As distractions go, the leaking of the public protector’s Report 12 of 2016-17, to wit, the "alleged failure by government to recover funds borrowed to Absa", is proving to be a big one.
Obviously its leaking has a strictly political purpose. It is designed to counter claims by President Jacob Zuma’s opponents that he has allowed the state to be "captured" by his cronies, notably the Gupta family. It does this by harking back to commercial and fiscal malfeasance in the dying years of apartheid, when the Reserve Bank decided it was duty bound to rescue a banking group called Bankorp. There, it seems to want to say, whites did it too!
You bet they did. There is lots of apartheid money lying around. I drive daily past the imposing homes of people I know made money busting sanctions. But I always thought the point about the "new" SA was that it was supposed to be a better place than the old one.
It is interesting that while former public protector Thuli Madonsela did much of the work on the report, it was her successor who fiddled with it and under whose watch it was leaked, along with obvious additions dragging many of Zuma’s enemies (Trevor Manuel, Pravin Gordhan and Thabo Mbeki included) through the dirt. That’s our politics here.
The fact is, though, that the Bank did bail out Bankorp, subsequently bought by Absa, by giving it some free stuff. But there’s a contract that sealed it, signed by the Bank and the bank. It was a neat affair. Bankorp was considered too big to fail back in the late 1980s, and 30 years ago the thought of nationalising a commercial bank was anathema in central banking. Also, the government was in trouble.
PW Botha had made his Rubicon speech, it was hard to borrow in the markets.
The Bank plan was simple. It would lend (not "borrow") R1.5bn to Bankorp as a soft loan. Bankorp would pay an interest rate of just 1%. But Bankorp had to use that R1.5bn to buy government bonds (at the time yielding about 16%) and then lodge the bonds back with the Bank. So the Bank was secure, Bankorp had unfettered access to the remaining 15% from the bonds and the government had sold R1.5bn (then a large sum) into the "market". The finance minister then was Barend du Plessis. His brother was a Bankorp director.
The public protector report tries to make the argument, three decades later, that Absa now owes the fiscus about R2bn because Bankorp got the cash flow from those bonds largely for free. But that was the contract. Two previous inquiries, both very critical of the way the Bank behaved, have ruled repayment out and I honestly can’t see it ever happening. Besides, if any side behaved improperly, it was arguably the Bank.
But I’m also sick of the carping I hear all the time about apartheid (white) money leaving the country as democracy approached. That didn’t happen in the Absa saga but it undoubtedly did, and on a large scale, and the one compelling action proposed by the public protector is that a commission of inquiry be created to establish if it is possible to trace and recover money that left SA illegally between, say, 1985 and 1995.
Zuma would have nothing to lose (and a lot to gain), so he could actually appoint a real judge with a real budget to do the job. Unfortunately, the public protector’s report relies exclusively on a report from a private British intelligence firm, CIEX, for her assertion that money did indeed leave these shores.
CIEX, like many of its competitors, grew up in the shadow of Kroll Associates, the American daddy of this new industry. Its lead man in the South African business was Michael Oatley, who was for a while chief MI6 officer in SA and, before that, was deeply involved in London’s war against the Irish Republican Army. Oatley saw a unique opportunity. The British, particularly under high commissioner Robin Renwick, had wormed their way close to the centre of the entente between the ANC and the Nats, and Oatley — when he left MI6 and joined CIEX — was perfectly positioned to introduce his new firm to some old friends in the ANC.
At one stage he persuaded former national intelligence director-general Billy Masetlha to hire CIEX to "track down" apartheid’s missing millions. For a fee, of course. The contract takes the public protector’s report by the throat, but it threatens to be lots of imaginative rubbish. CIEX would recover the Absa lifeboat, the Nedbank lifeboat, the billions Armscor siphoned out of the country through Luxembourg, up to R6bn from Sanlam and Rembrandt, the millions stashed in Swiss banks. Yadda yadda. With the Swiss, the sheer embarrassment of having done business with apartheid would suffice, according to the CIEX sales pitch that the public protector uses. "The Swiss are desperate to recover a ‘clean’ image and to slough off their reputation of providing a haven for dirty money," Oatley wrote. Really?
But Oatley knew his client. The ANC exiles he dealt with had never heard a conspiracy they didn’t fall for. They were perfect. But that isn’t to say nothing happened. Something certainly did. Let’s find out. Set up an inquiry. Give it a R5bn budget (it’ll potentially recover multiples of that) and give it five years. Look at Sasol, at Iscor and, yes, Armscor. Let’s finally know.
• Bruce is editor-in-chief
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