The famous words of Lord Denning: "fraud unravels everything" may be applicable to the situation which has arisen as a consequence of the investigation of the South African Police Services (SAPS) headquarters leases in Pretoria and Durban by the Office of the Public Protector.
According to press reports, the Minister of Public Works has received a letter of demand from the putative landlord, Roux Shabangu, who in turn is facing demands from Nedbank, the financier of the two invalid and unlawful deals in terms of which the SAPS headquarters were to be moved to buildings acquired by Shabangu's company Roux Property Fund (RPF).
As both deals were for procurement on behalf of the state, it was incumbent upon the parties involved to ensure that the procurement was effected in accordance with a system that is fair, equitable, transparent, competitive and cost effective. This is a constitutional requirement that is reinforced by the provisions of the Public Finance Management Act.
Nedbank and Shabangu should be aware of the legal and constitutional environment in which they do business. The consequence of conduct inconsistent with the Constitution is that such conduct (the conclusion of the two leases in this case) is invalid. The invalidity of the leases leaves both Shabangu and Nedbank without any legal recourse against the Minister or any other organ of state.
This is as it should be: the flouting of the requirements for proper tendering can not be rewarded with claims for damages, irrespective of the greed for profit of those involved. It is impossible to found a good cause of action in a moral swamp, or as AP Herbert put it: "a dirty dog gets no dinner from the courts". The mere invalidity of the leases, as determined by the OPP, excuses the taxpayer from having to compensate either the bank or the property developer involved in the negotiations outside the framework of the law and the criteria of the Constitution.
The "elephant in the room" in the SAPS HQ case is the astronomical rentals agreed in the putative leases. The willingness of the state to pay more than three times the going rate in rental for the two buildings in question has not been explained by any of the parties involved. The Public Protector herself, rather charitably, speculates that this could be due to incompetence, negligence, or even recklessness. It could also be due to fraud and corruption. No one knows because, in an ongoing display of lack of accountability, none of the players involved in the deals has explained their conduct or justified the decision to pay rental out of all proportion to the market value of the premises chosen. In the case of the Durban lease there is also the question of the dilapidated state of the building in question, and the obligation of the state to pay for its renovation to render it fit for habitation by SAPS personnel deployed at head office level.
It is reported that Nedbank is demanding to be repaid its loans to RPF. Shabangu's response has been to start legal proceedings to recoup R 1 billion from the Minister. She is blamed for reinstating the leases upon taking office, despite two opinions from senior counsel to the effect that they were unlawfully concluded. This purported act of reinstatement is legally ineffective. If the leases could not pass constitutional muster because they were not fair, equitable, transparently negotiated, competitively priced and cost effectively concluded; their alleged reinstatement can not magically render them valid. They are and remain invalid for want of compliance with the requirements of section 217 of the Constitution, as the OPP has found, thereby confirming the opinions of the two senior counsel whose advice was sought.
The officials in Nedbank who agreed to lend the necessary finance to Shabangu owe their management, and Nedbank's shareholders, an explanation for getting involved in the deal. It is the equivalent of paying R1250 for a tank of petrol at a particular pump when all other pumps are supplying petrol at R400 per tank. It reeks of impropriety.
Taxpayers can feel lucky that Shabangu rejected a settlement offer of R50 million which he says was made last year by the Department of Public Works. That offer was worth R50 million more than he is entitled to, and should not be repeated.
The Minister may have many problems around the conclusion of the leases and her own role in purporting to re-instate them, but a successful claim for damages is not one of them.
Paul Hoffman SC
27th July, 2011
Monday, February 27, 2012
Saturday, February 25, 2012
Mandela's life and times
Nelson Mandela is one of the world's most
revered statesmen, who led the struggle to replace the apartheid regime
of South Africa with a multi-racial democracy.
Nelson Mandela"In prison, you come face to face with time. There is nothing more terrifying"
In 2004, at the age of 85, Mr Mandela retired from public life to spend more time with his family and friends and engage in "quiet reflection". "Don't call me, I'll call you," he warned anyone thinking of inviting him to future engagements. The former president had made few public appearances since largely retiring from public life.
In November 2010, his office released photos of a meeting he had held with members of the US and South African football teams.
In late January 2011 he was admitted to a Johannesburg hospital for a "specialised tests" with the South African presidency reminding a concerned nation that Mr Mandela has had "previous respiratory infections". He was admitted to hospital again in February 2012 for what the president's office said was "a long-standing abdominal complaint".
Raised by royalty
He was born in 1918 into the Xhosa-speaking Thembu people in a small village in the eastern Cape of South Africa. In South Africa, he is often called by his clan name - "Madiba".
Born Rolihlahla Dalibhunga, he was given his English name, Nelson, by a teacher at his school.
His father, a counsellor to the Thembu royal family, died when Nelson Mandela was nine, and he was placed in the care of the acting regent of the Thembu people, chief Jongintaba Dalindyebo.
He joined the African National Congress in 1944, first as an activist, then as the founder and president of the ANC Youth League.
Eventually, after years in prison, he also served as its president.
He married his first wife, Evelyn Mase, in 1944. They were divorced in 1958 after having four children. Mr Mandela qualified as a lawyer and in 1952 opened a law practice in Johannesburg with his partner, Oliver Tambo.
Mr Mandela set up South Africa's first black law firm with Oliver Tambo
Mandela's key dates
- 1918 - Born in the Eastern Cape
- 1944 - Joined African National Congress
- 1956 - Charged with high treason, but charges dropped
- 1962 - Arrested, convicted of sabotage, sentenced to five years in prison
- 1964 - Charged again, sentenced to life
- 1990 - Freed from prison
- 1993 - Wins Nobel Peace Prize
- 1994 - Elected first black president
- 1999 - Steps down as leader
- 2001 - Diagnosed with prostate cancer
- 2004 - Retires from public life
- 2005 - Announces his son has died of an HIV/Aids-related illness
- 2007 - Forms The Elders group
- 2010 - Appears at closing ceremony of World Cup
Together, Mr Mandela and Mr Tambo
campaigned against apartheid, the system devised by the all-white
National Party which oppressed the black majority.
