Quote of the week

Regard must be had to the higher standard of conduct expected from public officials, and the number of falsehoods that have been put forward by the Public Protector in the course of the litigation.  This conduct included the numerous “misstatements”, like misrepresenting, under oath, her reliance on evidence of economic experts in drawing up the report, failing to provide a complete record, ordered and indexed, so that the contents thereof could be determined, failing to disclose material meetings and then obfuscating the reasons for them and the reasons why they had not been previously disclosed, and generally failing to provide the court with a frank and candid account of her conduct in preparing the report. The punitive aspect of the costs order therefore stands.

KHAMPEPE J and THERON J
Public Protector v South African Reserve Bank (CCT107/18) [2019] ZACC 29 (22 July 2019)
21 July 2019

Public Protector’s Ramaphosa report contains a good idea ruined by (more) bad legal reasoning

Another day, another Public Protector Report that will have an impact on the internal power struggle raging in the African National Congress (ANC), and (possibly) another judicial review of the report. While the Public Protector’s report on President Cyril Ramaphosa’s financing of his campaign to become President of the ANC (like many of her previous reports) is a legal and factual mess, it highlights the need for transparency in the funding of leadership elections inside political parties.

Money plays an outsized role in leadership elections inside the ANC. This obvious fact is underlined by the news that President Cyril Ramaphosa and his team may have spent as much as R440 million to get him elected as ANC President. We do not (yet) know how much Nkosazana Dlamini-Zuma and her allies spent on their (partly losing) campaign, but Ramaphosa’s backers claim the Dlamini-Zuma campaign spent much more than R440 million.

It would be naïve to assume that everyone who donated to either campaign did so without expecting (or hoping to receive) something in return. It would similarly be naïve to assume that the cigarette smugglers and other businesses who donate money to the Economic Freedom Fighters (EFF), and the property developers, and other businesses who donate money to the Democratic Alliance (DA) do so without hoping to get something in return.

It is for this reason that I agree with the basic premise of the Public Protector’s report that candidates who run for leadership positions in political parties ought to reveal all donations made to their campaigns. Unfortunately, the existing legal framework does not require such transparency – unless donations are made directly to a candidate who also happens to be a member of Parliament.

In 2016, Parliament’s Ethics Committee found that Mmusi Maimane had breached the Parliamentary Code of Ethics because he did not declare personal donations made to him to finance his campaign to become leader of the DA. The decisions was sent back to the Committee for review, but as far as I can tell it was never finalised so we still do not know who financed his campaign and how much he spent.

But unlike Mr Maimane, President Ramaphosa and his CR17 campaign must have consulted clever lawyers because he never personally received funds for his campaign (although his campaign reimbursed the Ramaphosa Foundation for expenses incurred on behalf of the campaign). Instead, a separate body entitled CR17 was established to raise and spend funds to advance his campaign to become president of the ANC.

Which brings me to the Public Protector’s report on the funding of his campaign. By far the most interesting – and if it were to prevail, most far reaching – finding in the Public Protector Report is that members of Parliament who run for political office in a political party have a duty in terms of the  Code of Ethical Conduct and Disclosure of Members’ Interest for Assembly and Permanent Council Members to declare to Parliament not only money received personally by them to pay for campaign costs, but also any funds received by others that is then used to finance such a campaign.

The finding sets a precedent that (unless set aside) will force other members of Parliament – including Nkosazana Dlamini-Zuma and opposition party leaders – to declare all their sources of funding used by them personally and by those campaigning on their behalf during the campaign for leadership positions inside a political party.

This would seem like an excellent idea as it would enhance transparency and accountability of those seeking to be elected to leadership positions in political parties. Although a candidate may not directly benefit financially from contributions made to his or her leadership campaign, he or she nevertheless benefits indirectly as this contribution is used to help him or her win a leadership election which brings with it other benefits.

Although many politicians and political parties will attempt to avoid scrutiny of their funding, legal rules that make it more difficult for politicians to hide who sponsor their political campaigns both inside political parties and in national and other elections, should be welcomed. Unfortunately, the Public Protector’s report makes a bit of a hash of it on this score, so the findings might not withstand judicial review. The Public Protector rightly summarises the question she is to decide on as follows:

The issue for my determination is whether or not President Ramaphosa as the then Deputy President and member of Parliament was duty bound to declare the financial benefit accruing to him during the campaign, and whether his failure to disclose such financial benefit was in violation of the executive ethics code.

