South Africa - Gordhan and the seven hundred elephants in the room - CNBC Africa

South Africa - Gordhan and the seven hundred elephants in the room

Special Report

by Gary van Staden, Senior Political Analyst, NKC African Economics 0

S.A. Finance Minister Pravin Gordhan. Photo: Flickr.

The general tone of responses to the heavy-handed and clearly intimidatory delivery of a criminal summons to Finance Minister Pravin Gordhan has either been outright condemnation of a political witch-hunt, or some sentiment that at least Mr Gordhan would now have the opportunity to clear his name in a court. But Mr Gordhan ever appearing in a real trial is not part of the plan.

Several institutions and political structures, including the presidency and the ruling African National Congress (ANC), have made the point that no-one was above the law and that Mr Gordhan would now have his day in court, but all have avoided the seven hundred elephants in the room – the 700 fraud, corruption and sundry charges still hanging over the head of President Jacob Zuma.

Ironically, the National Prosecuting Authority (NPA) – the very organisation that inexplicitly dropped all charges against Mr Zuma several years ago and is fighting attempts to have them reinstated – was among those ignoring the herd of elephants while pontificating that no-one was above the law.

Its credibility already in tatters, the NPA has become a political blunt instrument in the hands of factions rather than a legitimate independent authority, and that is one of the real tragedies of this saga.

As for the suggestion that now Mr Gordhan and his co-accused – the former South African Revenue Services (SARS) commissioner Oupa Magashula and the former deputy SARS commissioner Ivan Pillay – would have the opportunity to clear their names in a court of law, that is not part of the plan.

The prospects of this farce ever getting to trial is remote and not part of the strategy to force Mr Gordhan out of office, either by removing or suspending him, or to make his life so miserable and fearful that he decides to call it quits. There will be no trial – this saga ends one way or another long before the first court appearances on November 2 actually morphs into a full-blown hearing.

There is considerable legal opinion that these fraud charges and the “rouge unit” charges that are still pending are so thin they could not hold up a tea-bag, let alone hold up in court.

Responses to Tuesday’s announcement by NPA boss Shaun Abrahams, who managed to keep a straight face throughout even as he ignored the seven hundred elephants in the cramped room, was largely predictable and followed traditional lines.

Those ignoring the rampaging elephants demanding to be heard included the ANC who said that Mr Gordhan must fully co-operate with the NPA in order to bring the matter to finality as soon as possible, “This investigation and related, untested and mischievous ‘conspiracy theories’ has had a detrimental effect on the South African economy and we trust that today’s announcement will move us a step closer to uncovering the truth from facts and bring this matter to finality,” the ANC said.

The presidency agreed, as apparently did Mr Zuma himself, though the statement issued from Cape Town while Mr Zuma was in Kenya did not make it clear whether it was a presidency statement or a statement from the president. There is a difference.

While media reports claimed that Mr Zuma was standing by Mr Gordhan, the actual statement is less clear and confuses words attributed to the president with the views of the presidency speaking on his behalf.

“Our society is anchored on the rule of law as well as fair and just judicial processes,” Mr Zuma is quoted as saying. “In this regard, Minister Gordhan is innocent until and unless proven otherwise by a court of law. This is a fundamental pillar of our constitutional democracy and the rule of law. The president has reaffirmed his support for the minister and added that the decision by the NPA came at the most sensitive time for the country when Minister Gordhan was successfully leading initiatives towards economic revival, bringing together business, government and labour in efforts to reignite growth so that jobs can be saved and created,” the presidency said. It is unclear which bits are the actual words of the president and which are being spoken on his behalf, but in any event, this is lukewarm at best and no hint that Mr Zuma is going to withdraw his legal opposition to the challenge to reinstate charges against him.

The Black Business Council (BBC) was quoted by media as stating there was “no political interference” during the investigation leading up to the summons issued to Mr Gordhan. The BBC said it viewed these developments in a “serious light”. “We respect the rule of law and furthermore expect the Chapter 9 institutions that regulate and ensure that nobody is above the law,” the organisation stated, also ignoring the obvious parallels to Mr Zuma’s outstanding and unresolved legal issues.

Others were less impressed

The National Treasury said that “[i]t is most unfortunate that the Hawks have, once again, chosen to initiate legal proceedings at a moment that appears calculated to maximise the damage inflicted on the economic well-being of South Africans and essential processes of government”.

The Council for the Advancement for the South African Constitution (Casac) said that the summons would have “serious negative repercussions”. The organisation, chaired by Sipho Pityana, said the developments raised questions about the integrity of key institutions of democratic governance. The organisation believes that political interests are at the centre of this, especially given the timing of the announcement. “The circumstances around the investigation of these matters, the timing of questioning and the leaks to the media, all call into question the good faith and independence of the investigative authority, the Hawks, as well as that of the NPA,” said executive secretary, Lawson Naidoo.

Business Leadership South Africa (BLSA) was deeply concerned about both the timing and the decision to charge Mr Gordhan and two former senior SARS employees with fraud. “Our country is experiencing a period of profound upheaval. With another rating agency review ongoing, the Medium Term Budget Policy Statement (MTBPS) weeks away, serious social protest and violence occurring at our universities, and a number of contentious disputes between state institutions playing out in public, this decision could not have come at a worse time.”

Business Unity South Africa (Busa) said the NPA decision was “most unfortunate”. Busa President Jabu Mabuza said “while nobody is above the law, we remain deeply concerned about what appears to be the emergence of a pattern which sees serious allegations made against Minister Gordhan made very close to important dates and developments.” 

There is majority political opinion that the fraud charges directed against Mr Gordhan and his former colleagues at SARS have no legal merit and are part of a deliberate overtly political plan to force the finance minister out of office as he is perceived to stand in the way of the dominant patronage/ tenderpreneur factions in the ruling party and government.

On the other hand, there is minority opinion that there was no political interference in this saga that has been ongoing for several months now. A disturbing aspect in the political dimension is that the consequences of this action have been ignored, not merely underestimated or miscalculated, but deliberately ignored.

There is substantial legal opinion that the charges have no prospect of success and appear to be unfounded and based on little, if any, real evidence. The organisations and political factions that backed the NPA and suggested (correctly) that no-one was above the law ignored the massed ranks of elephants in the room related to the outstanding and unresolved legal issues around Mr Zuma. Apart from the very real damage these development could inflict on South Africa’s economy and finances, the NPA and the Hawks now face a pivotal credibility and legitimacy tests likely to undermine a crucial Chapter Nine institution and weaken our democracy.

Finally, there is no prospect that this saga is ever going to end in a full-blown hearing – that is not on the agenda – it either forces Mr Gordhan out of office or it does not, but either way, there will be no trial and no day in court for Mr Gordhan and his co-accused. There is no legal basis for such a development and it is a political bridge too far.