Confronting Corruption in SA: Why? How much? How to?
There is a great deal of low-hanging fruit available to our government if it chooses to "box smart" with the corrupt. Clawing back the proceeds of corrupt activities is a good start. The Assets Forfeiture Unit of the National Prosecuting Authority is well equipped to do so in the context of criminal investigations. And the Prevention and Combating of Corrupt Practices Act has adequate teeth and can be used to supplement the common law on fraud, theft and corruption.
Dirk de Vos (DM 28/11) has carefully and comparatively analysed the position in relation to the effect of corruption on the economic viability of a developing middle income country such as South Africa. It is unnecessary, for present purposes, to repeat his conclusions other than to highlight his observation that had we dealt effectively and efficiently with corruption in South Africa our economy would be 3.6% better off than it is. This, at current levels of GDP, amounts to R158-billion (or nearly R46-billion in lost tax revenues) annually.
It is worth noting that his scientifically based estimates approximate the "join the dots" figures "thumb-sucked" by former finance minister Pravin Gordhan in his public commentary on the effects of State Capture.
No right-thinking person can legitimately cavil at the remark by De Vos that "Fighting corruption should not need to be justified", indeed, he views it as an economic growth strategy. At this stage in our national economic decline any viable strategy to grow the economy is worthy of careful scrutiny. This is especially so if that strategy is able to produce amounts of the order suggested by the research relied upon by De Vos. Showing true resolve to deal with the corrupt is one of the better ways of promoting trust in good governance and of restoring the levels of business confidence that stimulate and attract investment, whether it be local or foreign. Nothing undermines these necessary elements of trust and confidence quite like a cavalier attitude towards countering corruption.
There is a great deal of low-hanging fruit available to our government if it chooses to adopt a corruption fighting stance and to "box smart" with the corrupt. Clawing back the proceeds of corrupt activities is a good start. The Assets Forfeiture Unit of the National Prosecuting Authority is well equipped to do so in the context of criminal investigations.
The civil law affords litigants opportunities for Mareva injunctions and Anton Piller orders that, properly executed, deal crushing blows to those criminals living off their ill-gotten gains. The former is more properly called an anti-dissipation interdict in SA law, while the latter enables any wronged party to preserve evidence in the course of tracking down laundered funds and illicit financial flows in the paper trail relating to any form of malfeasance where the risk of losing the evidence is real. There is also the vast civil law field of invalidating or cancelling procurements that are unconstitutional, illegal or tainted by fraud and corruption.
Lord Peter Hain has already stoked a fire under the British Serious Frauds Office in relation to UK banks being used as the vehicles of money laundering in the process of the capture of the SA state. Hopefully our Assets Forfeiture Unit will catch up soon. The FBI has the advantage of being able to rely on the USA's Foreign Corrupt Practices Act, which it has in the past used to good effect in the SA context, for example, against Hitachi for its irregular dealings with Chancellor House (the ANC's investment arm) in the Hitachi Power Africa procurement scandal. British Aerospace, from whom SA acquired overpriced and under-utilitised aircraft, has also paid substantial fines in the USA for irregularities in its business practices.
Were the government in SA to take pro-active steps to invalidate the arms deals, it could rapidly find itself between R70- and R100-billion better off than at present. All that is lacking is the political will to face the facts (even those facts grudgingly unearthed by the Seriti Commission) and take the necessary steps to set aside the deals. Similar steps in other procurements, both by the state and by State-owned Enterprises (think tall trains) would be a way of raising funds for education, poverty alleviation, the creation of jobs, the promotion of the achievement of equality and the rolling out of all of the other human rights guaranteed to all in the Constitution; rights that have not been delivered fully yet.
The obligations of the state to "respect, protect, promote and fulfil" the rights in the Bill of Rights are reason enough for engaged citizens to insist on recovery by the state of the proceeds of corruption and the setting aside of those deals done in illegal circumstances. This process happily involves the restoration of the rule of law to the status of supremacy it ought to enjoy according to the founding values of the Constitution.
The substantive law in South Africa is more than equal to the task of confronting the corrupt. The Prevention and Combating of Corrupt Practices Act has adequate teeth and can be used to supplement the common law on fraud, theft and corruption. Prosecutors tend to prefer to rely on the common law as it allows greater scope for the conclusion of plea bargains (no minimum sentences) and is often easier to prove.
It is in the field of the administration of criminal justice that there has been a great deal of slippage since the demise of the Scorpions, sacrificed on the altar of political expediency at Polokwane. Their supposed replacement, the Hawks, have never been able to function as effectively and efficiently as the Scorpions did. This is reflected in the comparisons made in the NPA annual reports at the time of the changeover from Scorpions to Hawks. The number of new investigation fell by 85% and the value of contraband seized plummeted by a staggering 99.1% from over R4-billion to a mere R35-million in the first year of operation of the Hawks.
These figures are hardly surprising. The motivation for dissolving the Scorpions was to put a stop to the investigation of corruption in high political places. The Hawks, having closely observed the reasons for the demise of the Scorpions, have no appetite for "catching big fish", whether they are politicians or the friends and business associates of politicians. Turkeys do not vote for Christmas. It is hardly surprising to note that the productivity of the Hawks has steadily declined over the years since their formation.
There are nevertheless lessons left by the Scorpions that remain relevant today. SA does have the expertise and the courage within the ranks of the criminal justice system to go after corruption in high places. The fates of Jackie Selebi, Tony Yengeni, the Travelgate fraudsters, Schabir Shaik and even John Block were all sealed by the investigative "troika-style" work done by the Scorpions. In the case of Travelgate, the conventional SAPS investigation went nowhere for ages; the Scorpions acted without fear or favour to bring some big names (some of whom are still in the Cabinet) to book for their "smallanyana" travel skeletons.
The creation of the Hawks was not universally welcomed. Johannesburg businessman Bob Glenister, later supported by the Helen Suzman Foundation, took on the might of the state to challenge the constitutionality of the creation of the Hawks. These challenges led to the adjustment of the powers and functions of the Hawks according to a set of criteria developed by the Constitutional Court in the course of the litigation. The basic idea is to have an anti-corruption entity that is adequately independent and equipped to effectively prevent, combat and investigate corruption. The Hawks, in practical terms, have never actually measured up to any of the criteria set by the court. They continue to operate to this day in a fashion that is inconsistent with the requirements of the Constitution as interpreted and enunciated by the court in the legal challenges brought against the operations and legislated structure of the Hawks.
At this stage, if anti-corruption efforts are to be a successful generator of economic development through the regeneration of business confidence and the recovery of the proceeds of corrupt activities in the private and public sectors, it is necessary either to reform the Hawks radically or to create a new institution that is better able to fit the bill by complying properly with the criteria laid down by the court. Further tweaking of the Hawks is possible via the tortuous route of further public interest litigation. It is better by far to leave the Hawks to get on with the investigation of priority crimes other than corruption and organised crime, which they are equipped to do quite well, and to create a new body that specialises in confronting corruption.
The Constitutional Review Committee of the National Assembly is considering a proposal for the creation of an integrity commission as a new Chapter Nine institution that will prevent, combat, investigate and prosecute the corrupt among us. Details are collected on the website of Accountability Now on the Glenister case page.
The country has experienced experts who could lead such a body: Vusi Pikoli, Thuli Madonsela, Kate O'Regan and other judges who have chosen (or been required) to retire young spring to mind. With a branch at every seat of the High Court, the integrity commission could round up and try the corrupt in a way that will stop the rot, recover their ill-gotten gains and discourage the continuation of the culture of corruption with impunity that is currently our lot.