The Public Protector answers this question by finding that the Code of Ethical Conduct and Disclosure of Members’ Interest for Assembly and Permanent Council Members – which binds all members of Parliament – imposes a duty to Ramaphosa to declare all the sources of funding received by the CR17 campaign.

However, the executive summary of the report claims to make a different finding not obviously related to the above. Instead of sticking to the question of whether all CR 17 funds should have been declared, the executive summary states that the President also exposed himself to a situation involving the risk of a conflict between his official responsibilities and his private interest or suggests he may have used his position to enrich himself and his son through businesses owned by African Global Operations, was substantiated. The conflict of interest claim is pursued in a perfunctory manner in the report itself but no concrete finding is made in the text of the report – despite what the executive summary claims.

There may be a second technical problem with this finding. It is unclear whether the Code can be enforced against someone like Ramaphosa who is no longer a member of Parliament. Parliament’s Ethics Committee has interpreted the Code to be only enforceable against sitting members and not against former members – even when the alleged breach occurred when the person was still an MP. For example, when convicted women beater, Mduduzi Manana, resigned as an MP, the Ethics Committee stopped its investigation against him. At the time co-chairperson of the committee Aumsen Singh explained:

In light of his resignation, Mr Manana is no longer a member of the [National] Assembly and by extension, a Member of Parliament. Consequently, the sub-committee and the code finds no application on Mr Manana in light of the allegations he was expected to answer.

On Twitter the office of the Public Protector claimed that the Code does apply to Mr Ramaphosa as it contains specific provisions making the Code applicable to former members. This is not correct. With one exception, the Code only applies to existing members. As clause 10.1.2 makes clear that “[a] former Member breaches this Code if the former Member contravenes clause 8.2 of the Code” Clause 8.2 states that:

A former Member must avoid any abuse or improper use of Members’ facilitiesor any benefit provided to the former Member by Parliament and strictly observe and adhere to the administrative rules that apply to such facilities or benefits.

In other words, former members of Parliament are only bound by the code in relation to their use of the Parliamentary facilities and other benefits they still enjoy as former members. It does not seem to relate to the disclosure of interests or other alleged ethical breaches. If this is correct, the remedial action imposed by the Public Protector ordering the speaker to refer the alleged breach of the Code to the Joint Ethics Committee within 30 days, and the further instruction to the speaker to order Ramaphosa to make a full declaration of all funds received by CR17 within 30 days, may also be unlawful.

Even if one assumes that the Public Protector interpretation of the Code is correct and the remedial action is lawful (as I would prefer to do as I support the conclusion that funding of political campaigns should be disclosed), many individuals who are not MPs (like Ace Magashule, but also Cyril Ramaphosa if he again runs for presidency of the ANC in 2022) will not be bound by this Code. It is for this reason that I would suggest that Parliament passes appropriate legislation to ensure transparency and accountability in the funding of campaigns for leadership positions within all political parties.

Before I read all the documents relating to the seemingly misleading answer Ramaphosa gave in Parliament when asked about money given to his son, Andile, I had thought that it was obvious that President Cyril Ramaphosa had deliberately misled Parliament on the matter. Ramaphosa responded to a question by Mmusi Maimane about a transfer of R500 000 into an account run by Andile, by claiming that money was paid to his son for work done for African Global Operations (former Bosasa).

When Ramaphosa later issued a statement to say the R500 000 was transferred to his CR17 fund (but failed to clarify that his son did do work for Bosasa and was paid by them for this as Ramaphosa claimed in Parliament), it sounded as if he had told quite a serious lie to Parliament.

However, it turns out that the information given by Ramaphosa to Parliament about his son and Bosasa was correct. Bosasa did give money to Andile Ramaphosa in payment for work done as the President claimed at the time. What had happened was that Mmusi Maimane had fluffed the question he asked Ramaphosa by claiming that the R500 000 from Bosasa was paid to Andile Ramaphosa, when he meant the money was paid to the CR17 fund. The Public Protector found that Ramaphosa had misled Parliament in breach of clause 2.3 of the Executive Members Ethics Code because he should not have answered the fluffed question before double checking the facts.

