The Hawks and Minister Gordhan: What is really happening?

There has been much in the news over the past week regarding a Hawks investigation into an apparent ‘rogue unit’ that was set up at the South African Revenue Service (SARS) and Minister of Finance Pravin Gordhan’s role. But what is this really all about?

Justmoney breaks the situation down for you.

What is this supposed rogue unit?

There are claims what when Minister Gordhan was head of SARS, he established what is now being called a rogue unit. In a statement, Gordhan has explained that this unit, which was called the National Research Group (NRG) was established through the correct legal channels. Furthermore, he noted the work that the NRG was able to accomplish.

According to Gordhan, the NRG has done commendable work in disrupting activities in the illicit economy and raising revenue from high risk sectors of the economy. In addition he pointed out that the group’s 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,” added Gordhan.

The NGR reportedly also assisted other law enforcement agencies in combating crime. Gordhan pointed out that the following results were recorded between 2007 and 2013:

•          Tobacco seizures of more than R2 billion,
•          Drug seizures of more than R5 million,
•          Recovered outstanding customs duties of more than R500 million
•          Assisted in raising tax assessments of more than R200 million against defaulting taxpayers, and
•          Assisted with the preservation of assets of more than R100 million.

What is this letter the Hawks sent to Gordhan?

Four days prior to the Minister delivering the Budget Speech 2016, he received a letter from the Hawks containing 27 questions regarding the NRG and other issues relating to this. (Click here to read the 27 questions)

Gordhan believes that the letter was sent to him “to intimidate and distract us [Treasury] from the work that we had to do to prepare the 2016 Budget.”

What do the ANC have to say about the investigation?

Following the news that Gordhan had been sent a list of questions by the Hawks, the ANC came out to show their support and confidence in the Finance Minister.

In a statement, the ANC said: “We are extremely concerned that 4 days before the Minister delivered the Budget Speech, questions from the Hawks were sent to the Minister. The timing of these questions indicates clearly that there was intention to distract the Minister during this important time. It is even more disconcerting that these questions were leaked to the media. In our view this is a well calculated destabilization plan with all the elements of disinformation, falsehoods and exaggerated facts.”

The ANC add: “In the event that the Hawks have anything to investigate related to the Minister and SARS, it would be in the best interest of our country if they did so professionally, using the correct channel and procedures and not seek to conduct a trial through the media.”

What is the opposition saying?

The Democratic Alliance (DA) has come out saying that in order to properly investigate the matter of the rogue unit, President Jacob Zuma needs to establish an independent judicial commission of inquiry.

Furthermore, the DA noted: “President Jacob Zuma is in full damage control mode desperately trying to keep the political lid on the internal civil war, which has broken out over the so-called “rogue unit” within SARS.

“However, the fact that the public had to be reassured that the Minister of Finance, Pravin Gordhan, has nothing to worry about and that his job is not in jeopardy, is likely to have the reverse effect and undermine, rather than boost, investor confidence in South Africa.”

It added: “What is not in dispute is that the Hawks have launched an investigation in to the SARS “rogue unit”, which the Minister believes is politically motivated and aimed at trying to intimidate and distract him as well as destabilise the economic stability of South Africa.

“What this suggests is that the President is in denial: there is an all-out civil war being fought within the state, and within the ruling party, over the SARS “rogue unit”.”