In 1956, Mr Mandela was charged with high treason, along with 155 other activists, but the charges against him were dropped after a four-year trial. Resistance to apartheid grew, mainly against the new Pass Laws, which dictated where black people were allowed to live and work.
In 1958, Mr Mandela married Winnie Madikizela, who was later to take an active role in the campaign to free her husband from prison. The ANC was outlawed in 1960 and Mr Mandela went underground. Tension with the apartheid regime grew, and soared to new heights in 1960 when 69 black people were shot dead by police in the Sharpeville massacre.
This marked the end of peaceful resistance and Mr Mandela, already national vice-president of the ANC, launched a campaign of economic sabotage.
Nelson Mandela"Only free men can negotiate. Prisoners cannot enter into contracts"
"I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities," he said. "It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die."
In the winter of 1964 he was sentenced to life in prison. In the space of 12 months between 1968 and 1969, Mr Mandela's mother died and his eldest son was killed in a car crash but he was not allowed to attend the funerals.
He remained in prison on Robben Island for 18 years before being transferred to Pollsmoor Prison on the mainland in 1982. As Mr Mandela and other ANC leaders languished in prison or lived in exile, the youths of South Africa's black townships did their best to fight white minority rule. Hundreds were killed and thousands were injured before the schoolchildren's uprising was crushed.
In 1980, Mr Tambo, who was in exile, launched an international campaign to release Mr Mandela.
The world community tightened the sanctions first imposed on South Africa in 1967 against the apartheid regime. The pressure produced results, and in 1990, President FW de Klerk lifted the ban on the ANC, and Mr Mandela was released from prison and talks on forming a new multi-racial democracy for South Africa began.
Huge crowds greeted Nelson Mandela's release
Slum townships
In 1992, Mr Mandela divorced his wife, Winnie, after she was convicted on charges of kidnapping and accessory to assault. In December 1993, Mr Mandela and Mr de Klerk were awarded the Nobel Peace Prize. Five months later, for the first time in South Africa's history, all races voted in democratic elections and Mr Mandela was overwhelmingly elected president. Mr Mandela's greatest problem as president was the housing shortage for the poor, and slum townships continued to blight major cities.
He entrusted his deputy, Thabo Mbeki, with the day-to-day business of the government, while he concentrated on the ceremonial duties of a leader, building a new international image of South Africa. In that context, he succeeded in persuading the country's multinational corporations to remain and invest in South Africa.
He married Graca Machel on his 80th birthday
On his 80th birthday, Nelson Mandela married Graca Machel, the widow of the former president of Mozambique. He continued travelling the world, meeting leaders, attending conferences and collecting awards after stepping down as president. After his official retirement, his public appearances were mostly connected with the work of the Mandela Foundation, a charitable fund that he founded.
On his 89th birthday, he formed The Elders, a group of leading world figures, to offer their expertise and guidance "to tackle some of the world's toughest problems".
Possibly his most noteworthy intervention of recent years came early in 2005, following the death of his surviving son, Makgatho. At a time when taboos still surrounded the Aids epidemic, Mr Mandela announced that his son had died of Aids, and urged South Africans to talk about Aids " to make it appear like a normal illness". He also played a key role in the decision to let South Africa host the 2010 football World Cup and appeared at the closing ceremony.
Source: BBC News
Friday, February 24, 2012
8ta struggles in competitive market
Earlier this week, Blue Label Telecoms, the largest distributor of prepaid vouchers and airtime in SA, revealed that 8ta accounts for well under 1% of its airtime revenues. Vodacom, MTN and Cell C contribute 53%, 34% and 10% respectively.
There was little doubt 8ta, which was launched in 2010 after Telkom disposed of its 50% stake in Vodacom, would have an uphill battle gaining market share. With the Vodacom and MTN brands so deeply entrenched in consumers’ minds, and with Cell C pouring hundreds of millions of rand into marketing its new corporate brand and network, it was never going to be an easy ride.
The market is mature, especially on the voice side, meaning 8ta would have to lure consumers across from the other networks. With a more limited coverage map and a marketing budget much smaller than its bigger rivals, it was always going to be tough going. That 8ta is falling short of Telkom’s expectations is no secret. But can SA’s fourth mobile network make any meaningful impact in SA telecoms in the long term?
Irnest Kaplan, MD at Kaplan Equity Analysts, says it’s not necessarily a case of 8ta doing anything wrong, but “more of a function of the time at which it entered the market”. He says consumers often forget that there are networks beyond Vodacom and MTN and that even Cell C has only recently begun to get traction in the minds of the general public. Aside from the problems of brand awareness, Kaplan says 8ta has had problems with distribution and that while this is normal for a newcomer, MTN and Vodacom have had “many years to build deep distribution networks that go right down to the rural level”.
With the SA cellular market so saturated, 8ta has to look to churn — customers leaving other networks — for customers. “8ta has to offer a really compelling reason to switch, particularly for the high-spending segment of the market. Most customers won’t switch for a 10% discount on calls.” The other problem 8ta faces is that it’s part of Telkom, and for many consumers that leaves a bad taste, Kaplan says. That connection alone will have some consumers assuming 8ta’s network isn’t as good as its competitors’. “Even low-end subscribers worry about the same thing.”
Kaplan says Telkom’s early predictions of capturing 15% of the SA mobile market are not only far too optimistic — as of September 2011 the company claimed 1,9% — but “those types of projections don’t say what kind of 15% share. Will it be the low-end of the income scale or the high-end? And if it’s a mixture, what portion is accounted for by which segment?”
8ta has said it hoped to leverage Telkom’s fixed-line serves by offering converged services, which suggests the move into mobile may be more defensive than an active assault on MTN and Vodacom, according to Kaplan. Denis Smit, MD at BMI-TechKnowledge, says Telkom recently began recruiting for a new mobile MD when many thought senior managing executive Amith Maharaj was tipped for the position. Smit says this suggests the board wants stronger and more decisive leadership.
Though 8ta has engaged in aggressive pricing in an effort to win customers, Brian Neilson, research director and head of telecoms consulting at BMI-T, says Cell C has been similarly aggressive, even before 8ta’s entry to the market, and that Vodacom and MTN have gone some way to responding to 8ta’s offerings “which dilutes their effect”. While an active subscriber base of 1,1m isn’t to be scoffed at, and 8ta certainly reached the 1m milestone in less time than it took Cell C, what is worrying is that of these subscribers more than 882 000 are prepaid users, and the average revenue per prepaid user in Telkom’s last set of financial results in September 2011 was R20,47. This is a fraction of the figures enjoyed by its rivals.