Although Ramaphosa clarified the matter later, the rules of Parliament are silent on whether this is possible, which led the Public Protector to conclude that the finding that the President misled Parliament should stand. It is worth quoting the report at length to get a flavour of the reasoning:

President Ramaphosa’s provocation by the question from the leader of the opposition cannot justify giving poorly prepared answers and creating the risk of misleading Parliament as he did in this case. As South African law is silent on whether Cabinet Members of the President may amend or make corrections to statements made in their oral reply to Parliament it is a grey area which calls for attention to Parliament’s rules. It therefore goes without saying that although President Ramaphosa may have been justified to correct the earlier statement he had made in erroneous or incomplete information at his disposal, but he did mislead Parliament.

Again there is a discrepancy between the wording of the finding provided in the executive summary (and in the section at the end of the report containing the findings) on the one hand, and the finding contained in the body of the report. The executive summary states that Ramaphosa had:

deliberately misled Parliament, in that he should have allowed himself sufficient time to research on a well-informed response. His conduct referred to above although in good faith, is inconsistent with his office as a member of the Cabinet.

Later the report changes this language and states that the President “ostensibly” acted in good faith. Leaving aside for the moment that it seems factually impossible to act in good faith and still to deliberately mislead someone, this finding differs from the one made in the body of the report that reads: “He inadvertently and/or deliberately misled Parliament, in that he should have allowed himself sufficient time to consider the question and make a well-informed response”. It goes without saying that one cannot at the same time mislead deliberately and inadvertently.

In coming to the conclusion that Ramaphosa deliberately (or maybe also “inadvertently and in good faith?) misled Parliament, the Public Protector purports to quote from clause 2.3 of the Executive Members Ethics Code which she claims says: “Members may not deliberately or inadvertently mislead the President or the Premier, or as in this case, the legislature”.

Elsewhere in the report, the correct language from clause 2.3 is quoted as saying: “Members of the Executive may not (a) wilfully mislead the legislatureto which they are accountable; (b) wilfully mislead the President or Premier, as the case may be.” Unfortunately, the report throughout claims that the Code prohibits a member of the executive from both deliberately and inadvertently misleading Parliament. This is incorrect as only a member of the executive that wilfully misleads Parliament acts in breach of clause 2.3 of the Code.

Lastly, the finding that allegations of money laundering “had merit” and the instruction that the National Director of Public Prosecutions (NDPP) must conduct further investigations into money laundering is never going to stand up in court. Apart from the fact that the NDPP does not have the power to investigate criminal offences (the NDPP is the final decision maker on whether to prosecute cases which have been investigated by others), the “legal reasoning” in this section of the report is also of a disappointingly low quality. The report quotes various provisions from the Prevention and Combatting of Corrupt Activities Act and then states that:

My investigation into the issue pertaining to possible money laundering is premised on the above legislation and applies not only to private members of offers bribes but also private individuals who receive bribes.

The problem is that the quoted legislation does not deal with money laundering at all. A one-minute search on Google will inform anyone who bother to check that money laundering is regulated by two other pieces of legislation over which the Public Protector has no jurisdiction when it relates to private parties. These are the Financial Intelligence Centre Act and Prevention of Organised Crime Act. It is not rationally possible to say that money laundering charges have merit without first determining what the law says about money laundering, but that is exactly what the report purports to do. In the case of review, this part of the report is therefore obviously doomed.

It was not easy to read and follow the thread of the various arguments in the Public Protector’s report. In places, it was also difficult to try and figure out what exact findings the Public Protector made and what the legal basis for these findings were. But hopefully members of the public will read the report (as well as Ramaphosa’s legal papers)to make up their own minds about the quality of the arguments contained in it.

Hopefully, the idea that funding of political leadership campaigns should become transparent and that there should be a legal duty to disclose such sources of funding will not get lost in the inevitable contestation about the quality of the arguments deployed in the report.

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