Reserve Bank to argue abuse of office by public protector

Busisiwe Mkhwebane faces a surprise new fight for survival after Constitutional Court ruling

12 November 2018 - 09:45 By Karyn Maughan
Busisiwe Mkhwebane.
Busisiwe Mkhwebane.

The Constitutional Court has given the Reserve Bank the right to argue that public protector Busisiwe Mkhwebane “abused her office” with her disastrous investigation of the central bank — in a case that will almost certainly affect Mkhwebane’s fight to remain in her position.

“The public protector failed to live up to the standards required of her office during her investigation. She conducted a partisan investigation which was aimed at undermining the Reserve Bank,” the Bank’s lawyers stated in documents before the Constitutional Court.

They added that Mkhwebane “also fell egregiously short of her duties” during the litigation that ultimately saw her office’s report on the apartheid-era bail out, given by the Reserve Bank to Bankorp, being overturned. Bankorp was later taken over by Absa.

On November 27 Mkhwebane’s legal team will ask SA’s highest court to reverse the estimated R900,000 legal costs bill that she was ordered to pay personally by the Pretoria High Court. The court found Mkhwebane did not fully understand her constitutional duties as public protector when she conducted her Bankorp Reserve Bank investigation.

Mkhwebane was forced to admit that she had got it wrong when she ordered that the Reserve Bank’s constitutional mandate be changed to no longer focus on protecting the value of the rand‚ as part of that report’s remedial action.

In her report Mkhwebane ordered the Special Investigating Unit (SIU) to reopen its earlier investigation into the apartheid-era lifeboat granted to Bankorp “in order to recover misappropriated public funds unlawfully given to Absa Bank in the amount of R1.125bn”.

Absa, then finance minister Malusi Gigaba and the Reserve Bank successfully challenged that report in the high court.

The court expressed disquiet over Mkhwebane’s meetings with the presidency and the State Security Agency (SSA) over her Bankorp investigation‚ certain parts of which she did not initially disclose.

It also emerged in court proceedings that a note recorded during Mkhwebane’s meeting with the SSA stated — in reference to the Reserve Bank — “how are they vulnerable?”

The high court expressed concern that Mkhwebane had met the SSA and the presidency less than two weeks before she released her far-reaching Bankorp report‚ without disclosing this to the Reserve Bank or Absa.

“Having regard to all these considerations‚ we are of the view that a reasonable‚ objective and informed person‚ taking into account all these facts‚ would reasonably have an apprehension that the public protector would not have bought an impartial mind to bear on the issues before her‚” the court ruled.

The high court expressed concern that Mkhwebane had met the SSA and the presidency less than two weeks before she released her far-reaching Bankorp report‚ without disclosing this to the Reserve Bank or Absa

“We therefore conclude that it has been proven that the public protector is reasonably suspected of bias.”

The court added: “It is necessary to show our displeasure with the unacceptable way in which [Mkhwebane] conducted her investigation as well as her persistence to oppose all three applications [bought by the Reserve Bank] to the end.”

It was on the basis of these findings that the high court ordered that Mkhwebane personally pay 15% of the Reserve Bank’s legal costs.

Mkhwebane now wants the Constitutional Court to rule that the costs order given against her by three Pretoria High Court judges “impacts adversely and directly on the exercise by the public protector‚ a Chapter Nine institution‚ of her constitutional power‚ obligations and functions without fear‚ favour or prejudice”.

Mkhwebane argues that the Constitutional Court must “set aside” the high court’s findings “that there is a reasonable apprehension that I was biased” and “that I do not fully understand my constitutional duty to be impartial and to perform my functions without fear‚ favour or prejudice”.

But the Reserve Bank is adamant that these findings are legally justified — and further, that the high court should have found that Mkhwebane “abused her office” in her handling of her Bankorp investigation

“These failings are not innocent errors or mistakes. They form a consistent pattern of obfuscation and avoidance. They deserve censure, both in the form of the personal costs ordered against the public protector and the declaratory order sought.

“Both these orders are designed to vindicate the constitution when its duties have been defied in such a flagrant manner.”

DA MP John Steenhuisen, who has repeatedly called for Mkhwebane to be removed, has told Business Day that parliament has “been dragging its feet” in determining her fitness to hold office.

“Parliament needs to finalise this inquiry as soon as possible, or again face accusations of dereliction of duty.”