8ta has been very aggressive in its pricing and in its marketing campaigns, but the question is how long it can keep pouring money into building market share. It will have to keep investing in advertising and promotions and needs to do this before it can even consider trying to improve average revenues per user. Also, it’s going to have to work hard to win over the big spenders, because most of the people going to 8ta at present are clearly those looking for deals, and these are also often the most price-sensitive users who are just as likely to leave when there’s a better offer elsewhere.
Source: — Craig Wilson, TechCentral
There was little doubt 8ta, which was launched in 2010 after Telkom disposed of its 50% stake in Vodacom, would have an uphill battle gaining market share. With the Vodacom and MTN brands so deeply entrenched in consumers’ minds, and with Cell C pouring hundreds of millions of rand into marketing its new corporate brand and network, it was never going to be an easy ride.
The market is mature, especially on the voice side, meaning 8ta would have to lure consumers across from the other networks. With a more limited coverage map and a marketing budget much smaller than its bigger rivals, it was always going to be tough going. That 8ta is falling short of Telkom’s expectations is no secret. But can SA’s fourth mobile network make any meaningful impact in SA telecoms in the long term?
Irnest Kaplan, MD at Kaplan Equity Analysts, says it’s not necessarily a case of 8ta doing anything wrong, but “more of a function of the time at which it entered the market”. He says consumers often forget that there are networks beyond Vodacom and MTN and that even Cell C has only recently begun to get traction in the minds of the general public. Aside from the problems of brand awareness, Kaplan says 8ta has had problems with distribution and that while this is normal for a newcomer, MTN and Vodacom have had “many years to build deep distribution networks that go right down to the rural level”.
With the SA cellular market so saturated, 8ta has to look to churn — customers leaving other networks — for customers. “8ta has to offer a really compelling reason to switch, particularly for the high-spending segment of the market. Most customers won’t switch for a 10% discount on calls.” The other problem 8ta faces is that it’s part of Telkom, and for many consumers that leaves a bad taste, Kaplan says. That connection alone will have some consumers assuming 8ta’s network isn’t as good as its competitors’. “Even low-end subscribers worry about the same thing.”
Kaplan says Telkom’s early predictions of capturing 15% of the SA mobile market are not only far too optimistic — as of September 2011 the company claimed 1,9% — but “those types of projections don’t say what kind of 15% share. Will it be the low-end of the income scale or the high-end? And if it’s a mixture, what portion is accounted for by which segment?”
8ta has said it hoped to leverage Telkom’s fixed-line serves by offering converged services, which suggests the move into mobile may be more defensive than an active assault on MTN and Vodacom, according to Kaplan. Denis Smit, MD at BMI-TechKnowledge, says Telkom recently began recruiting for a new mobile MD when many thought senior managing executive Amith Maharaj was tipped for the position. Smit says this suggests the board wants stronger and more decisive leadership.
Though 8ta has engaged in aggressive pricing in an effort to win customers, Brian Neilson, research director and head of telecoms consulting at BMI-T, says Cell C has been similarly aggressive, even before 8ta’s entry to the market, and that Vodacom and MTN have gone some way to responding to 8ta’s offerings “which dilutes their effect”. While an active subscriber base of 1,1m isn’t to be scoffed at, and 8ta certainly reached the 1m milestone in less time than it took Cell C, what is worrying is that of these subscribers more than 882 000 are prepaid users, and the average revenue per prepaid user in Telkom’s last set of financial results in September 2011 was R20,47. This is a fraction of the figures enjoyed by its rivals.
8ta has been very aggressive in its pricing and in its marketing campaigns, but the question is how long it can keep pouring money into building market share. It will have to keep investing in advertising and promotions and needs to do this before it can even consider trying to improve average revenues per user. Also, it’s going to have to work hard to win over the big spenders, because most of the people going to 8ta at present are clearly those looking for deals, and these are also often the most price-sensitive users who are just as likely to leave when there’s a better offer elsewhere.
Source: — Craig Wilson, TechCentral
Wednesday, February 22, 2012
Deadly force for police use only, MPs told
Parliament hears proposed changes to the law governing the use of lethal force under section 49 of the Criminal Procedure Act should apply only to police officers making an arrest and not to private individuals acting in self-defence.
Proposed changes to the law governing the use of lethal force under section 49 of the Criminal Procedure Act should apply only to police officers making an arrest and not to private individuals acting in self-defence, Parliament’s justice committee was told yesterday. Police shootings and the use of lethal force have been in the headlines of late. Both were particularly pertinent at yesterday’s committee deliberations following last week’s shooting of a youth, allegedly by a student policeman. Public hearings in the justice committee last August contained a wide variety of responses ranging from outright rejection of the new proposed section 49 to it being a welcome clarification of how and when police could use their firearms. At issue is when police can use deadly force to prevent a dangerous suspect from escaping. During last year’s hearings, University of Cape Town law professor Pierre de Vos warned : "Legislation that provides a blanket power to arrestors to use deadly force against anyone suspected of committing a crime involving serious threat of bodily harm, where suspects flee or resist arrest, would not pass constitutional muster."
Gen Tertius Geldenhuys, commenting on the public submissions, said yesterday that he was concerned some of the submissions wanted the law to apply to both police and private individuals. He explained that the way it was drafted, it applied to a specific purpose, and that was a police officer making an arrest to secure an appearance in court. The rules governing how private people could apply lethal force were covered by the common law. He said the amendment was an important measure which defines the "threshold that must be crossed before force can be used". He described the case of a young officer who had decided that an armed, fleeing suspect could not be shot in the back and ran after him, only to have the suspect turn and fatally wound him. Gen Geldenhuys agreed with submissions that stressed the importance of training in the matter of using deadly force, and also supported calls for a "use of force policy" to be developed. But sceptical MPs were unconvinced. Democratic Alliance MP Debbie Schafer said the first obligation was to ensure that police shootings did not occur, and then to define the conditions under which force could be used. She asked Gen Geldenhuys to explain how the police were trained in the use of force "because we have heard that the training is simply not happening".
