the appointment of


ministers by President Jacob Zuma, raised a concern that the

African leadership was not considered when appointing the

economic cluster of cabinet, particularly in the Ministry of

Finance. A matter Mr. Gordan took very personal and has since

then used his power/n fluence over SARS to fight his political

battles by manipulating the reputable institution of SARS. He is

well known in the congress movement to be a very vindictive


28

person. Even during his days in the UDF, Mr. Gordon belonged

to an Indian cabal that often destroyed comrades who disagreed

with them.

However and unfortunately, the debate about African

representation in the economic cluster of the cabinet got reduced

between ANCYL and Mr. Gordan. / particularly remember a

meeting between the ANCYL and the ANC where Mr. Zuma tried

to explain the appointment of the economic cluster, and the

whole discussion got reduced to one appointment - that of Mr.

Gordon. Mr. Zuma also indicated that he did not know Mr.

Gordon very well, except that he used to belong to an Indian

cabal during the days of the UDF.

it was then clear to me, to our disappointment, that a political

procedural matter got reduced to a personality. Mr. Gordon has

therefore always had intention to make us pay back, and the

fundamental differences in strategic vision of the movement that


participate in silencing
we in the ANCYL held, made him keen to

us with the hope to delegitimise our course."

33.7 Ultimately, however, and despite his intemperate and false allegations

against SARS, Mr Malema made an offer of compromise to SARS

which was accepted. On 26 May 2014 Mr Malema made a public

statement in respect of the acceptance by SARS of his offer of

compromise. I attach a copy of Mr Malema's statement marked


29

33.8 set out the full content of Mr Malema's statement:

"I can confirm that I was in formed by SARS today that it has

accepted an offer of compromise I submitted in respect of my

outstanding tax. This followed my making such an offer to SARS

as provided for in the Tax Administration Act. I was informed

that a governance committee considered my submission and

found it to have complied with the requirements for such an offer.

I can further confirm that the offer was conditional on a number

of aspects, including that / accept that I failed in my past tax

obligations that resulted in me owing the fiscus outstanding tax.

/ failed to declare certain income in the past and consequently

failed to pay certain amounts of tax during the required periods.

It was also a requirement that my tax affairs be brought up to

date at the time of the offer which I have done. The offer to

compromise took into account the existing outstanding tax of

R18 million. I accept that additional assessments for tax years

2011 and 2012 will follow and will include further amounts which

will include capital, added understatement penalties and interest,

and which will be dealt with in the normal course of my tax affairs

going foe'ward. I have committed to ensure that my tax affairs

will be in order going fonivard. The offer made by me included

an additional amount to be paid by me over and above the

amount that was collected by the curator bonis for SARS in

selling off my assets to date. I accept that in terms of the Tax

Administration Act, SARS will not be bound to the compromise in


30

the event that / fail to disclose a material fact to which it relates

or in the event that I have supplied materially incorrect

information or if / fail to comply with provisions or conditions

contained in the agreement. I have made a full and verifiable

disclosure to SARS in respect of my current assets and

liabilities.

I accept that I did not attend to my tax affairs in the manner

that I was required to by law in the past and in certain


instances, I left my financial affairs in the hands of others

without making sure that my obligations were complied

with. When my difficulty with SARS became public


knowledge, I accepted and acted on advice from persons,

which in hindsight, I should not have, It is so that at times I

was very frustrated with the process and I may have said

things publicly that reflected negatively on the reputation of

SARS and some of its officials. Where I may have made

public utterances that may have suggested bias or


wrongdoing on the side of SARS, I unreservedly apologise.

I accept the bona fides of SARS and its officials who have

dealt with the matter. / have come to realise that the tax

system of a country is a key pillar to economic growth and

stability. I recognise that SARS as revenue and Customs

agency plays a vital role in the building of our young democracy.

Paying your tax is probably the most direct means by which

those who are economically able, are afforded the opportunity to


31

contribute towards those less fortunate in our society, through

the funding of social grants and government development

programs. I believe it even more important that public and

elected officials take the lead when it comes to complying with

their tax obligations because ultimately their own income is

derived from the tax base directly. My advice is that all

taxpayers in South Africa should take a keen interest in their own

tax affairs and not leave matters unattended until it becomes a

problem. It is too easy an excuse to leave your tax affairs in the

hands of advisors and forget about it. Ultimately, there is no

excuse for not paying your tax and it only leads to higher

penalties and interest over time. / hope my experience with

SARS will be a• good example to others that it is not in the

interest of our country to disregard one's tax obligations. We

must all contribute our required bit towards building a better

future for all. I would urge others who find themselves in a

similiar predicament as I did to rather work with SARS and

resolve their disputes in an amicable manner.

/ hope to now put the matter behind me and focus on the future.

/ consider the matter to have been finalised and have nothing

further to discuss publicly on the matter." (Emphasis added by

me)

L
32

33.9 SARS issued a further statement on 26 May 2014 in response to

Mr Malema's statement, which I attach marked "L". It reads as

foflows:

"The South African Revenue Services (SARS) welcomes the fact

that Mr Julius Malema has acknowledged his failure to comply

with his past tax obligations.

SARS accepts Mr Malema's commitment to ensure that he

remains compliant in the future and views the process as

ongoing, in respect of Mr Malema's acceptance that further

assessments for tax years 2011 and 2012 will follow. The

sentiments and apology expressed in the public statement

released by Mr Malema are also welcomed.

On 10 September 2012 SARS obtained a civil judgment in the

Gauteng North High Court confirming an outstanding tax debt of

Mr Malema in the amount of R16.2 million. Since then, with

interest accruing, the amount has increased to R18 million. On

10 February 2014 the Gauteng North High Court granted a

provisional sequestration order against Mr Malema for this tax

debt. The return date for confirmation of a final order was set for

26 May 2014.

Mr Malema made two prior offers to compromise that failed the

statutory requirements for such offers to be considered

favourably. Mr Malema had to meet a number of statutory


33

requirements in order for the compromise to be considered

favourably, including making a full and verifiable disclosure in

respect of his assets and liabilities and sources of income. Until

Mr Malema has fully complied with payment arrangements as

agreed, in terms of the approved compromise agreement, the

provisional sequestration order as well as the appointment of the

curator bonis will remain in place.

SARS will not be bound to the compromise and the final


sequestration order will be brought into effect in the event that—

o It is found that Mr Malema has failed to disclose a material

fact relating to his settlement

• In the event that he has supplied materially incorrect

information

• Or if he fails to comply with provisions or conditions


contained in the agreement."

33.10 Records relating to operations and taxpayers fall within the ambit of

Chapter 6 of the Tax Administration Act. I believe the relevant records

will be in the possession of SARS.

34 Ad paragraph 7.1.10

34.1 I am not aware that the appointment of Accenture was irregular. I

believe that the appointment was proper. All SARS' checks and
34

balances and all governance measures did not produce any negative

finding on this matter.

34.2 I believe that the relevant persons at SARS who were directly involved

in procurement will be able to attest to this matter.

34.3 Records relating to operations and employees of SARS fall within the

ambit of Chapter 6 of the Tax Administration Act. I believe the relevant

records will be in the possession of SARS.

35 Ad paragraph 7.1.11

35.1 This allegation is simply nonsense.

35.2 I quote from the Nugent Commission:

"At the commencement of the period under inquiry SARS had an

effective and world-class IT division. Technology was central to

the Modernisation Programme and the driving force behind

many of its achievements up to that time. SARS IT worked

closely with the Modernisation Programme Office, and with a

generous budget, and dedicated people, had the capacity and

capability to quickly and efficiently initiate and complete projects

within the Modern isation Programme."

35.3 SARS had developed an excellent capacity to manage contracts. As far

as I am aware, SARS' IT contracting over the years progressed to the

point when in successive years, its IT costs began to reduce once the

Y
35

initial capital investments had been made, providing real value for

money. SARS had the best IT division in the South African state. It

rescued the Department of Home Affairs and the 2010 World Cup from

an IT disaster and, in the process, directly saved the Department of

Home Affairs and the people of South Africa millions of Rands and

saved the reputation of South Africa.

34.2 As reported in the Daily Maverick, according to Mr Barry Hore's

presentation to Judge Nugent, the modernisation project cost SARS

R3.6bn — but through this investment it realised nearly R5Obn in

revenue in seven years through the risk engine, which was developed

as part of this modernisation.

35.4 Records relating to operations and employees of SARS fall within the

ambit of Chapter 6 of the Tax Administration Act. I believe the relevant

records will be in the possession of SARS.

36 Ad paragraph 7.t12

36.1 As far as I am aware all the procurement requirements in relation to

Interfront were adhered to. All the governance structures of SARS and

the National Treasury were satisfied.

36.2 Prior to 2012/13 SARS had more than thirty separate stand-alone

systems that served its customs functions. SARS purchased Interfront

because of the customs system that it owned and SARS had decided

to modernize customs.
36

36.3 SARS thus became the owner of the intellectual property of tnterfront.

The Interfront customs system became the core of the new customs

system that SARS installed in about 2013.

36.4 A secondary intention was that the system could serve alt Southern

African Development Community countries, without our neighbours

needing to buy their own systems. The only costs that they would be

liable for were operating costs.

36.5 lnterfront had a small staff complement who were experts in their field.

They became available to SARS and moulded the original system to

suit SARS' needs.

36.6 SARS could therefore complete the design, coding and implementation

far quicker than if it involved an external contractor.

36.7 I believe the Annual Reports and annual Auditor General of South

Africa reports and further details in relation to Interfront are publicly

accessible.

36.8 Records relating to operations and employees of SARS fall within the

ambit of Chapter 6 of the Tax Administration Act. I believe the relevant

records will be in the possession of SARS.


37

I CERTIFY THAT THE DEPONENT HAS ACKNOWLEDGED THAT HE KNOWS


AND UNDERSTANDS THE CONTENTS OF THIS AFFIDAVIT SIGNED BEFORE
ME AT SANDTON ON THIS THE 23RD DAY OF APRIL 2019 AND THAT THE
REGULATIONS CONTAINED IN GOVERNMENT NOTICE NO 1258 OF THE
21st JULY 1972, AS AMENDED, HAVE BEEN COMPLIED WITH.

JONATHAN ISAKOW
COMMISSIONER OF OATHS

REPUBLIC OF SOUTH AFRICA


1ST FLOOR, 20 STREET
ROSEBANK, JOHANNESBURO
A U U

PUBLIC PROTECTOR SOUTH AFRICA

FILE REF Nth

Ni

MR FLOYD SHSAMSU ANb


ANONYMOUS

TN F SOUTH AFThCAN REVENUE SERVICES

SJ BP•OEMA

fl PLthUC. Ac1 ui I

MR IVAN PILLAY
261 MUW(LEN STREET
MUCI<LENEIJR
PRETORA
0181

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Pu1)hk; 175 Lunriun Road HUk rcis9


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5 5
D
African
Revenue Service
South African Revenue Service OATH I AFFIRMATION OF SECRECY
Inkomstediens Version: 09/2012
Uphiko Iwezimali Ezingenayo eNingizimu Afrika
Tirelomatlotlo ya

I, (Full names and surname)

Date of birth Identity number Persal. No(if applicable)


hereby swear/solemnly declare*that I:
(a) have read and am familiar with the applicable secrecy and confidentiality provisions of Chapter 6 of the Tax Administration Act, 2011 and section 4
of the Customs and Excise Act, 1964;
(b) in carrying out the provisions of any Act or portions thereof administered by the Commissioner for SARS under the SARS Act, 1997 (hereafter referred
to as the "tax Acts") or any other law in terms of which I have access to taxpayer information or SARS confidential information, as defined in section
1 of the Tax Administration Act or information relating to any any person, firm or business as contemplated in section 4(3) of the Customs and Excise
Act (hereafter referred to as 'trader information") will—
(i) preserve the secrecy of taxpayer information and not disclose taxpayer information to a person who is not a SARS official; and
(ii) not disclose SARS confidential information to a person who is not a SARS official, or to a SARS official who is not authorised to have access to
the information,
(Ui) not disclose trader information that may come to my knowledge in the performance of any duty or power under the provisions of any tax Acts,
except to the extent that disclosure is permitted by law;
(c) understand that I must take this oath / make this affirmation before commencing duties or exercising any powers under the tax Acts as a result of which I
have access to taxpayer information or trader information or SARS confidential informationunless this oath / affirmation is a renewal of a previous
oath taken / affirmation made by me;
(d) in executing my duties for and/or on behalf of SARS will preserve and aid in preserving secrecy with regard to all matters or informafion of any nature
that may come to my knowledge in the performance of any duty or power under the provisions of the tax Acts,
(e) understand that I may not disclose or allow access in any manner, including electronic or otherwise, to any unauthorised person, the taxpayer
information or trader information or SARS confidential information to which I have access or that has or may come to my knowledge as a result of
the performance of any duty or power under the tax Acts or any other law in terms of which I have access to such information in my capacity as a current
or former—
(i) employee of the South African Revenue Service (SARS);
(ii) consultant or contractor engaged or contracted by SARS;
(iii) person employed or subcontractor engaged or contracted by a person contemplated in (e)(ii); or
(iv) office holder, employee, consultant or contractor of a person referred to in section 70 of the Tax Administration Act who performs any function
referred to in that section,
except to the extent that disclosure is permitted by law;
to the extent that I am a person referred to in paragraph (e) above, have read and am familiar with the SARS Internal Information Security Systems
Life Cycle Policy and the SARS Information Life Cycle Security Policy,and will only copy, transport, disseminate or email any data which constitutes
taxpayer informafion or trader information or SARS confidential information,in accordance with such policies.
(g) accept that it is my obligation to determine whether any amendments have been made to the law referred to in paragraph (a) or policies referred to in
paragraph (f) and that it is my obligation to familiarise myself on a regular basis with the latest amendments to these laws or approved versionsof these
policies; and
(h) am fully aware of the serious consequences that may follow on any breach or contravenfion of the abovementioned provisions and instructions and that
lmaybe—
(i) criminally prosecuted for commencing duties or exercising any powers under the tax Actsbefore taking the prescribed oath or affirmation;
(ii) criminally prosecuted for any unlawful disclosure of taxpayer information, trader information or SARS confidential information;
(Ui) subject to internal disciplinary action or damages for breach of contract; and
(iv) civilly liable for any claim of damages arising from the unlawful disciosureof information subject to secrecy.

Signature
(Must be signed in the presence of a Justice of the Peace, Magistrate or Commissioner of Oaths)

Date Place
1. I certify that prior to my administering the prescribed oath/affirmation*, put the following questions to the deponent and wrote down his/her answers
I

thereto in his/her presence:


(a) Do you know and understand the contents of the above statement? Answer

(b) Do you have any objection to taking the prescribed oath/affirmation? Answer

(c) Do you regard the prescribed oath/affirmation as binding on your conscience? Answer

2. I certify that the deponent acknowledges that he/she*knows and understands the contents of this statement which was sworn to/affirmed*and signed by
the deponent in my presence.
Signed: Jusfice of the Peace/Magistrate/Commissioner of Oaths*

Full first names and surname

Designation / Rank

Date Place
* Delete whichever is not applicable
V VV

IN THE HIGH COURT OF SOUTH AFRICA


(GAUTENG PRETORIA)

The Acting Special Director of Public Prosecutions, Priority Crimes Litigation Unit,

who prosecutes for and on behalf of the State, throughout the country, hereby informs

the Honourable Court that:

VISVANATHAN PILLAY

a sixty four (64) year old male residing at 261 Muckleneuk Street Nieuw
Muckleneuk, Pretoria in the district of Pretoria;

(hereinafter referred to as accused no.1)

ANDRIES PETRUS JANSE VAN RENSBURG

a fifty three (53) adult male residing at Weltevrede farm, 3reèrivier, Worcester
in the district of Worcester.

(hereinafter referred to as accused

JOHANN HENDRICK VAN LOGGERENBERG

a forty nine (49) year old male residing at 6 Peckan Place, road,
Pretoria in the district of Pretoria,

(hereinafter referred to as accused 3)


are guHty of the crimes:-

WITh THE PROVISIONS


CONTRAVENTION OF SECTION 49(1) READ
SECTION 1 OF
OF SECTION 2 AND SECTION 61(1) (b) AS WELL AS
AND
THE REGULATION OF INTERCEPTION OF COMMUNICATION
INFORMATION ACT 70
pgOVISION OF
OF 2002 (RICA) UNLAWFUL INTERCEPTION OF COMMUNICATION
(ACCUSED I AND ACCUSED 2)

CONTRAVENTION OF SECTION 10 READ WITH THE PROVISIONS OF


SECTIONS 1, 2, 24, 26 AND 26 (1) (a) OF THE PREVENTION AND
COMBATING OF CORRUPT ACTIVITIES ACT 12 OF 2004 -
AN EMPLOYMENT
UNAUTHORISED GRATIFICATION BY A PARTY TO
RELATIONSHIP (ACCUSED I AND 3)

ALTERNATIVE TO COUNT 2

CONTRAVENTION OF SECTION 3 READ WITH THE PROVISIONS OF


THE PREVENTION AND
SECTIONS '1, 2, 24, 25 AND 26 (1) (a) OF
GENERAL
COMBATING OF CORRUPT ACTIVITIES ACT 12 OF 2004
CORRUPTION (ACCUSED I AND 3)

2
P

WHEREAS

Section 2 of the South African Revenue 8ervices Act, Act 34 of '1997


(hereinafter referred to as the SARS Act) establishes the South African Revenue
Service (SARS) as an organ of state within the public administration, but as an

institution outside the public service.

And whereas

South
Section 3 of the SARS Act determines the mandate and objectives of the
African Revenue services (SARS) as the efficient and effective:-

(a) collection of revenue; and

(b)control over the import export, manufacture movement, storage, or use of


certain goods.

And whereas

The long title of the SARS Act states that the purpose of the Act is to provide for
the efficient and effective administration of revenue collecting system of the
Rep ubi Ic.

And whereas

Section 4 of the SARS Act provides for the functions of SARS

3
(1) to achieve its objectives SARS must:-

(a) secure the efficient and effective, and widest possible, enforcement of

(I) the national legislation listed in Schedule I of the SARS Act

(ii) any other legislation concerning the collection of revenue or the


control over the import3 export, manufacture, movement, storage or
use of certain goods that may be assigned to SARS in terms of either
legislation or an agreement between SARS and an organ of State or
institution concerned

(2) SARS must perform its function in the most cost-efficient and effective manner
in accordance with the values and principles mentioned in section 195 of the
Constitution.

And whereas

Accused I and 3 were employees of SARS, Accused I as a General Manager of


the Enforcement and Risk Division of SARS and Accused 3 as a Special Officer in
the office of the General Manager of the Enforcement and Risk Division of SARS.
Accused I and 3 were both in an employment relationship together with witness
13, within the provisions of section 10 of the Prevention and Combattirig of Corrupt
Activities Act, 12 of Witness 13 is in the employment of SARSas a Manager
Technical Physical Security within At the relevant time referred to in Count

2, he was employed as a 'Specialist Agent" within the Enforcement and Risk


Division, reporting to Accused 2.

4
And whereas

Section of the Constitution Act 108 of 1996 (hereIn referred to as The


Constitution) provides for the basic values and principles governing the public
administration:

(1)Public Administration must be governed by the democratic values and


principles enshrined in the Constitution, including the following principles:

and maintained
(a) a high standard of professional ethics must be promoted

(b) efficient, economic and effective use of resources must be promoted

(c)

(d)

(e)

(f) public administration must be accountable

(g)transpareflCY must be fostered by providing the public with timely


accessible and accurate information

practices to
(h) good human resource management and career development
maximize human potential , must be cultivated

(i)

(2)The above principles apply to:

(a) administration in every sphere of government

(b) organs of state; and

(c) public enterprise.

5
And whereas

Section 199 of the Constitution establishes the structure and conduct of security

(1) the security services of the Republic consist of a single defense force, single
police service and any intelligence services established in terms of the
Constitution

(2) the defense force is the only military force in the Republic

(3) other than the security services established in terms of the Constitution,
armed organisations or services may be established only in terms of national
legislation

(4)the security services must be structured and regulated by national legislation

(5)the security services must act, and must teach and require their members to
act, in accordance with the Constitution and the law, including customary
international law and international agreements binding on the Republic

(6) no member of any security service may obey a manifestly illegal order

(7) neither the security forces nor any of their members, may in the
performance of their

(a) Prejudice a political party interest that is legitimate in terms of the


Constitution

(b) Further in a partisan manner any interest of a political party

(8) To give effect to the principles of transparency and accountability, multiparty


parliamentary committees must have oversight of all security services in a

6
manner determined by national legislation or the rules and orders of
parliament.

And whereas.
(herein referred
Section 1 of the National Strategic Intelligence Act 39 of 1994
to as the NSI Act) established National Intelligence Structures as:-

(a) the intelligence division of the National Defence Force;

(b) the intelligence division of the South African Police Service;

(c) the Agency

And

section 3(1) of
defines the Agency as the State Security Agency as referred to in
not mentioned as one of the
the Intelligence Services Act 65 of 2002, SARS is
only
National intelligence Structure established in terms of the NS1 Act and can
work with other law enforcement agencies within the principle of
government in achieving its objectives as outlined in section 4 and 5 of the SARS
Act

And whereas
Security Agency
Section 2(1) of the NSI Act provides for the functions of the State
as being to:-

(a) gather, correlate, evaluate and analyse domestic and foreign

7
(b)fulfil the national counter-intelligence responsibilities.., and to co-ordinate
counter-intelligence and to gather, correlate, evaluate, analyse and interpret
information regarding counter-intelligence.

(c) gather departmental intelligence at the request of any interested department


of State and without delay to evaluate and transmit such Intelligence and
any other intelligence at the disposal of the Agency and which constitutes
departmental intelligence to the department concerned and to NICOC
(National Intelligence Co-ordinating Committee).

And section 2(2) (f) enjoins tlte State Security Agency to co-operate with any
organization in the Republic or elsewhere to achieve its objective.

And whereas

Section 3 of the NSI Act provides for the functions of other department of State,
with reference to national security intelligence.

(1)lf any law expressly or by implication requires any department of State,


other than the State Security Agency, to perform any function with regard to
the security of the Republic or the combatting of any threat to the security of
the Republic, such law shall be deemed to empower such department to
gather departmental intelligence, and to evaluate, correlate arid interpret
such Intelligence for the purpose of discharging such function: Provided that
such department of State

(a) Other than the National Defence Force..,

(b) Other that the police service

shall not gather departmental intelligence within the Republic in a covert manner.

8
And whereas

Section 1 of the NSI Act defines


potential threat
departmental intelligence as intelligence on any threat or
department of State
to national security, which fails within the function of a
order to neutralize
and includes intelligence needed by such department in
information obtained and
such a threat Intelligence is further defined as any
informing
processed by a National Intelligence Structure for the purpose of
process carried out in order to
any government decision or
protect or advance the national security.

covert collection as the acquisition of information which cannot be obtained


continuous secrecy is a
by overt means and for which complete and
requirement.

And whereas
National Intelligence Agency)
Approval to fund a special capability within NIA (the
to address
to supply SAPS and law enforcement with the necessary
Minister of Finance on 22
the illicit economy was sought and obtained from the
include the importation of
February 2007. IllIcit economy is understood to
smuggling of cigarettes
counterfeit goods, the illegal harvesting of abalone, the
recognized that it lacked the
and the importation and exportation of drugs. SARS
and to partake in
capability incLuding the legislative mandate to manage
created within NIA to focus
clandestine activity. This special capability was being
on SARS work, SARS informed the Minister
of Finance in February 2007 that
Agency to supplement
discussions were taking place with the National Intelligence
arrangement into, a
SARS intelligence capability with a view to formalize the

9
memorandum of understanding, yet took no steps to even make contact with NIA,
nor was there a memorandum of understanding concluded.

SARS under the guidance and management of Accused I in his capacity as


General Manager of the Enforcement and Risk Division of SARS and
Accused
the National Research
2 as a line manager of the Special Projects Unit (SPU) or
(HRIU), established
Group (the NRG), later named the High Risk Investigation
the HRIU without any involvement of N1A. The recruitment, interviews and

.
assessment of the members of the Unit commenced around June 2006 without
any involvement of NIA, Most of the members of the unit commenced their
employment 1 March 2007. The Special. Project Unit forms part of the
Enforcement and Risk Division and both accused 2 and 3 reported to Accused I

And whereas

The Prevention and Combatting of Corrupt Activities Act 12 of 2004


(hereinafter referred to as POCA) creates a spectrum of crimes of corruption that
includes general, broad and offence of corruption where various

corrupt activities are criminalized into different categories.

And whereas

Section 1 of POCA

defines gratification to include

(a) money, whether in cash or otherwise;

(b) any donation gift, loan, fee, reward,.... or any other similar advantage;

10

L
(c).

(d).

(e).

(f)

description
(g)Any other service or favour or advantage of any

(h)

(I)

discount,
(j) Any valuable consideration or benefit of any kind, Including any
commission rebate, bonus deduction or percentage.

Arid whereas
of the
Accused I and 2 did not secure an interception direction from the office
Act, they authorized
designated judge In terms of sections 16, 17 or 18 of the RICA
Research Group of SARS to
members of the Special Projects Unit and or National
Directorate of Special
install surveiBance equipment at the offices of the erstwhile
(NFA) and to intercept
Operation (DSO) and the National Prosecution Authority
thereby made
communication within the NPA in contravention of the RICA Act and
hereunder. Conversations amongst
themselves guilty of offences mentioned
November 2007 were
members of the DSO during the period 3 October to 6
from the designated
monitored, recorded and transcribed without an authorization
recorded conversations
judge issued in terms of the RICA Act 70 of 2002. The
Accused I and 2 at their
amongst members of the DSO were handed to both
insistence.

11
/
And whereas
that was used to
Accused 3 knew, when he managed the HRIU that the process
members of the DSO was
procure the transcripts of the conversation amongst
witness 13, an employee
unlawfuL Accused 3, together with Accused 'I authorized
approximately One Hundred thousand rands
of SARS, to retain an amount of
equipment was fitted, for
(Rl00 000 .00) which remained after the surveillance
not due to him.
himself thereby giving him unauthorised gratification which was

NOW THEREFORE the accused are guilty of the following

Sections 2 and 51(b) as well as


of Section 49(1) read with
Communications &
Section 1 of the Regulation of Interception of
Transactions Act (RICA), Act 70 of 2000 (Unlawful Interception of
communication) AGAINST ACCUSED I AND 2 ONLY

IN THAT during the period June 2007 until


November 2007 and at or near
Accused I
Pretoria in the district of Pretoria within the Republic,
procured Mr Helgard Lombard
and Accused 2 unlawfully and intentionally
communication within the offices of
and/or authorize Mr Lombard to intercept
and those of the National
the Directorate of Special Operations (DSO)
Prosecution Authority (NPA) without an interception direction Issued by the
Interception of Communications
designated judge in terms of the Regulation of
Related Information Act, Act 70 of 2002.
and Provision of Communication

12
Contravention of Sections 10 (b) read with Sections 1, 2, 24, 25, 26(1) of
Activities (POCA) Act 12 of 2004
the Prevention & Combating of Corrupt
(Unauthoriseci Gratification by a party to an Employment Relationship)
AGAINST ACCUSED I AND 3 ONLY

and at or near SARS


IN THAT on or about August to September 2006
jurisdiction of this court,
offices, Brooklyn in Pretoria within the area of
Accused I and 3 whilst being in the employ of the South African Revenue
Services (SARS), an organ of state
within the public administration (although
and unlawfully gave or agreed
outside the public service), directly or indirectly
to give Mr Lombard unauthorized gratification, to wit cash in the amount of
00) whether for the
approximately one hundred thousand rands (RI00 000,
to act in relation to the
benefit of himself or for the benefit of another person,
exercise, carrying out or performance of Nir Lombard's powers, duties or
employment relationship
functions within the scope of Mr Lombard's

ALTERNATIVE TO COUNT 2

24, 25, 26(1)


Contravention of Section 3 read with read with sections 1, 2,
Activities (POCA) Act '12 of
of the Prevention & Combating of Corrupt
2004
(General Corruption — Offering a Benefit) AGAINST ACCUSED
I AND 3

ONLY

2008 and at or near SARS


IN THAT on or about August to September
of jurisdiction of this court,
offices, Brooklyn in Pretoria, within the area

13
Accused I and 3, directly or indirectly and unlawfully gave or agreed to give Mr
Lombard gratification, to wit cash in the amount of approximately one hundred
thousand rands (RI00 000, 00) whether for the benefit of himself or for the
benefit of another person, to act in a manner that amounts to the illegal,
dishonest, unauthorized, incomplete, or biased exercise, carrying out or
performance of any powers, duties or functions arising out of a constitutional,
statutory, contractual or any other obligation, designed to achieve an
unjustified result; or that amounts to any other unauthorized or improper
inducement to do or not to do anything

In the event of a conviction, the said Acting Special Director of Public Prosecutions
requests that the accused be sentenced in accordance the law.

ADV J P Sc
ACTING SPECIAL DIRECTOR OF PUBLIC PROSECUTIONS
PRIORITY CRIMES LITIGATION UNIT
(:) DATE:

14
1gNGDIVISIQNIPRETPRIA).
THE STATE
VERS
IVAN AND TWQ

QF

ACT

members of the Enforcement arid Risk Division


The accused persons were
(SARS) and were managed by
within the South African Revenue Services
accused 1, who was the General Manager of the division within SARS.
Accused 2 and 3
Accused I reported to the Commissioner of SARS and
Specialist Officer in
reported to Accused I. Accused 2 was employed as a
the office of the General Manager, accused '1,

under the leadership of


2. The Enforcement and Risk Division of SARS
signed by I on 2
Accused I produced a memorandum, which was
the then Minister of
February 2007. The Memorandum was directed to
requesting funding of intelligence
Finance, Mr Trevor Manuel and was
capability in support of SARS. The purpose of the memo was to
capability within NIA to
seek approval from the Minister to fund a special
information to
supply SARS and the law enforcement with the necessary
the importation of
address the illicit economy. Illicit economy refers to
smuggling of
counterfeit goods, the illegal harvesting of abalone, the
of drugs. The memo was
cigarettes and the importation and exportation
Gordhan on 8
recommended by the then Commissioner of SARS, Pravin
Minister of Finance, Jabu
February 2007 and approved by the then Deputy

15
of Finance signed his
Moleketi on 22 February 2007, The then Minister
approval to the request on 22 February 2007.

intelligence invariably meant


3. The memo recognized that collecting tactical
penetrated to unearth their
that Organised crime syndicates had to be
This was an activity
activities from which SARS was losing a lot of revenue
for which SARS did not, at the time have the capability (including the
legislative mandate to manage clandestine activity). The memo also
with the National
informed the minister that discussions were taking place
capability. It further
Intelligence Agency to supplement SARS intelligence
ring-fenced capability, provided that
stated that NIA was willing to create a
It indicated that N1A
funds were made available to cover personnel
of
was willing to fQrmalize these arrangements into a Memorandum
of SARS never
Understanding (MOU). The Enforcement and Risk Division
commenced any discussions or negotiations with NIA to pursue these

arrangements until the engagement was initiated by NIA. No Memorandum


SARS. Accused I and 2
of Understanding was concluded with the NIA and
and appointments
commenced with the recruitment of staff in June 2006
involvement of NIA.
were made in March 2007 without any

Investigation Unit of SARS with the


4. in July 2007 a member of the High Risk
equipment at the offices
assistance of accused 2, commenced installation of
and the National Prosecution
of the Directorate of Special Operations (050)
Authority (NPA). In September 2007, Accused 2 Instructed that the
This happened with the
meetings of the 080 and NPA should be monitored,
and 2 placed
knowledge and approval of Accused I. Both Accused I
under the impression that the
members of the High Risk tnvestigatiofl Unit
obtained from the then
authorization required in Act 70 of 2002 was
in the DSO were
President Mbeki. Various communications and meetings

•16
intercepted without the interception direction issued by the designated judge
amongst members of
in terms of the RICA Act 70 of 2002. ConversationS
monitored,
the DSO during the period 3 October to 6 November 2007 were
the designated judge
recorded and transcribed without an authorization from
recorded conversations
issued in terms of the RICA Act 70 of 2002. These
amongst members of the DSO were handed to both Accused I and 2 at
their insistence Accused I even gave witness 13 an assurance that if these
interceptions were discovered, he will take full
responsibility for having given
members involved legal
the necessary authorisationS and guaranteed the
assistance that will arise therefrom.

fitted at the offices of the


5. After the security and surveillance equipment were
rends (RI00 000,00)
DSO and NPA, an amount of one hundred thousand
remained and accused I and 3 authorized the member of the High Risk
Investigation Unit to keep the money as if it was a private installation,
which was not due to him. Accused 3 also
thereby giving him gratification
work after the work
gave the member an authorization to perform private
to appear regular.
was completed in order to make the gratification

17
OF ACT
IJST OF

Mr Thomas Swabihi Moyane


South African Revenue Services
Pretoria

2. Mr Mashudu Jonas Makwakwa


South African Revenue Services
Pretoria

3, Mr Vusumzi Patrick Pikoli


Cape Town

4, Mr Lukas Johannes Bartell Pieterse


Security Management Services
National Prosecution Authority

5. Mr Waither Peter Rhoode


557 Birzoi Street
Garsfonteifl
Pretoria

6. Adv Menzi Simelane


240 Govan Mbeki and Justice Mohamed Street
Department of Human Settlement
Sunnyside
Pretoria

7, Mr Laurence Smith
4 Dion Road
Sandown Extention 18
Johannesburg

Mr Christopher Basil James


8,
18 Lynnwood Road
Kloof
Kwazulu Natal

9, Mr Paul Andre RossoUW


135 Rivonla Road

18
Sandown
Johannesburg

10. Mr Pieter Lesley Jonker


4 Brits Avenue
Wierda Park
Centurion

11. Mr Casper Jonker


Directorate of Priority Crime Investigation
228 Visagie Street
Arcadia

12. Adv John Izak Welch


330 Du Toit Street
Wierda Park
Centurion

13. Mr Helgard Lombard


RiverWalk Office Park, Block A
Corner Garsfontein and Matroosberg Road
Ashlea Gardens
Pretoria

14. Mr Johannes Daniel Do Waal


Rieverwalk Office Park
Corner Garsfontelfl and Matroosberg Road
Ash lea Gardens
Pretoria

15. Captain Reinette Coetzee


Digital Forensic Laboratory
Forensic Science LaboratorY
Opera Plaza Building
Corner Pretorius and Bank Lane streets
Pretoria

16. Ms Jeannee Eleanor padiachy


299 BronkohorSt Street
Brooklyn
Pretoria

19
17 Mr Michael Peega
Soweto

1 8. Mr Edward Chieffer Kotze


Pretoria

19. Colonel Mafemafle Patrick Tshabalala


Detective Co-ordinator
Tshwane East Cluster
S A Police Service
Pretoria

20. Warrant Officer Bandile Bright Miumbi


National Crime Scene Management
S A Police Service
Pretoria

Ret: NCSPT CR 06/2016

21 Captain Lesiba Joseph Mokoena


Tactical Operation Management Section
Directorate of Priority Crime Investigations
Silverton Pretoria

22. sergeant Winchester Khan Baloyi


Tactical Operations Management Section
Directorate of Priority Crime Investigations
Silverton
Pretoria

23. Constable Ntsoloko Solomon Moloto


Tactical Operations Management Section
Directorate of Priority Crime Investigations
Silverton
Pretoria

24. Mr Lekgalake Kenneth Mphahlele


Riverwalk Office Park
Matroosberg Street

20
SARS
Pretoria

25, 'Mr Frar'icois van Niekerk


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

26. Mr Danie Le Roux


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

27. Mr Itumeleng Leeuw


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

28. Mr Jappie Tshabalala


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

29. Mr Humbutafli Gene Ravele


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

30. Mr Daniel DUb Nyapudi


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

31. Mr Ndabezinhbe Simon Nyembe


NPA Head Office
VOM Building

21
Westlake Avenue
Weaving Park
Pretoria

32. Colonel Izak JohanneS Fisher


Technical Support Head Office
Crime intelligence
S A Police Service
Pretoria

33, Mr Gerrit Jute


RiverwaliK Office Park
Matroosberg Street
SARS
Pretoria

34, Mr Anton Herman van'T Wout


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

35. Mr Pieter Gabriel De Bod


Riverwalk Office Park
Matroosberg Street
SARS
Pretoria

36. Colonel Lucase Mahawayi


National Office
Monitoring
Office for the Control and interception &
Pretoria

37. Mr Manala Elias Marizini


Johannesburg

38. Mr Trevor Andrew Manuel


Johannesburg

39. Adv Gerrie Mel


Pretoria

22
40. Mr Andrew Leask
Pretoria

41. Ms Joanne Scott


Pretoria

23
D
Monday, 22 April 20 1922/04/19
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NEWS & ANALYSIS

SARS: This is the inside story - Adrian Lackay


Adrian Lackay I
23 April 2015
Former spokesperson says allegations floated in the Sunday Times, and used to discredit former leadership, were
untrue

Submission from Adrian Lackay, former South African Revenue Service spokesperson, to Yunus Carrim,
Chairperson of the Standing Committee on Intelligence and Cornelia September, Chairperson of the Joint
Standing Committee on Intelligence, March 25 2015

24 March 2015
The Honourable Mr Vunus Carrim
Chairperson of: the Standing Committee on Finance

The Honourable Ms Cornelia September

Chairperson of: the Joint Standing Committee on Intelligence

Per e-mail;
Dear Madam/Sir

RE: Proceedings in relation to events at the SOUTH AFRICAN REVENUE SERVICE (SARS)

introduction
1. As you may be aware I was employed by SARS for a period of 11 years, until my resignation on 19 February
2015 with last working day being 19 March 2015. I served SARS with an unblemished record and received
recognition for outstanding performance from SARS every year. I am addressing this letter within the context of my
employment at SARS as the official media liaison and spokesperson, and for the specific-period since September
20 14, which coincides with the appointment of Mr Tom Moyane ('the Commissioner')

1.1. During the latter part of 2014 I was caused by the Commissioner to issue statements to the media and it became
apparent to me at a later stage that such public statements contained false and incorrect information;

1.2. My role as spokesperson, in particular with aspects contained herein, was diluted and eventually withdrawn in
part by SARS and my duties were referred to the SARS Executive: Mr. Luther Lebelo and other colleagues

1.3. Key facts which I was in possession of or came to be aware of during the course of my time at SARS that relate
to the matters at hand were being ignored deliberately , adapted to advance a particular narrative and which were
used as basis to effectively muzzle, frustrate, victimize and suspend key officials in SARS;

1.4. As the spokesperson for SARS I was effectively muzzled by SARS and the Commissioner and thereby unable
to ensure that the public was aware of critical factors regarding the ongoings at SARS;

1,5. I resigned from SARS under duress and because it became untenable for me to associate myself with the
ongoing matters at SARS, I have commenced instituting labour proceedings against SARS on the basis that Iwas
constructively dismissed

2. I have reason to believe that the Commissioner of SARS, Mr Tom Moyane ('the Commissioner'), will be
addressing the Standing Committee on Finance ("SCOF") and the Joint Standing Committee on Intelligence
("JSCI") in the coming days on the events that have recently occurred in that institution and related investigations. It
is my view that it is in the interest of the SCOF and JSCI, in the interest ofjustice and ultimately in the public
interest, that -

2.1. a true version of such events are also placed before the SCOF and JSCI and its members, albe/t in writing and
not in person; and

2.2. the SCOF and JCSI should be apprised of what Ibelieve to be at the heart of the ongoing matters at SARS,

3. 1 would be failing in my duty as a citizen if I did not ensure that the SCOF and the JSCI and its members are
completely apprised of the facts of the matter, and in that regard I am willing to make whatever evidence I have in
my possession available to the SCOF and JSCI, at request.

