Minister Gordhan and the Hawks: Your questions answered

Over the past few weeks the headlines have been abuzz with reports on the Hawks (The Directorate for Priority Crime Investigation) and Minister of Finance Pravin Gordhan. According to the reports, the Hawks are looking into the rogue unit that was set up in SARS (South African Revenue Service) in 2009 under Gordhan’s leadership.

There has been a lot of speculation and comment about what is happening between the Hawks and the minister. Justmoney provides six points that will help you better understand what is happening with the investigation.  

1.        What are the Hawks investigating?

Simply put, the Hawks are investigating the establishment of what has been named a rogue unit within SARS that was established when Gordhan was head of SARS. There have been questioned raised as to what this unit did, as well as its authority to investigate high ranking officials.

At the end of February the Hawks sent a letter to Minister Gordhan with 27 questions pertaining to the rogue unit. To date these questions have not been answered.

2.        What is the rogue unit?

In a statement released by Treasury on behalf of Gordhan at the beginning of March, he explained the role of the National Research Group (NRG), which it is formally known as. The points below were highlighted by Gordhan:

•          The NRG, and subsequent investigative units, were legally constituted and approved at ministerial level.
•          It has done commendable work in disrupting activities in the illicit economy and raising revenue from high risk sectors of the economy.
•          Its finances were approved transparently in the normal way of SARS budgeting processes and was audited by the Auditor General every year.
•          SARS ensured at all times that the NRG functioned within SARS legal and policy framework and within the laws of our country.
•          In assisting other law enforcement agencies in combating crime, among others the following were recorded between 2007 and 2013:

o   tobacco seizures of more than R2 billion,

o   drug seizures of more than R5 million,

o   recovered outstanding customs duties of more than R500 million

o   assisted in raising tax assessments of more than R200 million against defaulting taxpayers, and

o   assisted with the preservation of assets of more than R100 million

3.        Why hasn’t Minister Gordhan responded to the letter?

The original letter from the Hawks to Gordhan was sent a few days before the Minister was due to deliver the Budget Speech. At the time the priority was on the Budget Speech, and therefore the Minister made no mention of the letter to the press.

In a statement following the leak of the letter to the press, Gordhan stated: “I want to publicly state my version of events in relation to a letter I received from the Hawks on Thursday 18 February 2016, informing me that I must answer three pages of questions, keep the letter confidential and not interfere with “state witnesses”, without indicating who such witnesses are. I believe this was meant to intimidate and distract us from the work that we had to do to prepare the 2016 Budget.

“I did not make any public statements on the Hawks letter, deliberately. My intention was to ensure that nothing would jeopardise government’s reaction to the Budget and our efforts to create a better climate for investors.”

In a letter sent by Gordhan’s attorneys to the Hawks, which has since been released to the public, further clarification as to the failure to respond to the initial letter was provided. It stated: “You will have been aware that, at the time your letter of 19 February 2016 was delivered, the Honourable Minister was engaged in preparing the national Budget Speech for presentation to Parliament on 24 February 2016. This is particularly so since, when you telephoned on 18 February in an attempt to speak to him you were requested to contact him after the Budget Speech.

“You are aware of the national importance of the Budget Speech, and that he was not able to permit any distractions to jeopardise the Budget processes.

“In the circumstances, he has only just been able to begin to consult with his legal representatives on the best way in which to respond to your letter, and the questions annexed to it.

“He is therefore unable to respond by 16h00 today as you have requested. He will respond in due course, once he has properly examined the questions and ascertained what information, of the information you request, he is able to provide.”

4.        Was another letter sent to the Minister?

Over the past weekend there were claims that a second letter had been sent to the Minister. On Monday Treasury and Gordhan released a statement clarifying that this was not the case.

“My attorneys have confirmed to me that that no other letter has been received by their office until close of business on Friday 11 March; nor by email. I can also confirm that I am unaware of any "new" letter,” explained Gordhan.

5.        Are the Hawks harassing the Minister?

Gordhan and National Treasury released a statement calling for the harassment by the Hawks to end. However, reports have alleged that Gordhan may consider himself above the law, which the Hawks say is not true. No matter who the person is, the Hawks will investigate.

According to a statement released by Gordhan on Monday, the leaking of the letter and other correspondence between the Hawks and the Minister could be “harassment and intimidatory tactics”.

In response to the allegations that it leaked the letters to the press, the Hawks said: “We would like to set the record straight as well, that had the minister, like any law-abiding citizen, complied with our letter and provided answers, we would not be where we are today.

“This is neither a talk-show nor a soapie. We are mandated to investigate without fear, favour or prejudice and there is nowhere in the constitution wherein calling a press conference has been mentioned as another means of conducting investigations.

“The minister, for whatever reasons, has failed to meet the SECOND deadline for answering questions and our legal team are forging a way forward which will see the Hawks exercising our constitutional powers.

The investigations will not be stalled by an individual who refuses to comply with the authorities and demand a preferential treatment.”

6.        What is the Hawks’ response to all that has unravelled?

The Hawks released a statement on Tuesday explaining its stance on the current situation with the Minister. This is the first time that the Hawks have come out publically to discuss the investigation and the Ministers role in it.

In short, the Hawks summarised their correspondence with Gordhan and his legal team to date.

“The Directorate for Priority Crime Investigation (DPCI), commonly known as the Hawks, has noted with concerns the utterances by the Minister of Finance Mr Pravin Gordhan that he was not aware of the letter sent to him, detailing the 14th March 2016 at 16:00 as his deadline for answering questions sent to him.

“The Hawks do not engage people on public space but the Minister has left us no choice but to clear the air, set the record straight and restore public’s trust on us as an elite crime fighting unit.

“On 19 February 2016 the National Head of the Hawks Lieutenant General Mthandazo Ntlemeza sent a letter to Mr Pravin Gordhan. The letter contained questions which the Minister had to answer on or before 16:00 on 1 March 2016, so that we could continue with our investigations into the alleged rogue unit at SARS.

“The minister received the letter, but instead of providing us with answers he sent us a written response via his legal representatives, Gildenhuys Malatji Attorneys.

“In the letter the minister requested more time to answer questions, saying by the time he received the questions he was busy preparing the budget speech. The letter from his attorney was received by this office on 1 March 2016, approximately an hour before his 16:00 deadline.

“In the letter from his attorney, the minister did not mention how much time he needed to answer the questions, and as a result another letter was written to his attorneys on 3 March 2016.

“The letter it was received, stamped and the acknowledgement of receipt was signed by one Josephine at the reception desk of Gildenhuys Malatji Attorneys at 08:40.”

The Hawks have emphasised that it received a letter from Gordhan’s attorneys on 7 March 2016 acknowledging 14 March as the deadline for responses to be submitted.