Serjeant at the Bar

Bosasa corruption an indictment of Sars, FIC, NPA

2019-02-01 09:16
Former chief operating officer of Bosasa Angelo Agrizzi’s testimony at the Zondo Commission of Inquiry into State Capture depicts our state of corruption at high levels.

Former chief operating officer of Bosasa Angelo Agrizzi’s testimony at the Zondo Commission of Inquiry into State Capture depicts our state of corruption at high levels.

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The Agrizzi evidence points to the existence of a system that easily bypassed the legally established governance system, utterly undermining the key constitutional principles of transparency, accountability and compliance with legality, writes Serjeant at the Bar.

While the evidence given by former Bosasa COO Angelo Agrizzi will doubtless not have surprised Adriaan Basson, who exposed Bosasa a decade ago, the sheer magnitude of the allegations which at the very least rival those made against the Guptas has induced shock, even in a nation that has become punch drunk to the constant news about corrupt politicians and office bearers.

The shenanigans involving the Guptas gave rise to a body of literature which examined the creation of a secret parallel state run by the Zuptas, as the coalition between the family and leading politicians became known.

READ: Paul Pretorius - Guiding SA through a morass of corruption

Thanks to the Zondo commission and the evidence of Agrizzi it has become apparent that, like the mafia in their heyday, the South African racket is run by more than one family.

The implications for the future of constitutional democracy in South Africa could not be more serious. This said, any analysis at this time needs to be preceded with the usual caution, namely that the Agrizzi evidence has to be tested and independent documentary/electronic corroboration for his version must be produced.

According to Agrizzi's evidence, the vast operation of ensuring that an armada of key people were on the payroll of Bosasa was maintained by way of cash payments. Clearly the idea was to reduce the risk of a financial trail. But to achieve success by which is meant no detection and as little transparency as possible, Basson and a few similarly tenacious journalists aside, a range of institutions had to be incompetent, corrupt, negligent, or all of the above.

When a foundation, for example, received R300 000 a month, one can safely assume it was not placed under a matrass nor kept below a swimming pool. So if the cash was deposited in a bank account, the question arises as to whether the bank failed to raise questions as to the source of this huge regular cash deposit or if it did, was the matter reported to the Financial Intelligence Centre (FIC) as suspicious transactions?

The FIC may have well been the recipient of this information and it may in terms of the FIC Act have informed the National Prosecuting Authority (NPA).

Thus if the allegations made by Agrizzi are even true in part, (and it is hard to think that his entire narrative was nothing but a work of fiction), then one, two or all of the relevant banks, FIC or NPA was at fault.

That brings one back to the Agrizzi evidence: if key members of the NPA were on the payroll, no matter what the relevant bank, or FIC for that matter, would have done, Bosasa would have been immune from public accountability.

The rot goes further. The extensive use of cash – some R6m a month is a figure given – meant that neither Bosasa nor the recipients reported these transactions to the South African Revenue Service (Sars). Indeed, it is possible that the FIC, in terms of the FIC Act may have enquired from Sars about some of these transactions but drew a blank. It thus appears that these massive flows of income took place without a successful Sars audit or other relevant action.

In 2015 Sars did some form of tentative investigation of Bosasa but it came to naught. It does appear that Sars was thrown off the scent by the in-house financial officers and presumably the so-called independent auditors; raising again the role of the accounting profession in state capture.

ALSO READ: Agrizzi - Does the truth lurk behind the bombshells and racism?

In summary, the manner in which Agrizzi described the activities of Bosasa could only have taken place in circumstances where one or more of these key institutions were either asleep or in on the deal. For this reason, it should be obvious to all that this evidence points to the existence of a system that easily bypassed the legally established governance system, thereby utterly undermining the key constitutional principles of transparency, accountability and compliance with legality.

The cost is far greater than the ill-gotten gains obtained by Bosasa and its corrupt cronies. It raises the question of how to rebuild trust in public institutions and enforce the principles of accountability.

For starters, everyone named by Agrizzi should be investigated properly and with the public, where legally possible, being taken into the confidence of the investigators. To accomplish this task, there has to be a speedy inquiry of everyone at Sars, the NPA and the Hawks who have allegedly been implicated.

It is simply imperative that these institutions are staffed not only by people of integrity at the top but right through these institutions. In addition, an expeditious examination must be undertaken of all relevant legislation, including the FIC Act and all fiscal legislation to ensure that illegal flows of money can be detected and the culprits properly prosecuted.

The Bosasa story is one of abject failure of key institutions, arguably of the relevant legislation and most certainly in the manner in which key personnel to the guardians of the Constitution, other than the judiciary (the one institution that survived and indeed protected our democracy) are appointed.

Serjeant at the Bar is a senior legal practitioner with a special interest in constitutional law.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    bosasa  |  npa  |  sars  |  state capture inquiry
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