4. This version of events I place before the SCOF and JSCI, without prejudice to my rights, for the sole purpose of
assisting the SCOF and the JSCI to obtain a balanced and comprehensive understanding of the facts at my disposal.
5. Since September 2014, certain SARS officials and certain role-players in the media have been advancing a
particular narrative which I submit is false and contrived:

5.1. The existence of a so-called "rogue spy unit" in SARS

5.1.1. 1 submit that facts to my kl1ow!edge suggest the units, (there were three permutations of the units over time)
were formal SARS units and set up, managed and functioned in a manner no different from any other unit, The only
distinction between these units and others investigative units in SARS was that members were given leeway to work
from home and their activities wei'e kept discreet in order to ensure operational security, and the safety of the
respective officials and families over time;

5.2, 'That SARS had been denying the existence of this unit,"

5,2,1. 1 submit that in 2010 1 was principally involved in briefing various media houses on the existence of the unit
in its forni as it was then, that its existence was never denied and that the media was completely briefed on its
purpose;

5.3. "That these units over time were supposedly involved in spying on Mr. Jacob Zuma prior to him becoming
President of South Africa, infiltrated politicians as bodyguards, had sophisticated equipment used to intercept
communications and so forth,'

5,3.1. 1 deal with these later herein. To my knowledge all these allegations have their origins in a little truth and
much fiction,

6. It is my belief that any past attempt by any person within SARS to have countered this narrative, were muzzled,
bullied, threatened, suspended, and their tenure at SARS made unbearable. In some cases persons left SARS's
employ , I believe that even now persons are being and will continue to be victimized and bullied for wanting to out
the truth, sometimes at great cost to SARS by way of legal threats, Ultimately the taxpayer has to foot the bill for
this.

7. It is further my belief that the "narrative" advanced by SARS and others in the media deliberately conflates
certain issues, confuses or misrepresent material facts and embroiders significantly on a unit which was at best 27
officials strong at its height, and ended as 6 officials, and effectively capitalizes on the ignorance or lack of insight
and understanding of the complex environment of how SARS used to function. The operations of these units were
miniscule in comparison to the balance of operations in SARS in terms of number and scope. The amount of public
attention and gravitas allocated to the operations of the unit over time, is inordinate.

7.1. By way of example, SARS now advances that certain "spy equipment" belonged to or were "available" to the
unit whereas this is not the case. The truth of the matter, to my knowledge, is that such equipment which is
commercially available, were acquired by a totally different division within SARS, tasked to investigate internal
corruption and had nothing to do with the units in question. They were at all material times in separate divisions,
had separate cost centres and management.

8. What I relate here is based on my personal knowledge of facts I came to be aware of over time,

Actions by the Commissioner since September 2014

9. In September 2014, soon after his arrival at SARS, the Commissioner disbanded the entire EXCO of SARS.
Primarily his decision was based on what he stated formally to be news articles in the Sunday Times and leaks to the
media;

10, Suspended Deputy-Commissioner Ivan Pillay, Group Executive Peter Richer, Group Executive Johann van
Loggerenberg on effectively the "narrative" referred to and stated so publicly in the Labour Court under oath, in
internal communications to SARS staff and in at least one statement to the media. The findings of the "Sikhakhane
Panel" were also advanced as reasons for the suspensions . Despite the Labour Court finding that the Panel's report
made no adverse finding against any third party, the Commissioner and SARS have continued to advance this
narrative and acted against numerous SARS officials including the suspended Deputy Commissioner, at significant
financial cost to SARS, To date SARS has already had to concede and pay legal fees and other costs in three legal
proceedings against officials it had suspended.

11. Advanced publicly on Radio 702 in January 2015 that the so-called 'rogue unit" still existed at a time when the
SARS Commissioner had already closed down the High-risk Investigations Unit comprising of a mere 6 officials
who previously worked within the National Research Group and the Special Operations Unit. These investigative
units were the subjects of various investigations over time;

Sequence of events

12. Certain key officials in SARS appear to have reached a stage, since September 2014, where they took the
personal decision to resign from SARS, including Messrs. Barry Hore, Jerome Frey, Jacques Meyer, Johann van
Loggerenberg, and Clifford Collings and of late there are more senior personnel that have tendered their
resignations.

13. I wish to set out a limited narration to the sequence of events as I see it based on what I know:

13. 1. The primary protagonist who triggered off this saga in May 2014 was Ms Beinda Walter. In my view her
attack on Mr. Johann van Loggerenberg was based on a number of reasons but appears to have been based on her
emotional disappointment of a failed relationship at the time, the failure of her attempt to blackmail him and a fear
of the consequences of her financial affairs, and the existence of the data and evidence of her wrongdoing in his
possession.

13,2, In essence, her initial allegations were rather basic and undeveloped, and was aimed at insulting his person and
his fitness of office. Her narrative developed in time as she came to overlap with other persons and other interests,
and she adapted her approach accordingly, to eventually focus around a so-called "rogue unit", a charity van
Loggerenberg is a director of and now lately his qualifications.

13.3, She also started engaging the media - most notably a particular journalist with whom she shares a specific
history, Mr Malcolm Rees. To my knowledge the data extracted from her celiphones demonstrates that Ms Walter
had, at a time before he even knew of her existence, in conjunction with her erstwhile client "Carnilinx", sought to
advance stories to Malcolm Rees, and which suggested some kind of impropriety in respect of the business
associations of a Mi' Edward Zuma and a Pietermaritzburg-based tobacco manufacturer. This email sets out quite
clearly what was intended by Ms Walter at the time,1

13.4. I believe that what Ms Walter was completely unaware of, but very quickly adapted and utilized to her
advantage, was the acrimony that had already existed between Mr. Johann van Loggerenberg in his official capacity
and certain officials in other state agencies (moi'e especially the Anti-Illicit Tobacco Task Team referred to) who in
his view had busied themselves wittingly or unwittingly with advancing commercial interests of businesses,
participating in illegal tracking, allowing smuggling to occur undei' guise of investigations, duping state agencies
into believing cei'tain "intelligence reports", to name a few. Mr Johann Van Loggerenberg was outspoken about his
views on this towai'ds me ad other SARS officials,

13.5. I believe that it certainly "helped" that they were known to her from a period before she and Mi' Johann van
Loggerenberg had met, For example, Hawks Brigadiei' Casper Jonker who headed the Anti-Illicit Tobacco Task
Team, It was Brigadier Jonker who took Ms Walter's affidavit for the purposes of her "complaint" to the Hawks and
used it as reason why she did not want to testify under oath to the SARS "Khanyane Panel,"

13,6, A further example would be former Colonel Hennie Niemman, who was part of the same Tobacco Task Team,
and a member of the police Crime Intelligence Division, and has recently left the police. He had ali'eady started to
engage private persons as early as April 2014, prior to Ms Walter's complaint to SARS to seek "dirt" on Mr. Johann
van Loggerenberg. This mattei' was reported by Mi'. Johann van Loggerenbei'g via SARS to General Dramat of the
Hawks at the time,

13,7, It is this same Colonel Niemman who collaborated with Ms Walter and Mr Peega in a television broadcast on
Carte Blanche on 22 Februai'y 2015 about the alleged "SARS rogue unit" and made untrue and slanderous
allegations against Mr. Johann van Loggerenbei'g and others,
13,8. I believe that these persons functioned in tandem with Ms Walter and the second set of protagonists with the
sole purpose of ridding SARS of persons they were opposed to, I believe that their efforts had been unsuccessful for
some years, and finally came to fruition when the circumstances presented themselves for the proverbial "perfect
storm

13,9, I believe that it was virtually within a few days after the initial complaint that a fourth set of protagonists
capitalized on the situation . I believe that these persons hail from within the institution and have had axes to grind
with mainly Mr. Ivan Pillay, Mr. Pete Richer and Mr. Johann van Loggerenberg and others affected for a variety of
reasons. I believe that it very quickly became a case of "my enemy's enemy is my friend" and in a rather short space
of time, people who would never have associated themselves with each other from any perspective, began to
advance each other's agendas.

13.10. I believe that a fifth set of protagonists also capitalized on the "opportunity" created; consisting of persons
who were formerly employed at the institution, but left under a cloud or were dismissed and/or are facing criminal
charges. I believe that their efforts had been going on for some time and only served to bolster what the other groups
were up to, I believe that former SARS official and NRG-member, Mr Michael Peega falls within this category , He
was dismissed during 2009 for his involvement in rhino-poaching in a joint action between the South African Police
Service ("SAPS") and South African National Parks on Christmas Day whilst on leave,

13.10,1, He was the original author of a so-called "intelligence dossier" in 2010 which was advanced by politician,
Mr Julius Malema, and was given significant niedia coverage. SARS had submitted a line-by-line refutation of this
"dossier" at the time to the SSA, SAPS; the President of South Africa and various media outlets over that period;2

13,11. I believe that the by-product of this sequence of affairs is that there are now multiple agendas, being
advanced by multiple groupings in different ways, sometimes in tandem or concert, sometimes not, sometimes
individually so and sometimes in collusion. The lack of reaching a conclusion on the true facts has harmed and
continues to harm SARS as an institution, its public credibility and ultimately the fiscal prospects of the country.

13,12. Multiple "camps" appear to have formed, some apparently supporting the suspended SARS officials, some
supporting new management at SARS, some advancing individualistic agendas, some advancing agendas against
new management at SARS, political or ideological motives are beginning to feature and new "facts" which are
partly based on truth but again mixed with fiction are being leaked to various media outlets.

13,13. These media leaks have now developed to suggest some or other nefarious political motives byvarious
political persona in the political landscape.

13.14. Regular and known "information peddlers" have now also jumped on this situation and are beginning to
advance their own motives.

The relationship between former SARS-official Johann van Loggerenberg and Ms Belinda Walter

14. Much of the narrative in this matter was triggered by the involvement of a Ms Belinda Walter ('Ms Walter'),
who was the chairperson of a body representing small tobacco manufacturers (Fair Trade Independent Tobacco
Association - "FITA"), and who has repeatedly confessed that she was at all material times an informant of the State
Security Agency ("SSA") and her romantic relationship with former SARS-official and Group Executive of
Investigations, Mr. Johann van Loggerenberg. She has also from time to time declared publicly that she had on
behalf of the SSA spied on the tobacco manufacturers, for a fee,

15. It has been suggested by the "Sikhakhane Panel", and in various media reports (print and radio) her that
relationship with the SSA ended in 2012. This assertion is incorrect since, to my knowledge, her relationship with
the SSA only terminated at the end of 2013. In fact, Ms Walter, according to her own account of events, acted on
instruction of the SSA or one of its officials as late as 2 September 2013, and utilized a surreptitious recording-
device belonging to the SSA for that purpose. Mr. Johann van Loggerenberg made these facts available to SARS
and various persons in SARS over time,
16. Mr. Johann van Loggerenberg submitted a detailed affidavit with far greater detail than what will be reflected
herein, with supporting and substantiating evidence as annexures, to SARS and the Sikhakhane Panel, From Mi' Van
Loggerenberg's affidavit, the following is apparent-

17. On 2 September 2013, Ms Walter met Mr. Johann van Loggerenberg in his official capacity for the first time.
This was preceded by an unrelated complaint concerning tobacco-matters submitted to Acting Commissioner Mt
Ivan Pillay and some e-mail exchanges which ultimately led to Mr. Johann van Loggerenberg suggest ing an
informal interaction. Mr. Johann van Loggerenberg met with her on his own as he was entitled to in terms of the
Customs & Excise Act which specifically provides that an official may engage individually with any person in
matters concerning Customs and Excise,

18, At the time Mr. Johann van Loggerenberg had no knowledge of Ms Walter other than that she was the
chairperson of FITA, and the discussion between them was of a general nature intended (at least from his
perspective) to seek ways to ensure compliance with the FITA members' statutory tax obligations.

19. Nothing ultimately transpired from this meeting insofar as SARS was concerned. Approximately two months
later on 25 October 2013, Ms Walter invited Mr. Johann van Loggerenberg out on a date, They met at a restaurant,
after hours that following weekend, and were joined by two of Mr Van Loggerenberg's friends. Ms Walter and Mr
Van Loggerenberg commenced what could for all purposes be considered a romantic relationship from that date (i.e.
November 2013) onwards.

20. As events began to unfold within the context of a romantic relationship, Ms. Walter subsequently confirmed that
in the meeting with MrVan Loggerenberg that on 2 September 2013, she wore a concealed recording device
provided to her by her SSA handler, Mr Chris Burger, in the belief that Mr Van Loggerenberg was corrupt3

21, During this relationship, which lasted at best 5 and a half months, various issues arose between them, some of
which included his concerns about the impact of their relationship on his professional duties and obligations to
SARS. By way of example -

21.1. at the commencement of their relationship in November 2013, Mr. Johann van Loggerenberg enquired about
Ms Walter's tax status, and when it became obvious that she was not tax compliant, and in light of the sensitivities
associated with her being a paid informant of the SSA, they agreed that she would submit herself to a tax audit in
order to regularize her affairs, and to protect her status as an SSA informant. This audit was arranged by Mr. Johann
van Loggerenberg to be undertaken by another senior manager and was intended to be finally signed off by Mi'
Gene Ravele, the Chief Officer at SARS .4

At various times during the relationship Ms Walter sought private advice from Mr. Johann van Loggerenberg in this
regard, and she discussed aspects of hei' income and sought assistance from him from time to time. Ms Walter did
not at any stage express any concern or objection to the manner in which the SARS audit was being conducted, and
she was in fact quite complimentary about the auditor with whom she interacted at the time.

However, at the demise of their relationship, this suddenly became an issue. At various times, Ms Walter expressed
open acknowledgement of her tax issues, and her willingness to settle them and to do so properly regardless of the
consequences . Mr. Johann van Loggerenberg was not involved in the audit at a115

21.2. On another occasion early in November 2013, Ms Walter informed Mr. Johann van Loggerenberg that she had
disclosed their relationship to one of her tobacco manufacture clients, and that the client had encouraged her
relationship with him. Mr. Johann van Loggerenberg was not aware, at that stage that Ms Walter had been acting for
a tobacco manufacturer in litigation against SARS, Given that tobacco manufacturers were under close scrutiny by
SARS, Mr. Johann van Loggerenberg informed Ms Walter that her representation of the tobacco manufacturer was
problematic and that she had to make a choice about her professional relationship with the client or her personal
relationship with him. She chose the latter7;

22. On yet another occasion he i'aised with her his discomfort and the potential conflict between her role as
chairperson of FITA on the one hand, and his role as a senior employee of SARS who was involved in addressing
compliance issues of such manufacturers on the other hand. At the time, she informed Mr. Johann van Loggerenberg
that she anticipated that someone else would be elected as chaii'person of that organization , and that her role therein
would come to a natural end in November 2013, Contrary to her assertion in this regard, she was re-elected as
chairperson of FITA, and upon receipt of such information, he immediately (on the same day) informed her that she
would have to make a decision about their relationship. At that point, Ms Walter resigned from the organization8
and from her role as an SSA informant9.

23, Mr. Johann van Loggerenberg ended his personal relationship with Ms Walter on 13 May 2014 10 for a variety
of reasons, including the fact that she had not been entirely honest with him about the activities that she had been
involved in prior to the commencement of their relationship, and in respect of which he had developed serious
reservations, For example -

23.1. In documentation seen by me, Ms Walter informed Mr. Johann van Loggerenberg that whilst she was a paid
informant of the SSA, and with the knowledge of her respective SSA "handlers", she was also a paid informant for
British American Tobacco UK Pie ("BAT UK"). She informed him on several occasions that this came about as a
result of an introduction by her SSA handlers to BAT UK, and that BAT UK and the SSA and Crime Intelligence of
the police were aware of this "arrangement". Ms Walter also provided him with:

a) a copy of the correspondence between BAT UK and British American Tobacco SA confirming such payments; b)
two recordings of discussions that she had with a BAT UK "handler" privately and in which reference is made to the
respective state agencies who were aware of this "relationship"; and c) photos of 2 Travelex cards which were
utilized by her and BAT UK to receive payment for services rendered, and which were not in her name. She utilized
such cards to withdraw payments made by BAT UK in the United Kingdom at respective ATM's in South Africa
from time to time .11;

23.2. on various occasions during his tenure at SARS 12 Mr. Johann van Loggerenberg recorded his concerns about
the independence of a so-called multi-agency Tobacco Task Team headed by a Brigadier Casper Jonker of the
Hawks, [as he was aware of the close relationship between the Tobacco Task Team and certain private investigative
firms funded by large tobacco manufacturers]. who in his view exerted inordinate influence over the Tobacco Task
Team. According to him, this was unethical and to the disadvantage of the smaller traders in the industry. The fact
that Ms Walter informed him that her SSA handlers (Mr. Ferdi Fryer and later Mr. Chris Burger) were part of this
team concerned him greatly. Perhaps more importantly, he was extremely worried about Ms Walter's involvement in
these activities in light of the fact that it raised issues about her ethical duties as an attorney of the High Court;

23,3. she was caught accessing messages and c-mails on Mr. Johann van Loggerenberg's celiphone without his
permission on at least 3 occasions , When he confronted her about this on the third occasion which occurred on 31
January 2014, she retorted the very next day (1 February 2014), by making unfounded accusations against him - to
her former client "Carnilinx", senior counsel and the media - that were not only untrue but also defamatory of him.
After making such accusations and realizing the folly of her ways', she sent an e-mail to the relevant persons in
which she retracted her accusations against Van Loggerenberg, in the following sweeping terms:

"I am writing to you as colleagues to sincerely apologise for, and explain my inexcusable conduct yesterday

I had hoped that by exposing myself and explaining about the BAT relationship, it would allay Camilinx 'fears that I
have never and would never pose any threat to them and that my son would never be in danger.

What I said about Johann van Loggerenberg, was untrue and devoid of any truth. Johann conducts himself in such a
manner as to always be beyond reproach. Mr Cassim mentioned that too and it is so, He simply does not and will
not cross the lines that Cam ilinx so desperately hopes he has. He is not like the industry or its participants,
including me. Jam deeply ashamed of what I said.

My conduct was reprehensible and inexcusable and I can only offer my apologies and brief explanation as to what
had transpired and brought me to your office in the extreme emotional state that I was in.

1 am aware that I will need to extend an to Johann and I will endeavour to do so without reference to the
participants at the meeting or the exact context to ensure that Cam ilinx is not compromised in any manner. It is
grossly and I can only hope that you will respect the past I cannot disclose. "/3

'I
23,4. This incident, in particular, demonstrated that Ms Walter was tormented by her various contradictory roles and
that it was a very difficult road to tread in the context of her ethical duties as an attorney. These texts and the various
e-mails are available for inspection, if necessary, and were seen by me, This same incident apparently triggered
application to the High Court to interdict both her and BAT from spying on them, At various times Mr.
Johann van Loggerenberg submitted that her motives for contacting Carnilinx, were most likely founded on the
following:

23.4.1. A realisation that the regularisation of her financial affaii's will lead to dire consequences, including
revelations of her having received large sums of cash from "Carnilinx" improperlyl4;

23.4,2. Her insecurity about the relationship with Mr. Johann van Loggerenberg and her belief that he was unfaithful
to her and having improper relationships with other women

23.4.3. The information that she received from a FITA member, Mr Johan Beets, on 31 January 2014 that FITA
members distrusted her and were suspicious of her. In a whatsapp message to him on 31 January 2014 at 13h27 she
informed him that:

"He hates me. He feels betrayed. Ijust kept denying it, Said its all rubbish and they must bring proof No shit they
made on their computers. They said that evemything in the SARS letter is only stuff I knew. Beets then have me a
bunch of veiled threats that I would never be so stupid and risk mine and [her son's] safety because I know what
they would all do to me.

To some extent, Ms Walter confirmed these threats and the emotional effect thereof on her in an opposing affidavit
in the interdict application that she filed in the High Court and which is publicly available.

24. These and other issues permeated their relationship, and the fact that they had different views and many
disagreements about her ethical role in these activities, eventually destroyed the relationship, according to Mr Van
Loggerenberg.

25. It appears that in early 2014, Ms Walter approached the Sunday Times and the Mail & Guardian with a view to
address what she had expressed as a abuse of power in state agencies". This resulted in a number of media
reports concerning the relationship between BAT UK and the SSA in the tobacco industry. Van Loggerenberg
demonstrated that as part of the process, Ms Walter attempted (via a private company) to extract data from some of
her older celiphones in order to provide proof of her allegations.15 It appears, however, that she was not satisfied
with the results of the data extraction, and then asked Mr. Johann van Loggerenberg to assist her in extracting such
data. Mr. Johann van Loggerenberg asked a friend, who was a qualified data analyst, to do so, and then simply gave
her one of two memory sticks with the relevant information. Mi'. Johann van Loggerenberg retained the second
memory stick and when he eventually had the opportunity to look at the information, it was clear to him that Ms
Walter, BAT SA, BAT UK, a private investigation firm that does work foi' certain tobacco companies, police crime
intelligence informants, and former and current SSA officials were involved in a range of illegal activities which
had cost the fiscus hundreds of millions of rands. Mr Van Loggerenberg spoke openly about this at SARS and
provided information to this effect to SARS. I am aware that Mr Van Loggerenberg formally requested SARS to
either registei' criminal charges itself or give him permission to do so and he was extremely frustrated with the fact
that SARS never responded formally to him, Some examples of what have been described above include but are not
limited to:

25.1, Corruption;

25.2. Fraud against SARS, the National Prosecuting Authority, State Security Agency and the Swiss buyers of the
erstwhile London Stock Exchange company Lonhro and its South African subsidiary Rollex;

25,3. Money-laundering;

25,4, Setting up a "front company" with a view to trade in the YES-brand together with current and former SSA
officials and informants, to be partly funded by a convicted tax evader and tobacco trader under the guise of what
they termed to be "Project Robin", Their intention was to utilize their access to the SSA to fund part of the
activities
255. "Laying a paper trail" to deceive SARS on behalf of "Carnilinx";

25,6, Knowledge of an "illegal spy-ring" in Zimbabwe which was funded by a private company in South Africa, set
up by a former SARS official Mr Michael Peega and discussions that occurred between Ms Walter , the private
investigations company and a SSA official.

25.7, . A directed effort with the knowledge of certain SSA and Crime Intelligence officials to "ruin the career" of
SARS official Marietjie van Wyk who was instrumental in investigating Carnilinx . I am aware that Van
Loggerenberg compiled a detailed file on this matter and provided such to SARS.

26. . In various correspondence and affidavits under oath in the Regional Court and the High Court, Ms Walter: a)
denies that she had asked Mr. Johann van Loggerenberg to assist in downloading and extracting the data from her
cellphones; or b) insists that Mr. Johann van Loggerenberg and/or SARS intercepted her communications for a
period of 3 years 16 and c) challenged Mr. Johann van Loggerenberg to prove that she handed the cellphones to him
willingly.

27, Mr. Johann van Loggerenberg has photographs which I have seen of the cellphones, an envelope which he
claims, has Ms Walter 's handwriting with the details of access codes and passwords to a BBM "cloud" referring to a
so-called "chat group" named "Evil ink" of which Walter was a member, together with other persons in the tobacco
industry. It is obvious in my opinion, that she would not have written such details if she did not want his assistance
with the data extraction process and would not have discussed this with him in text messages. According to Van
Loggerenberg, the photos of the cellphones were taken, at the time, by his friend (the qualified data analyst) . The
photos display the serial numbers of three celiphones, the batteries, the MTN sirn-card and EMEi numbers, In a
legal notice to SARS dated 11 August 2014 in terms of section 11(4) of the Tax Administration Act, Ms Walter
gave notice of her intention to issue summons against SARS and recorded the following, which she attached to a
media statement to the South African Press Association (SAPA):

Finally, I place on record that I have at no time given ANY of my devices to Johann van Loggerenberg for
forensic evaluation for evidence and require that you provide myself and the Hawks with documentaiy proof of
these bald and false a/fe gations, such evidence would naturally include photo graphic material of the devices and my
signature making them available, date, etc."

28. . On consideration of what Mr Loggerenberg has advanced - i.e. photographs and text messages - Ms
Walter's denial is patently false, in my view. In addition to the information referred to in paragraph 18 above, the
following text messages between them, by way of example, which indicate that she had voluntarily handed over the
cellphones to him:

28,1. On 1 March 2014 at 09h38 Walter enquired from him: "Where are my phones? "He responded at 09h39:
"Sealed. Will get them in week. "A couple of seconds later Ms Walter responded:

28.2. An analysis of various cellphone text messages exchanged between them , which I have seen, confirms that
Ms Walter perused the extracted data and freely exchanged messages and discussed what she found therein.

29. Ms Walter has on many occasions suggested that he had interceher cellphones i what I believe to be an attempt
to discredit this data. As a fact, I know that she was c this belief when they met and he did not correct her belief that
SARS had sue capabilities up to a point in their relationship. I dealt with this in statements to the medi when asked
about this. It is of significance that Ms Walter never responded to this.

30. The data from het' cellphones was, on her request, physically extracted through program known as 'Cellebrite'
by a private company, and at no cost to Mi'. Johann va Loggerenberg. Physical extraction entails a bit-by-bit copy
of the entire flash memory I a mobile device and not actual live (or so-called aural) interception as alleged by tv
Walter. Experts in the field of data recovery will be able to easily identify the differenc

between physically extracted data as opposed to live (or so-called aural) intercepte data. In the absence of any expert
evidence to the contrary, Ms Walter's suggestion th; this data was not physically extracted from her celiphones or
that it constitute intercepted data, must be rejected.
31, Following the demise of their relationship, Ms Walter attempted to blackmail him asking him to "pay her
money" as a) "source" for SARS!,and when this failed, - .b) caused a complaint to be registered with SARS. It
appeal's that Ms. Walter was of th belief that Mr. Van Loggerenberg was able to obtain access to and pay
"informants" c behalf of SARS from text exchanges at the time.

32, During late July 2014 Iwas contacted by The Star, the Sunday Times and the City Fret newspapers with claims
that Mr. Van Loggerenberg was going to be "suspended an investigated for corruption." In my interactions with Mr.
Van Loggerenberg he told m that he was informed by one journalist that the "leak" originated from a persc
associated to the SSA. In preparing responses to these media enquiries, Mr Va Loggerenberg advanced that these
leaks were atti'ibuted towards persons in th tobacco-industry which SARS's view, had interests in discrediting him.

33. To my knowledge Ms Walter also decided, once again, to engage the media wil essentially the same allegations
that she had advanced and retracted previously February 2014. A Sunday Times Journalist, Malcolm Rees, pi'ior to
publishing the first of a series of articles regarding SARS and the so-called "rogue unit" left an email on the table
after meeting Mr. Johann van Loggerenberg on 8 August 2014, This email, which I have seen, indicates that Ms
Waltei"s intention was to create the inipression that Mi'. Johann van Loggerenberg was corrupt, conspired with
"organized crime figures" in the tobacco-industry and was an "apartheid spy".18

34. I point out that at this stage i.e. July/August 2014, the allegations against SARS were aimed solely at Mi'. Van
Loggerenberg and no mention was made of any supposed "rogue unit" and "illegal interceptions" of
communications at all. Such allegations had featured in the media from around 2010 when Mi' Peega, a former
SARS official had published a so-called "intelligence dossier" and which I have dealt with above. In this dossier
allegations were made of a so-called SARS "rogue unit", that the "rogue unit" had "infiltrated Fi'iends of Zuma" and
"illegally intercepted communications." SARS to my knowledge dealt with these allegations directly via the media,
the SAPS, the SSA and the Presidency at the time, The allegations being advanced by Ms. Walter were solely
suggestive that Mr. Johann van Loggerenberg was corrupt and that the romantic relationship was "ill-advised" or
"improper" in one or other way , The Sunday Tunes on 10 August 2014 referred to Mr. Johann van Loggerenberg as
"apartheid spy" first and this was penned by journalist Malcolm Rees. To my knowledge Ms Walter had prior to
knowing Mr. van Loggerenberg, a particular i'elationship with Malcolm Rees. I deal with this aspect later herein.

34.1. In September 2014 onwards multiple articles were published by the Sunday Times which began to advance
that there was a "rogue unit" that had "infiltrated politicians" and "bugged Zuma" and began to overlap what Mr.
Peega had been advancing to the media years before with what Ms. Walter began to advance about SARS, I believe
it no coincidence that Ms. Walter and Mr, Peega collaborated in a television broadcast on Carte Blanche on 22
February 2015 about the alleged "SARS rogue unit" and allegations against SARS, Mr. Johann van Loggerenbei'g
and others.

The investigations by SARS


To my knowledge and as consequence of Ms Walter's complaint to SARS, Mr. Johann van Loggerenberg was
subjected to three separate investigations by SARS19

The first investigation

35,1, The "Khanyane Panel" investigated the original allegations made by Ms Walter,

35.1 .1. At this stage of the chronology, Ms Walter's complaints were not directed towards allegations of a "rogue
unit" in SARS, but were essentially focused on Mr. Johann van Loggerenberg, his person and that he had
supposedly "infiltrated" her and "intercepted her communications". Her complaint morphed over time as she came
to meet with and learn more from others who were advancing agendas of their own. I deal with this aspect later
herein. In time the focus of the allegations began to draw in Mr Ivan Pillay and later on Mi' Peter Richer and
ultimately Messrs Pravin Gordhan and Trevor Manuel. On a live interview on Radio 702 in January 2015, Ms
Walter specifically mentioned Mi' Gordhan, claiming that she had been given access to confidential SARS
documents depicting his signature.

35.1.2. The Khanyane Panel report consisted of two documents, being a i'eport dated 11 August 2014 nd a summary
of the findings dated 12 August 2014 (the "report" and "summary") , The Panel found that it was unable to conclude
that the evidentiary material presented by Ms Walter was credible or reliable (paragraph 18,1.2 of the report and
paragraph 6.1 of the summary) and that she refused to make a statement under oath in the form of an affidavit
despite being represented by counsel,

35.1,3. Notwithstanding this finding, the Panel recorded certain concerns regarding Van Loggerenberg.

35.1.4, These concerns were made by the Panel in circumstances where they did not afford Mr. Johann van
Loggerenberg a right of reply before reaching such conclusions , as appears from paragraphs 4 and 5 of their
summary . It has been consistently stated by Mr. Johann van Loggerenberg that had the Panel had the benefit of his
input they would not have come to certain conclusions.

35.1.5. Of great concern is that this report, which was limited to a small number of SARS officials, found its way
into the hands of the Sunday Times even befoi'e Mr. Johann van Loggerenberg had been given access to the report or
an opportunity to respond to its findings . The Sunday Times had a front page report on the matter on the very
Sunday following the Friday when the report was completed and pi'ovided to the Minister of Finance, Mi' Nhlanhla
Nene, Despite the fact that Mr. Johann van Loggei'enberg requested SARS (in particular its company secretary , Dr
Giorgio Radesich) to investigate this leak, SARS did not acknowledge his request or investigate this leak,

The second investigation

35,2, On 10 September 2014 the Acting Commissioner of SARS, Mr Ivan Pillay, established an external panel
chaired by Advocate Muzi Sikhakhane, assisted by an attorney and two other independent counsel in order to
investigate various issues emanating from allegations made by Ms Walter.