African Christian Democratic Party MP Steve Swart said there was concern about the dangerous and stressful conditions in which police operated, "but there is also concern about the powers which police enjoy and how they are abused". Mr Swart took issue with the clause that said force could be used where the suspect could commit violent crimes in the future. "How can a police officer make a decision based on whether an arrest could be made later? That is asking them to be prophetic," he said.
Committee chairman Luwellyn Landers (ANC) questioned Gen Geldenhuys’s statement that training in the use of force would be reviewed once the new section 49 had been approved by Parliament. This sounded like an admission that police training was inadequate. Gen Geldenhuys said that whenever a police officer used his or her firearm, the matter should be investigated by the Independent Police Investigating Directorate, which will soon replace the current Independent Complaints Directorate.
Source: Business Day
Proposed changes to the law governing the use of lethal force under section 49 of the Criminal Procedure Act should apply only to police officers making an arrest and not to private individuals acting in self-defence, Parliament’s justice committee was told yesterday. Police shootings and the use of lethal force have been in the headlines of late. Both were particularly pertinent at yesterday’s committee deliberations following last week’s shooting of a youth, allegedly by a student policeman. Public hearings in the justice committee last August contained a wide variety of responses ranging from outright rejection of the new proposed section 49 to it being a welcome clarification of how and when police could use their firearms. At issue is when police can use deadly force to prevent a dangerous suspect from escaping. During last year’s hearings, University of Cape Town law professor Pierre de Vos warned : "Legislation that provides a blanket power to arrestors to use deadly force against anyone suspected of committing a crime involving serious threat of bodily harm, where suspects flee or resist arrest, would not pass constitutional muster."
Gen Tertius Geldenhuys, commenting on the public submissions, said yesterday that he was concerned some of the submissions wanted the law to apply to both police and private individuals. He explained that the way it was drafted, it applied to a specific purpose, and that was a police officer making an arrest to secure an appearance in court. The rules governing how private people could apply lethal force were covered by the common law. He said the amendment was an important measure which defines the "threshold that must be crossed before force can be used". He described the case of a young officer who had decided that an armed, fleeing suspect could not be shot in the back and ran after him, only to have the suspect turn and fatally wound him. Gen Geldenhuys agreed with submissions that stressed the importance of training in the matter of using deadly force, and also supported calls for a "use of force policy" to be developed. But sceptical MPs were unconvinced. Democratic Alliance MP Debbie Schafer said the first obligation was to ensure that police shootings did not occur, and then to define the conditions under which force could be used. She asked Gen Geldenhuys to explain how the police were trained in the use of force "because we have heard that the training is simply not happening".
African Christian Democratic Party MP Steve Swart said there was concern about the dangerous and stressful conditions in which police operated, "but there is also concern about the powers which police enjoy and how they are abused". Mr Swart took issue with the clause that said force could be used where the suspect could commit violent crimes in the future. "How can a police officer make a decision based on whether an arrest could be made later? That is asking them to be prophetic," he said.
Committee chairman Luwellyn Landers (ANC) questioned Gen Geldenhuys’s statement that training in the use of force would be reviewed once the new section 49 had been approved by Parliament. This sounded like an admission that police training was inadequate. Gen Geldenhuys said that whenever a police officer used his or her firearm, the matter should be investigated by the Independent Police Investigating Directorate, which will soon replace the current Independent Complaints Directorate.
Source: Business Day
Access to Information unpacked
Foundational to the new democratic order in South Africa are the values of accountability, responsiveness and openness as enshrined in the first section of the founding provisions of our state of the art Constitution, according to which we now all aspire to live.
Accountability means that those in positions of power or authority must be able to justify the decisions they take and explain their actions reasonably. To do so properly and to the satisfaction of the persons seeking accountability, it is often necessary to afford access to materials and information in them that back up the justifications and explanations that officialdom furnishes.
Responsiveness has been widely interpreted to mean acting in a way that is conducive to the promotion of fulfilling the needs of ordinary people. The state is obliged to respect, protect, promote and fulfil the rights guaranteed to all in the Bill of Rights which is Chapter Two of the Constitution. These rights to dignity, the achievement of equality and the enjoyment of the various freedoms set out reflect the aspiration of the new order to transcend the injustices of the past and to transform our society into one in which healing occurs and the divisions of the past are replaced by unity in diversity with peace, progress and prosperity.
Openness can be equated with transparency. This requires that the affairs of state should not generally be opaquely conducted behind closed doors and out of the public gaze. Government is exhorted to show what it is doing and tell the public why policy choices are made in any particular way. This is participatory democracy, limitable only in reasonable and justifiable ways.
Among the rights guaranteed to all are the rights to access to information and freedom of expression. These are inter-related.
In the 21st century there are oceans of data available containing seas of information that, when properly analysed provide waves of knowledge of the issues of the day. From the knowledge gleaned from the information available pearls of wisdom can be found to exercise rights responsibly, make choices wisely and exercise opportunities advantageously; all in ways that respect the humane and compassionate ethos of the new order.
To facilitate the implementing of the values highlighted and the exercise of the rights to freedom of expression and access to information, the Promotion of Access to Information Act has been passed, so that those who are stingy or shy with the information in their possession can be compelled to share it with interested parties for the greater good of the nation. Using this Act is a great accountability tool available to all for the cost of a letter.
Paul Hoffman SC
22 February, 2012.
Accountability means that those in positions of power or authority must be able to justify the decisions they take and explain their actions reasonably. To do so properly and to the satisfaction of the persons seeking accountability, it is often necessary to afford access to materials and information in them that back up the justifications and explanations that officialdom furnishes.
Responsiveness has been widely interpreted to mean acting in a way that is conducive to the promotion of fulfilling the needs of ordinary people. The state is obliged to respect, protect, promote and fulfil the rights guaranteed to all in the Bill of Rights which is Chapter Two of the Constitution. These rights to dignity, the achievement of equality and the enjoyment of the various freedoms set out reflect the aspiration of the new order to transcend the injustices of the past and to transform our society into one in which healing occurs and the divisions of the past are replaced by unity in diversity with peace, progress and prosperity.
