Findings against Mbeki, Manuel & Mboweni removed from Absa/CIEX report — public protector inquiry hears

10 August 2022 - 22:39
By Andisiwe Makinana
Significant changes, including the removal of adverse findings against senior government leaders, were made to the public protector's Absa/CIEX report after Thuli Madonsela left that office in October 2016.
Image: Freddy Mavunda Significant changes, including the removal of adverse findings against senior government leaders, were made to the public protector's Absa/CIEX report after Thuli Madonsela left that office in October 2016.

Significant changes which include removal of adverse findings against senior government leaders were made to the public protector's Absa/CIEX report after Thuli Madonsela left that office in October 2016.

This is according to Livhuwani Tshiwalule, who was the lead investigator into the alleged failure by government to implement recommendations of the CIEX report to recover public funds from Absa.

The removed information included criticism and remedial action against former president Thabo Mbeki, Trevor Manuel and Tito Mboweni. Manuel was  finance minister and Mboweni Reserve Bank governor at the time the CIEX report was concluded.

Tshiwalule said he investigated the complaint regarding the apartheid-era bailout of Absa and its predecessor Bankorp with Madonsela.

When Madonsela’s term of office ended in October 2016, he handed over a draft provisional report to the newly appointed head of the institution, Busisiwe Mkhwebane.

The draft report had recommended that Mbeki, Manuel and Mboweni be censured for the government’s failure to implement the CIEX findings.

But a report that came back to him, from Mkhwebane, that no longer contained the findings against the three senior politicians.

Tshiwalule, who left the public protector's office in December 2016, told the parliamentary inquiry into the suspended public protector’s fitness to hold office he had no idea where the changes came from, but the information did not appear in the report that was published by the office.

“When the report came back to me, there were a number of changes and this is part of the paragraphs that were no longer there,” he said.

While Tshiwalule told the inquiry that the changes were seen after the report came back from Mkhwebane, he did not think the public protector wanted to deliberately protect the politicians. He said he never asked about the removed findings and did not want “to make any conclusive statement about that”.

The investigator said the contents of the provisional report, which was published after he left office, were materially different from the draft report that was left by Madonsela.

That draft found Manuel and Mbeki’s conduct in failing to process the CIEX report was in violation of sections 195, 237, 96(2), of the constitution and the Executive Members Ethics Act and section 63 (2) of the Public  Funds Management Act and thus amounted to improper conduct and maladministration.

Tshiwalule said they had “an issue” with the government using state resources and appointing CIEX’s Michael Oatley to conduct an investigation on behalf of government and then ignoring the findings of that investigation.

“Our worry was that state resources were used to procure this service and during the investigation, at no point did anyone point us to a document where there was a cabinet meeting where the CIEX report was considered by government.

“There was no document that could be produced that said ‘we received a report from CIEX and we felt that its findings are not something that we agree with and that we decided not to implement that report’.

“It was our view that state resources cannot just be used and the people then undermine the work that had been done by the person they appointed,” he said.

This was the reason the office made an improper conduct and maladministration finding against them.

The Mkhwebane report found that the SA government, led by Mbeki at the time, and the National Treasury disputed that they failed to recover an amount of R3.2bn from Absa.

“Former president Mbeki and Mr Manuel simply dismissed the CIEX report and regarded it as a document with no status despite having paid for the same.”

“Records show that the main argument for non-recovery was the belief that this would trigger a run on the rand, the financial services sector and on the economy ...”

Tshiwalule said this was different to what was in the Madonsela draft and these claims were not disputed in the report he drafted with Madonsela.

Tshiwalule said he resigned from the public protector’s office in November 2016, but 12 days later, while serving notice, Mkhwebane asked him to investigate how other Reserve Banks operated worldwide.

He said he found the request “bizarre” because there was nothing from the complaint or complainant about the mandate of the other central banks in the world, and whether they were state-owned or privately owned.

“I had an issue with that part, though I didn’t ask her why she wanted it to go in that direction,” he said.

He looked at the central banks of the US, China, Nigeria, Zimbabwe and Russia.

After Tshiwalule left the public protector’s office at the end of December 2016, the preliminary report was leaked and he told the inquiry the Hawks and the NPA contacted him [while] investigating the leak. He denied leaking the report.

Two witnesses told the inquiry last month that Mkhwebane did not want former Free State premier Ace Magashule and then agriculture MEC Mosebenzi Zwane to be implicated in wrongdoing and maladministration that occurred in the Vrede dairy project.

Reinstated head of the public protector’s Free State office, Sphelo Hamilton Samuel, told the inquiry that Mkhwebane instructed investigators not to make adverse findings against the two ANC politicians and refused to subpoena them when they did not co-operate with the investigation.