35.2.1. This process, much like the first one, did not give Mi'. Johann van Loggerenbei'g a i'ight of reply prior to the
finalization of the i'eport. In this regard I know that he insisted on such a right at the first appearance before the
Panel and he repeated the request at the end of the process in writing via his attorneys. Ultimately, I know as fact
that he was not afforded any right of reply to any aspect contained in the report pi'ioi. to its publication;

3 5,2,2. Mr. Johann van Loggerenberg has to date not been given access to the final report, despite several requests
to SARS for it,

35,2,3, Of great concern is that whilst this process was ongoing, information that was available to only a limited
number of SARS officials, once again found its way in the hands of the Sunday Times. In this case the Sunday Times
attributed its 'sources" to "current and former senior managers in SARS" and had access to information about the
legal fees that Mi', Johann van Loggerenberg had incurred to date and details concerning his legal advice. Mr.
Johann van Loggerenberg i'equested SARS investigate the leak of information to the Sunday Times but the request
was never answered or effected.

3 5.2.4, 1 do not know how the Sunday Times gained access to this report. On multiple occasions Deputy-
Commissioner Ivan Pillay and Mi', Johann van Loggerenberg have advanced that:

35.2,4.1. . The "Sikhakhane report" is flawed in fact and law; it contains material omissions, misrepresentations and
factual inaccuracies;

35,2.5. Mr. Johann van Loggerenberg has also advanced that:

35.2,5.1. The suggestion that he failed to mention the existence of the High-risk Investigations Unit at his first
appearance before the Panel is false, The recording of the interaction between the Panel and Mi'. Johann van
Loggerenberg will pi'ove that the opposite is true. Mr. Johann van Loggerenberg gave the Panel a clear brief on the
units that fell under his management;

35,2.5.2. The assertion that he was an "apartheid spy" is not only false, but slanderous and has caused him immense
reputational damage in the media and public domain , He has served the country and government with total
dedication and his track record speaks for itself;

3 5,2.5.3, He was led to believe that the Panel's interests were focused on the allegations niade by Ms Walter (as
indicated to him by SARS). His response was, as a result thei'eof focused on such issues. In so far as the Panel had
any questions about the erstwhile Special Projects Unit, (later the National Research Group and finally the High-risk
Investigations Unit), they did not enquire about it and posed virtually no questions to him in this regard. He was
therefore unaware of their specific and pronounced interest in the Unit and more so the allegations which began to
feature in the Sunday Tunes;

35.2.5.4. All the findings and statements made by the Panel in respect of the charity that he is a director of, are to
my knowledge incorrect and no attempt was made by the Panel to engage the entity or even ascertain the most basic
assertions as finally presented in its report.

35.2.5.5. He submitted that had the second Panel offered him a right to reply, the Panel would not have come to the
conclusions that it did.

The third investigation

35.3. By September 2014, following the arrival at SARS of Commissioner Moyane, his disbandment of the SARS
EXCO and suspensions of Messrs Pillay, Richer and Van Loggerenberg - what in my view appears to be frivolous
actions were instituted against Messrs Barry Hore (Chief Operations Officer}, Clifford Collings (Group Executive:
Anti-Corruption and Security) and Yolisa Pikie (Executive to Deputy Commissioner Pillay). A third investigation
was then launched by SARS under the guidance of KPMG, and Advocates Mike Van As and Nadine Fourie. To my
knowledge, to date not Mr. Ivan Pillay, Mr. Pete Richer nor Mr. Johann van Loggerenberg have been engaged by
any of these persons to ascertain their versions of events and despite them offering their willingness to assist SARS
in such investigations.

The Inspector General of Intelligence investigation

36, Another relevant process that was unfolding just as the "Sikhakhane Panel" commenced, was an enquiry that
was conducted by the Inspector General of Intelligence ("IGI"). Mr. Peter Richer and Mr. Johann van Loggerenberg
prepared for and presented to the IGI on the basis what was believed the scope of their investigation was as stated in
a press release issued by the Ministry of State Security in the following terms: "In the wake of weekend newspaper
reports alleging improper conduct against persons reported to be associated with the State Security Agency, the
IVlinister of State Security IvIr David Mahlobo, MP has requested the Inspector General of Intelligence Advocate
Faith Doreen Radebe to conduct an investigation in terms of the Intelligence Services Oversight Act, Act 40 of 1994.
The investigation will seek to establish the facts and get to the bottom of the allegations made about members of the
State Security Agency . "To my knowledge, to date Ivan Pillay has never been called to provide evidence or
before the IGI.

37. I am aware that Mr. Johann van Loggerenberg presented 34 instances to the IGI that were to some extent related,
but stood alone with a basic synopsis of each one pertaining to the Intelligence Services. He identified over 60
individuals he believed should be interviewed by the IGI within this context, 20 He provided Advocate Govender of
the IGI with multiple data and evidence, including a memory stick containing whatever information and data was in
his possession. This included the data he received from Ms Walter,

Media reports
38. Multiple articles appeared in the media (initially the Sunday Times primarily) concerning allegations suggesting
inter alia that:

38,1. "SARS bugged Zuma";

38.2. "SARS had a rogue unit";

38.3. "SARS denied the existence of the unit"

38.4. "SARS spied on politicians"

38.5. "SARS ran a brothel";

4
38.6. "SARS acted as bodyguards to infiltrate politicians";
38.7. "SARS was involved in the deaths of Messrs Nkadimeng and Radebe";

38.8. "SARS spied on Selebi";

38,9, 'SARS rogue unit intercepted communications and had sophisticated equipment to do so";

38.10. "SARS meddled in political matters";

38.11. 'SARS used CCTVto conduct surveillance on late Mr Radebe";

38,12, "SARS rogue unit engaged in deals with taxpayers Wiese, King, Malema unlawfully or illegally";

38.13. "SARS rogue unit was formed, managed and utilized unlawfully and improperly"

39. To my knowledge none of these allegations or reports are true. All these articles were attributed to "insiders" i.e.
either existing "SARS officials" or "former SARS officials" and in one case an "intelligence official", Once again,
the Sunday Times was exclusively given access to documents that could only have been in the hands of few SARS
officials. In many cases the documents handed to the Sunday Tinies contained unproven and untested allegations
and were in raw format. Very few people would have had access to such information. To my knowledge SARS did
not investigate these leaks in any manner or form as would normally been the case.

40, Mr. Ivan Pillay and Mr.Johann van Loggerenberg have repeatedly informed SARS that:

40.1, The manner in which the original Special Projects Unit came about is well recorded in SARS, was approved at
Ministerial level, approved subsequently at institutional level and formed in a manner as any other unit was formed
in SARS at the time. These units were formed, mandated, managed and functioned in a lawful manner at all times;

40.2, At no stage did such unit, or its later permutations2l acquire or utilize or possess any "spy equipment",
especially equipment utilized to intercept communications . The Anti-Corruption and Security division (ACAS)
within SARS acquired certain commercially available equipment of such a nature. In the circumstances, the
allegation that such equipment was used or authorized by the SPU/NRG or HRIU is untrue and misleading

40.3. , The units did not "infiltrate" persons or entities;

40.4. A complete list of the so-called "dashboards" of each year of the existence of each unit held in SARS will
display the details of projects and investigations that resided under them. At best these investigations can be
described as data-mining, discreet investigations, elements of surveillance (in a manner no different to how private
investigative firms or other state agencies that are not intelligence agencies conduct surveillance) , identification of
potential witnesses and evidence and verification of assets, identities and addresses;

40.5. The units were managed like any other unit in SARS with an accounted for cost centre, HR files, leave
applications , reflected on the SARS personnel database, were remunerated from a shared SARS cost centre,
including travel, subsistence and the like;

40.6. The units did not have "front companies" or "false identities";

40.7. None of the units "bugged Zunia";

40.8. All the allegations published in the media comprise mostly of a little truth and much embroidery and fiction
and each have an origin that was explained to SARS by Mr. Ivan Pillay, Mr. Pete Richer and Mr. Johann van
Loggerenberg whenever they arose. At no stage does it appear that any effort was made by SARS to: a) investigate
the leaks to the media; b) ascertain the true facts of the allegations and rumours; and c) protect the reputation of
SARS by countering such rumours and allegations with the true facts. SARS did not even conduct the most
rudimentary process of calling the SARS officials who made such allegations , requesting them to submit their
allegations under oath and requesting specific details of the events i.e. who, who else, when, why, how, dates, times,
places - which I verily believe would have easily enabled SARS to counter these allegations publicly and protect its
reputation. Instead, these allegations were simply left unaddressed within SARS and in the media. It leaves me with
the inescapable conclusion that these "narratives and "stories" were considered convenient and led to very drastic
steps by the Commissioner since September 2014 that impacted very negatively on SARS,

My concerns

41. 1 record the following concerns:

41.1. It would appear that none of the institutions or investigative bodies to whom the true facts had been provided
had considered or referred to any of the very serious allegations and substantiating evidence in respect of Mr. Peega,
Ms. Walter and Colonel Nienirnan mainly, as well as other persons;.

41.2. . Neither the "Sikhakhane Panel" nor the 101, SARS or the Hawks have made any attempt to engage with Mr.
Ivan Pillay, Mr. Peter Richer or Mr. Johann van Loggerenberg about the information that should be of a far greater
concern than what SARS has been pre-occupied with;

4 1,3, None of the SARS officials affected by the allegations advanced by Ms Walter, Mr Peega and others - Messrs
Ivan Pillay, Peter Richer, Johann van Loggerenberg and Yolisa Pikie or any other SARS employees - by way of
complaints, media source reports, radio interviews and television broadcasts have been allowed by SARS, nor
requested by SARS to assist SARS in defending its public reputation by stating the correct facts;

41.4. Mr. Johann van Loggerenberg has on multiple occasions requested SARS, without success, to act against Ms
Walter in respect of evidence lie provided to them. Instead Ms Walter has instituted a combined summons against
SARS and Mr. Johann van Loggerenberg in his capacity as an employee of SARS. In the circumstances, I am left
with the distinct impression that the allegations by Mr. Peega and Ms Walter, which are unsubstantiated and
unsupported appear to cany credence in certain quarters, at the same time when a list of activities have been
highlighted which require at the very least SARS and the Hawks to act against her and others,

Conclusion
42. In the circumstances, it is my view that it would be in the interests of the SCOF and the JSCI to engage with
SARS and request them to get Messrs. Ivan Pillay, Pete Richer, Johann van Loggerenberg and Yolisa Pikie to make
submissions to the committees in this regard.

43. I have known and worked with the individuals listed above for more than a decade, often under difficult
,

circumstances and I have never had any reason to doubt their integrity. They have each played key roles in the
development of SARS and in particular SARS's contributory role in combating organized crime.

In my experience they have always acted without fear or favour and in the best interest of the country, its citizens
and the fiscus. Their track records speak for themselves. I believe it to be a travesty ofjustice if matters are left to
continue at SARS as they have been since September 2014. We would all be failing in our collective responsibility
towards the fiscal future of our country if these matters are not properly interrogated. This is what motivates me to
make this submission to you for consideration

Yours faithfully,

Adrian Lackay Sent electronically.

Footnotes:

lThis forms part of what was submitted to SARS, and the so-called "Sikhakhane Panel"

2 'This is available in the archives at SARS.

3 Since the meeting was recorded without his consent, but on behalf of the SSA, the SCOF and JSCI should request
a copy of the recording of this meeting from the SSA,

4 An email from Mr. Johann van Loggerenberg addressed to the auditor concerned dating from time and confirming
will be available in the archives of SARS
5 Multiple instances where this occurred are reflected in whatsapp texts exchanged within the context of the private
relationship.

6 Carnilinx (Pty) Ltd ("Carnilinx"), specifically to one of its directors, Mr Adriano Mazzotti.

7 Email to this effect was sent to the client "Carnilinx", SARS Legal Administration, SARS Enforcement.

8 Email to this effect was sent to the members of the body, SARS Legal Administration, SARS Enforcement.

9 There is an e-mail and a sms text from Ms Walter confirming this, This information also forms part of the affidavit
of Van Loggerengberg and was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel"

10 This forms part of what was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel"

1 iThis forms part of the affidavit as was submitted to SARS, the so-called "Khanyane panel" and the so-called
"Sikhakhane Panel"

12 Various letters authored by van Loggerenberg in his official capacity at the time, and a meeting and letters
addressed to General Moonoo and General Dramat of the Hawks and Detective Services will reflect this, In
addition, he drafted a letter for the Acting Commissioner which to my knowledge was utilised to brief the President
of South Africa in this regard during Febi'uai'y 2014.

13 "This e-mail was followed by a direct apology from her to Mr Van Loggerenberg.

14 A specific text message sent by Ms Walter to Mr Van Loggerenberg in January 2014 clearly demonstrates this,

15 This was clearly incorrect in light of the fact that they only met in 2014

17 This forms part the so-called "Khanyane panel" and the so-called "Sikhakhane Panel" and is recorded in text
messages exchanged.

18 This forms part of the so-called "Sikhakhane Panel" and a copy of this email was attached as annexure.

19 This forms part of what was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel" as well as the Inspector General of Intelligence

20 The interview was recorded by the !GI and these narratives should be available to the JSCI.

21 Special Projects Unit,National Research Group and lastly High-risk Investigations Unit

22 Ms,Walter confirms this in text to Mr Van Loggerengberg. This was submitted to SARS,the so-called "Khanyane
panel" and the so-called "Sikhakhane Panel"

Transcribed from PDF.

Issued by the DA, April 23 2015


UU U

Dear Commissioner,

In Re: The Report of the Sikhakhane Panel of

1. I appeared before the Sikhakhane on two occasions 19 September and on 24

October 2014. The first interview consisted in a generic description of the context

5 for enforcement at SARS. The main points I relayed to the panel are reflected in

paragraphs 43 and 44 of the report.

2. During the second interview I provided the Sikhakhane Panel with a written
submission, supported by numerous annexures. After the interview a written
supplementary submission, also supported by annexures, was provided to the
Panel that dealt with issues that were raised during the interview and may not
have been fully canvassed in the initial submission.

3. I believe that the report of the Panel as it stands cannot be considered final and

is not ready for publication for reasons that I outline below. This note does not
deal with each and every finding in the report but only those aspects that are
is suggested to be eminently open to challenge.
4. It is important to understand the background to the appointment of the
Sikhakhane panel and the mandate given to it.
4.1.During May 2014 Ms Belinda Walter made a number of allegations against
Johann Van Loggerenberg, SARS Group Executive: Projects, Evidence
20 management and Technical Support. Consequent thereon, the Acting
Commissioner for SARS appointed a 3 person panel ("the Kanyane panel") to

conduct a fact-finding enquiry into the allegations. The Kanyane panel


was instructed to determine and report on the consistency, reliability and
credibility of the facts associated with the allegations.

25 4.2.The report of the Kanyane panel stated that it makes no definitive adverse
findings against Mr Van Loggerenberg, and the panel in its conclusions
stated, inter-a/ia, the following:

1
"We are unable to conclude that the evidentiary material presented by Ms
Walter in support of the allegations is credible, especially in circumstances
30 where the allegations are denied by Van Loggerenberg."

"Our recommendation is that, unless Ms Walter's allegations are not disputed


or corroborated by other in formation to which we have had access, they
should not be used as a basis upon which to grant a decision whether or not
they disclose a prima facie basis for further investigation..."

35 "In view of what we have said above regarding the insufficiency of credible
reliable evidentiary material to support Ms Walter's allegations, we cannot
conclude that there is a prima fade basis for the acting Commissioner to
institute a formal investigation of these allegations, unless these allegations
are corroborated at a later stage."

40 4.3.Although the Kanyane panel did not make any finding of wrongdoing or
breaches of the law by Mr Van Loggerenberg, since the matter had come
under public scrutiny, and having regard to the importance of protecting the
integrity and credibility of SARS as an institution and maintaining public 'trust
in SARS, the Acting Commissioner decided to appoint an external panel ("the

45 Sikhakhane panel") to investigate the allegations in depth.

4.4The written terms of reference of the Sikhakhane panel required it to

investigate and, where appropriate, to make findings in regard to the multipe


allegations of impropriety made against Mr Van Loggerenberg (and in respect

of which the Kanyane panel was unable to make any findings).

50 4.5. The mandate and function of the Sikhakhane panel was certainly not merely
to gather evidence and to report on whether or not evidence exists to support

the allegations made. The Sikhakhane panel was required to critically assess

and evaluate all available evidence and to determine whether adverse

2
findings against Mr Van Loggerenberg, based upon the allegations made by

55 Ms Walter, could properly be made.

4.6.Ms Walter made various "allegations". An "allegation" is an unsupported


assertion or a statement by a party of what he/she undertakes or intends to
prove. On the other hand, a "fact" is something that has actual existence,
something which actually occurred, or a piece of information which has
60 objective reality. In order to establish whether an allegation is a fact, evidence

relating to and supporting or contradicting the allegation must be considered


and evaluated. "Evidence" is not simply allegation, but factual material which

might prove or disprove the allegation in question.

4.7. Evidence can consist of oral testimony (either under oath or not), an unsworn

65 written statement, an affidavit, a document, a photograph, a recording, or


something similar. Evidence not given under oath generally carries little
weight. It is also well established that the existence of a document does not
constitute proof of the correctness of the content of the document.

4.8. Courts of law and tribunals which are called upon to investigate and report on

70 allegations, make "findings of fact" based on evidence, and draw conclusions


based on those factual findings and the law. A statement by a court or a fact-

finding tribunal that certain evidence exists is neither a finding of fact nor a

final conclusion.

4.9."Prima fade evidence" is generally accepted by courts and fact-finding


75 tribunals to mean evidence which, in the absence of rebutting or contrary
evidence, may reasonably justify a finding in favour of the party making an
allegation. The existence of prima fade evidence to support an allegation is
of little significance where there is rebutting or contrary evidence. In such a
case, any finding which is to be made must take all the available evidence

80 into account, and it is the factual findings based on a critical evaluation of the

available evidence which is relevant.

3
4.10. In the matter of Betha and others v BTR Sarmcol 1998(3) SA 349 SCA at
page 405, the South African Supreme Court of Appeal stated that primary

facts are facts which are directly established by evidence, whereas


85 secondary facts are facts which are established by inference from the primary

facts, and that the drawing of an inference for the purpose of establishing a
secondary fact is also a "finding of fact".

4.11. With regard to the drawing of inferences, our courts have repeatedly quoted
with approval the following statement made by the English House of Lords

90 (the highest court of law in England): "Inference must be carefully


distinguished from conjecture or speculation. There can be no inference
unless there are object of facts from which to infer the other facts which it is
sought to establish. But if there are no positive proved facts from which the
inference can be made, the method of inference falls and what is left is mere

95 speculation or conjecture."
4.12. The South African courts have also consistently affirmed that in considering

a finding of fact made by an administrative tribunal (which is what the


Sikhakhane panel was), the court will interfere with and overturn a finding of

fact if there is not a rational objective basis which justifies the conclusion.

100 4.13. Insofar as the Sikhakhane panel reported that "prima fade evidence exists",

without critically evaluating all the available evidence and assessing the
weight and veracity which should be attached to the evidence, and failed to
make findings of fact, it has failed to fulfil its mandate, and no reliance could

or should properly be placed upon its report.

105 4.14. The publication by SARS of what may incorrectly be interpreted as "findings

of fact" and "conclusions of law" made by the Sikhakhane panel carries the
grave risk that this may be held to constitute admissions by SARS of the
correctness of what the Sikhakhane panel has stated.
5. According to paragraph 57 of the report, the Panel extended its mandate to
iio inquire into the legality of the establishment and the operations of the National

4
Research Group (NRG). The Panel based this decision to extend its mandate on
what was reported in the media.

6. Paragraph 57 of the report states that: "Shortly after the panel was appointed and
commenced its work, the media reports escalated and alleged the existence of a
us covert unit (my emphasis) that had been operating at SARS. By this time, we had
already interviewed some SARS officials, including Mr van Loggerenberg. It must

be stated that that the existence of such unit in any form was not specifically part
of the terms of reference. However the terms of reference extend, in our view (my

emphasis), to the consideration of the existence and operations of a covert unit,


120 to the extent that had we not considered such issues once they become
apparent, we would have failed in our obligation to fully respond to our mandate"
7. The extension of the mandate into the legality of the NRG is procedurally and
substantively problematic. I will deal with that in more detail below. In addition, as
is shown in sub-paragraph 4.13 of this note, the Panel has fallen short of
125 discharging its stated mandate as defined in the Terms of Reference.

5
8. The procedural deficiencies in the extension of the mandate
a. Van Loggerenberg was not involved in the formation of the SPU and
the NRG. He only took over as the manager of the NRG in 2008.

130 b. Mr Pete Richer was not called to appear before the Panel despite the
fact it was he who was instrumental in the conception of these units, in
consultations with the then National Intelligence Agency (NIA). It does
not appear from the report that the Panel had interviewed Mr Janse
van Rensburg who was the manager of the NRG during 2007 and the

135 early part of 20081.

c. When extending the mandate the Panel did not inform SARS or any
person interviewed, of their intention to investigate the legality of the
establishment or the operations of the NRG. In fact, the report states

that most witnesses had already been interviewed2.

140 d. If the Panel considered the legality of the establishment of the NRG
germane to their inquiry the Panel would have had nearly a month
within which they could have raised the questions with SARS. The
Panel gave no indication during this period that the legality of the NRG

would be a material aspect of their inquiry, nor did the Panel indicate

145 so at my appearance before them on 24 October 2014.

e. Given that the genesis of these units lay in the period between 2006 to
2008 and thus reaches back to previous Commissioners, Ministers and
Deputy Ministers of Finance, it would seem prudent and procedurally
proper for the Panel to have called for representations from these
150 parties. This was not done.

f. The Panel was not mandated to make recommendations.

1
Refer to sub-paragraph 74.4 of the report, which states that: "the unit was called NRG and was led by an
operative referred to as Skollie...under the management and guidance of Mr Pillay". Skollie is a nickname for
Andries Janse van Rensburg.
2
Paragraph 57 of the states that: "by this time, we had already interviewed same SARS officials, including Mr
Van Loggerenberg",

6
g. The decision to extend the terms of reference is unilateral and no
reasons are mentioned in the report for this extension except citing
media reports. Paragraph 14 of the report states, amongst other things,

155 that "the Panel met with Commissioner Moyane.. . .and confirmed its

terms of reference with him". It is therefore fair to assume that the


Commissioner did not extend the Panel's terms of reference. The

terms of reference cited in paragraph 13 of the report are identical to


the terms of reference that the Acting Commissioner had determined.

160 Paragraph 21 of the report states that "during the investigation [the
Panel] sought to confine itself to the terms of reference".

h. The Panel's broad objectives are stated, amongst others, in paragraph


38 of the report as: "it was crucial ... to makes a careful assessment of
what works within SARS, what is to be preserved and encouraged to

165 grow and develop, as well what is to be discarded'. Such an expansive

objective can certainly not be read into the Panel's terms of reference.

I. The Panel proceeds to state in paragraph 61 that "the existence of the

unit was not volunteered to us". This is in direct contradiction with


paragraph 43.4 the report which states that in my first interview with

170 them I explained that ". . SARS, through its highest office, approved the
.

creation of a group which was known by different names, including the


Tiger Group3, Special Projects Unit, the NRG and later, the High-Risk
Investigation Unit" (my emphasis). This is but one example, as we
show with more examples below, where the report's tendentious
175 reasoning is revealed.

Although my recollection cannot be certain, it is unlikely that I would have used the term, "Tiger Group" as
no such unit ever existed. There was however, a joint operation with the then NIA which was named
"Operation Tiger". The nomenclature of the various units that existed in SARS since 1998 is contained in my
initial submission to the Panel.

7
j. My interview with the panel, where the aforementioned information was
provided, took place on 19 September 2014. The media report referred

to by the Panel only appeared on 12 October 2014.

k. Once the Panel had decided to inquire into the matter, SARS was not

180 called upon to make representations to it in this regard. Nevertheless,


the submission presented to the Panel by me contains ample evidence

of the pains for governance that SARS took in establishing the NRG
and related units. This includes, but is not limited to, consultations with
the intelligence services, seeking Ministerial approval and adhering to

185 SARS internal procedures. This is part of the evidence bundle that was

presented to the Panel.

I. Among the evidence presented to the Panel are documents relating to

an investigation that was conducted by the then National Intelligence


Agency on the same matter. The report gives no indication how this
evidence was regarded by the Panel. I informed the Panel that the NIA

had informally told me, on two occasions, that their investigations could

not find substance to the allegations contained in the various so-called


"intelligence dossiers" which have been circulated over many years
which morphed depending on political exigencies. The NIA, however,

195 would not furnish me with a written report.

8.1. The substantive deficiencies in the finding of illegality


8.1.1. Flawed reasoning on organised crime
i. In paragraph 45 of the report the Panel states — "the real question

200 however is whether SARS in its current form has the statutory power to

investigate organised crime. In other word, what is the enabling


statute?"

ii. Nowhere in the preceding paragraphs of the report is there a distillation

of the facts and law that could reasonably lead to the question in

8
205 paragraph 45. Having stated the legal question in paragraph 45, the
report does not explain how they reached the conclusion nor does the
report explain the implications of such conclusion for the matters in
which they had to enquire. In my lay opinion this statement betrays a
lack of due diligence in reading the law on the part of the Panel and the

210 question itself is absurd. It is an established principle in law lby statute


and by judgements of the court, that where a tax and customs offence
may have been committed it is a prerogative of the Commissioner to
investigate the tax or customs crime. That a person may have acted in
concert with another in committing a tax or customs offence cannot by

215 simple logic be precluded from an investigation simply by the fact that
they have acted in concert. Organised crime refers to several persons
acting in concert for a common purpose in a manner that transgresses

established law.

iii. The judgment in the matter of The State v Schabir Shaik, delivered on

220 7 December dealt with the Commissioner's authority to

investigate whether a criminal offence under the Income Tax Act, 1962

had been committed, and the Commissioner's discretion to lay criminal

charges. In this judgment Squires J held:"If there has been an offence


committed by a taxpayer in one or other of those responses to his tax

225 liability for tax then, in the first instance at any rate, it must be the
Commissioner's decision whether to prosecute the offender
or not, because prosecution under the criminal law may not
be necessary or even desirable in the interests of levying
and collectin.g tax5. If the Commissioner ... thinks that a prosecution

230 is desirable, then it would obviously take place under the auspices of

The State v Schabir Shaik and 11 others under case number CC27/04
My emphasis

A
9
the Director of Public Prosecutions, as any other prosecution instituted

by that authority"

iv. This judgement confirmed the existing understanding of the law and
codified an established practice. Pursuant to the SARS mandate of

235 administering tax and customs law SARS has been granted extensive

power to gather information that could lead to the prosecution of tax


and customs offences. I do not intend to present a comprehensive
exposition of such information gathering powers.

v. The only questions that could apply here were:

240 a. whether the NRG had ever investigated anyone for an


offence that is not related to tax and customs laws;

b. whether the NRG had ever arbitrarily of unfairly selected


taxpayers for investigations.

vi. An inquiry into these questions is a factual inquiry and not an

245 interpretation of the law. The Panel was supplied with list of all the
projects that the NRG, the SPU and the HRIU had conducted from
2007 to 2014. In fact, the report in paragraph 70 cites some of the
examples of the investigations. The Sikhakhane report gives no
indication that in those instances the investigations had been into

250 offences that are not related to tax or customs. On the contrary where

an allegation is made that a certain investigation into John

Bredenkamp was for offences unrelated to tax, the passages below

proves the allegation to be untrue.

255 8.1.2. Unproven of an illegal covert unit


i. The report states that the NRG operated as a covert unit or had
elements of a covert unit. Nowhere in the report does the Panel explain

its definition of "covert". To do so, would have required the Panel to


have regard to the NSIA, RICA and any other relevant law. It would

10
260 also have had to consider the practices within the intelligence services
and compare the work of the NRG and related units to the commonly
accepted legal standard and operational practices of SARS. We found

no such diligence in the report. We are expected to take the Panel at

its word. In this note we have already addressed the distinction


265 between evidence and an allegation. We will not repeat it here.

ii. In the absence of a cogent definition of what the Panel considered and
due to the lack of transparency in the report about what factual
considerations the Panel made, we can only speculate on their
reasoning.

270 IiI. I suspect that in reaching this conclusion about the "covert" nature of
the NRG, the Panel made three errors, namely:

a. It relied on the untested allegations from certain quarters,


including the media;

b. It conflated the unit as was contemplated in 2007 and the unit

275 that came to be after it became clear that the NIA would no
longer host the contemplated unit (they are not the same); and

c. The Panel did not distinguish between discreet investigations


and the covert gathering of intelligence which is aimed at
national security.

280

9. Deficiencies in the recommendations of the report


9.1.The terms of reference and mandate of the Panel did not include the making
of recommendations as to any action which should be taken based on
findings of fact made by the Panel.

285 9.2.Furthermore, the Panel has failed to analyse and critically evaluate the
evidence and disclose the basis for its findings and recommendations, If the
Commissioner were to decide to accept and act upon the Panel's report and

the recommendations made, and were any such actions to be subjected to a

11
legal challenge, it would be difficult for the Commissioner to justify the taking

290 of the action in that the Panel in its report has failed to set out the material
evidence which it received, has failed to disclose what evidence was
accepted or rejected, and has failed to set out the factual findings on which

its conclusions and recommendation are based.

9.3.Be that as it may, the findings and recommendations in themselves are


295 flawed, as shown below.
9.3.1. Paragraph 190.4.1 recommends that: "[t]he activities and functions of
this unit must be specifically investigated by the Inspector General [for
Intelligence Services!6 (IGI)". This cannot be correct in law as the lGl has

no jurisdiction over SARS. In fact, the law limits its jurisdiction to the

300 intelligence services. The services are defined in the Inspector General
for Intelligence Services Act as "the Agency, the South African Secret
Service, the Intelilgence Division of the National Defence Force and the

Intelligence Division of the South African Police Service".

9.3.2. At any rate, SARS has cooperated with the IGI investigation that was

305 instituted by the Minister of State Security on 13 August 2014. As Acting

Commissioner for SARS, I met the IGI on 19 August 2014. Several


SARS officials have appeared before the IGl who inquired into the same

matters as did the panel. It is not clear what new issues the Panel
proposes to be investigated by the IGI. We have received reports from

310 the various officials that appeared before the lGl which indicate that the
focus of the exchanges between them and the IGI investigators was
largely on the NRG.

9.3.3. Paragraph 190.4.2 recommends that the "Commissioner should


recommend to the President that a /udicial commission of with the

6
The Sikhakhane report refers to the Inspector General which we deemed to mean the Inspector General of
Intellligence

12
315 powers of compulsion in terms of section 3 of the Commissions Act 8 of

1947 should be appointed'.

9.3.4. To many persons, instituting a Commission of Inquiry holds the


promise of a cathartic resolution. In practice, the desire for resolution is
rarely satiated but the promise retains its power in public consciousness.

320 It is therefore understandable that the Panel should have found this
option attractive. But, we must urge caution here. A Commission of
Inquiry is a legal instrument at hand for the President with specific uses
and limitations. Secondly, one must always guard against overreach — to

reach, as it were, for a four-pound hammer to crush an ant.

325 9.3.5. For these reasons, what follows here is a rather lengthy treatment of
the possibility of instituting a commission of inquiry.

i. Section 84(2)(f) of the Constitution confers on the President the power

to appoint a commission of inquiry. A commission of inquiry is a


mechanism through which the President can obtain information and

330 advice.7

ii. Section 1(1) read with section 3(1) of the Commissions Act8 grants the
President the statutory authority to confer powers of compulsion on a

commission of inquiry for the purpose of ascertaining any matter


relating to the subject of its investigation. This includes the power to

335 summon and examine witnesses, to administer oath and affirmations,


and to call for the production of books, documents and objects. A
commission of inquiry appointed by the President and vested with the

powers under the Commissions Act remains an investigative body


whose primary responsibility is to report to the President upon its

340 findings.9

President of the Republic of South Africa v SARFU 2000 (1) SA 1 (CC), para 147.
8
SARFU (supra), para 155,
S v Mulder 1980 (1) SA 113 (T), at 120 F-G; SARFU (supra), para 163,

13
iii. In the present circumstances, a commission of inquiry could notionally

be utilised to investigate the facts and to advise the President


regarding the alleged conduct referred to in the report.

iv. It is not possible to say whether the President would be agreeable to

345 such a request but, for the current purposes, assume that he would. It

could also be assumed that in any event, a reasonable period of time


would be required for SARS to approach with the President and for the
President to consider SARS' request and to make a decision. Even if
this preliminary step occurs reasonably promptly, it would still have an

350 effect on the overall timing of the commission of inquiry.

v. Similarly, a reasonable period of time would be required for the

President to make the proclamation in respect of the Commission.

vi. Under section 2 of the South African Revenue Service Act, No. 34 of
1997, SARS was established as an organ of state within the public

355 administration, but as an institution outside the public service. Since


SARS is an organ of state, therefore allegations that the Commissioner
wishes to investigate would constitute a matter of public concern within

the meaning of the Commissions Act. Accordingly, the President

would be entitled to make the Commissions Act applicable to a


360 commission of inquiry, if one were appointed.

vii. A commission is an important tool when matters of policy are in issue


or where mixed matters of policy and fact are in issue. It is a very
cumbersome instrument to investigate specific factual allegations. But

this has been done before.

365 Viii. Accordingly, while a commission of inquiry could establish the facts
relating to the alleged conduct, such a process may be of limited value

in light of SARS' objectives to maintain its integrity as an institution and

to decisively act against any SARS officials that are implicated in the
conduct described in the report.
(

14
370 9.3.6. In addition, the recommendation for the institution of a Commission is

problematic for the following reasons:

i. The Sikhakhane Panel had been appointed to investigate n-depth all


matters that fell with their terms of reference. Is the recommendation
an implicit admission that the Panel has not discharged its mandate?

375 The recommendation does not specify the issues that a commission of

inquiry should look into that the Panel could not have.

It also does not make clear how an issue involving 26 members of staff

at SARS could be elevated to a presidential inquiry.

iv. A Commission of Inquiry will not be in any different position than that of

380 the Panel, except that a Commission of Inquiry would have compulsion

powers. Nowhere in the report does the Panel state that not having
such powers influenced the outcome of the report.

v. Paragraph 16 of the report addresses the matter regarding the lack of


powers of compulsion of the Panel and paragraph 17 of the report

385 indicate the number of people who interviewed by the Panel.

Furthermore paragraph 17 states: "although several persons were


in v/ted to appear, others made the request. As a result of time
constraints not everyone that made such request was granted the
opportunity to make oral submission" Therefore, the Panel by its own

390 reckoning, did not suffer from a shortage of witnesses. In fact, it had
the opposite problem of more witnesses volunteering to appear before

it than it could accommodate.


9.3.7. Paragraph 190.4.4 recommends that the "SARS should
forensic investigation into all the settlements with tax payers (sic) that

395 had been under investigation since 2005'.