Openness can be equated with transparency. This requires that the affairs of state should not generally be opaquely conducted behind closed doors and out of the public gaze. Government is exhorted to show what it is doing and tell the public why policy choices are made in any particular way. This is participatory democracy, limitable only in reasonable and justifiable ways.
Among the rights guaranteed to all are the rights to access to information and freedom of expression. These are inter-related.
In the 21st century there are oceans of data available containing seas of information that, when properly analysed provide waves of knowledge of the issues of the day. From the knowledge gleaned from the information available pearls of wisdom can be found to exercise rights responsibly, make choices wisely and exercise opportunities advantageously; all in ways that respect the humane and compassionate ethos of the new order.
To facilitate the implementing of the values highlighted and the exercise of the rights to freedom of expression and access to information, the Promotion of Access to Information Act has been passed, so that those who are stingy or shy with the information in their possession can be compelled to share it with interested parties for the greater good of the nation. Using this Act is a great accountability tool available to all for the cost of a letter.
Paul Hoffman SC
22 February, 2012.
Tuesday, February 21, 2012
Senior Congo diplomats claim asylum in UK
Three senior diplomats have resigned from their posts at the Congolese embassy in London and claimed asylum in the UK, accusing their own government of presiding over a "climate of terror". Baby Kazadi Moussonzo, first secretary to the ambassador, Mamie Yaya Efunga, another first secretary, and Kabengele Mamba, second secretary, had between them notched up 14 years' service at the central London embassy. They resigned earlier this month and have issued a lengthy statement denouncing the government that had employed them. They accused it of presiding over a "climate of terror". They claimed the government of the Democratic Republic of the Congo was guilty of abductions, arrests and assassinations as well as turning the police and Republican Guard into a private militia.
Congo's incumbent president, Joseph Kabila, was re-elected last November but controversy surrounded the results with opposition politicians claiming the ballot was rigged. The Carter Centre, which observed the election, said the results "lacked credibility". Human Rights Watch reported that at least 24 people were killed by police in the aftermath of the disputed vote. The three diplomats said in their statement that there had been substantial election fraud and ballot box stuffing.
The Metropolitan police made 139 arrests last December during a demonstration organised by Congolese people living in the UK who added their voices to those who argued that the outcome of the election was flawed. Anti-Kabila demonstrations have also taken place in South Africa, most recently at the international Mining Indaba in Cape Town earlier this month.
"We had many concerns about the situation in Congo and that is why we resigned. We were accused by the Congolese government of taking part in the London demonstration against the government last December but this is not true," said Moussonzo. "The government said that because we were involved in this demonstration we were being recalled to Congo.
"We believed that our lives would be in danger if we returned to our country in these circumstances and so we had to resign and claim asylum here in the UK."
A spokesperson for the Congolese embassy in London said the embassy was not commenting on the resignations.
Source: Mail & Guardian
Congo's incumbent president, Joseph Kabila, was re-elected last November but controversy surrounded the results with opposition politicians claiming the ballot was rigged. The Carter Centre, which observed the election, said the results "lacked credibility". Human Rights Watch reported that at least 24 people were killed by police in the aftermath of the disputed vote. The three diplomats said in their statement that there had been substantial election fraud and ballot box stuffing.
The Metropolitan police made 139 arrests last December during a demonstration organised by Congolese people living in the UK who added their voices to those who argued that the outcome of the election was flawed. Anti-Kabila demonstrations have also taken place in South Africa, most recently at the international Mining Indaba in Cape Town earlier this month.
"We had many concerns about the situation in Congo and that is why we resigned. We were accused by the Congolese government of taking part in the London demonstration against the government last December but this is not true," said Moussonzo. "The government said that because we were involved in this demonstration we were being recalled to Congo.
"We believed that our lives would be in danger if we returned to our country in these circumstances and so we had to resign and claim asylum here in the UK."
A spokesperson for the Congolese embassy in London said the embassy was not commenting on the resignations.
Source: Mail & Guardian
Sunday, February 19, 2012
Obama administration brokers pro-bank mortgage fraud settlement
The Obama administration announced on Thursday a settlement between five major banks and the federal and state governments over massive fraud relating to home foreclosures. The terms of the agreement are entirely favorable to the banks, while doing little or nothing to aid the millions of people who have been devastated by the collapse of the US housing market.
Government officials reported that the final deal is valued at about $25 billion spread out over a multi-year period. This is a paltry sum in relationship to the extent of the housing crisis, the profits of the banks and the scale of corporate criminality. However, only a small portion of this would come from direct financial sanctions on the banks.
Forty-nine of the 50 US states signed on to the settlement with the five banks—JPMorgan Chase, Wells Fargo, Citigroup, Bank of America (which bought mortgage firm Countrywide), and Ally Financial Inc. (formerly GMAC, the financial arm of General Motors). These five banks involved had net profits of $46 billion last year alone.
In exchange for the settlement, the banks will be released from liability for fraudulent and likely criminal activities. This includes “robo-signing,” in which the banks had employees sign hundreds of thousands of legal foreclosure documents without any knowledge of the underlying mortgages. Banks were also involved in forging documents. The true extent of the illegal operations is not known, and keeping this information secret is one of the aims of the settlement.
Evidence of these actions first emerged in 2010. States launched investigations in response, and the Obama administration stepped in to package these investigations and lead them to a settlement favorable to the banks. Over the past several weeks, the administration has placed heavy pressure on several state holdouts to sign on to the deal.
Of particular importance for Bank of America is the fact that the settlement will end a lawsuit filed by Nevada and Arizona over allegations that the bank has been deceiving homeowners seeking to participate in a refinancing program.
Only about $5 billion of the settlement will take the form of direct payments, including, according to government officials, a payment of about $2,000 to some individuals who had their homes foreclosed between September 2008 and December 2011.
Despite the evidence of fraud, no one will get their home back. Since 2007, there have been some 4 million home foreclosures.
About $17 billion will come from the modification of existing loans, spaced over a three-year time period. Details are still emerging, but it is evident that decisions on what loans to modify will be left to the banks themselves. Many of the loans have already been packaged off and sold to investors (“securitized”), thus minimizing the impact on bank assets.
