I spy more Pravin pain

Finance Minister Pravin Gordhan came out guns blazing yesterday, insisting that the SARS spy unit was legally established and an essential part of the enforcement strategy.

His response came as Police Minister Nathi Nhleko, in a separate case involving Freedom Under Law and the Helen Suzman Foundation, said Gordhan was not above the law and the Hawks had a responsibility to probe without fear or favour.

Yesterday, Gordhan told the Hawks his legal advice was that the establishment of the unit - Special Projects Unit, National Research Group and High-Risk Investigations Unit - was lawful and that he participated in the decision to establish it in 2007.

He said earliar findings of impropriety relating to the formation, funding and operation of the spy unit were off the mark as they were based on incorrect interpretation of the law.

The unit, which was accused of spying on taxpayers, including President Jacob Zuma, has since been disbanded.

The standoff between Gordhan and Hawks boss Mthandazo Ntlemeza started when the Hawks sent the finance minister 27 questions about the formation of the SARS "rogue" unit days before his Budget speech in February. At the time Gordhan questioned the timing of the questions and the motive behind them.

Gordhan is leading an economic battle to save South Africa's economy and avert a sovereign credit rating downgrade to "junk".

Institute for Security Studies policing researcher Johan Burger said it was now a matter of "wait and see what happens".

"There are serious questions which have been raised around this entire matter, especially over the ferocity with which the Hawks have been pursuing the finance minister, while there are other cases, such as the disgraced former police crime intelligence head Richard Mdluli matter, which have simply vanished off the radar."

He said he believed a game of smoke and mirrors was being played, especially around the police's approach to Gordhan. Now with the questions answered it remained to be seen whether they satisfy Hawks investigators or would start another standoff.

Yesterday, Gordhan said as far as he was aware "the unit lawfully performed its functions. I was not personally involved in the recruitment of its members but I am told that the process was in accordance with SARS policy."

He said if members of the spy unit engaged in unlawful activity they did so without his knowledge or consent.

"I have no knowledge of the operation code-named 'Sunday Evenings'."

Gordhan said he believed he or the unit could not be investigated because the latter's activities - meant to investigate organised crime related to tax and customs legislation - was not governed by a law that advocate Muzi Sikhakhane concluded in a report had been contravened.

"My legal team has found that the establishment of the unit did not contravene section 3 of the National Strategic Intelligence Act and its activities were not subject to the provisions of section 3 at all. The Sikhakhane finding that the establishment of the unit contravened the National Strategic Intelligence Act was wrong and based on a superficial and clearly mistaken reading of section 3(1) of the National Strategic Intelligence Act," said Gordhan.

ANC secretary-general Gwede Mantashe questioned the timing of the Hawks' questions last month, even suggesting that those behind them were not interested in restoring international confidence in the economy and averting a credit rating downgrade.

Ratings agency Moody's Investor Services was in the country to assess whether to retain South Africa's credit-rating status or downgrade it. It has placed 11 municipalities and three municipal entities on review - possibly to be downgraded.

The public standoff between the Hawks and Gordhan saw Zuma publicly pledge support for Gordhan and assure him the safety of his job despite strong suggestions that the president still preferred minister Des van Rooyen - who replaced Nhlanhla Nene in December as political head of Treasury for a few days before Gordhan was reappointed.

But Gordhan had fighting words for the crime unit, arguing that the Hawks' conduct and public utterances of his possible arrest were illegal.

"The Hawks declined to answer my questions seeking clarity on what offence they were investigating and by what authority they were acting. They merely referred me to the powers conferred to them by chapter 6A of the South African Police Service Act 68 of 1995. None of the provisions of chapter 6A entitle the Hawks to demand answers, set deadlines and threaten me with retaliation if I fail to respond. The deadlines and threats of retaliation were accordingly unlawful," said a fuming Gordhan.

The fallout over a draft KPMG report that confirmed the ''rogue'' unit's existence has seen SARS Commissioner Tom Moyane initiate a restructuring process aimed at purging the revenue service of people aligned with the unit.

Gordhan has repeatedly instructed Moyane to halt the restructuring, and repeatedly threatened to resign unless Zuma got Moyane to stop.

Gordhan said though he had been legally advised that he was under no obligation to respond to questions, he believed it was in the public interest.