This recommendation is not founded on any evidence or conclusions


contained in the report. The report also does not say what the purpose of
c

15
such investigation will be. Presumably, the suggestion is that those

400 settlements should be reconsidered, reassessed or re-evaluated. The

other assumption is that the recommendation may lead to a finding of


undue influence of a SARS official connected to a NRG or related entities.

ii. Be that as it may, one would have expected the Panel to proffer factual
findings that demonstrate that the NRG (or other related units) conducted

405 investigations in a manner that warrants the suggested investigation. No


such findings are proffered in the report.

iii. More importantly, the Commissioner's attention is drawn to provisions of

the law in respect of settlements.

iv. Having regard to the relevant sections of the Income Tax Act (ITA) and the

410 Tax Administration Act (TAA), I need to point out that any consideration to

amend or alter a settlement is against the law. I will deal with that in more

detail below.

v. Section 148 of the TAA deals with the finality of a settlement agreement
and states: "The settlement agreement represents the final agreed position

415 between the parties and is in full and final 'settlement' of all or the
specified aspects of the 'dispute' in question between the parties."

vi. Before the TAA came into effect in October 2012, similar provisions
existed in the ITA. Section 88 dealt with settlement of disputes and states:

"The written agreement will represent the final agreed position between

420 the parties and will be in full and final settlement of all or the specified
aspects of the dispute in question between the parties." — section 88F(4)

vii. It cannot not ne that the Panel intended an action that contravenes the
TAA

viii. This above is a further indication of the Panel's lack of due diligence in

425 considering tax and customs law.

10. Deficiencies in the procedure and methodology of the Panel

16
10.1. The Panel ignored, overlooked or did not consider
significant amounts of evidence presented to it and gave
430 credence to unfounded allegations.
i. Paragraph 23 of the report states "the evidence was in some instances

in tensely voluminous. We were presented with volumes of documents


some of it were lengthy. We have no doubt that such in formation will
become absolutely critical in a much more extensive inquiry who's

435 times frames are not as limited'.

ii. While it is clear from this statement that the Panel did not consider
everything that was placed before it, it is not clear which evidence was

overlooked and the reasons for ignoring certain evidence.

iii. It is however clear from the findings, in sub paragraph 186.1 and

440 paragraph 188 and paragraph 189, that the Panel overlooked
evidence that would have, at least, cast doubt in its findings or
neutralised them completely. I refer the Commissioner to paragraph 26

of my submission to the Panel which makes certain averments that are


supported by objective facts. The report does not make clear why

445 these were overlooked, or if they were considered, why they were
disregarded. If the Panel had any reason to doubt the averments or
the facts provided in their support, they did not inform me.

iv. That the Panel overlooked the submission I made to it, is made clear
in paragraph 14 of the report which states "Mr P//lay provided the

450 Panel with two sets of submissions. Of particular reference is the


supplementary submission which deals with issues related to the
NRG, it's resourcing and its fundinçJ'.

v. It is difficult to escape the impression from the above statement that


the Panel had discarded my initial submission in its entirety, however

455 delicately the report makes the point. The supplementary submission
contained two reports, being a finance report on issues raised by a

17
Sunday Times article relating to the acquisition of equipment for the
NRG and a report on equipment that Danie le Roux had handed over

to Tony Apsey.

460 vi. Paragraph 65 of the report makes the observation that "evidence was
presented suggesting that certain electronic devices were indeed
recently returned to SARS". This remark is meant to substantiate the
conclusion that members of the NRG and related units had been
involved in what seemed like 'covert' operations and the electronic

465 tracing of vehicles and individuals. If the panel had regard to the report

on the equipment returned by Danie le Roux it would have noted that


the equipment included the following: 1 Cannon camera in blue

canvas carry bag, I digital recorder in Pelican case, I set of Njala


voice transmitters composed of 4 units in Pelican case, 1 Sting Button

470 video recorder in protective case.

vii. The finance report makes clear that neither the NRG nor any other
business unit in SARS acquired equipment to the value (R546million)

or the type that was reported in the press.

viii. The report, regarding the equipment from Danie le Roux, makes clear

475 that the equipment referred to therein had been acquired in 2006 for
purposes of combating theft and corruption within SARS.

ix. The conception, establishment and the legality were addressed in the

initial submission. None of the reports that were contained in the


supplementary submission relate to the conception, establishment and

480 the legality of NRG's operations.

x. As stated above, Mr le Roux had acquired this equipment for purposes


of combatting theft and corruption within SARS. He was not then a
member of the SPU and the NRG had not been established yet. When

Mr le Roux left the Anti-Corruption Task Team he joined the Customs

485 Modernization division and had the custody of the equipment with him

18
throughout this period. Mr le Roux only joined the NRG in 2007 and
never became part of the High Risk Investigation Unit (HRIU). If the
Panel had any reason to doubt the submissions dealing with the return

of equipment, the Panel should have considered the evidence


490 presented, weighed up the evidence, and make a factual finding
thereon and clearly explain what evidence could not be accepted as
fact. Instead, the Panel discarded the entire submission dealing with

the return of the equipment.

xi. It would be a great stretch of imagination to believe that Mr le Roux

495 had acquired the equipment under the guise of combatting internal
corruption, in contemplation of a yet-to-be established "covert" unit.
Looking at the list of equipment itself, it is hard to imagine that it could

conceivably be used for purposes described in paragraph 65.

xii. It would appear therefore that even where the Panel had considered

500 the evidence before it, in this instance, it proceeded to misconstrue the

facts to suit a preconceived notion.

xiii. Secondly, paragraph 81 of the report states — "one individual that was

later absorbed into SARS indicated that he found no evidence that any

of the information that he gathered had found its way into existing

505 SARS investigations".

xiv. The paragraph cited above, like in many instances in the report, has
appearance of being accepted as a fact. The Panel seems to have
adopted the testimony of the witness without demonstrating how they

consider it to be credible.

510 XV. I had the benefit of reading Mr Nyaphudi's report provided to the Panel
that led to the remarks in para 81. Specifically, the report states that:

"[f]or example, I was tasked to work on John Bredenkamp and


prepared a dossier on his cigarette smuggling and Arms deal
commission. I later suspected that the reason that I was allocated the

19
sis case was to get access to the enigmatic Fana Hlongwana". He then
states that: "When / later joined NEU / made follow up on the cases
that I worked on while at the NRG. None of the evidence/intelligence
that I collected reached the NEU."

xvi. The fact is that the investigation into the business of John

520 Bredenkamp and Master International led to an assessment of


R78million. SARS had confiscated about 45million cigarettes during a
raid on Bredenkamp's businesses. In addition, 480 tons of tobacco
was seized and stored. Bredenkamp attempted to pre-empt the
collection of debt by putting Masters International into voluntary

525 liquidation. SARS however approached the High Court and took over
the liquidation. Three criminal cases were also handed over to the
NPA. A letter of demand was issued to the value of R69million for
customs duties. Information gathered to prove that John Bredenkamp

was managing Master International was submitted to the legal division

530 of SARS with the intention of holding Mr John Bredenkamp personally

liable.

xvii. The above explanation clearly refutes what the Panel gleaned from
Nyaphudi's report. The Panel could have asked for this information
from SARS and SARS would have obliged.

535 xviii. There are further problems with para 81:

a. The first five lines of the paragraph describe how the NRG used
to work, that is, they were divided into "cells and sub-units" and
that "each cell did not know what other cells were doing." It then

concludes with the allegation from Nyaphudi. It is not

540 immediately apparent what the connection is between the


description and the allegation.

b. Secondly, the formulation "absorbed back into SARS" leaves


the impression that Nyaphudi had left SARS at some point. This

20
is not the case. Nyaphudi had been a SARS employee before

545 the NRG was formed. NRG was a business unit within the
enforcement division of SARS. When he left NRG to join the
National Enforcement Unit, it was a transfer within SARS.

xix. Another instance where the report states an allegation without having

verified it appears in paragraphs 66 and 69. Paragraph 66, of the

550 reports states: "some of these members1° had been asked by one of
their handlers to pose as drivers to political figures like Mr Julius
Ma/ema and Mr Fikile Mba/u/a. They did not know how this task
related their tax functions (sic), but performed them as they had been
told never to ask questions". Further, paragraph 69 states "the covert

555 unit operated outside of the traditional SARS. and disguised


. .

themselves as drivers to certain political figures. This was regarded as

un/awful and outside of the SARS mandate by some members of the

unit.11"

xx. When considering the passage above, one must have regard to sub-

560 paragraph 13.10 of the report referring to the Terms of Reference for
the Panel which requires the Panel to investigate: "[amy act of
impropriety in general or in terms of any law as well as any allegation
that may come to light in the course of the Further, the

Panel was aware that the contents of the report would be made public.

565 XXI. SARS would never give, and has never given, an instruction to an
investigator or an auditor to disguise their true identity to a taxpayer.

Therefore, the Panel should have considered an alternative

explanation for this conduct such as whether these members acted on

a frolic of their own. Furthermore, the Panel could have applied

10
Presumably, members of the NRG
My emphasis

21
570 elementary tests to verify their allegations. They could have asked the

witnesses whether:
a. They had prepared and submitted any report arising from their
activity;

b. The members made any claim to recoup their travel and

575 subsistence expenses;

c. These activities were part of any of the operations that had been
disclosed to the Panel. If not, what are the alternative operations;

d. Given their express doubts about the legality and procedural


propriety of the instruction, did the members report this to anyone

580 else including Mike Peega's manager.

xxii. Of the four reports that were presented to the Panel, only one makes
mention of posing as the bodyguards and posing as drivers to political

figures. This is the report of Japie Tshabalala. Nowhere in

Tshabalala's report does he express doubt about the legality and

585 procedural propriety of the instruction. It also does not state who gave

the instruction. We must presume that when the Panel's report speaks

of "members" in plural and refer to the doubts that these members had
expressed, the information must have been given as part of the
interviews. Once again, this is not immediately apparent in the report.

590 XXIII. The Panel should have distinguished between the written statements
and the oral testimony of the witnesses in determining what weight it
attaches to either form of evidence. This is not transparent from the
report. Read carefully, Tshabalala's report provides less certainty than

paragraph 69 would purport. In my view, the certainty expressed in

595 paragraph 69 exceeds the weight of the written evidence presented to

the Panel. It would appear that having decided, without foundation,


that the NRG was a covert unit, the Panel had to shoehorn the
testimony into the conclusion.

22
xxiv. Paragraph 67 states "Three of the witnesses confirmed that during the

600 operations, they had been asked to use fake SARS cards, bearing
false names"

xxv. This is another vague allegation that lacks essential particulars that
are necessary to verify it. Take note of the word, "confirmed'. A reader
of the Panel's report would be under the impression that the Panel had

605 established the existence of fake ID cards through its own

investigations. This is not so. Instead, it is but one of the allegations


contained in the unverified reports from some members of the unit.
Take note, too, of the expression "during operations". The so-called
operations are not specified. It also does not specify who had given

610 such an instruction.

xxvi. Had these allegations been put to SARS, SARS would have informed
the Panel that once the unauthorised acquisition of the fake access
cards were discovered, the manager of the unit at the time, Van
Loggerenberg, issued final warning letters to those who were
615 responsible for it — Janse van Rensburg and Frans van Niekerk. Final
written warnings are expunged after an effluxion of time. However,
Van Niekerk still works for SARS and can attest to this fact. But for the

Panel, the die was cast.

xxvii. It is clear that some members retained the said fake card. SARS

620 management, at the time, should have assured that all fake cards
have been returned. I concede that this is a shortcoming in managerial

diligence.

10.2. The report attributes equal evidential value to all evidence placed before

625 the Panel regardless of whether it is from unnamed sources, unsworn


statements, oral submissions as well as affidavits.

23
I. The report does not demonstrate any instance where the Panel
weighed up the evidence provided against each other to determine the

weight that should be attached to any evidence and whether such

630 evidence should be accepted or be regarded with caution or be


disregarded.

ii. The Panel relies on unnamed sources. Any reliance on unnamed


sources should be treated with utmost circumspection weighed up
against the right of an individual. If a report relies on an unnamed

635 source the limited credibility of such a source must be significantly


outweighed by the evidential value of the information that is relied on

by the Panel.

iii. The hierarchy of evidence determines the reliance that a finder of fact

must place on the evidence that is presented to him/her. A sworn

640 statement or affidavit to which a witness is prepared to provide oral


testimony is the most reliable form of evidence. This is so because
there is sanction of perjury if the author of an affidavit is found to have

lied.

iv. The next level of reliance is placed on an unsworn statement to which

645 the witness is prepared to give oral testimony. An unsworn statement


to which a witness would not give supplementary oral testimony is not
evidence but a mere allegation. The report grants the reader no basis

to judge which evidence the Panel deemed more reliable. Instead,


unnamed sources are given credibility.12

650 v. I submit that the report in paragraphs 64 — 69 places great reliance on

allegations that can easily be contested, neutralised or disproved were

the allegations to be examined.

12
See sub paragraphs 42.6 and 42.7 as an example

24
10.3. The report makes facile psychological commentary that should have been

655 avoided.

The Panel for instance refers to how SARS were "hypnotized" by van
Loggerenberg perceived power and charm.131t also refers to high level of

"suspicion and cynicism"4entering the world of "intrigue, deceit and


subterfuge" and to an atmosphere of fear that the existence of former
660 intelligence operatives induced in SARS. No facts are proffered to support

these observations.

10.4. The report contradicts itself.

i. As I have already stated in paragraph 2.3 above, the report states that
the existence of the NRG was not volunteered to the Panel until it was

665 revealed in the media.15 This is repeated in paragraph 61.16 This is


contradicted by the report itself in sub paragraph 43.4.

ii. In sub paragraph 42.1 the report accepts as fact that Ms Walter cut
her formal ties with the SSA at the end of 2012. Yet in sub paragraph
42.3 the report states Ms Walter also revealed to the panel that she

670 initiated the formation of FITA as part the project of the SSA. FITA was

established during the latter half of 2013.

10.5. witnesses were not called

i. The finding in sub paragraph 188.1 that "the establishment of the unit

675 without having the requisite statutory authority was indeed unlawful',
reaches back to previous Commissioners of SARS, Ministers and
deputy Ministers of Finance. It would have been prudent for the Panel

to have obtained their perspectives.

13
Paragraph 24
14
Paragraph 24
15
Paragraph 54
"We express our disappointment that the existence of this unit, whose name or names we shall return to
later, was not volunteered to us in the early stages of the investigation"
ii. The most blatant omission however is in the failure to call Mr Pete

680 Richer to appear before the Panel despite fact that he was instrumental

in conceiving the NRG and the consultations with the then NIA.

iii. Among the list of interviews, Mr Janse van Rensburg, the erstwhile
manager of the NRG is not named and the report does not

state whether he'd been called and refused or he wasn't called at all.

685

10.6. The report introduces a new factual issue without foundation


Paragraph 188.4 states that "there is prima fade evidence that the existence

of this unit had the real possibility of undermining the work of those agencies
tasked with the investigation of organised crime and the collection of
690 intelligence" In the preceding passages, we've already showed how "prima
fade" evidence is not a "finding of fact". The allegation contained in the
paragraph is introduced without any evidence referred to.

11 .The cumulative effect of the aforesaid is to render the report a mere opinion and

most definitely not a finding of fact.

695 12.Based on the procedural, substantive and general deficiencies in the report as

detailed above, I am of the view that the report poses a significant and
unwarranted risk for SARS if the report were to be published in its present form.
The report also has the potential to tarnish, not only the reputation of SARS, but
also the reputation of those who are implicated by the unfounded opinions and

700 recommendations of the report.

13. In light of the above, I recommend that the report, together with this response and
all other relevant material be referred to a retired judge from the Supreme Court
of Appeal. Every party that is affected by the issues in the report should be
allowed to make representations to the judge. The judge would then make factual

705 findings available for the Commissioner so that he can decide on the best course

forward.

26
CONFIDENTIAL
"F

PROJIECT BROKEN
ARROW

CONFIDENTIAL
PROJECT BROKEN ARROW REPORT
OUTLINE:

1. Purpose of the report.

2, Project Broken Arrow report.

3. Time-lIne (incorporated)
PURPOSE OF

The purpose of this report is (as a matter of urgency):

+ To bring to the attention of Mr. Ivan Pillay (IP) and Mr. Johann van Loggenrenberg (JVL) both of
SARS, organized efforts by certain identified individuals to destabilise, disorganize and ultimately
create havoc and damage to the reputations and stability of the targeted functionaries and that
of the SARS as a state institution.

Special Request:
+ I humbly request that the Information that Is written below be treated with the utmost caution
and confidence, as is my identity.
• The people that are involved here and mentioned in the report are extremely dangerous and
have connections to powerful resources.
Project Broken Arrow Report
1,

1.1.1 have met on several occasions this year (2009) with former SARS employee Mike Peega (MP),
whereby he duly informed me of his intentIons to merge with other individuals in order to
'expose' and possibly 'take care' of P and JVL and a host of other significant individuals in the
'NRG'. This would ultimately include the then Commissioner of SARS and now Finance Minister
Pravin Gordhan.
1.2, M P spoke of a number of interested individuals Inside the SARS who are more than willing to
combine efforts to target lP and JVL.
1.3. It must be borne in mind that, although the aforementioned names of people were identified,
NO other way of corroboration was actually done.
1.4.The aforementioned individuals have allegedly met on a number of times at different locations
before I could be approached.

2. Time-line of events.

2.1.12-08-2009 — Received call from MP to meet.


2.2.21-08-2009 — MP came to my house and he told me that there were highly influential people
that would like to meet with me. He was referring to Mr. Leonard Radebe (LR),' Mabheleni' Ntuli
(MN)and Bizoski Manyike (BM).
2.3. Later that day, he went to the airport or somewhere in Kempton Park to meet with LR and MN,
Minister Fikile
as MN was scheduled to fly to Durban. MP later mentioned to me that Deputy
Mbalufa was present.
2.4.The following day the on Saturday, he came back to my house in Pretoria East at around
8am and he was driving a greenish Volvo SIJV.
2.5. He told me we were to meet with IR and BM for a discussion.
2.6.We met LR alone at the House of Coffees in Silver Lakes at exactly 10:00 in the morning. LR was
driving a BMW X5 vehicle. BM did not show up.
2.7.Atthe meeting we were introduced by MP and a series of discussions followed. The discussions
were primarily on:
- The 'NRG'.
- The 'NRG's' involvement in gathering intelligence on and targeting several individuals who
belong to the ANC's 'inner circle', particularly in the KZN.
- The 'NRG's' homage to former DSO operatives who were investigating JZ.
- The 'huge' salaries which were given to these operatives. And who, how and why were they
authorized.
It was also discussed that the majority of 'black' operatives were marginalized salary-wise,
especially the cadres of the MKVA (Eric, Timothy and Nora),
- MP's and LR's alleged 'plots' by SARS' management to bring them down. (Reference to the
resignation and dismissal of both).
- JVL's and Danie KrIel's concerted efforts to destroy LR. LR later mentioned that he has
spoken to the Commissioner of the SAPS Bheki Cele about 'looking' Into ways of addressing
Danie.
- LR's contention that 'some people' In SARS have' meddled' in his ultimate departure from
the African Bank.
- The meeting that happened some time ago between LR and the State President Jacob Zuma,
who was continuously referred to as the 'Old Man' in the discussions, It is alleged by LR that
this particular meeting was to 'prove' to JZ that SARS had paid money In IR's account/s to
implicate him in the Dave King saga.
- The organization of key and powerful figures who were extremely not happy with JZ's
appointment of functionaries in government key positions, notably the Minister of Finance
Pravin Gordhan.
2.8. IR informed me that there were 'several' comrades in SARS who were working with him. BM
was notably the most talked about.
2.9. LR then asked us to compile a very comprehensive report about the 'NRG'. This report I was
informed, would be then taken to the 'Old Man' for perusal.

3.

3.1. LR — to facilitate the hand-over of the 'NRG' report to 'Old Man'.


3.2. MP — to collect all data from 'disgruntled' former and current 'NRG' operatives.
3.3.Japple Tshabalala, Eric Khwela, Dillo Nyaphudi, Nora Pitsi and Timothy Mabaso have been
identified as potential contributors to the report.
3.4. Mabheleni —to finance the operations' efforts (cars, resources, money, etc).
3.S.Commisiofler Bheki Cele —look Into ways of 'rewarding' contributors into the Hawks or suitable
units.
3,6. Deputy Minister Fikile Mbalula — 'influence' the decision to be made by the 'Old
Man'.

4.1. Safe house LR told us that we could use one of his townhouses in JKB.
4.2. Laptops, 3G Internet cards, e-mail accounts, cell-phones.
4.3. Dedicated cars for the entire operation.
4.4. FInancial budget for running costs.
0147101532 VEEDIEFSTALMODIMCLLE 5E

SOUTH AFRICAN POLICE SERVICE * SOUTH AFRICAN POLICE SERVICE

CAB NUMBER: . AG

I was also immediately notified the with reference to SectIon 35 of the Constitution of the
of South African, Act 108 of 1998:

1. The reason for my *artest/detentlon/thls intor.ilsw with me.

2. My right to remain silent.

3. That anythIng choose to say may be used in evidence against me in a court of law.

4. That I have the right to consult with an attorney of my choice, end where my Inability to prod uce
the services of an attorney WiN lead to en Injustice, the state will provide ma with the seMces of
an attorney.

5. That I am riot obliged to make a confession or a statement that can by used sasinat me,

I understand these provisions of the Constitution and I now state as folIows:*

I elect to make a statement


- I decline to make a statement
I elect to answer questions
I decline to answer questions
i elect to exercise my right to remain silent
I decline to exorcise my right to reman silent

where not applicable Initial and date)


0147101032 07

SOUTh AFRICAN POLICE SERVICE SOUTh AFRICAN POLICE SERVICE

CAB NUMBER:

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27/81/20e9 PACE 53

SOUTH AFRICAN POLICE SERVICE SOUTH AFRICAN POUCE SERVICE

GAS NUMSER; PAGE/,.....

WARNING STATEMENT SUSPECT

states further voluntarily:


(nwne ol

The decision to make the above statement answer questions la/is not my own.

/
I not aseaufted or threatened in any way to induce me to make the above statement
answer questions,

I not at present under the Influence 01 any alcoholic beverage hand/or narcotic related
suatance.

4J11 eatla led that everything stated was noted down correctly.

that this statement 'and/or answers reflect my version regarding the


matter.

I not have objections to the manner in which this statement was taken down
were put to me.

I with the Interpreter.

Above statement r answers to questions taken down by


Place

Time :

*f

Cdetete where not applicable; Initial and date)


27/01/2009 16:41 0147181032 PAGE 01.

ER, JACOBUS LUBBE


verktaar In Afrikeans onder ead
1.

ER is voiwesse man met ID nr 680704 5188 089, pers&nommer Ek is


Kaptoin in die Suid-Afrikeanse Po edlens en Is geatasloneer te
Modimofle. TeL 014718-1031.
2.

Op 2008-12-24 gedurende die nag hat ek na Vaalwater gereis tydens die ondersoek van 'n
sindikast wat Renosters onwettig jag en die horirigs verwyder, 'n Verdagte voertuig, rool
Toyota Corals met registrasie nommer: HOL 814 NW" sou vermoedetik die verdagte
persona vervoer. ER hat Inllgting ontvang dat die rool Toyota rels vanaf Vaaiwater in die
rigling Melkrivier, Ek hat oak vanaf Vaalwater in die rlgtlng van MeiRrivier gary met 'n
ongamerkte Polislevoeduig. Naby Melkrlvler bet ek 'n maroon kleurlge Toyota voertuig sian
verby my ry met registraslenommer : HLD 814 NW". Die voertuig moas waarskynhlk
omgedraal hat naby MelkrMer en teruggekeer bet na Vaalwater. Ott was ongeveer 05:00 op
2008-12-26. Ek ken sIege een swartman In die Toyota voertuig opinerk. ER hat vermoed
dat die beetuurder van die maroon Toyota persona op 'n pleas afgelaai hat am 'n renoeter te
jag en dat die maroon Toyota ears In Vaalwater sai wag tot by benodig word om die Jagters
op te IaaI. Ek hat teruggekeer na Vaalwater en 'n beriggewer geteak am die maroon Toyota
dop te hou totdot hy wear vertrek. Ore ongeveer 11:00 hat die maroon Toyota baja heastig
vertrek In die rlgthig van MeiRrivier. Ek hat by die Ingang van die lokasle gewag op die
Na 'n kort mkkle hat die maroon Toyota met registrasie HLD 814
NW" vanutt rigllng Melkrlvler In Leseding butte Vasiwater ingedreal. ER kern dat
dear ten minste vler (4) ewartmans nou In die maroon Toyota was, Ek hat in samewerklng
met Veatwater SAPD lade die ultgangsroetes vanuit Vaalwater gemonitor. Kort hiema hat
ek wear die maroon Toyota met registrasle" NW 814 NW opgemerk wear dit Ult die
Leseding lokasle ry en in die rtgtlng van Bulgerivier. Op hlerdle stadium Ron ek siege twee
swartmans In die voertuig opmerk. ER hat Bulgerivier SAPD Inkennis geetel om die maroon
Toyota met registrasle" HOL 814 NW "of" HLD 814 NW" vir my at to trek en die twee
verdate persone vir my ean te hou tot ek by hulie kam.

3.

Inspektaur Mafeto, van Bulgerivier 8APD hat my per radio gekontak en my meegadeel dat
by die verdagte voertuig met regletrasle" HLD 814 NW" afgetrek bet en aen verdagte
gesresteer hot, Ny hat my ook meegedeel dat die tweede verdegte weggehardloop hot.
Met my aenkoms by map. Mafeto hat hy san my 'n verdagte oothendlg. ER hat myself as n
lid van die SAPD geidentlllaeer san die verdsgte dmv my poilsie aanstelIingaertlflkaat. ER
hat dIe verdagte Ingelig liv sy regte. Die verdagte bet homsetf aan my voorgestel as" Mike
Peega". vardagte bet 'n beursie san my getoon met tn eantal kaarla in by.
Bestuurderslisonsie, bankkaarte, SARS Identifikasie keart met 0)7504225404080. Ook in
die maroon toyota voorin was nag 'n ewart beursia wet oR ondersoek hat in teenwoordigheid
16:41 0147101032 02

van Mike Peega. in hierdlo swert beursie was 1n beetturdersilsensie van persoon
Washington Phtri Hierdla kawt was uitgerelk In MaISW1. Dear waS 00k 'n Nedbsnk
bankkaart no. 1876 083 018. Ek hat in die panseildasia 'n TV liaensle gesien In die neam
van Miss M Mhlongo, Po Box 879, Green Side, Oukasle, Brlts, 0250 Ek hat vir die
vardagte Mike Poega gevra wie die verdagte Is wet weggeherdioop hat, wanrop hy gesê hat
dit Is Washington'1. In die teanwoordigheid van Mike Peega Is die maroon Toyota verder
ondersoek. Voorin was 'n pear tskkiea by die bestuurder sowel as 'ri aelfoon. Agter op die
agtarate sitplek was 'rt brood, twee Vaipre SUU waterbotteis (sen vol en die artder hail), een
Ronaqua 1.5 It waterboltai (vol)1 sen 21t Fanta orange (half). Hierdle bottels hat ek versamel
en in 'n forensiese ask geaeei met FSE 302148", Ek hat die bagaslebak
van die maroon toyota oopgemaak In teenwcordlghe(d van Mike Peaga en die
daarvan oridersoek en tilt die voertuig geleal Die volgenda Is gevind:

sen grocit byl, ongeveer 1.5 meter lank, "TUVIGS product service". Die
snykant Is wear skerpgemaak. Kop Is goudkleurlg met Inskiywlng° nmega
drop forged'1

eon .303 jaggeweer met reeksnommer'1 7526". Die geweer hat 'n grendel,
lee rband, bushneli sportvlew 4 x 38 teleskoop op asook magesyn. Die gewser
wee oorgehaai met 'n lewendige rondte in die kamer on tien lewendige rondtes
in die magesyn. Die lewendige rondtee Ba beskvywing: (a) 6 x skerppunt
ammunisle wearvan esri so punt met 'n tang vermoedeilk afgesny Is. (b) 4 x
aagtepunt 303 PMP lewendige roridtes, (c) I x eagtepunt 303 britIsh nny
lewendige rondte.

eon kamoetleer oorpak en groen wlndbreker uitgewys dour Mike Peega as sy


elendom wet hy in Frankryk gekry hat. Twee lewendige .303 skerppunt
ammunisle vind ek In die kamoefleer oorpak se rsgtar broekeak

die voigende Mere behoort eon Washington volgens Mike Peega:


(a) eon bruin vemiekie sweetpak beadjie" urban revolution"
(b) een bruin weermag broek
(c) eon donke,brujn aweetpak baadjle "go go"
(d) eon weermeg Kamofleer oorpak '1 spasitlco size RL 87
(c) sen Klein vull wit hoedjia

eon stel leisure nommar 7 tekkiea met dlamantpatroon op sooi - behoort eon
Washington

4.

Ek hot besiag gele op die maroon Toyota esook el die hems aoos bo beskryf. Ek hot
vemeem by mop. Mafotø dat die verdagte wet ontenap hot gekiee was In 'n blou t-hemp en
'n kamotleer kniebroek, Die verdagte hot kealvoet ontsnap. Volgens Mike Peega hot hy op
hierdle Kersdag 2008-12-25 aaam met venal PretoriaAely, verby
-
27/81/2009 8147181032

Washington hull. na pleas geneem


Brits en Thabazimbi na Vasiwater wear °n vrlerid van
oppad hulstOe. Volgens
bet om renostera ta skiet, Hull. bet nb renosters gekry nb en was
Mike Peega
Mike Peega werk by as 'n agent vir persoon Lumbo van KrugelwikIttJbfl.
Vaaiweter wet In beSit was van
beweer dat by en Washington tweia yard eglas afgebaal hat In
verdates en AK 47
'n AK 47 geweor en twee patrons. Ek hot Mike Peege versoek om die
hy sinkhula
geweer to wys In Veatwater. Ek hat Mike Peege vergesel ne Vaabwater wear
598 ultwys to beading bokesle Vaalwater, Ek hat huis 59B besoek en 1n vrou Sarafina
SPORTS U
BaiOi mat hear babe in 'n kamer gevind Ek bet 'n swert dresek POWERLAND
In die kamer op die vtoer gokry lange die vrou
Sarafine, Die vrou kon slogs Shangaen preat
en met behutp van 1n tolk hat sy gesé dat die swart drasak ean hear broer Jochus Beioi
behoort en dat hy naby is. Ek hat dIe swart drasak in teenwoordlgheld van Sarafina
deursoek en die volgende gevind:

een AK 47 geweer met Die geweer was oorgehaal met lewendige


AK rondto in die kamar. fri die magasyn was ook 'n lewendige rondte. Soda
nommer van AK 47 nn3108" asook 632411 1977 U
U

nuwe klein handbyl met rool kieurlge Snyvlak is ekerpgemaak.

U U
await flits sonder batterye Japan
U
vuil groan hendskoen met neam Stephen binne in geskryf

bout koif vir AK geweer

- ruol kl.urige tafeldoek met blomme

- gaol

bruln weermagbeadJle" smell U

await belakiawa11 LO U

awed kerkbroek met await wet wit atrepe bet

gtys Iangbroek met wit sit bbou t4iemp

groan oorpak boadjbe dryteohU


U

stert van gemebok

paspoort U Jochua Eblea Baioi U


17/0112U1 10141 OtITlatail
A 114k

to le w&dl wet 0000 'Ii Kc.Oitd$ tok hat dl og n wentedegevied soot


valgendo lame hi:

'Thames gekywn Boloyl ID 100818 6021 181

Vele000 die Oei*M0 cm twos loot en wig 0 tIMMe8d din ensign dog no toO woninO oeIcf 4
1st cm to tejbw, beweos dot halO osoottsoe$ ten hear locee Jodwa 0*4cm
8k hal Oosolloe goerooloea on coped vane? hwwweog belay die enaikdg goatee
en nam oy bones, Mar boner Jodeon 8*4 to Ole Yen sIc men atom
owes diegeaigopdepeapooot.
AX goweer oy elendoon to. 8kM4 oak die own von SOsO*to gnooootoor oongeabwt die AK
to ay homer wee. Hy0(dwn eke. Hy Is Joe Meekobe,

Olovctgend. cggend took dour hiap. Meida van OAPD Betgostneo b*seujo goest dot by
Waildoglosi goorcetoor hat 8k tnt no OAPO erloorpgoon wow Map. MeMo * my
'n ewotbnon ceotmedig tnt not to 'to b&ooi I4iomp en terncltooo galilee woo. 8k
boO weji oto poison gehlenVioeat isle potolobeomcl.dma soy p000!. Id beset on
hot dl. posoon en eagle *on hoso vseiloiedk. Ole wodngte was ongotseprekond en hot
homoell ooWuM*o Tbwigwon. eon myvcoogostol, lOordla pOtooonhM my meegedeat
dot hyvh'npotscoo
aidnop eon Igrselliio. Weotslnglaoi wee berold con *ooiote to gene utwye. Woshbigtai hot
bweosdel dl. mason Toyole' HOL 814 NW' ion cy vow batsecot. Weoldeglon hot
by weal oeeos 'it .308 gawearwaggeetookls detuhameny to 8410 on dot by
wya4etg Noidlo gneose eel iamye. 8k hot Wae08igtoo tOont. C, lkilela 001h001rig wet
ourn mat my WMOoosn to con no Noodle .303 gewoo.'to Voodoglo lIke
Pedge won loenwociodig too Weoldogien ldonllobawedngo moakonhat giti dot by by ey
nedlgadlowaa,oolusyawotstloododlyaegiIcoktocm,aiewtoos toolint. 8khot
like Poogo noogooal in oyonbtgto dlgn&7. Clissealwocosgsbled, Prekirlo
Nowd llorhethy'n POi In tolgsrsofsaptebeoto'RIW 16002P'uPganoys. like
Poagobstitovoostdg en bogeeiel.dlocppoiuoekenwoobolavoiboco. Hylntnbmygeei
del die gevoowkt ekeogootoboiwee. 8k hot 'ii to8 S le .303 gawean Its di.
bogcdehdag.vtod, Mt. Pooga Oe motili wetdlbydbewoi*ig gontod hoe. Gugu
iou lIMO shaM vi0000 die dog die gaweattlom wowjdarmnt Dl. oon man woo 'ii
.b0!os. iyhotvoin'so*ddlo gawow to op die Atnolopad woggogcd on htst'n pOol goon
day.. Owl. gooo,koendee eutieoo. Kossot hMoto tnt myto Modowltoonto*4 onto
Ieenwooos0gbotd venWoolol.gten'n .308 met '6811 '.LXo

.303 gewoor bet 'ii groan oak doekeewl en legtandil oeooler'n mogesym AidbawurseP04%o
my ne Ic woe pettoow oil g on

1.

ElotoVot.osjdnwtdbWmoodvOndiw004ldOObigiflbe08P*
a bet pen beesoor lean dl. eM von dl. vowge*eWa aid nb
El beekou dl. voosgeolvowe cod 00 bindand *onygoneto.

