Pillay faces criminal charges after SARS spies explosive confession

Former SARS deputy commissioner Ivan Pillay faces a string of criminal charges after two members of the tax authority's disgraced rogue unit submitted explosive affidavits to the Hawks implicating him in the illegal bugging of the National Prosecuting Authority offices.

Pillay stands accused of authorising an illegal operation in 2007, code-named Project Sunday Evenings, to spy on former prosecutions boss Vusi Pikoli and other senior NPA members who were investigating former police commissioner Jackie Selebi.

Affidavits by two former rogue-unit members, Helgard Lombard and Johan de Waal, submitted to the Hawks investigators on Thursday and seen by the Sunday Times, also implicate senior prosecutors and former Scorpions officials Gerrie Nel and Andrew Leask in paying R900000 for the bugging equipment.

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Nel is South Africa's most celebrated prosecutor, with a string of high-profile convictions under his belt, including those of Selebi and Paralympian Oscar Pistorius.

The exact motives for the South African Revenue Service to spy on the NPA remain unclear, but in an affidavit former rogue unit head Andries Janse van Rensburg says he wanted the group to "have the power to decide who will next govern South Africa".

Van Rensburg, a former intelligence operative nicknamed Skollie, also wanted the unit to "execute a coup by deciding to whom the group are going to give the evidence we got from the DSO [the Directorate of Special Operations, or Scorpions] monitoring operation".

Lombard and De Waal's affidavits reveal that the SARS agents secretly installed audiovisual bugging devices in 12 NPA offices and boardrooms at the NPA headquarters in Pretoria, including Pikoli's.

SARS spokesman Luther Lebelo said the tax authority was "deeply shocked" at the latest allegations but declined to comment until investigations into the rogue unit by audit firm KPMG and senior counsel were completed.

"It will be inappropriate for SARS to comment before receiving and studying this report," he said.

Documents seen by the Sunday Times include a legal opinion about Project Sunday Evenings by law firm Mashiane Moodley and Monama that was submitted to SARS commissioner Tom Moyane this week.

It says Moyane is legally obliged to institute criminal charges against Pillay, Van Rensburg, Lombard and De Waal for corruption, money laundering, racketeering and conducting covert intelligence on the NPA. Failure to do so would itself amount to a criminal offence.

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Lombard and De Waal, who still work for SARS, confessed in March that they had spied on the NPA on instructions from Pillay and Van Rensburg. This was after they were confronted with evidence found on computers seized by investigators from KPMG.

Moyane appointed KPMG to probe the rogue unit earlier this year after a panel led by advocate Muzi Sikhakhane and an advisory board headed by retired Judge Frank Kroon found its establishment was illegal and it had committed unlawful acts.

The KPMG investigation is expected to be wrapped up next month.

"It is known amongst the investigating team that both Mr De Waal and Mr Lombard have already confessed to the commissioner with regard to their role in the spying of the NPA," the legal opinion states.

Moyane caved in to political pressure earlier this month and let Pillay quit with a golden handshake shortly before his disciplinary hearing.

In his affidavit submitted to the Hawks this week, Lombard says he and De Waal decided to spill the beans to Moyane, adding: "I am no longer going to keep it secret because it will damage the image of SARS should it leak out."

Lombard outlines how Van Rensburg had asked him in April 2007 about the feasibility of planting bugs in the NPA offices. Lombard had replied that it would be difficult but not impossible if legally authorised.

Van Rensburg then claimed he was contacted "out of the blue" in June by Nel and Leask, who asked him for help in securing the NPA offices against infiltration by crime intelligence officials wanting to sabotage the Scorpions case against Selebi.

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The Scorpions paid Lombard two tranches in cash of R900000 and R250000 to buy the surveillance equipment, which he installed together with Van Rensburg in July.

It included "overt and concealed cameras with digital video recorders and microphones" that could be activated remotely and "remote viewing software to be used with cellular telephones".

Then, in September 2007, as political tensions around the Selebi investigation escalated, Van Rensburg tasked him with accessing recordings of any discussions related to the police chief's case. He continued to do so for several months.

"As far as I can remember, I only monitored and gave information regarding the case of commissioner Jackie Selebi through to Skollie and ignored other non-related discussions," he said.

Lombard said Van Rensburg had claimed they were spying on the NPA with legal authorisation and the approval of former president Thabo Mbeki, because he wanted to keep tabs on the Scorpions' investigation into Selebi, but that this was a lie.

When Lombard informed Pillay he was uncomfortable with the operation, the deputy commissioner told him to "carry on with the monitoring unless it is unsafe to do so. At no time [had] Mr Ivan Pillay told me to stop the operation," he said.

Pillay denied Mbeki had approved the project and said that he would take full responsibility for it. "Mr Pillay said that if I ever was confronted with this operation he would say that he [Pillay] gave the instruction."

SARS sources said the reason for planting bugs at the NPA offices was to help the Scorpions to keep tabs on deliberations by their managers handling the Selebi case.

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The SARS leadership at the time was at war with Selebi because he wanted the police to take over the tax authority's border-control functions, the sources said.

Selebi had angered the Scorpions when he called for the elite crime-fighting unit to be collapsed into the South African Police Service, accusing its members of encroaching on the police's arrest mandate and of manipulating evidence to boost their success rate.

Police arrested several Scorpions members for corruption on Selebi's watch, including Nel.

The charges against Nel were later withdrawn.

Selebi was convicted of corruption in 2010 and died earlier this year while on medical parole.

SARS's clandestine spying operation on the NPA was code-named Project Sunday Evenings because Lombard would "dial in from his home every Sunday evening to listen to week-long discussions in the NPA offices", said a source close to the investigation.

SARS requested legal opinion this week after it received media queries from the Sunday Times.

This prompted Moyane to prepare a statement to be submitted to the Hawks recommending that the rogue agents be charged with corruption, money laundering, racketeering and conducting covert intelligence on the NPA, said sources.

The legal opinion confirms Lombard received R900000 to buy bugging equipment. He spent only R800000 and was told to pocket the rest.

This R100000 payment constituted a bribe in terms of the Prevention and Combating of Corrupt Activities Act, carrying a maximum prison term of up to 10 years in jail, the law firm said.

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"Once the criminal case has been opened it is up to Mr De Waal [and] Mr Lombard to become state witnesses against Mr Pillay."

The law firm said the spying allegations were "intertwined and inseparable from the R100000 gratuity given to Mr Lombard", adding: "The allegation if proven amounts to a serious criminal offence. SARS does not possess the legal mandate to conduct intelligence."

Late last night, NPA spokesman Velekhaya Mgobhozi confirmed that the prosecuting authority paid SARS agents more than R900 000 to "upgrade security" at its headquarters but declined to comment on the bugging incident.

"The NPA can confirm that the amount in question was spent in relation to security upgrades in the offices of Leonard McCarthy, Gerrie Nel, Vusi Pikoli and another official. It wasn't a bribe or an extortion," Mgobhozi said.

He declined to comment further.

Pillay said: "I cannot comment."

"I am totally shocked, this is a new revelation. We were always suspicious that we were illegally bugged at the time as we were investigating the police commissioner and we expected crime intelligence to be doing it and not some rogue elements from Sars, of all places," Pikoli said.

investigations@sundaytimes.co.za