The $17 billion in loan modifications is a tiny fraction of the total negative equity (the value of loans in relation to the value of the underling houses) of $700 billion to $750 billion. The deal will affect less than 10 percent of US homeowners who are “under water.”
An additional $3 billion is to come in the form of mortgage refinancing, again left to the discretion of the banks.
The banks will be tasked with self-reporting their actions. The industry and the state attorneys general selected North Carolina banking commissioner Joseph Smith to “oversee” the agreement and determine whether the banks are in compliance based on the bank reports. Smith is a former bank lawyer with close ties to the industry.
Markets reacted enthusiastically to the terms and bank stocks rose Thursday. The banks involved already have set aside funds that cover the amount of the agreement. Indeed, since many banks have written down the value of their existing loans, the agreement could have a positive net impact on their balance sheets.
“I wouldn’t say it’s a panacea for the housing industry,” commented Barclays analyst Jason Goldberg, “but it is good for the banks to get this behind them.”
Perversely, the deal will likely lead to a surge in home foreclosures, with banks now confident that they can proceed with business as usual. Bloomberg News commented, “Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year… With today’s agreement, banks are likely to resume property seizures.” Increased foreclosures will also lead to a further fall in home prices.
In hailing the deal, Obama said that it would “speed relief to the hardest-hit homeowners, end some of the most abusive practices of the mortgage industry, and begin to turn the page on an era of recklessness that has left so much damage in its wake.”
In fact, as with every component of the administration’s policy, the agreement will leave things entirely as they are, while giving a free pass to corporate criminals responsible for the economic crisis.
Source: World Socialist Web Site
Government officials reported that the final deal is valued at about $25 billion spread out over a multi-year period. This is a paltry sum in relationship to the extent of the housing crisis, the profits of the banks and the scale of corporate criminality. However, only a small portion of this would come from direct financial sanctions on the banks.
Forty-nine of the 50 US states signed on to the settlement with the five banks—JPMorgan Chase, Wells Fargo, Citigroup, Bank of America (which bought mortgage firm Countrywide), and Ally Financial Inc. (formerly GMAC, the financial arm of General Motors). These five banks involved had net profits of $46 billion last year alone.
In exchange for the settlement, the banks will be released from liability for fraudulent and likely criminal activities. This includes “robo-signing,” in which the banks had employees sign hundreds of thousands of legal foreclosure documents without any knowledge of the underlying mortgages. Banks were also involved in forging documents. The true extent of the illegal operations is not known, and keeping this information secret is one of the aims of the settlement.
Evidence of these actions first emerged in 2010. States launched investigations in response, and the Obama administration stepped in to package these investigations and lead them to a settlement favorable to the banks. Over the past several weeks, the administration has placed heavy pressure on several state holdouts to sign on to the deal.
Of particular importance for Bank of America is the fact that the settlement will end a lawsuit filed by Nevada and Arizona over allegations that the bank has been deceiving homeowners seeking to participate in a refinancing program.
Only about $5 billion of the settlement will take the form of direct payments, including, according to government officials, a payment of about $2,000 to some individuals who had their homes foreclosed between September 2008 and December 2011.
Despite the evidence of fraud, no one will get their home back. Since 2007, there have been some 4 million home foreclosures.
About $17 billion will come from the modification of existing loans, spaced over a three-year time period. Details are still emerging, but it is evident that decisions on what loans to modify will be left to the banks themselves. Many of the loans have already been packaged off and sold to investors (“securitized”), thus minimizing the impact on bank assets.
The $17 billion in loan modifications is a tiny fraction of the total negative equity (the value of loans in relation to the value of the underling houses) of $700 billion to $750 billion. The deal will affect less than 10 percent of US homeowners who are “under water.”
An additional $3 billion is to come in the form of mortgage refinancing, again left to the discretion of the banks.
The banks will be tasked with self-reporting their actions. The industry and the state attorneys general selected North Carolina banking commissioner Joseph Smith to “oversee” the agreement and determine whether the banks are in compliance based on the bank reports. Smith is a former bank lawyer with close ties to the industry.
Markets reacted enthusiastically to the terms and bank stocks rose Thursday. The banks involved already have set aside funds that cover the amount of the agreement. Indeed, since many banks have written down the value of their existing loans, the agreement could have a positive net impact on their balance sheets.
“I wouldn’t say it’s a panacea for the housing industry,” commented Barclays analyst Jason Goldberg, “but it is good for the banks to get this behind them.”
Perversely, the deal will likely lead to a surge in home foreclosures, with banks now confident that they can proceed with business as usual. Bloomberg News commented, “Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year… With today’s agreement, banks are likely to resume property seizures.” Increased foreclosures will also lead to a further fall in home prices.
In hailing the deal, Obama said that it would “speed relief to the hardest-hit homeowners, end some of the most abusive practices of the mortgage industry, and begin to turn the page on an era of recklessness that has left so much damage in its wake.”
In fact, as with every component of the administration’s policy, the agreement will leave things entirely as they are, while giving a free pass to corporate criminals responsible for the economic crisis.
Source: World Socialist Web Site
Mbeki: $50-billion illegally exported from Africa annually
An estimated $50-billion is exported out of the African continent illegally every year, former president Thabo Mbeki said on Saturday. "This money is exported illegally instead of being invested in the continent," he said. Mbeki was speaking at the launch of a United Nations Economic Commission for Africa (Uneca) high level panel in Johannesburg. The panel, chaired by Mbeki, would investigate illicit and financial flows of finance out of the continent.
Mbeki said the loss needed to be addressed before it undermined the prospect of Africa's development. "Almost $25-billion comes in to the continent. That means it loses twice the capital it receives in financial assistance," he said. "The panel will study the flow of money and understand how it is done. The African continent will expect the panel to provide practical measures to stop the flow." He said it would take a year for the panel to complete its investigation. "This is a matter of vital importance to the continent. In the end [the investigation] should result in action taken by the continent and individual countries," he said. "As a panel, we have no punitive measures. The panel will make proposals to those with punitive power and explain how it [the flow of money] is done."
He said the panel would provide sufficient information about the different methods of the outflow. This would include over-invoicing and under-pricing of exports and money laundering strategies.