8kooo*Ieoet dot die vooldeerdar ashen dot Isy vootzoud to awl dIe Macvol von die boetaosvda
on 011 haWk,. t6aidli vaeklos$srp to voormy boldig on
haniltokenhig to loony toemoasosdigleoll oongobthig to MOdim040 0920084240cm

KCeAMISSARIS VAIl ODE

VOILE NAME : JOHANIlED (3ERHAROIJO ERAE&IUE


EtflD.APMKAANEE PfJUSIEthONO
VEflIIEPSTAKEEW1IEIO
KE?8(E1RMTOO
VEEDXEFSTALMCDfl.rJLLE

SOUTH AFRICAN POUCE SERViCE


SOUTH AFRICAN POLICE SERVICE

CAS NUMBER: ,,

states In the of
who acted as Interprete, Into the .
.
(Janguage), a language understood by me
that, I am a years old, residing at 7
with telephone no and cellular phone no
lam employed at

wrk no ?. P
On I em In the presence of
tin pemal rank and nama)
Informs me that is the InvestigatIng officer ln this case and is ax officio a *peace
of the peace, and produces appointment certificate.
further Informs me that Is involved In the inveejgation of

that was comm



on ,.,,
9 (fuft .
at , at

end that he/ahe is In possession of Information that


could ImplIcate me as beIng Involved In commItting
the said cslme.

the allegation against me,

where'hot applicable : InItial and date)


f
r

CASE NUMBER: ACS 1690/2009

S S
VS

MICHAEL PEEGA

EVALUATION REPORT

ACAS 0
t CASE DATA:

EMPLOYEE: MICHAEL PEEGA

IDENTITY NUMBER: 7504226404080

EMPLOYEE NUMBER:
AGE: 34

POSITION: ENFORCEMENT SPECIALIST

PERIOD IN POSITION: 3 YEARS

OFFICE: HEAD OFFICE

TELEPHONE NUMBER: 012 422 4000

CELLPHONEN UM BEft 072 9730802


MISCONDUCT: NO

MARITAL STATUS: SINGLE

EPENDANTS: 0

I CA SE
UMITED.

I & APPROVAL
REFERRAL FOR PROSECUTION HAS BEEN APPROVED BY THE
MANAGER.

ACAS
BACKGROUND TO
Mr Michael Peega was employed as a specialist investigator within the
National Research Group. He was arrested in Vaalwater for Rhino Horn
Pouching and possession of Arms and Ammunition without a licence.
SUMMARY OF THE FACTS OF THE
Mr Peega received remuneration for services outside SARS without proper
authorization being at least RiO 00.00. He conducted activities during
November 2008 whilst he was on duty and on leave, where such activities
of a nature that was in conflict with the nature of his duties( illegal hunting
of Rhino, possession of arms and ammunition and arms).
SUMMARY OF THE EVUDENCE:
The evidence is primarily real/documentary and oral.

1. Johannes van Gave evidence about the Factual;


Loggenberg: mandate of the National Relevant
Group Research Group (NRG). Material
This was to investigate
Enforcement illicit economy and rhino
pouching forms part of
illicit economy. Peega
was arrested as a result
of his involvement in the
syndicate of pouch ing
rhino horns.

2 Edward Kotze: He visited Peega at the Factual;


Co-ordinator holding cells, P eega told Relevant

ACAS
_-J

them that he want to Material


resign as he wanted a
clean record, Edward
then offered to give him
the template for
resignation letter. They
did not force him to
resign.

3. Hermanus He was investigating a


Lubbe: SAPS syndicate of illegal Material
Captain hunting of rhinos. This
led him to Vaalwater
were he arrested Peega
for pouching and
possession of arms and
ammunition. Peega co-
operated with the police
and he thoughtthat he
was operating
undercover. This was not
the case. Peega gave
him a warning statement
detailing how the
syndicate operates.

4. Johan De Wall: Investigators are not Factual;


Specialist allowed to operate on Relevant
Investigator- their own. The NRG Material
NRG operated on information

A CAS
or leads that are received
and investigations should
be escalated to the team
leader who then
escalates it to Johan Van
Loggenberg who will
finally decides on how to
respond. Peega was
aware of the mandate of
NRG as it was discussed
with them on several
occasions. There are
minutes of meeting to
prove it.

5 Michael Peega: He denied being found in The


Accuse possession arms and employee
employee ammunition, He denied was not
taking RiO 000.00 from certain about
the syndicate or any what the
knowledge of the crimes reason for the
or the syndicate. He just trip was or
accompanied a friend on their exact
a day trip. Further denied destination.
admissions made to Placed trust
Johan. He agreed to be in a stranger.
aware of the mandate of Reasons for
NRG. judgement by
presiding
officer was
further that it
is probable
was aware of
the reason for
the trip. Given
Peega's
investigation
skills in all
probability he
knew that he
was
associating
with a
syndicate

6. Jappie He gave evidence about Factual;Relevant


Tshabalala: his involvement in Material

I facilitating bail money


NRG for Peega. Further gave
evidence about the
good relationship
between Peega and his
managers.

ACAS 36fl
6'
ELI

The employee was found guilty as charged and dismissed with immediate
( Charges were drafted. Criminal case is still on against the employee.
failed at the CCMA in Pretoria. We are waiting for the date for
Arbitratlion.

ACAS
Signed at Pretoria on the 18 August 2009.

TP TSUAELI
Operational Specialist: Pro ecutor.

Or KANNEMEYER
MANAGER: Prosecutions.

YENH
AC S: SENIORS A GER

C COLLINGS
ACAS: EXECUTIVE

ACAS
RISK IDENTIFICATION REPORT

PART A: CASE DATA

L Case Identification

1.1 ACAS Ref. no


Michael Peega

Male
race African
00008028

Head office
1.11 Employee years of 4 Years
service
1.12 Divisia ii Enfo rcement

1.14 ACAS Prosecutor Tshe o Tsuaeli_________

Case Information

2.3 Place of Vaalwater

2.4 Financial loss

2.6 Possible Contravention of the Arms and


crime/transgression Ammunition Act and National
(insufficient evidence) Environmental Management,
Biodiversity Act No 10 Of
2004,

Y
PART B: BACKGROUND

Mr Michael Peega was employed as a specialist investigator within


the National Research Group. He was arrested in Vaaiwater for
Rhino Horn Pouching and possession of Arms and Ammunition
without a licence,

PART C: POSSIBLE/ACTUAL WEAKNESS/VULNERABILITY


EXPLOITED

Lack or inadequate: Motivation for Opinion


1

1.1 Training

1,2 Management

1.3 Procedure/policy

1.4 Technical Security

1.5 Vetting

1.6 Physical controls

1.7 Other X Employee abused his skills by


associating with a syndicate that
pouches Rhino Horns.

PART D: MOTIVATION FOR CRIME/TRANSGRESSION

Cause: Motivation for Opinion

1.1 Greed

1.2 Debt (personal X Employee had financial problems.


fi
circumstances)

1.3 Revenge

1.4 General
dissatisfaction (job &
work environment)

1.5 Other

PART PROPOSAL OF PRO-ACTIVE MEASURES

HR should play a very instrumental role in making employees aware


about the weliness program and its benefits.
Enforcement
and Risk

INTEROFFICE MEMORANDUM
Enforcement Operations

P Posthumus
GM: Enforcement & Risk
F Ramcharan
Mr. Ivan
AJ van Rensburg
Enforcement Special Operations
FROM Johann van Loggerenberg REFERENCE
amework 2007/2008
TEL NUMBER (012) 422 7227 DATE
PRlORrn' high

SUBJECT
RECOMMENDATION For approval

Forwarded to you for:

Approval
LI For Your Records Irifomiation
LI Action as required E Proof Reading

On completion please forward to:

Sender [I] Other

1. Comments:

In February 2007, the President in his State of the Nation Address clearly indicated severaf of the Governments objectives
for the coming year: ".,.start the process of further modern/sing the systems of the South African Revenue Services,

especially in respect of border control, and improve the work of the infer-departmental co-ordinating structures in this
regard; intensify intelligence work with regard to organised crime, building on the succe.sses that have been achieved in the

last few months in dealing with cash-in-transit heists, drug trafficking and poaching of game and abalone..."

This document proposes the mandates for those functions housed within the SMS Enforcement division: Special

Operations in support of the SARS strategic objectives. The activities housed wthin the Special Operations environment

are those operational activities that fall outside the normal steady-state businessand certain functions that aim to support

the management of the division.

@SARS Enforcen,ent and Risk - -- Confidential Page fl


PLEASE INSERT TOPIC

Internal Memorandum

2, TOPIC

Operating framework for Enforcement Special Operations

3. PURPOSE

To obtain approval for the proposed mandates / structures, basic operating frameworks for the respective functions housed

within Enforcement: Special Operations as set out herein,

4. DISCUSSION

4.1 Background

In February 2007, the President in his State of the Nation Address clearly indicated several of the Government's objectives
for the coming year: the process of further modern/sing the systems of the South African Revenue Services,
especially in respect of border control, and improve the work of the inter-departmental co-ordinating structures in this
regard; intensify intelligence work with regard to organised crime, building on the successes that have been achieved in the

last few months in dealing with cash-in-transit heists, drug trafficking and poaching of game and abalone,,.

This document proposes the mandates for those functions housed within the SARS Enforcement division: Special

Operations in support of the SARS strategic objectives, The activities housed within the Special Operations environment

are those operational activities that fall outside the normal steady-state business and certain functions that aim to support
the management of the division,

Derived from the Enforcement Strategy 200712008, within the operations environment a distinction is made between

"steady-state" operations, design and strategy and those activities that do not fall within the "steady-states environment,

The Enforcement structure as approved by SARS executive in February 2007 provides for the grouping of those "non

steady-staten activities under the auspices of Special Operations. The functions that are indicated under this part of
Enforcement are:

- National Enforcement Unit

- Significant Case Management Unit

Enforcement Communications

© SARS Enforcement and Risk Contidenhal Page 2 of 11


PLEASE INSERT TOPIC

Management support Operationa'


state"

case enforcement
management

Enforcement I
projects
commu

4.2 Management support functions:

4.2.2 Significant Case Management Unit (SCMU)

Proposed mandate:

Background

From time to time, SARS engagements with taxpayers I customs-clients result in:
— The matter becoming public knowledge via media where it is not in SARS'S interests;
— The matter being escalated via ministerial channels;

— The matter being escalated via SSMO;

— The matter provides for the opportunity to:

Set precedent (legal/public);

Set an example;

— Mistakes or oversights by SARS lead to embarrassment;

— The potential for any or a combination of the above.

Typically the instances menUoned occur because of either of the following scenarios:
— The taxpayer is someone significant;

—. The type of aoUon is

Political considerations;

Significant tax-liability;

Actions to curb organized crime;

• Reputational risk to SARS image.

© SARS Enforcement and Risk Confidential Page 3 of 11


PLEASE INSERT TOPIC

Problem statement:

The Enforcement and SARS have definite needs when cases commence that have the potential to develop
into any of the situations as stated, The operational challenges are:

For management to identify these types of cases in time in order to allow for proactive preparation and planning;
• For Enforcement to have the capacity and capability to deal with such cases efficiently and in the most suitable

way and report to the executive;

• Whilst these cases are being dealt with, normal operahons should not be disturbed;

Use the knowledge obtained in dealing with these matters to improve normal operations;

To develop a discipline that will support management of such cases:

The original intention of the creadon of the Significant Case Management Unit arose out of a SARS EXCO discussion

and instruction during 2004/2005 and Enforcement was required to create the ability to identify and track cases of

significance. This proposal is a further elaboration on this request.

It is therefore proposed that the Significant Case Management Unit be mandate to:

On a continuous basis identify, record, track and notify management of any audits, criminal invesdgations, debt

management actions, outstanding return collections actions and estate management actions within the

Enforcement division that may fall within the descripdon:

— Any matter concerning any person or entity that may be or connected to a political party in South Africa;

— Any matter that could lead to any precedent insofar SARS practice, policy or procedures;

— Any sizable matter in respect of rand values of assessments or debts;

— Any matter concerning any person or enfity that may be or connected to what can be considered a VIP;

— Any matter that could or may have already been reported in the media;

— Any matter that could affect the reputation of SARS.

— The unit will be required to operate systemic soludons enabling the above.

A central register where cases or regional or nadonal importance are recorded and controlled;

— A formal process enabling operadonal staff to report potenUal cases of the described nature;

— Periodic tracking and reporting to management;

— Providing assistance to operational staff involved in such cases,

Proposed structure:

In order to fulfill its mandate, it is proppsed that the unit be organized in the following manner. The basic rationale is as

follows:

— Current case load of 184 cases suggest that the most efficient manner to allocate workloads will be on a
basis;

SARS Enforcement and Risk Confidenlial Li Page 4 of 11


PLEASE INSERT TOPIC

Zone 1 comprising of Gauteng South Gauteng North and Gauteng Central comprises of the largest volume of

significant cases and therefore justifies the allocation of at least 2 persons to coordinate and track cases in this area;
— Zone 2 comprising of the Western Cape, Eastern Cape, FreeState and Kwa-Zulu Natal justifies at least a single person

to coordinate and track cases;

Zone 3 comprisIng of North West, Mmpumalanga and Limpopo justifies a single person tracking oases;

— The NEU justifies a single person coordinating and tracking cases in this area;

order to provide technical assistance in respect of significant matters to both the operational personnel involved In

such cases as well as to assist in the compilation and technical advice to management, a number of key specialists are

also considered critical in this area of business:

Income tax specialist

VAT specialist

Legal advisor

Custom specialist

2xSC
Coordin
lxSC
Coordin Coordi
I lxlT
specialist
IxSC
Coordi
ator ator nator nator
71 Z2 Z3
1 xVAT
specialist

'IxCustorn
a specialist

lxLegal

4.2.3 Enforcement communications

This function is currentiy only fulfilled by one person. Due to the proposed nature and function for this area of business, e

mandate and is considered inherent in the proposed outputs:


/
® SARS and Risk Confidential - Pa 5 11
PLEASE INSERT TOFIC

Internal communication: outputs

Daily media scan and brief

Early morning media brief to update Enforcement management of news highlights and SARS in the news.

Recipients: COO (Kieswetter); GM: Enforcement and Risk (Pillay); GM: Risk (Mokwena); GM: Enforcement

Ops: (Makwakwa); Enforcement strategy, product and project managers.

Enforcement ya Buwa

Bi-monthly General Enforcement and Risk newsletter to inform & motivate members explain issues and
create a sense of community

Con tent

• Achievements (case specific)

Strategy

Projects and progress

Business Plans

• Quarterly review feedback

Developments

Action plans

• Office news

• People in the news

GM's Letter

Monthly newsletter to managers. Channel for GMs to address managers in an informal way, explain

directives general management and motivational articles.

SARS News

o Provide at least one Enforcementrelated article for SARS general newsletter for every issue

Editing

Editing of reports: GM's and Minister's monthly report

Ad hoc: Strategies, policies, correspondence, reports for GM's Office, GM: Enforcement Ops,

strategy and design managers.

Ad hoc: Letters, articles, forms for GM's Office

© SARS Enforcement and Risk Confidential Pa of 11


(
PLEASE INSERT TOPIC

o External communication: outputs

ldenUficaUon and notification of upcoming Enforcement events.

Weekly report to on noteworthy upcoming events and brief feedback of Enforcement-related media

coverage of the previous week.

Recipients:

Commissioner

COO

GM: Office of the Commissioner

GM: Enforcement and Risk

GM: Legal

GM: Systems Architecture & Technology

Manager: Communication Division

SARS spokesperson

Liaison with CommunlcaUon Division

Act as contact person for Communication Division regarding media enquiries, eg find

organise interviews,

Weekly with Communications (Adrian) to discuss media coverage and assist whore possible,

Draft articles

Prepare press releases, draft arilcies and responses for external media, eg VAT News, Gauteng Business.

4.3 "Non steady-state" operational activities

4.3.1 National Enforcement Unit: (NEU)

Proposed mandate

The National Enforcement Unit has a national mandate, which must be executed in full collaboration with regional

enforcement centers and the Large Business Centre and customs offices. will primarily be any or a combinaUon

of:

o Audits / civil investigations

o Criminal

o Joint-actions with Law Enforcement Agencies where officially approved

o Resultant debt management, collection of returns and management of estates.

© SARS Entorcement arid Risk Page 7 of 11


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AU activities wili be conductod in accordance with Enforcement policies and procedures as published and amended

from time to time, Any deviation requires advance executive approval.

The unit is mandated to focus its activities Into any action required by the Enforcement Division executive where any or

a combination of the following is apparent:

SARS related audits, invesUgalions and other enforcement acflvitles of taxpayers and customs clients suspected of

being involved or associated with unlawful activities, (Illicit / organized crime economy)

Organized and sophisUcated financial schemes that has the actual or potenilal effect of misleading the public or
negatively abusing public trust and monies

• A case that may have the potenflal to develop into a situation that could affect the reputation of SARS;

• Cases of a sensitive or political nature;

• Cases of such a nature that pro-determined outcomes may necessitate the deviation from current standards and
norms

Structure of the unit:

The structure of the NEU was approved by the executive in February 2007.

Data Analyst

rEnrorceme

SARS Enforcement and Risk Page 8 clii


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4.3.2 Spectat Projects Unit

Proposed mandate

The Special Projects Unit is mandated to focus Its into any action required by the Enforcement Division executive

where any or a combinabon of the following are apparent wilt be assigned:

Scope:

o The focus of the unit will be directed towards cases (current or potential) where activities of taxpayers fall

within the ambit of organized crime. A emphasis will be placed on cross-border and

related

o Activities will be in accordance with Enforcement policies and 2 roved and amended from
to

o The unit will have a national mandate and will be active in all geographic areas in South Africa.

o Actions will primarily be any or a combination of:

The of key role-players in the illicit economy and collecting sufficient information

about them in order to allow SARS to:

Consider the revenue and customs related consequences of their


activities

Focus and prioritizes which activities to direct law enf orceme nt

Investigation techniques considered outside the norm

Additional

o Cases may also be referred to (he unit that are under investigation by conventional enforcement units

(based on executive approval and in SARS that may benefit from information gathered

unconvenbonally such as:

The customs border control unit

The enforcement unit

The integrated customs enforcement teams

Enforcement operations

Internal Corruption investigations unit V'

Cases referred to SARS by means of external formal law enforcement units that may

or benefit from unconventional investigation techniques.

@ SARS Enforcement and Risk Confidential Page 9 of Ii


PLEASE INSERT TOPIC

of such a nature that pro-determined outcomes may necessitate the deviation from current
standards and norms.

Joint-actions with Law Enforcement Agencies whore officiafly approved

Proposed structure:

4.4 Proposed measures:

Attached please find the proposed scorecards for the managers of the respective units as agreed in consultation with
them for the financial year 2007/2008,

In respect of the proposed measures, an incremental approach is proposed that initially aims at not only production

and quality but also places an emphasis on the building of the business units and stabilizing the organization within the

units, The effect of this approach means that managers will be expected by means of a Jag kpi to finalize aspects

(including systems) concerning structure, roles, job descriptions, grading, kpi's, PDP's and reports associated per role

on Weekly, monthly, quarterly and annual periods immediately. Over time, the emphasis will be placed on more

detailed lead kpi's insofar operations and production and quality and ultimately insofar the lead kpi to ensure impact in
the focus areas

2007/2008 200812009 2009/2010

Stabilizing 30% weighting Stabilizing 20% weighting


organizational weighting organizational organizational
structure structure structure

© SARS Enlarcernent and Risk Page 1 QOf 11


PLEASE INSERT TOPIC

Operational I 35% or more Operational I 40% or more Operational I 40% or more

production production production

HR 10% HR 10% HR 10%

Focus 5% areas 20% Focus areas 40% or more

Date:

NOT APPROVED

General Manager: Enforcement and Risk Management


Date:

© SARS Enforcement and Risk Confidential Page 11 of 11


V r C Lnforcernem
FNTEROFnCE MEMORANDUM
Memo Tifle

TO Mr I. Pillay CC Loggerenberg

FROM Naflonat research group steeroom REFERENCE

TEL NUMBER (012) 422 6836 DATE 17 May 2008

PRIORITY Urgent

SUBJECT Mandate

RECOMMENDATION Request for operational framework approval

Forwarded to you for:

Approval Li Verification
[Ii For Your Records [Ii Information
Li Acüon as required Eli Proof Reading

On completion please forward to:

Sender Eli Other

Comments:

Proposed Mandate, Workflow and Structure:


Research Group (NRG)

PURPOSE

The purpose of this document is to obtain approval for a proposed mandate, work flow and structure for the Group.
The Group is currently in a re-design cycle and the approval of these proposals wifl give direction to the work to

follow.

OSARS Enforcement Page 1 o16


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Introduction

The group was tasked to create a capability that will fortify, compliment and support the SARS Enforcement effort. A
capability that can reinvigorate the current investigative and information gathering capacity of SARS Enforcement
and as such will have to;

Be able to access information not normally available to SARS:

o using legal methods,


o applying technology and scientific collection/investigative methodology;

)
Mandate:

mandate of the unit is to collect departmental intelligence relating to non-compliance in respect of tax, customs
and excise in a directed manner. The direction is informed by the focus areas identified in the illicit economy. The
focus will be information that is not normally available to SARS and will be collected by means of engagement of
identified persons (recruitment) and observation of suspect activities (surveillance.) This information will aim to
provide the following:

0 Recommendations and justification to enforcement units on targets for auditing or investigation within the
selected focus areas in the illicit economy when directed to do so;
o Collecting specific information pertaining to identified suspect entities or individuals under investigation, with
the aim to identify potential evidence and the location thereof (documentary/goods or potential witnesses),
that will enable investigators to access it easier, as directed;
o Specific ad hoc tasks (as approved) relating to the engagement of potential witnesses or suspects and
observing activities as directed, in support of investigations by enforcement units.

All the above activities will be done within the legal and policy framework of the South African Revenue Service.

Workilow:

The group designed a workflow process that will support the execution of the proposed mandate. The workflow is
fundamentally about the organization of our work. It describes a set of activities that will coordinate our team
members and work, Take note that the workilow model is fractal, meaning sub-processes will be defined separately.
Each of the sub processes may consist of micro aggregated services. This model will encourage re-use and
agility, which will lead to more fixed but also flexible business processes. Based on past pilots, previous experience
and best practice the workflow attached to this document below is proposed.

0 SAPS Enforcement Confldenliat Page 2 of 6


PLEASE INSERT TOPIC

ii
1 H -

4
4 -

1__4

L
V

Structure:

The organizational structure was designed to be adaptive to process requirements as set out in the work-flow
document, aiming to optimize the ratio of effort and input to output The structure is designed to facilitate working
relationships between various roles in the unit and wifl support the working efficiency between diverse roles and
functions, We propose for this structure to be retained as a set order and the efficiency thereof to be monitored for a
four month period after which it should be reviewed.

)lfl light of the mandate and the developed workflow the following structure is proposed, based on the following
operational principles:
0 Single accountability and responsibility in respect of the entire operational unit.

• Specific functions were the accountability and responsibility will fail upon the
different Business Area Managers.
0 Specialist functions were applicable accountable to professional bodies.
0 Span of control based on 1:7 ratio.
0 Specialization based on workflow.

This constitutes the bare minimum structure. Upon implementation a future design will be developed based on an
end-state vision.

® SARS Confidential Page 3o16


PLEASE INSERT

(New job description to be developed)

o Role: Overall responsible to plan and execute information gathering activities with

regard to the illicit economy. To ensure effective, efficient operational performance

in line with the overall strategy of Enforcement.

o Job Purpose: Accountable for the planning and managing of information gathering

activities related to the illicit economy to meet enforcement targets. Managing


enforcement cases within the specified quality and performance norms. Planning

and managing resources at the enforcement unit.

Information Gathering (Adapt existing JD: BIU)


o Role: Overall responsible to prepare and monitor operational plan for the business

unit to manage the volume of work, resources required and associated facilities.
Organize resources to manage and deliver information products.

o Job Purpose: To plan, organize, track, monitor, control and implement information
collection activities (informant recruitment and surveillance) that relates to willful acts

of tax and duty evasion of all legislation administered by the Commissioner, in


accordance with the Constitution, the Criminal Procedure Act, and the prescribed

laid down policies and procedures of SARS.

(Adapt existing JD: BIU)

o Role: Overall responsible to plan and execute research and analysis activities with

regard to the illicit economy, Effective utilization of resources to access information.

o Job Purpose: Overall accountable to coordinate, prepare, collect, review and


compile information and find data sources required to facilitate analysis for
investigations. The critical elements of this job are to establish and maintain a data

base of illicit activities within the illicit economy.

Team Member (New job description to be developed)

o Role: To provide timeous, quality mandated information to customers related to the

illegal activities of companies and/or individuals operating in the illicit economy.


Focused on recruiting individuals within the network to supply information on
activities of the crime syndicate, or conducting surveillance with regard to generation

and confirmation of information related to the illegal activities of identified targets.

o Job Purpose: The Information Collector is responsible to collect, collate, interpret,

analyze and evaluate operational and tactical information that would suppo the

investigation of illegal related to the illegat

I SARi
PLEASE INSERT TOPIC

trade, and any other circumvention of the provisions of the Customs and Excise Act.

He must further ensure that accurate and reliable information are available to
support the primary objective and also to provide direction to investigators to focus

on specific threats, risks, individuals, companies, routes and syndicates.

(Adapt existing JD: BIU)

o Role: To gather data from various systems as well as the analysis of this data and

information gathered in specialized investigations where both conventional and

unconventional investigative techniques are used,

o Job Purpose: To research, compile, analyse and interpret data from a variety of
sources, including governmental systems, 3rd party data, arrest reports, economic

and demographic reports, surveillance feedback, informant data, and other related

data. Uses quantitative and qualitative methodology.

Tax Specialist: (Adapt existing JO: NEU)

Customs Specialist: (Adapt existing JD: NEU)

Advisor: (Adapt existing JO: NEU)

(Adapt existing JD: NEU)

Psychologist: (New Jobdescription to be developed)

Documentation and Systems created for utilization within the group:

Operational

1) Project Templates for Project Types A, B and C.

2) ConcoptualizaUon Document

3) Project Plan

4) Project File

5) InformatIon Reports

6) Final Report (Project Managers)

7) Monthly Report (Project Managers)

8) Source File

Office Based

1) Personnel File
Page 5 of 6
0 SARS Enforcement
PLEASE iNSERT TOPIC

2) Ahnual Leave Register

3) Sick Leave Register

4) Operaions Register (Dashboard)

5) Mailing List

6) Asset Register

7) HR Database

8) Registraion Database

9) Human Resources

10) Travel

11) Procurement

RECOMMENDED 1 NOT RECOMMENDED

Johan Van gerenberg

Head: Special Operations

Head Office
Date: I
)!'

APPROVED I NOT APPROVED

Ivan Pillay

General Manager

Enforcement & Risk


Head Office:

Date:

@ SARS Enfomement Page 6 of 6


SARS Reply to the "Intelligence Dossier"

Introduction:
SARS wishes to respond to the existence and recent media-reports regarding a so-
called "intelligence dossier," The intention is to clarify apparent misconceptions that
seem to exist in this regard.

By way of introduction, SARS wishes to place the following on record:

This document is not an official SARS document, The content of the


document is in SARS's opinion a mixture of some fact and much fiction.
SARS believes that the author of this document is a former SARS employee,
namely Michael Peega and it is believed that the document has been made
available to a wide range of media representatives as well as political parties
since October 2009. Peega seems to have accepted ownership of the
document in the media and has "challenged SARS to publicly confront him
insofar the authenticity thereof." Peega whilst in the employ of SARS, was
arrested on the 25th December 2008. At the time of the arrest he was on
-
annual vacation leave. SARS was officially informed on the 12 January 2009
by SAPS by way of letter of his arrest and incarceration for the illegal
possession of unlicensed firearms, the poaching of rhinos and related
charges. A formal media statement of this arrest was issued by the SAPS and
SANPARKS. The media release named Peega and others as being involved
in a syndicate involved in the poaching of rhinos. According to the SAPS at
the time of his arrest he claimed to be working undercover for the
SANPARKS, but this was later refuted by SANPARKS. On the 24th Feb 2010,
in an interview with the media, Peega claimed that he was part of a sting
operation. Significantly, during his disciplinary hearing held on the 11 and 31
March 2009 and 1 April 2009, he did not claim to have been part of a sting
operation nor did he make this claim during his subsequent appeal. See
Annexures "0", "P" and "Q". Peega was dismissed from SARS in June
2009 following the dismissal of his appeal.

it is known to SARS that Peega has since his dismissal collaborated with
other former SARS employees who were either dismissed from SARS
because of fraud or opted to resign from SARS in the face of disciplinary
action. Furthermore SARS has obtained affidavits from a number of Peega's
former colleagues explaining that they were approached during the period
after his dismissal claiming to be working for the Presidency and that he
attempted to coerce them to "work for them" and provide them with
statements of alleged illegal activities in SARS. When they informed him that
they did not know what he was talking about, he became abusive and angry
with them. Peega and some of these disgruntled employees have been trying
since 2009 to force SARS to pay them money otherwise with threats of
publicly embarrassing SARS in the media by releasing a 'dossier." Some of
these threats have been made via email of which SARS has copies and form
part of an investigation by the SAPS. SARS believes that the document was
compiled sometime after July 2009 when Peega had already been dismissed
from SARS.

SARS believes that the so-called 'dossier" compiled by Peega and possibly
others is a classic example a type of report that is sometimes presented to
intelligence agencies by what is known in the trade as "information peddlers.1'
Such reports typically contain some fact that can usually be confirmed in order
to lend some authenticity to the report and then contain fictitious information
that supports some or other agenda of the "peddler." The failure of any
recipient of such reports to critically verify the content and then to further
distribute such reports tends to lead further authenticity to the report. This
"dossier" compiled by Peega at face-value contains very little fact, is
contradictory at times, is very poorly constructed and can hardly be
considered as factual. SARS believes that what Peega attempted to do with
this document is quite obvious: to discredit the integrity of SARS as a public
institution.

It is believed that there may be multiple versions of this particular document


(referred to as the "dossier") in circulation. SARS had sight of what we believe
to have been the first version of the document in November 2009. It was
shown to SARS by the media; however SARS was not allowed to make
copies of the document. According to the SARS individual who had sight of
the first document, the first few pages seem to have suggested that the
current Minister for Finance during his tenure as Commissioner of SARS,
personally created a unit for sinister purposes. It also lists the names of
members of this unit and their respective backgrounds and functions in the
unit.

The version of the "dossier" in possession of SARS excludes the first three (3)
pages and some annexures which was visible in the original version shown to
SARS. SARS obtained a copy of this version from the media. Some portions
in the document in possession of SARS have also been blocked out. It is
believed that the exclusion of the first few pages and the censoring of parts
thereof were done deliberately by the author thereof.

The "dossier" in SARS' possession only highlights the last few names of these
members and for purposes of public distribution for this document SARS has
blocked out the names of current and former SARS employees. This does not
detract from the nature and content of the document.
When SARS became aware of the existence of the "dossier" arid its
slanderous content, the matter was reported to other law enforcement
agencies by SARS. SARS has and will continue to fully cooperate with any
other law enforcement agency requesting further information.

Response to the "DossIer":

The following response relates to the version of the document in SARS' possession
and is believed to be the "intelligence dossier" referred to in the recent media
reports.

In responding to the issues highlighted in the "dossier" (pages unnumbered), SARS


has taken the liberty of numbering the pages for ease of reference, with pages 1 to 5
comprising of the body of the document and pages 6 to lithe annexures.

Response per page:

Page 1 lists a number of people who formed part of the unit in question. It is
not a complete list of SARS personnel that were in the unit. The names of
SARS personnel have deliberately been censored by SARS, for the purposes
of public distribution. Members of the unit in question investigated serious
instances of organised crime, specific to smuggling, drug
trafficking and abalone smuggling. The identities of members were kept
confidential as they faced real and serious threats to their personal
safety and that of their families:

o Person "A": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is correctly described in terms of background;
o Person "B": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is incorrectly described as an expert in data
systems and counter intelligence. Person "B" in fact has expertise and
background in criminal investigations and was deployed into the unit for
this reason;
o Person "C": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is correctly described as a former SANOF
member. The suggestion that this person was used as a 'honey trap' in
the context of the unit suggests that this person provided sexual
favours to subjects under investigation on instruction of SARS. SARS
rejects this suggestion with contempt and considers this to be highly
insulting to the integrity of the individual concerned.
o Person "D": SARS can confirm that this person was a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual has since
resigned from SARS and is currently employed in another government
department. The background of the person is accurately described;
o Person "E": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG), The background is somewhat
accurately described, however this person formed part of the linkage
between the unit and management mainly to facilitate management
and liaison needs and not due to what is stated as "because members
of the unit were not allowed to be at head office". Members of the unit
actuaily frequented head office throughout its existence.

Page 1 of the "dossier" Point 4 headed "Teams Division":

o This part of the document elaborates on the supposed


"compartmentalisation of members.1 SARS's response is that job
functions and projects were allocated on the basis of skill and expertise
as a normal division of labour exercise and not for the reasons stated
in the document;
o The suggestion that SARS was able to block and bug communication
tools are untrue. Apart from the legality aspects concerning such
activities (it would be illegal for SARS to conduct such activities), the
technical capability to do so does not exist in SARS.
o The 'dossier" includes a "diagram of the NRG placement chart" (page
9). This forms part of a working document that was compiled by
individuals during interactive sessions with members of the unit during
2007/8. It was never intended to be an official document and the
supposed structure was never implemented. SARS can only conclude
that Peega included this diagram with the hope of adding authenticity
to his so-called 'intelligence dossier".

• Point 5 under the heading "Induction":

o The "dossier" claims that induction for the unit was done at a private
location. This is true. At the time SARS used many outside venues for
induction purposes for various new entrants into SARS. Often the
venues would be selected based on the size and needs of new
entrants into SARS. Induction was conducted with some of the
members of the unit at the time. The content of the induction, however
dealt with the following topics:
• Basic introduction to legal entities;
• Introduction to various forms of income tax;
• Basic introduction to the VAT cycle;
• Basic introduction to imports and exports;
SARS illicit economy strategy;
• Basic forms of common customs and tax scams.

The so-called induction referred to in this document is false, The


"dossier" also refers to "vetting' which occurred. SARS wishes to
record that the process of vetting SARS personnel is a lengthy process
that is done in conjunction with the NIA. Depending on the level of
clearance required for an employee, such a process could take up to 6
months. Peega was not vetted by NIA.

• Page 2:

o Point 6 under heading "Management":

In respect of paragraph 1:

• The "dossier" is accurate in so far as the unit during its


inception phase was under the management of Person
"F" who was a former NIA employee;
• The "dossier" suggests that Person "F" had close ties to
the right wing. In this regard SARS is not aware that "F" is
or was involved with any right wing group that may be a
threat to South Africa or SARS. SARS doubts the veracity
of the statement made by Peega;
• The "dossier" further suggests that Person "F" ran the unit
as a personal entity and that case allocation to the unit
was problematic. In this regard SARS can confirm that in
the formation stage of the unit certain operational
challenges did exist in so far as one would expect of a
newly formed unit which is in development. This is not
considered a unique phenomenon. The unit was however
never ran as a personal entity by any SARS employee.
The unit was properly constituted and conducted its work
within the legal mandate of SARS;
• The "dossier" also suggests that the unit came under the
scrutiny of various law enforcement agencies. SARS
wishes to place on record that both the NIA and SAPS
CIG were consulted at conceptualisation phase of the unit
and throughout its existence at various levels. The unit
frequently cooperated with various law enforcement
agencies.

In respect of paragraph 2:

The "dossier" suggests that 'the unit operated without a


mandate". SARS rejects this statement. A formal
proposal in a SARS memorandum dated 8th February
2007 clearly sought approval for the appointment of
personnel and proposed for the creation of a specialised
capability to focus on the illicit economy. The
memorandum further proposed that the capability be
created within the Custom Border Control Unit (CBCU)
and sought to combat organised crime in the following
areas:

o illegal drugs;
o illegal abalone;
o illegal importation of second-hand vehicles;
o importation of counterfeit goods; and
o smuggled tobacco.

This proposal was recommended by the General


(8thl
Manager Enforcement and Risk at the time February
2007) and approved by the Chief Officer Corporate
Services on the 13th February 2007. See Annexure A.

