ONE of the most debated issues relating to the intelligence unit in the South African Revenue Services, famously known as the rogue unit, is whether it existed at all, whether it was legally established and whether it operated within the law.
The answer to this question started with an investigation and findings by Advocate Moeti Kanyane, who was appointed by the then acting Commissioner Ivan Pillay. The Kanyane Panel found the unit was illegal and unlawful and recommended further investigation.
In and around August 2014, Pillay established another investigation. This time headed by Advocate Muzi Sikhakhane SC who, in November 2014, found “the unlawful establishment of a unit that operated ostensibly in a covert manner, has created a climate of intrigue, fear and subterfuge within the organisation”. They further found it “improbable that Mr. Van Loggerenberg was unaware of the manner in which the Special Projects Unit, the NRG and/or High Risk Investigation Unit operated, he was not responsible for their establishment”.
Writing on Twitter, former SARS Commissioner Tom Moyane says, following the Sikhakhane report, that he sought legal opinion from Advocate Martin Brassey who among others, recommended he (Moyane) must institute a forensic investigation due to the seriousness of the allegations.
On the 28 of February 2015 the then Finance Minister, Nhlanhla Nene established a SARS Advisory Board, which was chaired by the retired Judge Kroon with the mandate to look into SARS processes with priority being on the investigation and guidance on the Sikhakhane report. The Kroon Advisory Board found that the establishment of the secret unit within SARS in 2007, which covertly gathered intelligence, was unlawful. The Board went further to instruct SARS to charge employees involved and open criminal charges against those implicated in this act of crime hence the ongoing criminal case by the Hawks.
KPMG was appointed to do the forensic audit on the allegations of an illegal unit in Sars. It found that the intelligence unit within Sars was breaking the law and further concluded now Public Enterprises Minister Pravin Gordhan knew about it.
The three employees inter alia Johann Loggerenberg, Ivan Pillay, Pete Richer, were charged as a result of the Sikhakhane report. Instead of facing the hearing and clear their names, all of the three opted to resign, with Loggerenberg resigning in February 2015 and Pillay and Richer resigning in May 2015.
Those implicated in the establishment of the unit have dismissed the Sikhakhane Report on the basis that it doesn’t say what law was contravened or ignored or not complied with.
Judge Kroon backtracked on his findings at the Nugent Commission of Inquiry into tax administration and governance, saying the board had blindly endorsed the Sikhakhane Report.
KPMG later announced that it had withdrawn its report based on the work the audit firm did for Sars and on behalf of the Gupta family and opted to reimburse Sars the fee it had received for its work into the Rogue Unit.
The Sikhakhane Report
The investigation headed by Advocate Muzi Sikhakhane SC arose from a complaint made against JohannVan Loggerenberg by Belinda Walter, an attorney and director of Belinda Walter Attorneys in Pretoria. Following a rather acrimonious end to a romantic relationship between Walter and Van Loggerenberg on 27 May 2014, Walter filed a formal complaint against Mr. Van Loggerenberg alleging that Van Loggerenberg ran a covert unit within SARS, unlawfully revealed taxpayer information, was engaged in unlawful interception of conversations and initiated their romantic relationship with the sole purpose of obtaining incriminating information about her clients in the tobacco industry . This complaint led to widespread media speculation about SARS and the alleged unlawful or unethical conduct of Van Loggerenberg
8 The details of the above allegations are contained in various communications to SARS and the media. The media reports that followed painted a picture that Mr. Van Loggerenberg and Ms. Walter were entangled in what was referred to in certain newspapers as “SARS LOVE AFFAIR” “SPY LOVE GETS UGLY” “SPIES AND LIES: AS LOVE AFFAIR ENDS”, and so on.
The report reads: “It is common cause that Mr. Van Loggerenberg and Ms. Walter engaged in a romantic relationship from 25 October 2013 to 27 May 2014. It is equally common cause that Mr. Van Loggerenberg has been romantically involved with no less than three female fellow employees at SARS, the names of which will be revealed later in this report. While they didn’t report directly to Mr. Van Loggerenberg at the time of the relationships, at least two of the persons in question, were Mr. Van Loggerenberg’s subordinates.