Source: Mail & Guardian
Mbeki said the loss needed to be addressed before it undermined the prospect of Africa's development. "Almost $25-billion comes in to the continent. That means it loses twice the capital it receives in financial assistance," he said. "The panel will study the flow of money and understand how it is done. The African continent will expect the panel to provide practical measures to stop the flow." He said it would take a year for the panel to complete its investigation. "This is a matter of vital importance to the continent. In the end [the investigation] should result in action taken by the continent and individual countries," he said. "As a panel, we have no punitive measures. The panel will make proposals to those with punitive power and explain how it [the flow of money] is done."
He said the panel would provide sufficient information about the different methods of the outflow. This would include over-invoicing and under-pricing of exports and money laundering strategies.
Source: Mail & Guardian
Saturday, February 18, 2012
South Africans Suffer as Graft Saps Provinces
When she moved from a cramped room in a boardinghouse to her very own bungalow on a speck of land here last year, Jeanette Munyai became one of the millions of South Africans given a decent home by an ambitious government program inaugurated at the end of apartheid. House-proud for the first time in her life, she immediately planted corn, pumpkins and tomatoes on a patch of her yard. Only two things were missing: running water and electricity. “They told us water and light was coming, but we are still using the bush as a toilet,” she said. “We are waiting.”
Ms. Munyai and her neighbors are unlikely to get water or electricity any time soon. The provincial government is broke, and the dry pipes and powerless plugs have for her and many others come to symbolize the heavy toll graft and cronyism have taken in this impoverished northern province.
Corruption has long bedeviled South Africa, but the crisis here in Limpopo Province has pushed the common practice of doling out overstuffed government contracts to people with friends in high places to its logical conclusion: bankruptcy. Provincial officials overspent their budget by an estimated $250 million, much of it on questionable — or blatantly fraudulent — government payments and contracts with private businesses enjoying close ties to the politicians leading the province. “There is evidence emerging that some of these service providers are politically connected, and many of them may have gotten those tenders in dubious kinds of ways,” said Kenneth Brown, deputy director general in the Treasury Department.
Dan Sebabi, leader of Limpopo’s branch of Cosatu, the powerful coalition of trade unions that is allied with the governing African National Congress, put it more bluntly. “You have leaders who are politicians by day, businessmen by night,” he said. Graft and wasteful spending have sapped the government’s ability to tackle inequality. Only 3 of 39 government departments were pronounced clean in audits by South Africa’s auditor general last year. Only 7 of 237 cities passed muster the year before. “We thought that South Africa could be different from the rest of the countries that came before us on the African continent,” said Gilbert Kganyago, leader of Limpopo’s branch of the South African Communist Party. “But at the rate that things are happening, we have actually caught up to the African scenario quite more quickly than we might have thought.”
A recent report by the auditor general found that in the last fiscal year, government officials and their relatives won $15 million in contracts for work with the Defense Department, the Tax Service and the Department of Home Affairs, among others. And that does not come close to accounting for the many millions of dollars quietly awarded to friends and other associates, experts note.
Almost from the moment it was elected to govern in 1994 after decades of fighting to end apartheid, the A.N.C. has struggled with allegations of graft. Jacob Zuma, the current president, took office only after a bevy of corruption charges against him were dismissed amid accusations of prosecutorial misconduct. But corruption has become so entrenched that it is eating away at the nation’s soul, said Zwelinzima Vavi, secretary general of Cosatu, in a recent speech to announce the formation of an antigraft organization, Corruption Watch. “We are moving towards a society in which the morality of our revolutionary movement — selflessness, service to the people and caring for the poor and vulnerable — is being threatened,” Mr. Vavi said. “If we do nothing it will be swept away by a tidal wave of a culture of individualism, a ‘me first’ attitude and to hell with everyone else. Some argue that we are already a society where only the fittest survive and dog eats dog.”
Corruption is a particularly serious problem in provincial governments, which are responsible for delivering many of the services needed by the poor. Many powerful regional politicians use their offices to enrich their friends, forming a coterie of wealthy elites reminiscent of the tribal chieftains the apartheid government used to administer the tiny, nominally independent bantustans where blacks were forced to live.
Limpopo has the nation’s second-highest proportion of people living in poverty — 62 percent, according to the South African Institute of Race Relations. The average unemployment rate for the province is 40 percent, but it is much higher for blacks and young people. Signs of waste and fraud are everywhere. Pipes that were supposed to bring clean drinking water to parched, impoverished communities were laid improperly and burst, requiring the whole job to be done again, according to local officials. Tiny government houses like the one in which Ms. Munyai lives are crumbling only months after being built. Since she has no water, she uses her toilet as a storage closet and has to walk several blocks to a shared pump several times a day. Roads paved a year ago are already covered with potholes. “This road is not more than two years old,” said Geoffrey Tshibvumo, a local councilor from the Congress of the People, a party that broke away from the A.N.C., as he bounced along a rural road in the province one afternoon. “They spent millions on it, and it is already spoiled.”
The crisis here has been brewing for some time. Late last year, the province ran out of money and asked the central government to lend it about $130 million. But the central government balked at handing over such a large sum without first taking a close look at the province’s books. A quick survey of its accounts showed that the state treasury was in chaos. State officials had made $360 million in unauthorized payments, and millions of dollars’ worth of contracts had been awarded without competitive bidding, the central treasury said.
The Education Department had 2,400 more teachers on its payroll than it was budgeted for, and 200 “ghost” teachers, who drew salaries but did not actually exist. The department had overspent its budget by almost $40 million even before ordering textbooks and other supplies for the coming school year. In the Health Department, more than $50 million worth of goods had been improperly ordered, leaving almost nothing for salaries for government nurses and doctors. Public works contracts showed evidence that they had been manipulated, the Treasury Department said, to increase the cost of projects — and presumably the profits of the contractors. Consulting fees ate up a quarter of the infrastructure budget.
Big contracts tended to go to a small handful of companies, many of them run by close associates of the province’s top politicians, according to provincial government documents. Some officials had been warning that the province was headed for a crisis. One whistle-blower in the Health Department sent a memo to a senior official in February 2011 outlining major problems with a contract for medical supplies. The prices for bandages and dressings had been inflated, the whistle-blower said, and the department could not possibly use the quantities ordered.