The 'dossier" suggests that SARS expected and


designed the "operations of the unit to be illegal". This is
not true and can be evidenced in the annexure in the
document compiled by Peega marked page 7. This
document was an informal note compiled by the manager
of the unit at the time under the heading "ethics/legality".
Attention is drawn to the following:

o Bullet point 4 states clearly "according to the law


SARS cannot collect covert intelligence";
o Bullet point 5 stating "everything the unit does
must be measurable against whether it is
approved, whether it has to do with tax or
customs"; and
o bullet point 6 which states "everything the unit
does must be in accordance to the constitution an
must be legal".
o Your attention is also drawn to bullet point 3 of the
same page which places the onus of responsibility
to ensure basic knowledge of SARS policies,
procedures, mandate and legislation which
governs SARS on every member of the unit In a
sense, by attaching this annexure to the dossier
Peega is contradicting the statement made.

• The 'dossier" claims that "white members of the unit were


paid much more than African members". It also states
that "African members were given the excuse of budget
constraints with respect to their salaries". Whilst SARS
can confirm that some of the highest paid members of the
unit were white employees, this was not restricted to
white members but included members from the African
and Coloured groupings. In fact, the lowest paid member
of the unit was in fact a white female. However some
discrepancies did exist in respect as a result of newly
recruited employees and internally seconded employees.
This had been rectified during the course of the unit's
existence.

• The "dossier" also claims that '... a mandate was only


proposed in late 2008 and never approved". This is not
true. The mandate for the unit was approved in February
2007 at its inception. Peega was employed by SARS on
15 March 2007. In a formal memorandum dated 25 July
2007, the mandate of the unit was further expanded and
linked to the government objectives to address organised
crime for that year. Later, when the unit was moved from
the Custom Border Control Unit (CBCU) to the
Enforcement Special Operations sub-division the
mandate was further developed to include the additional
focus of the unit to be directed towards cases were
activities of tax payers fall within the ambit of organised
crime and a particular emphasis was placed on cross
border and corruption related activities. It again
emphasised that all activities should be in accordance
with SARS policies and procedures and stated that the
activities will be primarily on key role-players in the illicit
economy, It included joint actions with law enforcement
agencies were official approved. See "Annexure B". On
the May 2008 the mandate was even further clarified
to differentiate between collecting departmenta
intelligence and the purpose of the unit. The use of legal
methods and operating within the legal and policy
framework of SARS was again emphasised. See
"Annexure C"

• The 'dossier" then claims that "...grievances lodged by


members with respect to their salaries were never
resolved because the employees of the unit were not on
the SARS employee database", This is patently untrue.
All SARS employees deployed in the unit (newly
appointed) were interviewed and selected for posts.
Motivations for appointments were done in the standard
interoffice motivation and were subject to approval of the
senior manager human resources, manager finance,
general manager enforcement and risk and the chief
officer corporate services. Internally seconded employees
were already on the SARS personnel database. This was
the case with Peega ("Annexure D"). Successful
applicants received an offer letter on a standard SARS
letter head as is done with all prospective employees in
SARS. Peega received such offer letter on the 15 Feb
2007. See "Annexure E". SARS as his employer
provided him with an employee number 8028 and he was
placed on the SARS payroll system as is the normal
SARS practice. SARS contributed to his group life
insurance scheme ("Annexure F"), as well as his
medical aid scheme ("Annexure G"). Peega entered into
a standard employment contract with SARS in February
2007. ("Annexure H"). No formal grievance was ever
registered by any member of the unit during its existence.
Informal complaints were raised

• The "dossier" suggests that "... some members were paid


amounts between RI million and RI, 2 million because of
their grievances and were told to leave SARS' employ
and barred from media contact". SARS has no knowledge
of what Peega is referring to in this instance. Since the
inception of the unit to date, only one employee's contract
was terminated by mutual agreement and a number of
employees resigned over the period 2007 to date. Peega
was dismissed after an internal disciplinary and appeal
process in June 2009. It is true that all SARS employees
are barred from sharing information with the media and
third parties regarding taxpayer information
investigations; that are either directly or indirectly
acquired by them in the course of their duty. This is
achieved by means of an employee signing an oath of
secrecy once employed. Peega also signed his on the
15th
February 2007.

In respect of Paragraph 3:

• In essence the "dossier" suggests that ".,,African


members in the unit were involved in a number of
controlled deliveries but were withdrawn as soon the
exchange of monies or abalone took place". It further
suggests that "persons arrested were the competitors of
other suspects". SARS' position is that any controlled
delivery that occurred during the existence of the unit was
done in conjunction with relevant law enforcement
agencies. This unit did not have powers of arrest and all
arrest executed were done by the law enforcement
agencies at their own discretion. Allegations that
"competitors" were favoured through investigations by
SARS is utter nonsense and untrue.

In respect of Paragraph 4 (pages 2-3):

• The "dossier suggests that "...undisclosed amounts of


money were paid to sources and that Person "G" was
brought into the unit as mediator and that Person "F" the
former manager was fired, that Person "F" "threatened to
expose the unit" and that Person "F" was offered a
"silence cheque" as well as that unit members were
warned to cut ties with Person "F". SARS's response is
that it is common cause that law enforcement agencies
do under certain circumstances pay sources of
information relating to organised crime. SARS policies
and Treasury regulations provide for such instances. All
such transactions are subject to inspection by the
Auditor-General on an annual basis. Person "G" was
brought in as manager for the simple reason that the
span of control in the division required an additional
manager to ensure proper oversight, Insofar Person "F's"
departure from SARS, it occurred on mutual agreement,
when his contract terminated. This occurred amicably an
was certainly not because Person "F" threatened SARS
as stated in the report.

In respect of Paragraph 5 of point 6 (page 3):

• Here the "dossier" seems repetitive insofar the mandate


and operations. SARS has responded to this already.

In respect of Paragraph 6 of point 6 (page 3):

• The report seems to suggest 'many name changes of the


unit and that of the job-descriptions of the members in the
unit", This paragraph again seems to suggest something
"sinister" in the activities of the unit. This is rejected by
SARS. The reality is far simpler in that. The Special
Projects Unit came under the auspices of the Special
Operations sub-component as described earlier, and
another unit with the same name already existed. As a
result, the unit's name was changed to National Research
Group (NRG) in order to avoid organisational confusion.
With regard to job titles, Mr. Peega was recruited and
appointed as a customs agent. This was a standard job
description which exists to this day in the Customs Border
Control Unit and remained his job description until the
day he was dismissed. What Mr. Peega seems to be
referring to is the process currently underway in SARS
(which he was part of at the time) to place employees on
an employment career placement family. All the unit
members partook in this exercise and as a result, most
were placed within the investigations or information
management career-families.

In respect of Paragraph 7 of point 6 (page 3):

• The "dossier" seems to deal with minutes of meetings.


SARS has not had the benefit of seeing these minutes,
but can state that it is possible that Peega may have kept
copies of such minutes. It is practice in SARS that
business units participate in daily, weekly and monthly
operational management meetings and that such
meetings are recorded in minutes. SARS would caution
though that in the event that such minutes are indeed true
minutes of such meetings, Mr Peega and others
be aware of the restrictions and obligations of privacy
with regard to taxpayers. In the event of the minutes
reflecting names or activities pertaining to taxpayers, care
should be taken to publicly release such as it could be a
possible breach of secrecy in terms of the Income Tax
Act and Customs Act.

Page 3:

o Point 7 "Case Criteria":

In respect of Paragraphs I and 2:

The suggestion in the report is that "the unit was tasked


to investigate various individuals based on their political
associations". It further suggests that "the unit was
involved in stealing mail, intercepting emails, mobile
phones and land lines as well as extracted bank
statements and so-forth". SARS denies all as stated in
these paragraphs. In "Annexure C", page 6 sets out the
process of task allocation and the steps to be followed by
the unit. As already stated the unit's mandate was to
focus on organised crime in the illicit economy with
specific reference to smuggling. The investigations
undertaken by the unit required approval for activities, at
various points during a six stage process from allocation
to conclusion. Furthermore with reference to page 7 in
the annexure attached to the Peega dossier bullet point 7
clearly states that the focus area of the group stays within
the illicit economy and lists cars, drugs abalone and
cigarettes as examples. Again, bullet point 4 states that
SARS cannot collect covert intelligence. If Peega has any
evidence of any illegal activities, SARS advises him to
report it to the SAPS without delay.

In respect of Paragraph 3 (Starting at the bottom of page 3


to page 4):

A portion of the information in the "dossier" has been


censored by someone unknown. The essence of this part
seems to suggest "that the unit was sent to KZN to
investigate Mr Zizi Kodwa, and Mr Fikile Mbalula". Peega
also claims that he was ordered by
surrender his laptop and electronic devices within this
context. This is not true. According to the project
documents, travel plans and reports requested from the
members who participated in the investigation, SARS can
confirm that 6 members of the unit were dispatched to
Durban on the 18th to 27th August 2008. The purpose of
the travel was to conduct investigations in respect of
three approved projects in the unit focusing on drugs,
abalone and counterfeit DVDs, Four of the members
stayed at the Hilton hotel including Peega, At the time
SARS had a corporate rate agreement with the Hilton
hotel. The hotel vouchers and travel costs were paid for
by SARS and can be identified accordingly. According to
the other members who accompanied Peega the
following incidents are important to mention:

18th
o On their arrival at Durban airport on the
August 2008 while standing in a queue at the AVIS
car rental desk, Peega recognised Mr Tony
Yengeni. Peega and Mr Yengeni had a
conversation and Peega introduced some of the
members of the unit to Mr Yengeni and they had
an informal conversation this meeting was a
coincidence.
o In the parking lot of the rental cars, Peega walked
up to another person and had a discussion with
him and when asked by a member who this person
was he responded by saying that the person was a
member of the NEC and stated that he had met
him in Polokwane. Peega on numerous occasions
shared with his team members how well he knows
Mr Fikile Mbalula from "days long before he joined
SARS". On either the 19th or 201h August 2008
whilst the team was having breakfast at the Hilton
hotel Mr Zizi Kodwa who was also having
breakfast at another table came across and
introduced himself to the team members and an
informal conversation occurred. At some point Mr
Kodwa went to another table and conversed with a
lady, he then returned to the table and interacted
informally with the team members. One of the
team members made a comment that seemd to
have offended Mr Kodwa who then subsequentl
excused himself and left. Peega reprimanded
team member for talking "like that" to Mr Kodwa
after which this team member apologised and
stated that he did not realise who Mr Kodwa was.
o Peega claimed to his team members that he knew
that Mr Zuma was also staying at the Hilton at the
time, and he. invited the team to see what the
presidential suite looked like. Peega also stated
that he would be able to arrange a visit for them
via Peega's contact with the security personnel,
and he subsequently arranged a such a tour.

All of the above occurred coincidentally and had nothing


to do with the formal purpose for the travel to Durban.
Furthermore it needs to be stated that the team at the
time was insufficiently resourced with laptops and it was
common practice for the team whilst travelling to provide
daily reports to management. The unit manager
requested Peega to give his laptop to the team leader in
Durban in order to enable him to compile an urgent report
and this made him unhappy and almost lead to him
resigning. His team members convinced him not to
resign. During their stay in Durban the team "bumped"
into Fikile Mbalula at the hotel reception, the team
proceeded to their respective rooms and Peega remained
with Mbalula.

In respect of the last Paragraph of page 4:

Then a list of names of subjects/individuals supposedly


under investigation by the unit is provided, SARS's
response in this regard is as follows:

o None of the names listed were allocated to this


unit for investigation at any point in time
throughout its existence;
o Cases allocated to the unit were done formally in
writing as per "Annexure K". Once any
investigation was allocated to the unit, an
authorisation was recorded on a management
dashboard and which has been subject to regular
office inspections, Taskings are very specific and
in all cases the adherence to legal compliance is
emphasised.
• The suggests that lifestyle questionnaires,
registry of assets versus income, auditing and money
laundering investigations were conducted by this unit. In
this respect SARS states the following:
o None of the members in the unit are auditors nor
were they trained to conduct audits. They did not
have access to SARS' core tax systems and would
not have been able to conduct activities as
suggested. is highly unlikely that even if they
It
wanted to conduct audit type functions that they
would be capable of doing so;
o A life style questionnaire is a relatively common
tool used by tax auditors worldwide and by
definition requires direct interaction with the
subject of the audit. The practice would require
SARS to send a lifestyle questionnaire under
SARS letterhead in terms of SARS legislation to
the subject of the audit. This unit was not capable
of conducting 'lifestyle audits' at any given time. In
SARS' view this list was deliberately crafted by
Peega and others in order to create certain
perceptions that would suit their own agendas in
the hope of somehow garnering support for their
own agendas.
• Page 4:

o Point 8 "Marginalisation of Blacks":

• This point has already been addressed. The "dossier"


also suggests that some of the team member threatened
to go public with information pertaining to the activities of
the unit and were supposedly threatened with disclosure
clauses. SARS has on record only one threat of this
nature by a member of the unit. Peega threatened to
publicly embarrass SARS which occurred on at least two
instances, namely:

o On 10 February 2009, at 10:00 Peega made


verbal threats to other employees in SARS
indicating that he intends exposing SARS in
the media. What is important to note of this
date is that it was preceded by Peega's
temporary withdrawal from the unit an
placement at head office following his arrest in
December 2008 and subsequent release on bail
of R20 000. Peega continuously arrived late for
work and received a written warning for this
which seemed to have upset
o Later on the same day the manager of the unit
received a telephone call from an attorney
Elise Swanepoel, who acted for Peega in his
disciplinary hearing. In the telephone
conversation she requested if SARS would
consider paying Peega one year's salary
following which he would resign. Alternatively
it was her instruction from Peega that he would
go to the media and expose SARS. The
manager warned the attorney that what she
Q was stating was tantamount to extortion and
was highly unethical for a legal practitioner.
The attorney asked for a formal meeting on the
same day and the manager agreed and took
along another manager as a witness.
o The meeting took place at the attorney's offices in
Maiherbe Street Pretoria, and during the meeting
the manager raised his concern regarding this
previous conversation, in which it was stated that it
was the intention of Peega to expose SARS in the
media. The manager also raised the issue of
unethical behaviour and attempted "blackmail".
The manager requested further information from
Peega and his legal representative:
That the employee remain bound by the
oath of secrecy of which a copy was
handed over
Should the employee consider proceeding
with the media that Peega should consider
the safety of his colleagues as they were
investigating organised and syndicated
criminality specific to smuggling.
Should they intend engaging the media that
they formally inform SARS to enable SARS
to put contingency plans in place to protect
employees that may be endangered by
such exposure. The legal representative
responded that she was merely acting
instruction of her client Peega.
o Both of the above incidents are contained in
affidavits as per annexture LI and L2.
Page 5:

o Point 9 "Payments Method":

It is correct that the unit was funded through the cost code
502031. The cost centre 502030 however belongs to a different
department within SARS. The term "cost codes" refer to "cost
centres" which in turn refer to various units or divisions in SARS.
No cost centre in SARS is secret and is subject to audits by the
AG and SARS internal audit on an annual basis. The report
seems to confuse the terminology of "cost code" and "cost
centre.'
The report suggests that sources were paid with funds from
"clients". This is not true, The SARS annual budget makes
provision for a line item "informant rewards", and such rewards
are paid for from a central point in SARS and are subject to very
strict controls.
The suggestion that a secret account was managed by the unit
is totally unfounded as SARS does not operate in this manner.

o Point 10" Conclusion":

In respect of this paragraph, it would be improper for SARS to


get drawn into a debate of a personal nature. Suffice to say that
Peega never interacted officially with the Deputy Commissioner,
Ivan Pillay or with the former Commission and now Minister
Gordhan. Secondly the suggestion that state of the art
equipment was purchased by SARS for this unit is untrue.

• Pages 64:

o "Annexures":

"Rule of play" — as stated already, this document was an


informal document compiled by the manager of the unit which
was intended to address rumours and fears that came about in
the unit during a time that SARS was changing its operating
framework. Bullet I confirms the cost centre, bullet 2 was to
ensure the members safety and that their names are not
mentioned, the rest of the comments relates to the job security

75/16
of the NRG members in SARS and that the work they engaged
in was important to SARS, bullet 3 was an attempt to bring
about some order in the manner in which the unit dealt with
administrative issues bullet 3 (operational issues) was to
,

reaffirm that the project required authorisation, page 7 is about


ethics and legahty relating to the projects of the unit and page 8
is to ensure adherence to SARS' operational management
system. The last point on page 8 was intended to ensure that
one of the members of the unit who had left would not be
inadvertently exposed to information in SARS by members of
this unit.
Page 9:

o This annexure is a document generated by a member of the unit and is


one of more than 30 such documents which were called for during the
design brainstorm sessions (interactive session), and was never
accepted or implemented.

Page 1O& 11:

o This email confirms management sessions with members of the unit


from 25-28 March 2008. The relevance of this document is unclear but
seems to be used to create some validity to Peega's report.

Comments:

1. SARS published a strategy to deal with the illicit economy in 2006. This
strategy took into account the operational agreement between the SAPS and
SARS wherein amongst others it is stated that the agreement was entered
into an attempt to combat and prevent offensives as contemplated in laws
administered by SARS. It also took into account a MOU between SARS and
the NPA which set out the strengthening of relationships in the field of
information sharing, joint enforcement action and combating trans-national
crimes and financial crimes. See Annexures "Ml" and "M2"

2. The illicit economy strategy identified specific focus areas where SARS
believed it could play a supportive role in the financial and criminal justice
system. See "Annexure N":

a) A number of units between 1999 to date have been formed some of


which amalgamated over time in order to give effect to the social
responsibility contribution to the fight against crime. The first unit was a
criminal investigations unit (1999) and this unit still exists in SARS. In

1
2000 the tax and customs intelligence unit came into being as was later
absorbed into the Business Intelligence Unit and today exists as two
separate business units namely, Segmentation and Research and
Case Generation and Compliance Risk.
b) The special compliance unit, the organised revenue crime unit, the
revenue activation programme and the Woodmead unit amalgamated
in to the national enforcement unit in 2006 and is now known as the
national investigations unit.
c) The prosecutions unit amalgamated with the criminal investigations unit
in 2009.
d) The special projects unit was formed in 2007 later changed its name to
the national research group, and at its inception was discussed with
NIA and SAPS GIG regarding its existence and future placement, as
well as its joint operational activities with such. The NRG later
amalgamated with a small part of the BIU to form the unit now know as
the illicit economy research unit towards the end of 2009.
e) The anti smuggling units in customs amalgamated with the newly
formed Customs Border Control unit to 2006 onwards.
f) There are small joint customs and audit teams which are mainly based
at ports of entry which came about in 2005 and still exist.
g) The special projects unit which handles significant cases came about in
2002 and is still in existence.
h) The forensic audit unit was established in 2009.
i) The unit has been in existence since 1999.

3. SARS employees that are involved in combating organised criminal do face a


real threat to themselves and their family's safety; this is evidenced in a
number of personal threats, assaults, shooting incidents that have occurred
over the last few years (the most recent attempted assassination attempt of
an employee in Durban). It is incumbent on SARS as the employer to take
steps to ensure the safety of its employees.
Former Special Forces Operator specializing in weapons, clandestine tactics, ruial and
urban reconnaissance, demolition expert, infiltration of syndicates, operations adviser, intelligence
analyst used as a foot soldier.

SHIOBAN WiLSON

Mathematics and statistician expert used as an operation statistic data capturer and information
analyst.

TSHABALALA
investigator within and expert in data systems within used as a thot soldier and
counter intelligence within the unit,

NORAH PITS!

Former Military Intelligence and investigator in the unit used as a foot soldier and honey trap
concerned suspects.

TIMOTHY MABASO

Former Military Intelligence and investigator in the unit used as a foot soldier.

EDDIE KOTZE

Former Police officer and manager in the enforcement within worked as liaison of
administration between the unit and the head office since we were not allowed to be at the head
quarters.

41'EAMS DIViSION

The teams were divided in a way that we could not know what others were busy with if
they were investigating other unit members because of their affiliation and who they associate
wtth and communtcation was severed by means ofcompartmentahzatiori of
I would regard concentration camps where a member had-to the team leader if he to
communicate with other members and failure to do that would result in blocking and bugging
of any communicative tools used especially within the black members.

Find attached the diagram of the Placement chart, inquiries will be addressed

S iNDUCTION

Induction was done in a private location where members were taken through tactics such as

Tracings
Tracker installation
Weapon handling
Bugging Systems
Sleep Deprivation
Surveillance ( Physical ,Mobile and Electronic)
Systems Breaching
Building Cover Stories
Changing of Identity
Communication Security
House Penetration
Cryptology
Safe Houses and their protection

For every exercise vetting would take place and cross training would take place on live targets

During the inception of the unit it was under management of Andrics van Rcnshurg foniier
N.LA Operative with close ties to the right wing who ran the unit as a personal entity
created confusion amongst team members as we would go after personal targets of various
managers from what we were told they were pedophiles to "tax evaders" of which the
units members would not see the end results especially black members, the unit became under
scrutiny from various law enforcement agencies but everything dissappeared without any
explanation from management.

The unit operated without a mandate from inception until some members complained ol the
legality of our operations whether the operations were revenue driven or personal agendas from
the white majority who were silenced with huge salary packages and blacks given an excuse of
budget constraints with exception of two black sympathizers who were at the lowest of (he
salary scales despite the promise of entry packages of not less than R550,000.00 per annum.
Late 2008 a mandate was proposed which never saw its approval and yet we still operaleft
Some grievances were lodged by members that happy with packages they were
never resolved to date because we were not on the S.A.R.S data base but were paid from Mr
ivans bud&et. Some members were paid out as said in the background above for
continuos complaints, between (Rimil and Rl,2 mu) and were told to leave and barred from
the media contact.

Some of the operations leading to right wing operatives were exposed by some black members
as we did a lot of so called "controlled deliveries" which we felt we were being used to escort
exchanges of abalone poachers which we never saw the bust as black foot soldiers wouid he
withdrawn as soon as the exchange of moneys and abalone takes place. all these operations
were verbally approved with no involvement of any other enforcement agency. Some dealers
would be arrested of which we believed were competitors to the concerned suspects.

Sources would be paid an undisclosed amount of money which were handled by what came to
he known as the INNER CiRCLE of the unit, The division created conflict and (JVL) as
the mediator and finally Andrics van Rcnsburg was tired but not before he threatened to CXfXISC
the unit and was oflèred a cheque' and the unit members warned to cut all ties
communication with him,

The unit was left without the manager until we were told that (JVI would be the manager but
nothing was on paper to that effect and that all operations would he approved by him or (IP) -
Meeting with these management was an obstacle for members with salary grievances who
were
sent from pillar to post. When also asking about the approval of the mandate in writing,we
were told to imagine if Pillay's signature could appear on the document, that wou'd cause a
serious problem and would expose him(IP), immediately then operations would carry on as
usual, as if nothing has happened.

The unit went through several name changes trying to shy away from being persecuted for
collecting intelligence on tax payers by means of covet tactics, we were recruited as Specialist
J\gents which later became Specialist investigators we were no longer intelligence Collectors
but Information Veritieis, all the nonsense Especially if we suspect El ial people dre
aware of our existence

More information with regards to the method of operation and approval of projects will he
attached in the minutes of meetings held at the time.

CRITERiA

Projecis were given psuedo names project managers would not give the lull intelligence until
we were on the target area .Post Polokwauc we were given projects and named TAX
OFFENDERS hut on close inspection we realised that the concerned targets were J.Z
sympathisers or what came to be known as FRIENDS OF J.Z subjects of interest were mostly
in GAUTENG and K2,N provinces and internally in SARS especially if perceived to he
aligned to JZ, when the black members objected to the merit and reason for investiaation they
would not he paid their allowances or either redirected to more hostile operations hut the
operations would still carry on with the exclusion of black foot soldiers then handed over to the
N [ Ii for further investigation and collection Operations would involve stalmg olrn4u I roni
residences (Dumpster diving),interccptiori of mobile and land lines, extraction of bank
statements, installing of tracker systems on vehicles and posing as loiuers around the premises
while monitoring movements via hidden cameras even using sound enhancers to listen
conversation of our targets.

When we request whose our client, we would be met with hostility and threatened with
insurhodination, as the instruction comes from above, meaning (IP and SVL). Ours was to do as
we are instructed, no questions to he asked. Cases would range from Chinese business people.
Indians aligned and known to he bankrolling JZ ,Black business people aligned to if and who
were vocal to his pre Polokwane. vocal members of the ANC NEC alwav.s told with
requests from clients'. During one operation post Poiokwanc we were in l)urhan (I liltori
Hotel) to he precise; I had a heated argument with the (cani leader questioning and
sharing the hotel with us, in this instance, it was Zizi Kodwa and Fikile Mbalula. ihe followuig
day 1 received a call from the management ordering me to surrender niy laptop and electronic
devices to the team leader, I was banned from meetings and little communication with the resi
of the team members,my mobile was tapped and I was under surveillance which I reported and
confronted some of the members about.

Names and requests from 'ghost clients'

Mahhelcni Ntuli -- Lifestyle questioneer and links for source of funds


Julias Malema — Lifestyle questioneer, registry of assets versus income.
Zizi Kodwa Lifestyle questioner, registry of assets versus income.
Tony Yengeni lifestyle questioner and his links with JZ.
Lembede Associates — Fund allocation and future covet auditing into hinds with aim of
investigating recipients for vat and tax compliance.
Fikile Mbalula Lifestyle questioner and associates.
s Fana Hlongwane and his links with the retired Gen. Siphiwe Nyanda and company
called Ngwane securities.
Robert Gumede his links with JZ, and his money laundering schemes.
• Khula Zuma lifestyle questioner, registry of assets versus income and source of income.
• Zweli Mkhize, Bheki Cele and his association with JZ. Also look at KZN 'departmental
tenders' under their MEC roles.
• Vivian Reddy Fund allocation and future covet auditing into funds.
Ace Magashule lifestyle questioner, registry of assets versus income.
• internally Senior Managers like Vuso Shabalala, were targeted to be sidelined from the
restructuring and activities of SARS until he resigns from SARS, and exacily that
happened later he left and joined DoJ as he was seen as a threat to replace the
Commisioner and expose some of the Procurement irregularities since he was very vocal
on the appointment of Barry i-lore and BB & D relationship.
• We were told to track and tag Leonard Radebe's vehicle (RVT74 RGP) because he
constantly visited JZ at Forest Thwn, we also bugged the mobi1e phone 0824990249. At
some point we followed him in KZN up to Beverly hills hotel were he was to meet JZ,
this infonnation was tapped on the phone and intercepted.

&MARQII4ALISAfION OF BLACKS

Black members internally began to be sidelined financially, knowledge of clients because they
were questioning the method of case selection and the criteria used for selecting targets as we
felt we were stepping beyond our jurisdiction, which was to collect revenue as we were told by
our managers before. It was also becoming very dangerous for some of us as we got deeper in
these operations, because it was quite evident that SARS was playing dirty and danjierc'ns
games, the issue was WIlY are the state resources being abused in such a dirty way'1 We were
also surprised to here that some of our members come from the NPA structures that were
thereatened by closure. At some point, documents were amended when we refused to take
cerlain instruction, certain members were told to leave this unit for refusing to in Dc dirt
and told not to be in touch with us for good. Some ofus threatened to go public with thr
activities and were threatened with disclosure clauses, all of a sudden approvalr uf nub
ligitirnate eases were made available to us as members and the direction changcd to
investigating counterfeit and textilc industry.

9 .PAYM.ENTS METHOD

Theunit was funded through a cost code centre 50 20 30 /3 1,


Sources were paid with funds from "clients",
Claims and salaries were paid out of the same cost code centre.
The unit had a secret account from which only members in the "inner circle who
funded that account. There was always a thought and suspisions that the funds came
from the busts that were never declared.

I 0.CONCLUSJON
As concerned members of the community, we are aware that SARS is being perceived by the
public as an effective, most organized and highly performing organization. We however regret
that a lot of ill conceived actions taken and being performed by some senior management in
particular Merrs (IP) and (J VL) arc totally against our constitution. It is also a fact that the then
Commissioner Mr (PC) is well aware of these activities despite him always waiving the card of
being an activists. No one is safe, particularly if he disagreed with (PC), that will be the day of
athrocities and serious victimization if not seen as fighting his legacy. It is also very clear, how
his successor has been appointed, it is simply to protect and shield his activities, particularly
procurement in SARS. No one why, even the Auditor General failed to audit and give the true
reflection of the state of SARS, THEY WILL NOT DARE EVEN WI lEN WE KNOW, IHERE
HAS BEEN PROBLEMS [N THE PAST particularly with assets. including the assets that were
bought for our unit. Nobody knows their existence except for (PC), (IP) and (JVL), because
this state of the art equipment will raise eye brows and questions will be asked as In what is
being used for? Only agencies like NIA should be in possession of such equipment, but SARS
ghost employees are in possession of all that. Someone must stop this nonsense the
sccurity of our country is threatened, taking into consideration that the profile of some
members is questionable. We also appeal that the Enforcement team has been in existence since
1999, (PC), (IP) and (JVL) should he dismantled with immediate effect and be redeployed
elsewhere. Why is it easy for all SARS structures to he conlirwosly restructured hut not
Enforcement leadership, who is protected by (IP),
o stays intact
o Status of group
Group is not known

Cost centre is not known


Until further notice this wili be the case
Any activity which effect this status is against policy and regulations
Any change must take place in the design, we are discussing the
interim

All members are valuable to EARS


Nobody will be redeployed or asked to resign. Nobody saiaiy or grade
is under threat
o Channels of conirnunication
U
Administrative Issues:
U All admin issues to Eddie, who will pass it on to Karen.

Do not speak to Karen.


Examples;

o Claims, equipment, S4T, Vehicle claims, study

bursarles, leave, changing of banking particulars


U
Operational issues;
U Approval of operations lies between Ivan Piliay end Johan van

Loggerenberg. Without approval from them operation


unauthorized.

All potential Cases must be fotwarde'd in writing to Johan v


Log/Mr Pillay.
U Any personal issue/problem must be in writing. Including in

your [after addressed to Mr PlIlay must be the issue as well as


a possible solution to the problem, This channel is from you to
Eddie to Mr Pillay and is open at all times, The request
however is not to misuse the channel.
o With regard to our work circumstances the freedom under wtilch we found
ourselves are precious and must be protected
o The request from the top Is to control your passion and desire to go out and
catch crooks, Keep that passion but keep in mind that we are this
unit The request Is to be patient and to make sure that we can build
something that is not dependarit on individuals but can survive without any of
us,

o Some members will be tasked to do things. When you are not tasked then the
least you can do is to go and study the policies with regard to leave, S&T,
traveL kilometre claims etc. It is the responsibility of every member to have a
basic knowledge or SARS% policies, procedures, mendate and the 34 laws
that govern BARS. (Internet)
o According to the law BARS cannot collect covert intelligence
o Everything we do must be measured against the following:
Is it approved?

Is it In the mandate? In other words does it have to do with tax and


customs?
Both questions must be yes
o Everything we do must be in accordance to the constitution and must be
legal, (If you do not know, then don't do it).
o The focus area or the group stays the illicit economy (Remember the list,
cars, drugs, abalone, cigarettes etc.)
o Wd will be tasked by the client to establish something in his investigation that
cannot be established through the nonnal channels.
o We then have the luxury or planning en operation and to obtain authorization
to execute the planning.
o We are not a liaison unit. if you want to liaise with the SAPS, NIA, SASS.
050 etc. then you can ask for a transfer to the BARS unit tasked for liaison
o Interaction with other govamrnent depertmenth is out and not authorized
14 May. 2008 15:31

o Every week an 0MB report must be foiwarded. Done as follows:

we meet and discuss the things that happened end what is


about to happen, Thk S reflected In the 0MB that Is liaised with Johan
van Log.

- Skolils

o Contact wtth Skollie must be broken completely.


o My contact must he authorized.
o If he makes contact then it must be reported in writing via unit leaders to Mr
Pillay.

I
-

NAI1ONAL RESEARCH GROUP


PLACEMENT
Live Hotmaui Pdnt MessaLe cl 3

Fwd: FW: Re
From: ]ohan De
Sent: 17 March 2008 02:16:25 PM
To:

Forwarded message
From: Skollie
Date: Man, Mar 17, 2008 at 1:02 PM
Subject: EW: Re
Ta: Johan De Waal <jddewaal©gmaiLcom>
Cc: itumeleng leeuw >1

Please circulate to all memebers

From: Hayes
Sent: Ma)th 14, 2008 16:18

Subject: Re
*

NB: This email and its contents are subject to our email legal notice
which can be viewed at

Dear AJ

As discussed; Mr. PiUay requests to meet all the members of the team separately on the following dates and
time:

25 March 2008 at Hatfield Gardens Interview Room 1:

121130431100 Chad Fourie

13H0043H30 Sipho Nkoma

13H3044H00 DIUo Nyaphudi

14H00-14H30 Danie to Roux

http://bl I O9vvblu 1 681 S


55 Live Hotmail hk4t Messtj1

30451-100 Joharrde Waal

£5H0045H30 Anton Wout

3H3046H00 GilbertG nn

16H0046H30 Pieter de Sod

16H3047F100 Frans van Niekerk

26 K/larch 2008 at Hatfield Gardens Room 2

Helgaard

OSHOO-09H30 Kenny

09H3040H00 Itu leeuw

10H0040H30 Eric Kweta

101-1 3041H00 Muller

11H0041H30 Fanie So hma

11H3042H00 Gerrit Jute

12H0042H 30 Mike Peega

12H30-13H00 Japie Tshabala

28 March 2008 at Hatfield Gardens InteMew Room 1

Keith Hector

09H00--09H30 Siobhan Wilson

09H3040H00 Nora Pitsi

10H0040H30 Timothy Mabaso

and regards

tiup:4 t 09whlu I 1Iivccomirnaij/PtfmShcl l.aspx'fiype mcssagc&cpids oX I bu72c-... X 24 2009


Preamble to SARS Response to the Intelligence Dossier"

Background
Much of what has been highlighted in the media regarding claims that SARS operated a
secret unit which allegedly targeted certain individuals for political aim can be linked to a so-
called "intelligence dossier" compiled by a former SARS employee known as Michael Peega.
It is also the belief of SARS that other disgruntled former employees assisted Peega in the
compilation of the "intelligence dossier",

Peega was employed in SARS in March 2007 as a specialist agent (customs), deployed in a
unit known as the National Research Group (NRG) which was tasked with investigations into
smuggling by organised crime groups. He was dismissed in May 2009 following his arrest
and charge of illicit rhino hunting. His criminal case is still pending.

SARS' Efforts in dealing with Smuggling

Historically SARS, from Customs perspective, operated in what may be simply phrased as
an administrative approach focused on revenue collection. With the rise in issues of trans-
national crime and smuggling in particular linked to organised crime syndicates, it became
evident that SARS' Enforcement actions with regard to Customs needed to be adjusted to
successfully address this issue. This adjustment in the manner in which SARS executed its
enforcement mandate however took various forms over time, which were informed by the
"lay of the land" at a particular point in time, SARS' own interpretation and understanding of
what was required, as well as through consultations with law enforcement and intelligence
agencies of South Africa,

It is important to note that the emphasis has always been place on improving SARS'
monitoring and investigative capacity in order to address smuggling. This has been achieved
as follows:

a) The first unit created was a criminal investigations unit (1999) and this unit
still exists in SARS.
b) The anti-corruption unit was setup in 1999.
c) In 2000 the Tax and Customs intelligence Unit came into being and was later
absorbed into the Business Intelligence Unit and today exists as two separate
business units namely, Segmentation and Research and Case Generation
and Compliance Risk.
d) The Special Projects Unit which handles significant cases came about in
2002 and is still in existence.
e) There are small joint Customs and Audit teams which are mainly based at
ports of entry which came about in 2005 and still exist.
f) The Customs Border Control Unit (CBCU) was setup in 2006 and the
previously setup anti-smuggling units were amalgamated with the CBCU.
g) The Special Projects Unit was formed in 2007 later changed its name to the
National Research Group (NRG), and at its inception was discussed with NIA
and SAPS CIG regarding its existence and future placement, as well as its
joint operational activities with such. The NRG later amalgamated with a small
part of the BIU to form the unit now know as the Illicit Economy Research Unit
(IERU) towards the end of 2009.
h) The Forensic Audit Unit was established in 2009.

