said in their report that even before the conclusion of their presentation, Radebe indicated that he had “heard and seen enough and that it is a prima facie case that must be dealt with by law enforcement”.
In January 2011, Lieutenant-General Anwa Dramat, the head of the Hawks (which by then had replaced the Scorpions), arranged a meeting for the investigators with Major-General Hans Meiring, in charge of the Hawks' commercial crimes unit. Meiring allocated a Hawks colonel to evaluate the evidence. He concluded that the case was “too big for us” and recommended that the matter be taken further by a multidisciplinary task team comprising the police's commercial crimes unit, the Crimes Against the State unit of the Hawks, the Asset Forfeiture Unit (AFU) and the Special Investigating Unit (SIU). It was agreed that the SIU was best suited for the investigation.
Two months later, the SIU presented a “business plan” to the State Security Agency (SSA) that included an independent forensic investigation by PricewaterhouseCoopers that would cost R15 million. Gibson Njenje, head of domestic intelligence, personally entered the negotiations and later told the investigators that he had managed to bring down the cost of the audit to R6 million.
Although Engelke believed there was already enough evidence to charge and convict the PAN top structure, he realised that nobody, except for Njenje, had the stomach to take on the might of the SSA. Can you imagine charging one of the most powerful people in the country with treason and those around him with fraud and corruption?
Such trials had the potential to rip open the underbelly of the SSA and unmask those we entrust to guard the Republic as nothing but a coterie of thieving and squandering thugs. Although the state could cite national security to hold prosecutions behind closed doors, details of the debauchery would leak to the media and prompt uncomfortable questions about the antics at “the Farm”. Spooks prefer to skulk in the shadows of anonymity for as long as possible.
Engelke refused to capitulate and turned to the only law enforcement agency that at the time would have the guts to cross swords with the SSA: the South African Revenue Service (SARS). The service was by far the most efficient law enforcement agency in the country and had pursued the like of Julius Malema, Radovan Krejčíř and Lolly Jackson with a hyena-like relentlessness and would have gone where the Hawks and the SIU feared to tread.
Furthermore, NIA and SARS had signed a cooperation agreement whereby they would share information and engage in joint operations. In April 2011, Engelke wrote to the SARS forensic service investigations and requested them to probe nine senior PAN managers and agents and several companies for their declared income and the taxes they had paid. Among them were Fraser, Engel, Makhwathana and Wallace.
SARS investigators and analysts compiled profiles of the managers/agents as well as their spouses and connected the dots between the companies and their directors. Although most of the PAN transactions and payments were done in cash, it was clear that several of the “persons of interest” had feasted greedily during their terms at PAN.
One of the PAN agents who acted as a service provider had eight vehicles registered in his name, including a R1.3 million Mercedes-Benz, a Range Rover Sport, an Audi A4, a Pajero and a Harley-Davidson. He was an active and former director of more than twenty companies. One of these companies received 27 government payments worth R5.6 million; another 57 government payments worth R10 million. The latter company still owed R5.6 million in unpaid taxes.
The profiles of the other persons of interest showed how millions of rand of taxpayers' money flowed into the bank accounts of their companies, which had service provider contracts with PAN. They bought farms, jet skis, imported motorcycles and 4x4s.
The profile of Arthur Fraser, however, didn't show excessive wealth. He owned two BMWs and a house in Observatory in Johannesburg and was a director of a couple of companies. He did, though, receive two government tenders of R81,000 while he was the operations director of the NIA. But the profile of his wife, Natasha Fraser, made for more interesting reading. She became a director of a security company by using her maiden name of Taylor. After she resigned from the company, it received 240 government payments between 2005 and 2010 to the value of R7.4 million. It also owed SARS almost R4 million in unpaid taxes.
I have no doubt that there was great anxiety in the security agency around the SARS investigation. It had to be stopped.
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When Zuma came to power, he was dealt an enviable hand because he had vacancies to fill in most of the key criminal justice institutions, which meant he could appoint his allies and cronies to them. He had to select a new police chief, a new national director of public prosecutions, a new intelligence chief and the head of the Hawks.
A former intelligence hand himself, Zuma has always relied on his intelligence and security chieftains to infiltrate the state apparatus while at the same time safeguarding him from revolt and overthrow. These stooges have little regard for law and order and for keeping the Republic safe. Instead, they have mostly been reduced to squads of hooligans that are prepared to harass and hound any Zuma adversary into submission.
A pattern of appointing cronies and loyalists in key positions emerged at the outset of Zuma's presidency. He was mindful that he could still be brought to book for corruption in the future, and set in motion a shadow security state that would undermine the independence of the police and the National Prosecuting Authority (NPA).
After Siyabonga Cwele became state security minister, Zuma appointed three loyalists as his intelligence chiefs: Gibson Njenje as head of domestic intelligence, Moe Shaik as head of foreign intelligence, and Jeff Maqetuka as so-called super-director-general. Unexpectedly, the trio soon showed an alarming sense of independence when they became intent on investigating the influence of the Gupta family on the government and the state. This was after press reports that the family had offered former ANC Youth League leader Fikile Mbalula a ministerial post. Cwele flew his three administrative heads to Cape Town and ordered them to halt the project. They refused and he ordered them to resign.
With Njenje gone, Engelke had lost one of his only allies. He wasn't ready yet to throw in the towel. He had a further appointment with the SIU, who told him that they were awaiting authorisation from the new spy boss, acting SSA director-general Dennis Dhlomo, to request the audit. Nothing was forthcoming.
Cwele also began to change his attitude towards the investigators during the latter half of their probe. He told Paul Engelke that he didn't trust him any longer and that he held a vendetta against Fraser. The investigation was on the rocks. At the time Cwele himself was under siege. His wife, Sheryl, was convicted of drug smuggling and sentenced to 12 years' imprisonment, later increased by the Appeal Court to 20 years. Opposition parties called for Cwele to step down, arguing that if he was not aware of his wife's illegal activities, he should no longer oversee the country's intelligence-gathering. There were also reports that the minister ordered that his wife be afforded intelligence protection for the duration of her trial. She was transported to and from court in official vehicles and protected by intelligence agency officers.
When Cwele received the final PAN report, he referred it to the inspector-general of intelligence (IGI) for “further investigation”. This made no sense. PAN was already being investigated by the best legal brains in the SSA. What more was there to uncover? By doing so, Cwele ensured that the mire of PAN would be entombed in Musanda's boneyard and would ultimately disappear in the hidden workings of the inspector-general. This included the SARS investigation into the tax affairs of the PAN beneficiaries.
Only two bodies have oversight over the intelligence agencies: the Office of the Inspector-General of Intelligence and Parliament's Joint Standing Committee on Intelligence. The IGI is constitutionally mandated to protect the public from abuses by the intelligence services. Its activities are cloaked in secrecy, however; its reports are not made public and it doesn't engage with the media.
Engelke and Meiring had stored their evidence in an office at Musanda which they referred to as the “war room”. The IGI never interrogated this evidence. Engelke appeared before inspector-general Faith Radebe and Jay Govender, the IGI's legal adviser, and was grilled about his apparent feud with Fraser and whether it had clouded his forensic appraisal.
The Office of the IGI has