“Significantly, at the time the romantic relationship between Ms. Walter and Mr. Van Loggerenberg started Ms. Walter was the Chairperson of the Fair Trade Independent Tobacco Association (“FITA”), whose members were the subject of pending investigations by SARS. Mr. Van Loggerenberg had been directly involved in these investigations .
It is also common cause that Ms. Walter was a covert agent for the State Security Agency (“the SSA”), previously the National Intelligence Agency (“the NIA”) since approximately October 2010. She had also acted in a professional capacity as the attorney for several clients in the Tobacco Industry including Carnilinx Tobacco Company (Pty) Ltd (“Carnilinx”) before and during the course of her relationship with Mr. Van Loggerenberg”.
Advocate Sikhakhane found there existed “a covert unit first called the Special Projects Unit (“SPU”), which changed its name to NRG, and then again changed to HRIU, was acknowledged by those who knew about it, including Mr. Van Loggerenberg, Mr (Ivan) Pillay and some of its operatives. When asked, one of those who were aware of the existence of the NRG indicated that it was unlikely that any of its members would have told this panel of its existence because of the manner in which it operated, in other words – it was a covert unit which operated outside of the traditional SARS framework and physical environment.
THE PURPOSE BEHIND THE FORMATION OF THE NRG
75 The history of the NRG was confirmed by Mr. Van Loggerenberg, Mr Pillay and the unit’s operatives who were interviewed. In particular, Mr. Van Loggerenberg and Mr. Pillay told the panel about the existence of the unit during their second sessions with the panel and their perspective is as follows:
75.1 They confirmed that the unit was started in approximately 2007 with the view to combat organised crime through the deployment of intelligence capacity in addition to normal SARS operations. The initiative was supported and approved of by the relevant Ministers and Commissioner at the time. The unit was intended to be housed in and managed by NIA in an effort at co-operation between NIA and SARS. Such co-operation is in fact encouraged by the Constitution of the Republic of South Africa;
75.2 Negotiations were commenced between SARS and NIA but did not progress to a point where the plan became a reality. As fate would have it, when the negotiations failed SARS had already started gathering the required personnel experienced in intelligence work and had already started conducting limited intelligence work against organised crime. It is generally accepted that the unit never progressed to conduct anything more than the limited intelligence it did when it started;
75.3 This limited intelligence work entailed desk-top research and physical surveillance and tracking (following), with the use of borrowed vehicle tracking devices in two or three cases in its entire life-span. It is also generally accepted that the efforts of this intelligence team had impressive returns against organised crime throughout most of its existence. Through its work, the unit has been able to contribute immensely to the creation of the best revenue service in the continent and one of the best in the world;
75.4 The unit started with between 23 and 26 members who came from various backgrounds including tax, intelligence and law enforcement. The unit was called the NRG and was led by an operative referred to as “Skollie” (whose real name is Andries Janse Van Rensberg) under the management and guidance of Mr Pillay. During that time, its operational structure was in the form of cells or sub-units where each cell was self contained and independent from other cells save during general operational meetings which happened mostly in a place called the Brooklyn Guest House; and
75.5 Members worked from home and were not known by the general SARS staff. In fact, one of the unit’s “rules of play” was that the unit was not to be known by other SARS employees. These “rules of play” were formalised after Skollie had left the unit in 2009 and Mr. Van Loggerenberg had taken over the leadership of the unit. In its original form, the unit was “disbanded” in 2009 and only six were retained to continue operations under the new name, High Risk Investigation Unit.
75.6 It is important to state that Mr. Van Loggerenberg denied any knowledge of unlawful activity of the unit. In fact, he told the panel that when he took over, he made sure that the unit operated within the framework of the law governing SARS.
76 The six members who were retained after the disbandment of the NRG in 2009 were mostly from the intelligence and law enforcement backgrounds . They remained in operation, unknown and unheard of, until they were exposed through the Sunday Times on 12 October 2014 following the romantic fall-out between Mr. Van Loggerenberg and Ms Walter”.
The full Sikhakhane report here: Sikhakhane Report