The establishment and reorganising of the above mentioned units is illustrative of SARS'
shift towards a law enforcement approach, specifically in the Customs environment.
Additionally, laws were amended to provide Customs with law enforcement powers,
including powers of arrest and being allowed to carry official firearms; a dog unit has been
established and are operational at major ports of entry; detection equipment such as
scanners have been deployed.

With specific reference to the Special Projects Unit (SPU) later known as the NRG, this unit
at its inception was designed to focus on investigations into smuggling activities of organised
crime groupings and by virtue of being housed within the CBCU environment, was deemed
to be a support structure to the CBCU, It is further reiterated that during the conceptual
phase of this unit, SARS consulted with the NIA and SAPS Crime Intelligence Gathering
(GIG) regarding its establishment as well as its future placement. As mentioned above the
unit was amalgamated with other units and is now known as Illicit Economy Research Unit
(IERU).

SARS' Anti-Corruption Efforts

It is important to note that as far back as 1999 SARS started to strengthen its anti-corruption
capacity. There is a fully fledged structure known as Anti-corruption and Security (ACAS)
which forms part of Enforcement and Risk division. SARS has embarked on a zero tolerance
view of corruption with specific emphasis on its efforts to promote an organisational culture
of selfless service and integrity. Whilst this applies to the public service in general, the nature
of business at SARS heightens the risks, and makes the organisation a target of
sophisticated international crime syndicates.

The zero tolerance view of corruption has also been highlighted recently by the Deputy
Finance Minister Nhlanhla Nene, who remarked that "the elite have "pick-pocketed" state
resources through corruption, crony empowerment and by milking the state through charging
exorbitant prices." He also stated that "even as we search for a new growth paradigm and as
the world searches for a new economic paradigm, let us recognise that no system in the
world is sustainable if it is not underpinned by a sense of morals, ethics and values".

Similar sentiments were also expressed by the former Commissioner of SARS, now Minister
of Finance during the Budget speech. These sentiments are also shared by the
Commissioner of SARS, Oupa Magashula and is evidenced in the recent signing of a pledge
by the entire SARS executive.

SARS' efforts to root out corrupt officials, as stated above, dates as far back as 1999, and its
more recent anti-corruption campaign has shown positive results which is evidenced through
recent stats showing that between 80 to 100 members a year have either been dismissed
from SARS on corruption related charges or have resigned in the wake of disciplinary action.
For the period 2009-2010 the anti-corruption unit together with law enforcement agencies,
have arrested 30 individuals in relation to corruption within SARS.

In relation to the author of the so-called "intelligence dossier" SARS would like to highlight
25th
that Peega also faced disciplinary action which related to the fact that on the December
ammunition was discovered in the vehicle he was travelling in. Subsequent to his arrest
SARS became aware that he was being investigated on a number of charges relating to
illegal hunting of rhino.

At the time of his arrest Peega claimed to have been working as an undercover agent for
SANPARKS, this claim however was not true and he confessed in his statement to the
SAPS that he was involved in the syndicate. Additionally he was also on annual vacation
leave and any further claims of official operations within the NRG context would not be true.

It is understood that the above criminal cases have been investigated by the SAPS together
with the Enforcement section of SANPARKS and are currently with the NPA for prosecution.

In conclusion, it is SARS' belief that the anti-corruption drive within SARS has on the one
hand impacted positively on the organisation, and on the other has seen certain former
members colluding with Poega to divert attention from their own corrupt activities, by trying
to place disinformation such as a 'SARS hit-list" in the public domain. It is SARS' views that
the "hit-list" displays a carefully crafted list of candidates who are told that they are on a hit-
list and thereafter their support is leveraged.

It is important to highlight that SARS' selection of entities is done in the following manner:

• Random selection
• Risk engines which are driven by analysis and by statistical formulas; and through
• Suspicious activity reports which are sent to SARS and are verified before any
investigations are instituted.

SARS' Significance to the State

The significance to the State is aptly captured in the following quote:


"(T)axes (sic) underwrite the capacity of states to carry out their goals; they form one of the
central arenas for the conduct of state-society relations, and they shape the balance
between accumulation and redistribution that gives states their social character". In short,
taxes build capacity (to provide security, meet basic needs or foster economic development)
and they build legitimacy and consent (helping to create consensual, accountable and
representative government)." Margaret MeKerchar and Chris Evans, eJournal of Tax
Research (2009) vol. 7, no. 2, pp. 171-201.

SARS' position in terms of the State's ability to execute its Constitutional obligations, places
this institution in many respects at the heart of Government. This institution is a vital cog in
the wheel of government's ability to deliver, as such the integrity of the institution and the
confidence of the public in the institution is critical to Government delivering the necessary
revenue to fulfil the many demands on the fiscus.
Further, tax authorities of most countries are mandated specifically to shelter them from
direct party political influence in order precisely to prevent the undermining of the States
capability.

By the very nature of its work SARS will attract attacks from those attempting to avoid their
obligations to pay their taxes and carry out legal trade. SARS has consistently pursued those
who are non-compliant without fear or favour, without regard to political pressures and with a
commitment to fulfil its mandate with integrity and credibility. The strong stance taken by
both the present and former Commissioners of SARS against corrupt elements within SARS
is critical to maintaining the organisations integrity and commitment to treating all
taxpayers/traders fairly and with due process.

Giving credence to corrupt former employees potentially endangers the public confidence in
the integrity of this vital institution. Whilst any reports of wrongdoing should be investigated
fully, they should also be investigated through the correct channels and with circumspection,
and not through the pages of the media. The payment of taxes and compliance with customs
and tax laws has internationally been shown to be closely related to the public confidence in
the tax authorities, It is therefore at great risk that this confidence be undermined
unnecessarily.
What follows is a complete depiction of the details contained the "intelligence
dossier" reported on In the media, followed by the SARS response:
Some preliminary comments by way of introduction:
1. There seem to be more than one version of this document that has been distributed
publicly;
2. SARS only managed to get access to the version being addressed herein via the media;
3. This version has some pages missing from an earlier version that was shown to SARS.
SARS was not allowed copies of the first version. The essence of the various versions
remains the same.

The "intelligence dossier"

The document begins setting out the details of SARS employees that were deployed in a unit in
SARS, based in the Enforcement & Compliance Risk division. The names of the employees have
been deliberately removed by SARS for privacy reasons.

Extract from "dossier"

Operator in ctarlc
analy'( expert inflhlrntion
*t loot udvke,: I

SARS response:
This paragraph refers to dismissed SARS employee Michael Peega. It accurately describes what is
contained in his CV.

Extract from "dossier"

Mathejnat and
used as an data eap(urer and
I.

SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group.

Extract from "dossier"


I
WkJ)ifl expert jfl data
COUHICJ
the
within SA R.S and
II 1

SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group, but is incorrectly described as expert in data systems and counter-intelligence, This person
has a background in criminal investigations.
Extract from "dossier"

Intelligence and investigator in the


concerned suspects. uChl used as a and honey

SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group. The term "honey trap" suggests that the person provided sexual favours to subjects under
investigation by SARS. This is untrue, and more importantly considered offensive to the dignity of the
SARS employee.

Extract from "dossier"

MiJiiary IntelJigence and inVestigator


the Unit used as a

SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group, who has since resigned from SARS and is now employed in another government department.

Extract from "dossier"

elke and manager in the enforcement within &A.R.S


drninis(rutjtrn Worked as liaison oF
the unit and head office since we were not allOWe4l to he at head

SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group. The suggestion that this person acted as liaison since unit members "were not allowed to be at
head office" is incorrect,

Extract from "dossier"

learns we.re divided in a way thai


could not know what others werc busy with
they wc.i'e investigating
other unit members because of their affiliation and who ii
with and cot was severed by means of comparIm
I would regard of members into whai
concentratiOn camps where a
to
of any communicative tools to do that would result in hiocking arid
used especially within the black members.
Fiud the diagram of the N.R,G
Placement chart, inquiries will hc

SARS response:

The team's division was done as is the case in any other unit in SARS in terms of span of control.
Work was allocated to team members on the basis of skill and expertise. The suggestions that
members were "compartmentalised" and in "concentration camps", are false.
It is not exactly clear what is meant by "blocking" and bugging of any communicative tools" but it is
assumed that it suggests the prevention of use and/or monitoring of or telephones. The
suggestion that SARS "blocked" and 'bugged" communication tools, especially among black members
is false. Apart from such activities being illegal, SARS does not have the capability to do so.

Extract from "dossier"

Indoetion Was done in


private location where were laken

I racker instellatjojt

ggiug
Sleep t)eprivatiou
* ( .14)1)1k and
*
o Building Cover Stories
Clnging of identily
° ion Security
o I Jouse Ii,Cir lion
o Cryptology
Safe Ilotises and their

For every exercise vetting woujd take place and cross training would Uke place on live argels.

SARS response:
The induction for the unit was done at a private location as SARS did use outside venues for induction
purposes for new employees into SARS. Venues would be selected based on the size and needs of
new employees into SARS Induction was conducted with some of the members of the unit at the time
The content of the induction, dealt with the following topics:

o Basic introduction to legal entities;


• Introduction to various forms of income tax;
• Basic introduction to the VAT cycle;
• Basic introduction to imports and exports;
• SARS illicit economy strategy;
• Basic forms of common customs and tax scams.

The so-called "induction" referred to in this document is false. The report also refers to "vetting" which
occurred. The process of vetting SARS personnel is a lengthy process that is done in conjunction with
the National Intelligence Agency. Depending on the level of clearance required for an employee, such
a process could take up to 6 months. While Peega did undergo pre-employment screening like any
other employee, he was not vetted by the National Intelligence Agency.
Extract from "dossier"

During the inception of the unit it was under management Name removed bysARs
N.l.AOperativc with close ties to the right wing who ran the unIt as a personal entity that
created amongst team members as we would go after personal targets of various
S.A.R.S managers from what we were told they were pedophdcs to
the
units members would not see the end results especially black menihe.rs, the unit became under
scrutiny from various law enforcement agencies but everything dissappeare.d without any
explanation from management.

The unit operated without a mandate from inception until some members c nptained of the
legality of our operations whether the operations were revenue driven or personal agentias fiarn
the white majority who were silenced with huge salary packages and blacks given an excuse ot'
budget constraints with exception of two black sympathizers who were at the of the
Late 200* a mandate was proposed which never saw its approval and yet we still opcrnied,
Some grievances were Lodged by tncrnbers that weren't happy with packages bu' they were
never resolved to date we were not on the dasa base hut were j,aid from Mi
lvans Pillay's hud&et. Some members were paid Out as said in the above thr
complaints, between (RI mu and Ri,2 mil) and were told to leave and barred from
the media contact.

Some of the operations leading to right wing operatives were expose.d by scone black iembcrx
as we did a lot of so called "controlled deliveries1' which we rdt we were being used to escort
exchanges of abalone poachers which we never saw the bust as black foo whukl be
as soon as the exchange of moneys and abalone takes place. all these operations
were verbally approved with no involvement oany other eriforcemem agency, Stunte dealers
would be arrested of which we believed were corupetilors to the concerned suspetis.

Sources would he paid an undisclosed amount of money which were handled by what came u
he known as the of the unit, 'ihe division created crintlk-f and ti VI. e'tme as
,, 1,

the Name removed by


odjatur and (mall)
niti a ad flred but ma he tircatened in xc
o I a si cheque' and unit wa,ij ad (C t it alt cx i ad
km with Itim.

1
uic "nit was wit how, the manager uOtj I we were told that U VI.) would be he
nothing was on to that effect and that at) operations wOuld hr appi-oved b\' hut
Meet flft With these 'imanageinent was an him ot
sent from pillar to post. Whefl also asking with salary were
were laid to imagine if 'Mr Pillay's signature could the approval of the mandate in writing,we
problem and woulj appear on the doc.UniCni, that won Id cause a
him() linmedj,,tejv ilicru operations
usual, as ifnoihirtg has happened, Cai'rv on as

The unit went through several name changes trying


collecting i telligeuiee on tax payers by means to sh away heiuig persecuted kur
Agents which later iac(ics, we WetC i'cc.rnitcd as
Special 1st, we were no longer Intelligence
hut Veriflers, all the nonsense.
aware Of our it'we suspect (luat certain people mire.

More lnl'ormation with regards to the method of


operation and approval of Wilt be
attached in the minutes ot'mnecings held at the time.
SARS response:

During its inception phase the unit was under the management of a SARS employee who was a
previously employed by the National Intelligence Agency. SARS is not aware that this person is or was
involved with any right wing group that may have been or may be a threat to South Africa or SARS.
SARS doubts the veracity of this claim.

The report also suggests that the former manager ran the unit as a "personal entity" and that case
allocation to the unit was problematic. The suggestion that "the unit operated without a mandate" is
rejected by SARS. A formal proposal in a SARS memorandum dated 8th February 2007 dearly sought
approval for the appointment of personnel and proposed for the creation of a specialisect capability to
focus on organised crime and in particular smuggling. The memorandum further proposed that the
capability be created within the Custom Border Control Unit (CBCU) and sought to combat organised
crime in the following areas:

illegal drugs;
illegal abalone;
illegal importation of second-hand vehicles;
importation of counterfeit goods; and
smuggled tobacco.

(8th
This proposal was recommended by the General Manager Enforcement and Risk at the time
February 2007) and was approved by the Chief Officer Corporate Services on the 13th February 2007.
A very clear standard operating procedure was introduced to the unit. The unit was not in a position to
select investigations on their own accord. The unit was never managed as a personal entity by any
SARS employee. In a formal memorandum dated 25 July 2007, the mandate of the unit was further
expanded and linked to the government objectives to address organised crime for that year. Later, the
unit was moved from the CBCU to the Enforcement Special Operations sub-division and the mandate
was further developed to include the additional focus of the unit to be directed towards cases were
activities of tax payers fall within the ambit of organised crime and a particular emphasis was placed
on cross border and SARS corruption related activities, It was again emphasised that all activities
should be in accordance with SARS policies and procedures and that the activities of the unit would
be primarily on key role-players in the illicit economy. It included joint actions with law enforcement
agencies were official approved. On the May 2008 the mandate was even further clarified to
differentiate between collecting departmental intelligence and the purpose of the unit. The use of legal
methods and operating within the legal and policy framework of SARS was again emphasised. The
report seems to suggest "many name changes of the unit and that of the job-descriptions of the
members in the unit". This paragraph again seems to suggest something "sinister" in the activities of
the unit. This is rejected by SARS. The reality is far simpler in that. The Special Projects Unit came
under the auspices of the Special Operations sub-component as described earlier, and another unit
with the same name already existed. As a result, the unit's name was changed to National Research
Group (NRG) in order to avoid orgartisational confusion.

The suggestion that the unit came under the scrutiny of various law enforcement agencies is
disingenuous. Both the National Intelligence Agency and South African Police Service Crime

//
Intelligence Gathering were consulted frequently throughout its existence at various levels. The unit
often cooperated with various law enforcement agencies in the execution of its mandate.

It is suggested that SARS expected and designed the "operations of the unit to be Internal
notes (which happen to be attached to the "dossier") clearly states the opposite:

Bullet point 4 states clearly "according to the law SARS cannot collect covert

a to
covert Intel gence
Bullet point 5 stating "eveiything the unit does must be measurable against whether if is approved,
whet her if has to do with tax or customs

we do must be against the


' Is It approved?
Is In the. In other wOrds doe.s 10 dO wUh

Both queslions be yes

Bullet point 6 which states "eveiything the unit does must be in accordance to the constitution and
must be

(If you do not know, then do It).

Bullet point 3 placed the onus of responsibility to ensure basic knowledge of SARS policies,
procedures, mandate and legislation which governs SARS on every member of the unit.

Same me wflJ be to do Things you not taeked then the


least you do is to go study the policies with regard to teave, S&T,
travel, etc. it is the of every rnernbGr to have a
of Procedures, arid 34 laws
that govern SARS. llnternej)

It is stated that "white members of the unit were paid much more than Afilcan It is also
stated that "African members were given the excuse of budget constraints with respect their salaries".

Some of the highest paid members of the unit were white employees. However, so were some of the
African and Coloured members. The lowest paid member of the unit was in fact a white female. Some
differences in salaries did exist within salary bands associated with those posts.
The report then claims that ".. grievances lodged by members with respect to their salaries were never
resolved because the employees of the unit were not on the SARS employee This is
patently untrue. All SARS employees deployed in the unit (newly appointed) were interviewed and
selected for posts as is the practice in SARS. Motivations for appointments were done in the standard
interoffice motivation and were subject to approval of the senior manager human resources, manager
finance, general manager enforcement and risk and the chief officer corporate services. Internally
seconded employees were already on the SARS personnel database. Successful applicants received
an offer letter on a standard SARS letter head as is done with all prospective employees in SARS.
SARS as employer provided all employees with employee numbers and they were placed on the
SARS payroll system as is the normal SARS practice. SARS contributed to all employee's in the group
life insurance scheme as well as their medical aid schemes. All employees entered into a standard
employment contracts with SARS. No formal grievance was ever registered by any member of the unit
during its existence.

The report suggests that ".. some members were paid amounts between RI million and RI, 2 million
because of their grievances and were told to leave SARS' employ and barred from media
Since the inception of the unit to date, only one employee's contract was terminated by mutual
agreement and a number of employees resigned over the period 2007 to date. One member was
dismissed after an internal disciplinary and appeal process in June 2009. The balance of the unit
members was absorbed into the Enforcement Investigations component.

Itis true that all SARS employees are barred from sharing information that is either directly or
indirectly acquired by them in the course of their duty. This is achieved by means of an employee
signing an oath of secrecy once employed. All employees in the unit were required to do so.

The report then suggests that ". . .Afrfcan members in the unit were involved in a number of controlled
deliveries but were withdrawn as soon the exchange of monies or abalone took It further
suggests that "persons arrested were the competitors of other suspects". SARS' position is that every
controlled delivery that occurred during the existence of the unit was done in conjunction with relevant
law enforcement agencies. This unit did not have powers of arrest and all arrest executed were done
by the law enforcement agencies at their own discretion.

The report then suggests that "...undisclosed amounts of money were paid to souives and that JVL
(this apparently refers to Johann van Loggerenberg — Group Executive Enfo,t,ement Investigations)
was brought into the unit as mediator and that the former manager was fired, that the former manager
"threatened to expose the unit" and was offered a "silence cheque" as well as that unit members were
warned to cut ties with the former manager. It is common cause that law enforcement agencies do
under certain circumstances pay rewards for information relating to organised crime. It is also well
known that SARS policies and Treasury regulations provide for such instances. All such transactions
are subject to inspection by the Auditor-General on an annual basis.

Johann van Loggerenberg was brought in as manager at the time when the SARS operating
framework underwent change and for the simple reason that the span of control in the division
required an additional manager to ensure proper oversight. Insofar as the former departure
from SARS - it occurred on mutual agreement - when his contract terminated. This occurred amicably
and was certainly not because he 'Threatened SARS" as stated in the report.
The attached minutes being referred to in the report have not been made available in the version
provided to SARS and SARS can therefore not respond. It certainly is possible that the author may
have access to copies of such minutes if what is being referred to relate to the standard weekly OMS
reports. It is practice in SARS that business units participate in daily, weekly and monthly operational
management meetings and that such meetings are recorded in minutes. SARS would caution though
that in the event that such minutes are indeed true minutes of such meetings, the author and others
should be aware of the restrictions and obligations of privacy with regard to taxpayers. In the event of
the minutes reflecting names or activities pertaining to taxpayers, care should be taken to publicly
release such as it could be a possible breach of secrecy in terms of the Income Tax Act and Customs
Act. SARS can unequivocally state that such minutes NOT will confirm any of the targeted
taxpayers as mentioned in the "dossier" since none of them were ever assigned to the unit for any
investigation.

Extract from "dossier"

Projects were given names


we were on the (arget area would not (he wuil
we were given pwjceis lAX
close rnspect reaiiscd that the
what eai-ne to be known as PRTEN'DS
m
OF .1.Z Oflntercst Were
GAUTENG and K ZN

would not bepaid their allowancesor either and reakoji fOr they
rcdireeted,to more hut the
ojx r4lions would still
carry on with the c,xehmion of black root then
for further In
residences (l)unips(er
Op±ratioiis would involve stealing of ftom
ofe—mails. mobile and landlines. ton of bank
Statements, Installing of tracker
systems On vehicles and
while monitoring moveIllejils via bidden as around the premises
COO VcrSation 01 even using Sound enhancers to listen ic
targets.

When we request whose our c'ient,


we would be mel with and threatened with
osurhodinaijoti as the instruction comes
above, meaning UP JVI,). lo do as
are Inst nrcted, no questions to be asked, Cases would
range Chinese Inrsiucss people,
rttlians aligned and known to be
bnnkrof tins .JZ ,Black business people a! igtred In J/. and who
vocal to hjs C mpaign pro
vocal members of the ANC NEC Iufd with
cqucsts 1mm (jho't tjtuiic Dui mg ont,
posi in L)w b rn (Hilton
prcc)se, I had a heated argtlmenr with Iheleant
arid

SARS response:

The suggestion in the report is that "the unit was tasked to investigate various individuals based on
their political It further suggests that "the unit was involved in stealing mail, intercepting
emails, mobile phones and land lines as well as extracted bank statements and SARS
denies all as stated in these paragraphs. The process of task allocation for the unit was clearly defined
and the steps to be followed by the unit when cases where allocated. As already stated the unit's
mandate was to focus on organised crime in the illicit economy with specific reference to smuggling.
The investigations undertaken by the unit required approval for activities, at various points duiing a six
___________

stage process from ailocation to conclusion. Furthermore with reference to the annexure attached to
the "dossier" bullet point 7 clearly states that the focus area of the group stays within the illicit
economy and lists cars, drugs abalone and cigarettes as examples.

The focus area of Ihe group stays the lilleft


Beonomy (Peniamber tha lh;t.
drugs,

Again, bullet point 4 states that SARS cannot collect covert intelligence.

o to coUect covert
-

Extract from "dossier"

thitrirn, the hotel with us. in this inst5nce, it was Zizi Kodwa anti Fikile Mbaiukr.
day 1 received a call from the management ordering ore to my laptop and
devices to the lean) leader. I was banned from and flnla it-jib rest
at tire team memhcrs,my mobile was lapped and I was under surveillance whith I reported and
canf'rorrted some of the trienThers about.

Nanies 'iad r asts floin

Mahhekni Ntuli q er and links for sourcc of Ii.uids.


.Jtjlias Malema . registry ol assets versus income,
Zizi Kodwa Lilèstyle questioner, registry olassets versus income.
* J'ony Yengeni lifestyle questioner and his links with
Associates —• Fund aflocation and Ilitute covet auditing into tlmds with aim ot
investigating recipients for vat and tax compliance..
* Fikile Mbaluta Lifbstylc questioner and associates,
Fana Hlongwane and his links with the retired Gen. Siphiwe Nyanda and company
called Ngwane securities.
* Robert Gumede his links with JZ, and his money laundering schemes.
i(Jnda Zuina lifestyle questioner, registry of assets versus income and source of income,
* Zwcli Mkhize. ITheki Cele and his association with JZ. Also look at KZN 'dcjuirtmeiurd
tenders' under theIr MEC roles.
* Vivian Reddy Fund allocation and covet auditing into funds,
lifestyle questioner, registry of assets versus income.
internally Senior Managers like Vuso Shabalala, were targeted tc be froni the
restructuring and activities ol'SARS until he resigns from SARS, arid esneily that
happened later he and joined DoJ as he was seen as a threat to replace the
Commisioner and expose some Qithe Procurement irregularities since he was wry vocal

We were (old to track and tag Leonard Radebe's vehicleL


constantly visited JZ at Forest Lbwu, we also hugged the mobile At
some point we followed him in KZN up to thus hotel were he was to meet
this in formation was tapped on the phone anti intercepted.
SARS response:

The first part of this paragraph appears to be censored by someone and SARS can therefore not
comment on this part. The essence of this part seems to suggest "that the unit was sent to
Natal to investigate Mr Zizi Kodwa, and Mr Fikile It also claims that dismissed employee
Micheal @ Mike Peega was ordered by management to surrender his laptop and electronic devices
within this context. This is not true, According to the project documents, travel plans and reports
requested from the members who participated in the investigation at the time, SARS can confirm that
6 members of the unit were dispatched to Durban on the l8th to 27th August 2008. The purpose of the
travel was to conduct investigations in respect of three approved projects in the unit focusing on drugs,
abalone and counterfeit DVDs. Four of the members stayed at the Hilton hotel, At the time SARS had
a corporate rate agreement with the Hilton hotel, The hotel vouchers and travel costs were paid for by
SARS and can be identified accordingly. According reports obtained from members who accompanied
Peega the following incidents are important to mention:

On their arrival at Durban airport on the 18th August 2008 while standing in a queue at the AVIS
car rental desk, Peega recognised Mr Tony Yengeni. Peega and Mr Yengoni had a conversation
and Peega introduced some of the members of the unit to Mr Yengeni and they had an informal
conversation this meeting was a coincidence.
In the parking lot of the rental cars, Peega walked up to another person and had a discussion with
him and when asked by a member who this person was he responded by saying that the person
was a member of the NEC and stated that he had met him in Polokwane.
Peega on numerous occasions shared with his team members how well he knows Mr Fikile
Mbalula from "days long before he joined SARS".
On either the 1gth or 20th August 2008 whilst the team was having breakfast at the Hilton hotel Mr
Zizi Kodwa who was also having breakfast at another table came across and introduced himself to
the team members and an informal conversation occurred, At some point Mr Kodwa went to
another table and conversed with a lady, he then returned to the table and interacted informally
with the team members. One of the team members made a comment that seemd to have offended
Mr Kodwa who then subsequently excused himself and left. Peega repnmanded the team member
for talking "like that" to Mr Kodwa after which this team member apologised and stated that he did
not realise who Mr Kodwa was,
Peega claimed to his team members that he knew that Mr Zuma was also staying at the Hilton at
the time, and he invited the team to see what the presidential suite looked like. Peega also stated
that he would be able to arrange a visit for them via Peega's contact with the security personnel,
and he subsequently arranged such a tour.

All of the above occurred coincidentally and had nothing to do with the formal purpose for the travel to
Durban. Furthermore it needs to be stated that the team at the time was insufficiently resourced with
laptops and it was common practice for the team whilst travelling to provide daily reports to
management. The unit manager requested Peega to give his laptop to the team leader in Durban in
order to enable him to compile an report and these made him unhappy and almost lead to him
resigning. His team members convinced him not to resign. During their stay in Durban the team
'bumped" into Mr Fikile Mbalula at the hotel reception, the team proceeded to their respective rooms
and Peega remained with Mbalula.
Then a list of names of subjects/individuals supposedly under investigation by the unit is provided.
SARS's response in this regard is as follows:

None of the names listed were allocated to this unit for investigation at any point in time throughout
its existence;
Cases allocated to the unit were done formally in writing and only focused on subjects involved in
serious organised crime activities. Once any investigation was allocated to the unit, an
authorisation was recorded on a management dashboard which was subject to regular office
inspections. Taskings are very specific and in all cases the adherence to legal compliance is
emphasised.
The report suggests that lifestyle questionnaires, registry of assets versus income auditing and
money laundering investigations were conducted by this unit. In this respect the following:
o None of the members in the unit are auditors nor were they trained to conduct audits. They
did not have access to SARS' core tax systems and would not have been able to conduct
activities as suggested. It is highly unlikely that even if they wanted to conduct audit type
functions that they would be capable of doing so;
o The life style questionnaire is a relatively common tool used by tax auditors worldwide and
by definition requires direct interaction with the subject of the audit, The practice would
require SARS to send a lifestyle questionnaire under SARS letterhead in terms of SARS
legislation to the subject of the audit. This unit was not capable of conducting lifestyle
audits at any given time.

In SARS' view this list was deliberately crafted by Peega and others in order to create certain
perceptions that would suit their own agendas in the hope of somehow garnering support for their own
agendas.

Extract from "dossier"

Rhick rncnihers intermilly began to he sidelined knuwledge ihe


qiicslioiiing the method selection and the erierIa used br select inn. tat ns we
fell we were beyond our jurisdierion, which wos to collect rev UltO tctld by
our managers tire, It was also becoming dangerous for al'us as we dc per in
it quik. that SARS was tog dirt, and d
was WIJY the resourtes bc.ing ihusul to such 4&hrl\ w
to here that of out' Come 1mm uiI
lhercalencii by At some ductimenis were amended when

cCrluin 'J)Sltuc[jfl,t, Certain inejitbers were told to leave Unit let' I to the dirt
'old to bC iii l()l,I(J) With US trw Some thrcatefled 10 the w,
acUvilics dnd thrcaicncd with disclosure i '1
ligiamalL cases madL avathihle to US members the tian UI
lexifle industry,
SARS response:

The suggestions made in these paragraphs are figments of the author's imagination. The report
suggests that some of the team member threatened to go public with information pertaining to the
activities of the unit and were supposedly threatened with disclosure clauses. SARS has on record
only one threat of this nature by a member of the unit. Michael @ Mike Peega threatened to publicly
embarrass SARS which occurred on at least two instances, namely:

On 10 February 2009, at 10:00 Peega made verbal threats to other employees in SARS indicating
that he intends embarrassing SARS in the media. What is important to note of this date is that it
was preceded by Peega's temporary withdrawal from the unit and placement at head office
following his arrest in December 2008 and subsequent release on bail of R20 000. Peega
continuously arrived late for work and received a written warning for this which seemed to have
upset him.
• Later on the same day the manager of the unit received a telephone call from an attorney Elise
Swanepoel, who acted for Peega in his disciplinary hearing. During the telephone conversation
she asked that SARS consider paying Peega a year's salary in which case he would resign,
alternatively it was her instruction from Peega that he would go to the media and expose SARS.
The manager warned the attorney that what she was stating was tantamount to extortion and that
it was highly unethical for a legal practitioner. The attorney asked for a formal meeting on the same
day and the manager agreed and took along another manager as a witness. This meeting took
place at the attorney's offices in Malherbe Street Pretoria, and during the meeting the manager
raised his concern regarding this previous conversation, in which it was stated that it was the
intention of Peega to expose SARS in the media. The manager also raised the issue of unethical
behaviour and attempted "blackmail". The manager requested further information from Peega and
his legal representative:

That the employee remain bound by the oath of secrecy of which a copy was handed over
• Should the employee consider proceeding with the media that Peega consider the safety of
his colleagues as they were investigating organised crime syndicates.
• Should they intend engaging the media that they formally inform SARS to enable SARS to
put contingency plans in place, to protect employees that may be endangered by such
exposure. The legal representative responded that she was merely acting on instruction of
her client Peega.

Both of the above incidents are contained in affidavits obtained from witnesses at the time

Extract from "dossier"

• UniL was funded thrGugll a cost code


50 20 30 Ri
• were paid with funds fi-om
e and were paid out' of tue same cost code centre
• The unit had a secrel account fl-nm which onjy member in the
funded that weount Thcie was who
a Ihoug)u thv iht. (itnd\ 'i
ihat were never .deehiretL
SARS response
It iscorrect that the unit was funded through the cost code 502031. The cost centre 502030 however
belongs to a different department within The term "cost codes" refer to "cost centres" which in
turn refer to various units or divisions in SARS. No cost centre in SARS is secret and any cost centre
in SAPS is subject to audits by the Auditor General and SARS internal audit on an annual basis. The
report seems to confuse the terminology of "cost code" and "cost centre."

The report suggests that sources were paid with funds from "clients". This is not true. The SARS
annual budget makes provision for a line item "informant rewards", and such rewards are paid for from
a central point in SARS and are subject to very strict controls.

The suggestion that a secret account was managed by the unit is totally unfounded as SARS does not
operate in this manner.

Extract from "dossier"

As coneerned members r1 the community,


we are aware that SARS is being by the
public as an ctThctive, nmst organized
and highly performing (Wganizaiiun. We. however
that a lot of ill conceived actions taken and being performed
by some senior rnanageme.itt in
(IP) and (JVL) are lotatly against our constitulion. It is also
Comm iss loner Mr (P0) is well aware of these actiVities
a that the then
being an activists. No one is sale, despite him always waiving the card al
if he with (Pci), that will be the day of
athrocjtjcs and serious victimization if not seen as
his hegacy. ii is also very clear, how
been it is simply to protect and shield his activities, p:trtieularlv
procurement in SARS. No one why, even the Auditor General failed
reflection of the state of SARS, to audit and give the (rue
WILL. NOT DARE \V1IEN WE l<NOw, I'!
iN ThE PAST particularly with assets
this state of the art equipment will raise (IP) and (JVL). because
being used for? eye brows and questions will he asked as In wlmt is
Only agencies W<c NfA should be in possession olsuch
ghost employees are in possession of but SARS
all that. Someone must slop this nonsense the
security of our country is threatened,
taking into consideration [fiat the of some
members is questionable, We also appeal that the
tentit has been in since
I 999, (PC), (IP) and (JVL) should he dismantled with imñtediate
riThet and be redeployed
Why is it easy lbr all SARS .Stfl.lCtures to be ca)nhinuoslv restructured h
a oat
who is pmiecied by (W),

SARS response:

In respect of this paragraph, it would be improper for SARS to get drawn into a debate of a personal
nature concerning managers at SARS. Suffice to say that Peega (who is believed to be the author)
never interacted with the Deputy Commissioner, Ivan Pillay or with the former Commission and now
Minister Gordhan. Secondly the suggestion that state of the art equipment was purchased by SARS
for this unit is false.
Extract from "dossier"

1)
stays inaøt
Status of group

Cast centi'e is known


Until further notice this will be the cass

Any activity
is against polIcy end regulations
Any change must take place in the design, we era discussing
the

All are to SAPS


NObOdy will be redeployed or asked to resign,
ealar'j or grade
is under threat
o Channels of

Admjrilstratjvo

AM admin lesues who will pass it on

o
Vehicle claIms, study
leave, changing of bankinij particulars
Oparnucnaj

• Approval of operations lies Ivan Pillay end Johan van


Without approval from them operation s
UnauthOrized,
• All potential eases must be
In writIng 10 Johan v
LogIMr Plilay.

• My must be in wailing. Including in


your letier addressed to Mr Pillay mtasl be the Issue as well as
a possible to the problem. This channel is from you In
Eddie to Mr Pilley and is opon at all times. The request

however is not In misuse channel.


Extract from "dossier"

With regard to OUt work o


the freactorn under which we
Ouseives 9nd must be protected
o The request from the fop ía to contrOl your
passion and desire to go out
Oatoh eronks. Keep that passion but keep in mind that
we are this
unit The- request Is to be patient and to make
sure that we can build
that is not cn hut can suMve without any of
us,

o Some members wiR be $askatf to do things.


When you are not tasked then the
YOu can do Logo and Study the
with regard to leave, S&T,
travel, kRometre etc. it is the of eveiy member to have a
basic ef EARS'S potici
procedures, mandate and the 34 laws
that SARS. (Internet)
a to the law SARS cannot collect covert intelligence

we do must be against the following;


Is It approved?
Is it in the. mandate? In
does it have to do wUh tax Md
Customs?

L3oth questions must be yes

legal, (If you do not know, then dort't do It).


O The focus area at the group slays the
illicit economy the flat,
cam, drugs, abalone, cigarettes etc.)
o wHi be tasked by the client to establish something
in hIs Investigation that
cannot be through the normal channels.
We than have the luxuty of planning an Operation
end tt' obtain authorization
to CXCCuLo the planning.
We are riot a liaison unit. If you want to liaise with
the S,APS, MA, SASS.
DSO etc. then you can a* (or a transfer to the
unit tasked for
with other govefnrner,f
out and iint
SARS response:

'Rules of play" document was an informal document compiled by the manager of the unit which
was intended to address rumours and fears that came about in the unit during a time that SARS was
changing its operating framework. Bullet I confirms the cost centre, bullet 2 was to ensure the
members and their family's safety and that their names would not mentioned, the rest of the
comments relates to the job security of the NRG members in SARS and that the work they engaged in
was important to SARS, bullet 3 was an attempt to bring about some order in the manner in which the
unit dealt with administrative issues bullet 3 (operational issues) was to reaffirm that the project
,

required authorisation, page 7 is about ethics and legality relating to the projects of the unit and page
8 is to ensure adherence to SARS' operational management system. The last point on page 8 was
intended to ensure that one of the members of the unit who had left would not be inadvertently
exposed to information in SARS by members of this unit.
G

SARS: Ivan Pillay and Peter Richer's response to


Nhleko and Mahiobo
MEDIA STATEMENT BY FORMER SARS OFFICIALS, MR IVAN PILLAY AND PETER RICHER

RESPONSE TO INVESTIGATIONS BY THE HAWKS

JOHANNESBURG, 2 MARCH 2016- The public statements today by the Ministers of Police and State
Security on investigations by the Hawks into investigative units at the South African Revenue Sewice
(SARS) is a violation of our rights to dignity and reputation.

We are left with no other option than to seek legal advice and to take appropriate action to defend
ourselves. To date, all investigations that have been instituted against us, either by SARS or other
state institutions, have never afforded us a fair opportunity to be heard or to have our side of the
story represented.

Allegations that the investigative units in SARS were unlawful and illegal, operated front companies
including running a brothel, bugged President Jacob Zuma, spied on taxpayers and entered into ille-
gal settlements for tax disputes, gave certain taxpayers preferential treatment, infiltrated taxpayers,
broke into homes and planted listening devices and the like, are all false and unsubstantiated.

In addition, the allegation that SARS, during our time as managers, purchased and used sophisticated
spyware is false and unsubstantiated.

Several things are notable about the Ministers' public statements:

They did not announce or mention which law has been breached or the specific breaches that the
Hawks are investigating;

They ignore the assertion that was made by the Minister of Finance, that the National Research
Group (NRG) and other investigative units at SARS were established lawfully, with ministerial
approval, operated within the SARS legal and policy framework and generated significant tax reve-
nue for South Africa.

The Ministers of Police and State Security have sought, among others, to rely on the Sikhakhane
report which is flawed in fact and in law, and is eminently challengeable, and the Kanvane report,
Which bears no relevance to the lawfulness Of or not Of the investigative units in SARS.

We reiterate again: The NRG, and subsequent investigative units in SARS, were legally constituted
and did admirable work to disrupt activities in the illicit economy. Its finances were approved trans-
parently in the normal way Of SARS budgeting processes and was audited by the Auditor General
every year.

SARS, during our time as managers, ensured at all times that the NRC and subsequent investigative
units functioned within SARS legal and policy framework and within the laws of our country.

Issued by Ivan Pillay and Peter Richer, 2 March 2016


HHVV

From: johannvanlogg <iohannvaiilogg(Z0grnail. corn>


Date: 22 April 2019 at 14:08:21 SAST
To: Bernard Hotz
Subject: Ivan annexure H

Purchase Date Equipment Amount - R


Order Description/Purpose

4500107608 22.07.2009 NTS Countermeasure .. deluxe 55


countersurveillance probe monitor 886.00

4500107609 22.07.2009 NTS Countenrieasure .. Linear 176


junction detector 700,00

4500107610 22.07.2009 NTS Countermeasure equip ... 5000 222


spectral correlator 300.00
4500107611 22.072009 NTS Countenneasure equip ... 216
telephone and line analyser 020.00

4500112548 26.10,2009 Basic course in electronic 49


eavesdropping (michael schutte) 590.00

4500114215 24.11.2009 NTS Countermeasure - DMC3 8


Detector of Mobile and wireless 265.00
activity

4500114420 30.11.2009 Supply - VS-125 Wireless video 9


camera detector 120.00

4500125532 26.17.2010 Advance course in electromnic 18


detection (Mario van Aardt 240.00
s20] 6645)

4500126567 19.08.2010 Basic course in electronic 36


eavesdropping (Ingrid Yegappen) 480.00

4500146457 10.10.2011 Wolfhouiid Pro 28


500.00

4500150084 10.01.2012 XSweeperSpectrumsweeper 18


634.71
4500150537 23.01.2012 TG-VCAL J56 Signal Jammer 5
928.00

4500150551 23.01.2012 CPM-700 deluxe 35


countersurveillance probe monitor 520.00

4500150553 23.01.2012 ETA-3A single line telephone 58


analyser 653.00

4500150937 30.01.2012 Signet Advanced counter 20


surveillance RF detector 804.00

4500151377 07.02.2012 Signet Mobile GSM phone detector 20


805.00

4500152022 16.02.2012 FA Pinhole lenses 16


445.00

4500152134 17.02.2012 COSE12OST Zoom pinhole lenses 169


860.00

4500154640 30.03.20 12 GSM module call mynah


(consummables) 573.20
4500165358 10.12.2012 cellular detector-surveillance 23
countenneasure Winkelman 558 10
GSMI96 with SA918

4500165535 14.12.2012 HAWK XTS - surveillance 190


countermeasure equip 603.80

4500166611 31.01.2013 Oscor (Goen) spectrum analyser 237


(8Ghz) 758,84

4500166657 01.02.2013 mark 11 hand held receiver 22


539.65

4500184795 3 1.01.2014 fluke aircheck wi-fl tester 40


346.88

1 684
131.18

• The above spreadsheet reflects equipment purchased between July 2009 and July 2014.
• As stated earlier in the presentation, this list may not be exhaustive, and that additional information may still be found within the procurement
division of SARS.
• Accordingly, efforts are currently underway to locate as much information as possible in this regard.
• The above spreadsheet does however, provide a sense of the extent to which this Unit, under the guise of ACAS, went about in procuring
security-related technology and assets.
"1

The tax affairs of Julius Malema SARS


SARS Media Release - Responding to Mr JS Malema

Pretoria, 2 August 2013

Background

On 27 June 2013 counsel for the South African Revenue Service (SARS), addressed a letter to Mr Jul-
ius Malema and his legal representative, cautioning Mr Malema to refrain from making false public
statements about the state of his tax affairs and his engagements with SARS.

SARS is still involved in various aspects of litigation with Mr Malema and entities associated with
him. Mr Malema was afforded a period of 48 hours to rectify the following false allegations-

• That there was an agreement in principle between him and SARS to repay outstanding tax
liabilities and that the agreement was breach by SARS due to political interference
• That a request for a compromise was declined by SARS due to political interference
• That SARS was part of a 'concerted effort" to discredit Mr Malema and caused the farm
Schuilkraal to be sold to remove all means for Mr Malema to generate an income.

In subsequent weeks, Mr Malema has not only refused to correct his lies, he has in fact repeated such
allegations in various news interviews.

Normally SARS would prefer not to allow legal and other processes of engagement with taxpayers to
be side-tracked by questionable public campaigns in the media. SARS would also prefer to rather
make its case before the relevant legal platforms at appropriate times instead of getting involved in
public spats with non-compliant taxpayers. SARS considers the public comments made by Mr Malema
and reported on by the media as a serious threat to the integrity of SARS, that it is necessary to
respond.

SARS has therefore invoked Section 67(5) of the Tax Administration Act which allows SARS to dis-
close taxpayer information that would otherwise be treated as confidential, in order to disprove false
allegations made against SARS and its processes.

SARS is a state institution and subject to the Constitution and the Bill of Rights. SARS seeks to apply
the tax and customs laws it administers with fairness, in a transparent and even-handed manner
without any external influence.

No single person in SARS can decide who to investigate, who to audit, who to settle tax debts with
and who not to. Case selection for further investigation or audit is subject to oversight from various
mechanisms - committees with governance rules exist to consider and execute certain activities. All
these committees exist by statute, policy or governance mechanism and have very clear rules. They
comprise of persons with the requisite knowledge and expertise and are themselves subject to over-
sight mechanisms.

SARS is a semi-autonomous public institution with specific statutory obligations. SARS has consist-
ently conducted its work independently and in a non-partisan manner that does not allow for exter-
nal interference. It is an established principle that the Minister of Finance, the Deputy Minister of
Finance nor their respective offices involve themselves in the affairs of any taxpayer, particularly in
instances where there is a dispute between SARS and a taxpayer.

HISTORY OF MR MALEMA'S INTERACTION WITH SARS

An analysis of Mr. Malema's interaction with SARS in public records (media statements, interviews
and records before will demonstrate the following:

1. In January 2010 Mr Malema claimed to be in possession of an "intelligence dossier" which in his


view, proved that SARS had a special unit that was focusing on him and other persons because of
their association and support for President Jacob Zuma. It is ironic that Mr Malema is now claiming
the exact opposite. At the time he claimed that these documents originated from within the state
intelligence agencies. Later this so-called "dossier" was in fact revealed to be a product of a disgrun-
tled former SARS-employee who was dismissed because of his involvement in rhino-poaching. SARS
believed it was unfortunate that such a baseless document was used to attack a state institution.
SARS even went to the extent of meeting with Mr Malema to take him through the entire "dossier"
and to demonstrate to him the fictitious nature of the content. At the time Mr Malema indicated that
he accepted SARS's explanations.

2. In July 2011 Mr Malema publicly invited SARS to audit his tax affairs. He claimed that his tax
affairs were in order. In recent media interviews he has suggested that he approached SARS at the
start of the process that has led to his predicament now. This is not true.

During 2010 SARS made contact, on its own accord, with Mr Malema after he had failed to submit his
tax returns for a number of In accordance with SARS's general procedures he was afforded a
reasonable opportunity to make good on his tax obligations and submit outstanding returns.

On the insistence of Mr Malema, SARS attempted to resolve the matter within a month. It should be
noted that Mr Malema was represented by lawyers and accountants and a Chartered Accountant from
the very first interaction. At a later stage his representative team was broadened to include a legal
firm and a member of the Johannesburg Bar Council. Far from complying and resolving his tax
affairs within that month, every single time since then, a delay occurred on his

Responses in respect of outstanding returns were only received when SARS repeatedly requested
such information over many months. At no stage were any responses to SARS at the initiative of
Malema or his It took him a period of more than 18 months to file his outstanding
Ultimately he failed to regularise his tax affairs.

3. In relation to the trust under Mr Malema's control, even after a number of requests from SARS, he
still has not registered it for tax purposes.

4. Neither of these situations - his personal income tax affairs and that of the trust - was helpful in
demonstrating his willingness to comply with his tax obligations. Such situations do not only speak
to the failure of Mr Malema to comply with his statutory obligations, but also the fact that it is not
fair for SARS to treat one taxpayer different from another.

5. After eventually receiving the outstanding tax returns, on analysis of the information at SARS's
disposal, it became evident that Mr Malema submitted inaccurate information to SARS for the tax
years 2005 to In respect of the trust under his control, the same was found to be the
All indications were that Mr Malema was attempting to restructure his asset holdings without
informing This situation left SARS with no alternative but to launch a financial investigation
into his tax

a. At no stage was the Ministry of Finance, the Commissioner or Deputy-Commissioner for SARS in
any way involved in the operational aspects of the investigation, nor the decision to commence with
the financial investigation. This investigation was conducted in the ordinary course of SARS's busi-
ness.

b. The matter was assigned to the Financial Investigations team, who's Senior Manager at the time
was an African male. Since then, even though line managers have changed over time, the new senior
manager responsible for the unit is an African male. The project leader, a white male reported to
these managers throughout. Two lawyers were designated by SARS to participate in the case, of
which one is a white female and the other is an African male. The primary financial investigator in
the case is a white female. The suggestion that particular racial groups are "conspiring" against Mr
Malema is ludicrous.

6. The outcome of the financial investigation led to the following

a, Mr. Malema failed to register for tax in

b. Mr. Malema under-declared and mis-declared income in the years 2005 to 2011 and was assessed
for an amount of approximately R 16 million;

c. Mr Malema failed to register the Ratanang Trust for tax purposes;

d. Mr Malema failed to submit the tax returns for the Ratanang Trust;
e. Whilst Mr Malema was engaging SARS, he was transferring assets he owned to third parties in a
clear attempt to shift assets outside the reach of

7. Once assessed, Mr Malema failed to pay his tax that was due on the required date. He remained
unresponsive to several attempts from SARS to get him to pay. It left SARS with no alternative but
to obtain a default judgment for debt against him. Mr Malema, despite having had the opportunity to
do so, failed to challenge this This judgment led to the Sherriff of the Court to attach
property in his name. Only at the stage when this occurred, did Mr Malema engage SARS with an
offer to settle.

a. It is important to note that a taxpayer at this juncture has several options open to him/her. He/she
can object, appeal and take his/her dispute up along the hierarchy of Courts in the legal system. Mr
Malema did submit an objection. His objection was denied. He chose not to appeal this

b. An alternative for a taxpayer at this stage is then to consider making an offer to settle. Tax settle-
ments are guided by law and not by the whims and decisions of individuals in SARS. There are no
"special deals" for certain types of taxpayers because of their status in society, despite the sugges-
tions made by Mr Malema. He stands misinformed if he believes this to be the case. In fact, to the
contrary, SARS has committees who consider these offers that convene on a weekly basis. Neither the
Minister of Finance, the Deputy Minister of Finance nor the Commissioner or Deputy-Commissioner
for SARS, or any other manager for that matter, can influence decisions by these committees. The
considerations applied at the committee meetings are prescribed by statute and are recorded, A tax-
payer either qualifies for settlement or does not.

c. A requirement for a settlement to be considered isthat the taxpayer must make a full and frank
disclosure of his/her financial affairs. Another requirement is that a taxpayer must truthfully dis-
close all his assets and liabilities, including those held on his/her behalf by third Settle-
ment offers pass through a settlement committee.

[171
d. In Mr Malema's case, his offer was rejected and the reasons for this were put to him.

8.Mr Malema never made any attempt to pay any amount or portion thereof towards his tax debt.
This left SARS with no alternative but to allow the Sherriff of the Court to continue with the sale of
his possessions, in order to satisfy his tax In addition, because of the risk of dissipation of
assets, SARS obtained an order of Court, preventing Mr Malema from further dissipating It
was at this stage that SARS learnt that the National Prosecuting Authority with the Asset Forfeiture
Unit had already submitted a claim over the Schuilkraal farm. For that reason SARS relinquished its
claim over the farm.
g. Through several act Mr Malema demonstrated that he is either unwilling or unable to pay his tax
debts. It left SARS with no alternative but to institute sequestration proceedings against
hough having indicated his intention to do so, Mr Malema has yet to oppose this application.

CONCLUSION

As outlined, the behaviour demonstrated by Mr Malema has shown a consistent disregard for his
obligations as a taxpayer. This is not the sort of behaviour the millions of honest taxpayers in this
country should condone. His non—compliance is purely a tax matter - it has nothing to do with past or
current political processes in the country.

• Mr Malema failed to register as a taxpayer and consistently failed to submit income tax
returns honestly and on time.
• He has until now failed to register his trust for tax purposes. SARS had to register it on his
behalf
• Ultimately when SARS reached a conclusion of how much tax Mr Malema owed SARS, and
despite him having had, by his own account at least R 4 million available at the time, he
opted not to pay one cent towards his tax debt.
• He accepted that he owed SARS R 16 million in tax, but he did not offer to convert any of his
assets towards his tax debt.
• He did not request any form of payment arrangement. Instead, he attempted to dissipate
assets beyond the reach of SARS.

Mr Malema failed the procedural requirements to qualify for a settlement for tax debt through his
own design, and not because "somebody decided" so. Mr Malema must, as we all do, face the conse-
quences of his actions. He had ample opportunity to utilise the various mechanisms provided for in
law to state his case.

He opted in other instances not to pursue the matters through the legal process. To attempt to politi-
cise his predicament and attack a state institution is behaviour that cannot be condoned in a free,
open and democratic society.

Footnotes:

Sequestration application by SARS and annexures attached

Sequestration application - indexed number page 9 para 14

Sequestration application - indexed number page 9 para 16

L4J Sequestration application - indexed number page 13 para 27, 28, 29, onwards
Sequestration application - indexed number page 9 para 16

Sequestration application - indexed number page 13 para 27, 28, 29, onwards

Sequestration application indexed number page 13 para 27, 28, 29, onwards

Sequestration application indexed number page ii para 23

Sequestration application - indexed number page 9 para 17

Sequestration application - indexed number page 9 para 17

LiiJ Sequestration application indexed number page 13 para 27, 28, 29, onwards

L!2J Sequestration application - indexed number page 25 para 72

Sequestration application indexed number page 16 para 39, 4°, 41

Sequestration application - indexed number page 16 para 39, 40, 41

Sequestration application - indexed number page 18 para 46

1161
Sequestration application - indexed number page 21 para 58, 59 and number 22 para 64

Sequestration application - indexed number page 17 para 45

Sequestration application - indexed number page 16 para 39

Sequestration application - indexed number page 23 para and number 24 para 69

Sequestration application - indexed number page 20 - entirely

Statement issued by Adrian Lackay, SARS Spokesperson, August 2 2013

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H)"

My reply to SARS Julius Malema


A Fighter's Response to SARS the Leviathan

The decision by the South African Revenue Services to reveal the well-known details of my dealings
with them as a response to my public utterances about the unethical conduct they displayed towards
me is further proof of their increasing moral bankruptcy. All the information they revealed is not
new to the public or even newsworthy, the fact that the details compare favourably with previously
leaked information serves as proof that the leaking was by SARS. Otherwise, if it had been an inven-
tion of the press there would be contradictions. It is disappointing that instead of explaining the
unethical conduct SARS has made this about my tax affairs.

It should be noted that this is SARS' way of intimidating the public and any tax payer who will want
to criticize them in future. This is precisely because they told themselves that they beyond reproach
and sacrosanct, and that anyone who dares to criticize them will be intimidated into silence; that is,
they will use the privileged information they have about such a person to silence him\her. Neverthe-
less, such an act of cowardice will never work with me.

I will fearlessly and without any fear of contradiction respond and correct the distortions that SARS
has made regarding my dealings with them. I will show that they are merely furthering a political
agenda against me, and to that extent, through their latest statement they have proved beyond any
reasonable doubt that they are a branch of ZANC.

The history of my interaction with SARS started when the so called "intelligence dossier" was
brought to my attention by an anonymous source whilst I was president of the ANCYL and we (in the
ANCYL) then chose to expose it to the public. I then received a letter from SARS requesting my per-
sonal information relating to SARS matters immediately after releasing the dossier to the public. I
interpreted this as an act of intimidation but gave it the benefit of doubt. Following this, a meeting
was convened between me and SARS officials, in which my lawyer and accountant, the SARS commis-
sioner and his deputy, with an additional staff member from SARS by the name of Van Loggernberg
were present.

In this meeting, my personal tax matters were briefly discussed in the presence of all, My lawyer and
accountant, together with Mr. Van Loggernberg were then requested by the Commissioner to excuse
themselves from the meeting and an indication was given on their departure that Mr. Van Log-
gernberg will be helping us to resolve my issues. I then remained behind with the Commissioner and
his deputy.

In this closed session between the three of us, the details of the "intelligence dossier" were
cussed, and in what looked like their defence I was told that Mr. Jacob Zuma had a similar
problem and they helped him with it, Mr. Pillay in particular told me that he had helped Mr. Zuma
and that to their disappointment Mr. Zuma took two years to resolve his problems, which even ran
into his presidency of the republic.

It honestly puzzled me as to why senior SARS officials would discuss another taxpayer's matters with
me because it means they could do the same to me and that is unethical. Nevertheless, they both
offered to help me with my tax matters because they have done it before with Mr. Zuma and other
comrades. Mr. Pillay added that they would do this also because both of them are comrades and that
he in particular was from exile.

We then agreed that I must join my lawyer, my Accountant and Mr. Van Loggernberg who would
then take the mater forward, which I did. Mr. Van Loggernberg also invited a second employee - a
white lady whose name I can't recall. It was then agreed in that meeting that within a month I should
have made submissions of my tax returns, The lady in question was to then help my accountant in
that regard.

It is therefore noteworthy that if SARS is on an honest route of revealing my engagements with them
they should also reveal this closed meeting with the Commissioner and his deputy in which we had
this private conversation. But SARS is not interested in an open and honest deliberation about my
engagements with them expressly demonstrated by their deliberate omission of these details and I
challenge them to do so.

Following this meeting, my personal tax income returns were filed and payment was made to that
effect. When attempts were made to pay for the Trust, we were told we could not pay as the Trust
was under investigation. This is therefore what caused delays, even when the personal tax matter
had been settled. It is worth noting that the Ri6m assessment in question is not regarding my per-
sonal income, but that of the Trust. However, they would insist that they can't charge the Trust
directly as the assessment is taxable in my own hands.

There was never an attempt from me to restructure my assets so as to hide them from SARS. I have
always been honest with SARS in disclosing my assets to them. This is a usual allegation which they
have made for a long time, to the extent of establishing special inquiries where they investigated my
close friends and relatives with an attempt to expose hidden assets, yet without success. In essence,
to this day SARS found no evidence, even after spending millions of state resources, that I have hid-
den any asset from them,

I publicly challenge SARS to expose any hidden asset which they discovered during their expensive
processes of investigation that have included spending large sums of money on inflated white legal
teams and Afrikaner Senior Counsels amongst other things. I further challenge SARS to tell the public
how much they have spent on these inquiries around my friends and family, including me. Also, how
much they have recovered from all of this thus far, so that we can determine if there is value for
money, or that they are just spending tax payers' money to settle political differences and perpetuate
racial hatred.
SARS has now established an enquiry with the same intent, and I want to categorically sate that
there is no need to spend more government resources as they have taken everything I have; that is -
all of my assets!

I must add that the ANCYL, following the appointment of ministers by President Jacob Zuma, raised a
concern that the African leadership was not considered when appointing the economic cluster of cab-
inet, particularly in the Ministry of Finance. A matter Mr. Gordan took very personal and has since
then used his power\influence over SARS to fight his political battles by manipulating the reputable
institution of SARS. He is well known in the congress movement to be a very vindictive person. Even
during his days in the UDF, Mr. Gordon belonged to an Indian cabal that often destroyed comrades
who disagreed with them.

However and unfortunately, the debate about African representation in the economic cluster of the
cabinet got reduced between ANCYL and Mr. Gordan. I particularly remember a meeting between the
ANCYL and the ANC where Mr. Zuma tried to explain the appointment of the economic cluster, and
the whole discussion got reduced to one appointment - that of Mr. Gordon. Mr. Zuma also indicated
that he did not know Mr. Gordon very well, except that he used to belong to an Indian cabal during
the days of the UDF.

It was then clear to me, to our disappointment, that a political procedural matter got reduced to a
personality. Mr. Gordon has therefore always had intention to make us pay back, and the fundamen-
tal differences in strategic vision of the movement that we in the ANCYL held, made him keen to par-
ticipate in silencing us with the hope to delegitimise our course.

The letter requesting the suspension of payment written on the 13 June 2012 to allow further engage-
ment is but an example of a willingness to resolve the matter on my part, even before the attainment
of the warrant of execution which was only issued in October 2012. To therefore suggest that we
started acting after seeing the execution order is misleading, to say the least. It should be noted that
not going to the court was because deliberations with SARS top officials had created an impression
that an amicable solution would be found and equally it had proven to be an expensive exercise to
approach the courts.

The argument that one did not use options available to him, including going to court should not
translate into the fact that one had accepted such findings. In essence, the principle is that not
appealing decisions in the hierarchy of courts should not be taken as admission of guilt. For me, it
meant I did not have resources to do so, but also hoped on the amicable resolution. Ultimately, I
made an offer for settlement and a full and honest disclosure of assets. I must emphasise that to this
day SARS has failed to explain what it means by my "failure to make an honest and full disclosure" of
assets, to which they have insisted and dedicated resources to investigate, regardless of being met
with failure.

I approached comrades who were willing to help me to make an offer of R5m to SARS on condition
SARS was willing to settle. Coincidentally these were the same comrades that helped Mr. Zuma with
his problems with SARS. These comrades indicated that I must even disclose their names to SARS,
but SARS was unwilling to engage in such an arrangement.

I had a meeting with the Commissioner and his deputy earlier in October where they repeated their
willingness to help; they also repeated, once more, that they had helped Mr. Zuma. However, this
time, Mr. Oupa Magashula was very uncomfortable in talking about Mr. Zuma and made an attempt
to put Mr. Zuma's issue in a different context which will not be seen to be a special favour done to
Mosholozi. However, his deputy continued with the same line of having helped Mr. Zuma because
they are comrades and always willing to intervene. I indicated that I did not want a special treat-
ment, it be negative or positive. That day, the Commissioner even made me sign a confidentiality
form from SARS, but since there's no confidentiality between me and them anymore I have opted not
to respect that form.

We then agreed in that meeting that I should request a formal meeting with SARS which will formal-
ise some of the agreements of our meeting, hence the meeting with SARS officials later in October. It
is noteworthy that the "honest" SARS does not reveal this part when dealing with what they call "The
history of Mr Malema's interaction with SARS" and I challenge them to do so.

In the meeting with SARS officials I was told that they fully understand my financial difficulty and
they were willing to help because the matter had dragged for far too long at that point. An under-
standing was reached that I should first accept the debt of R16m before and then I will be helped to
get a compromise. This is because if I did not accept the debt of R16m, SARS would have not even
entertained my request for that compromise.

I particularly remember SARS' white Senior Counsel trying to caution them that they cannot speak
like that on matters that have potential to go for litigation, but SARS officials insisted that this is how
we are going to proceed. It was even agreed in that meeting that the letter of compromise will first,
before being given to the compromise committee, be sent to them to check if it meets the standard
requirements, such that in case it does not, they would help to redraft.

I was then asked to speak to Minister Mbalula and Mr Lebogo, the then Limpopo Provincial Secretary
of the ANCYL, to refrain from publicly attacking SARS because they were making it difficult for the
matter to be settled amicably. I was thanked in the same meeting for having not attacked SARS pub-
licly and I accordingly and immediately spoke to these comrades after the meeting.

Following this meeting, it must be noted that I honoured my part of the bargain, i.e. accepted the
Ri6m assessment (which I disputed throughout and still do to date), made an offer of compromise,
spoke to the two comrades, Mbalula and Lebogo. But SARS has not done the same on their part. Once
more, the 'Thonest" SARS does not reveal this part when dealing with what they call "The history of
Mr Malema's interaction with SARS" and I challenge them to do so.

As per agreement, I wrote the compromise letter accepting the R16m assessment in a meeting with
SARS Officials. That first letter had more pages and raised many issues including reminding them
that they told me that SARS has handled matters like mine before including that of Jacob Zuma. And
as promised they came back to me and said my letter raises many unnecessary issues. They said I
should write a brief letter and gave advice on its structure. I then wrote a letter withdrawing the ini-
tial letter of compromise and then submitted a brief version as advised by SARS officials. Once again,
SARS seems to be experiencing amnesia on this part, because they have deliberately omitted this
interaction in their public statement. I challenge them to dispute it.

SARS promised to come back to me within 3 weeks, but the so called efficient SARS then came back
to me in January i.e. in nearly three months after my submission. Coincidentally, it was after the City
Press published a story about my farming activities and showed a picture very good looking cabbages
on the Sunday after the ANC January 8, 2013 rally held in KZN.

This apparently angered the minister of finance, Mr Gordon, who then summoned the legal repre-
sentatives of SARS and officials to his office and asked them as to what was Melema still doing in his
farm because to his knowledge that farm was taken by SARS. Following that meeting, a letter of
rejection of our offer of compromise was sent to us claiming that we have not done a "full and honest
disclosure" something we are still waiting to hear its substantiation. SARS then started the execution
of properties immediately.

To set matters straight, SARS is lying when saying that there was an African at some point who dealt
with my matter. My matter with SARS was dealt with by an Afrikaner, from the first day I met with
SARS, to the last. As indicated earlier, following my meeting with the Commissioner and his deputy I
was then referred to Mr. Johan Van Loggenberg. After Mr. Van Leggenberh, we dealt with a certain L
Van Esch, then later Mr. Pieter Engelbrecht who then referred us to their lawyer A Wessel. A Wessel
then appointed a curator called Cloete Murray who appointed his attorney Wim Cilliers, who has now
appointed a senior counsel Swart.

I am raising all these Afrikaner names to demonstrate that there is an Afrikaner institutionalised
political and racist onslaught against me due to the views I hold about the direction of our country.
In addition to this, Mr. Gordon's and Mr. Pillay's Indian clique took advantage of the situation and
used it to settle political differences through manipulation of the noble institution in defence of their
politically corrupt principal, Mr. Zuma, who has lost all moral legitimacy as a leader and citizen. We
must not forget that SARS is, like all institutions of government, prone to corruption; and Mr. Oupa
Magashula is a living example and case in point.

My activism against abuse of state institutions does not start now, Ironically I defended President
Zuma when it was clear that state agencies, namely Scorpions and SARS were used against him by
his political rivals. Needless to state the on-going fiasco around the so called Zuma tapes, this is a
clear indication that my activism is not that of self-preservation, but a defence of our hard fought
freedom and constitutionalism. We must never as citizens lay back and watch politicians reduce our
glorious achievements to a shame state.
Finally, if SARS thinks it will use sequestration to delegitimise me politically, then they must think
twice because I'm not obsessed with holding public office or being a director in any of the private or
public institutions. Mine is an unmovable interest in the African Revolution; and for this to happen it
does not need me to hold public office; it is about South Africans, Africans in particular reclaiming
their dignity and total economic emancipation in our lifetime and with or without sequestration I
shall fight until victory is attained SARS should know that I'm not one of the cowards they silenced
before, I remain unshaken not even death can change my political views. Now or never victory is cer-
tain.

Yours in the struggle against abuse of state power,

Julius Sello Malema

Statement issued by Julius Malema, Commander-in-Chief of the Economic Freedom Fighters', August 4
2013

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U U

Fuld statement JuUus


on Sars
"I can confirm that I was informed by SARS today that it
has accepted an offer of compromise I submitted in respect
of my outstanding tax. This followed my making such an offer
to SARS as provided for in the Tax Administration Act. I was
informed that a governance committee considered my submission
and found it to have complied with the requirements for such
an offer.
I can further confirm that the offer was conditional on a
number of aspects, including that I accept that I failed in my
past tax obligations that resulted in me owing the fiscus
outstanding tax. I failed to declare certain income in the
past and consequently failed to pay certain amounts of tax
during the required periods. It was also a requirement that my
tax affairs be brought up to date at the time of the offer
which I have done. The offer to compromise took into account
the existing outstanding tax of R 18 million. I accept that
additional assessments for tax years 2011 and 2012 will follow
and will include further amounts which will include capital,
added understatement penalties and interest, and which will be
dealt with in the normal course of my tax affairs going
forward. I have committed to ensure that my tax affairs will
be in order going forward.
The offer made by me included an additional amount to be paid
by me over and above the amount that was collected by the
curator bonis for SARS in selling off my assets to date. I
accept that in terms of the Tax Administration Act, SARS will
not be bound to the compromise in the event that I fail to
disclose a material fact to which it relates or in the event
that I have supplied materially incorrect information or if I
fail to comply with provisions or conditions contained in the
agreement. I have made a full and verifiable disclosure to
SARS in respect of my current assets and liabilities.
I accept that I did not attend to my tax affairs in the manner
that I was required to by law in the past and in certain
instances, I left my financial affairs in the hands of others
without making sure that my obligations were complied with,
When my difficulty with SARS became public knowledge, I
accepted and acted on advice from persons, which in hindsight,
I should not have. It is so that at times I was very
frustrated with the process and I may have said things
publicly that reflected negatively on the reputation of SARS
and some of its officials. Where I may have made public
utterances that may have suggested bias or wrongdoing on the
side of SARS, I unreservedly apologise. I accept the bona
fides of SARS and its officials who have dealt with the
matter. I have come to realise that the tax system of a
country is a key pillar to economic growth and stability. I
recognise that SARS as revenue and Customs agency plays a
vital role in the building of our young democracy. Paying your
tax is probably the most direct means by which those who are
economically able, are afforded the opportunity to contribute
towards those less fortunate in our society, through the
funding of social grants and government development programs.
I believe it even more important that public and elected
officials take the lead when it comes to complying with their
tax obligations because ultimately their own income is derived
from the tax base directly. My advice is that all taxpayers in
South Africa should take a keen interest in their own tax
affairs and not leave matters unattended until it becomes a
problem. It is too easy an excuse to leave your tax affairs in
the hands of advisors and forget about it. Ultimately, there
is no excuse for not paying your tax and it only leads to
higher penalties and interest over time. I hope my experience
with SARS will be a good example to others that it is not in
the interest of our country to disregard one's tax
obligations. We must all contribute our required bit towards
building a better future for all. I would urge others who find
themselves in a similiar predicament as I did to rather work
with SARS and resolve their disputes in an amicable manner.
I hope to now put the matter behind me and focus on the
future. I consider the matter to have been finalised and have
nothing further to discuss publidy on the matter."
L'
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SARS Home> Media> Media Releases > 26 May 2014 - Compromise agreement offer with Mr JS Malema

COMPROMISE AGREEMENT OFFER WITH MR JS MALEMA

26 May 2014— The South African Revenue Services (SARS) welcomes the fact that Mr Julius Malema has acknowledged his faili

BARS accepts Mr Malema's commitment to ensure that he remains compliant in the future and views the process as ongoing, in respect of
ax years 2011 and 2012 will follow. The sentiments and apology expressed in the public statement released by Mr Malema are also welcoi

)n 10 September 2012 SARS obtained a civil judgment in the Gauteng North High Court confirming an outstanding tax debt of Mr Malema
nterest accruing, the amount has increased to R18 million. On 10 February 2014 the Gauteng North High Court granted a provisional sequ
Ihe return date for confirmation of a final order was set for 26 May 2014.

vir Malema made two prior offers to compromise that failed the statutory requirements for such offers to be considered favourably. Mr Male
)rder for the compromise to be considered favourably, including making a full and verifiable disclosure in respect of his assets and liabilities
with payment arrangements as agreed, in terms of the approved compromise agreement, the provisional sequestration order as v
n place.
BARS will not be bound to the compromise and the final sequestration order will be brought into effect in the event that—

• It is found that Mr Malema has failed to disclose a material fact relating to his settlement
• In the event that he has supplied materially incorrect information
• Or if he fails to comply with provisions or conditions contained in the agreement.

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