In addition, officials ordered more than $30 million worth of items in the last days of the fiscal year, most of it “labels and forms that are not critical or lifesaving drugs,” according to the memo. Prices for other items were wildly inflated. The national attention to the crisis in Limpopo is in no small part a reflection of the politics of the province. It is the home of Julius Malema, the polarizing leader of the A.N.C.’s youth league, who was suspended from the party for five years for his incendiary remarks and harsh stance against the president, Mr. Zuma. Limpopo’s provincial leader, Cassel Mathale, is a close political ally of Mr. Malema.
But many other provinces face a lesser version of the same crisis, analysts say. “It is not unique to Limpopo — it is all over the country,” said Moeletsi Mbeki, a political analyst and businessman. “It is a general form of self-enrichment by the politically connected.”
Mr. Brown, the deputy director general at the treasury, said that politics played no part in the decision to intervene in Limpopo. The crisis threatened the country’s financial reputation. “If you are sitting in New York and you are an investor in South Africa and you see a provincial government that cannot pay its teachers and nurses,” he said, “what does that tell you about South Africa?”
Source: New York Times
Ms. Munyai and her neighbors are unlikely to get water or electricity any time soon. The provincial government is broke, and the dry pipes and powerless plugs have for her and many others come to symbolize the heavy toll graft and cronyism have taken in this impoverished northern province.
Corruption has long bedeviled South Africa, but the crisis here in Limpopo Province has pushed the common practice of doling out overstuffed government contracts to people with friends in high places to its logical conclusion: bankruptcy. Provincial officials overspent their budget by an estimated $250 million, much of it on questionable — or blatantly fraudulent — government payments and contracts with private businesses enjoying close ties to the politicians leading the province. “There is evidence emerging that some of these service providers are politically connected, and many of them may have gotten those tenders in dubious kinds of ways,” said Kenneth Brown, deputy director general in the Treasury Department.
Dan Sebabi, leader of Limpopo’s branch of Cosatu, the powerful coalition of trade unions that is allied with the governing African National Congress, put it more bluntly. “You have leaders who are politicians by day, businessmen by night,” he said. Graft and wasteful spending have sapped the government’s ability to tackle inequality. Only 3 of 39 government departments were pronounced clean in audits by South Africa’s auditor general last year. Only 7 of 237 cities passed muster the year before. “We thought that South Africa could be different from the rest of the countries that came before us on the African continent,” said Gilbert Kganyago, leader of Limpopo’s branch of the South African Communist Party. “But at the rate that things are happening, we have actually caught up to the African scenario quite more quickly than we might have thought.”
A recent report by the auditor general found that in the last fiscal year, government officials and their relatives won $15 million in contracts for work with the Defense Department, the Tax Service and the Department of Home Affairs, among others. And that does not come close to accounting for the many millions of dollars quietly awarded to friends and other associates, experts note.
Almost from the moment it was elected to govern in 1994 after decades of fighting to end apartheid, the A.N.C. has struggled with allegations of graft. Jacob Zuma, the current president, took office only after a bevy of corruption charges against him were dismissed amid accusations of prosecutorial misconduct. But corruption has become so entrenched that it is eating away at the nation’s soul, said Zwelinzima Vavi, secretary general of Cosatu, in a recent speech to announce the formation of an antigraft organization, Corruption Watch. “We are moving towards a society in which the morality of our revolutionary movement — selflessness, service to the people and caring for the poor and vulnerable — is being threatened,” Mr. Vavi said. “If we do nothing it will be swept away by a tidal wave of a culture of individualism, a ‘me first’ attitude and to hell with everyone else. Some argue that we are already a society where only the fittest survive and dog eats dog.”
Corruption is a particularly serious problem in provincial governments, which are responsible for delivering many of the services needed by the poor. Many powerful regional politicians use their offices to enrich their friends, forming a coterie of wealthy elites reminiscent of the tribal chieftains the apartheid government used to administer the tiny, nominally independent bantustans where blacks were forced to live.
Limpopo has the nation’s second-highest proportion of people living in poverty — 62 percent, according to the South African Institute of Race Relations. The average unemployment rate for the province is 40 percent, but it is much higher for blacks and young people. Signs of waste and fraud are everywhere. Pipes that were supposed to bring clean drinking water to parched, impoverished communities were laid improperly and burst, requiring the whole job to be done again, according to local officials. Tiny government houses like the one in which Ms. Munyai lives are crumbling only months after being built. Since she has no water, she uses her toilet as a storage closet and has to walk several blocks to a shared pump several times a day. Roads paved a year ago are already covered with potholes. “This road is not more than two years old,” said Geoffrey Tshibvumo, a local councilor from the Congress of the People, a party that broke away from the A.N.C., as he bounced along a rural road in the province one afternoon. “They spent millions on it, and it is already spoiled.”
The crisis here has been brewing for some time. Late last year, the province ran out of money and asked the central government to lend it about $130 million. But the central government balked at handing over such a large sum without first taking a close look at the province’s books. A quick survey of its accounts showed that the state treasury was in chaos. State officials had made $360 million in unauthorized payments, and millions of dollars’ worth of contracts had been awarded without competitive bidding, the central treasury said.
The Education Department had 2,400 more teachers on its payroll than it was budgeted for, and 200 “ghost” teachers, who drew salaries but did not actually exist. The department had overspent its budget by almost $40 million even before ordering textbooks and other supplies for the coming school year. In the Health Department, more than $50 million worth of goods had been improperly ordered, leaving almost nothing for salaries for government nurses and doctors. Public works contracts showed evidence that they had been manipulated, the Treasury Department said, to increase the cost of projects — and presumably the profits of the contractors. Consulting fees ate up a quarter of the infrastructure budget.
Big contracts tended to go to a small handful of companies, many of them run by close associates of the province’s top politicians, according to provincial government documents. Some officials had been warning that the province was headed for a crisis. One whistle-blower in the Health Department sent a memo to a senior official in February 2011 outlining major problems with a contract for medical supplies. The prices for bandages and dressings had been inflated, the whistle-blower said, and the department could not possibly use the quantities ordered.
In addition, officials ordered more than $30 million worth of items in the last days of the fiscal year, most of it “labels and forms that are not critical or lifesaving drugs,” according to the memo. Prices for other items were wildly inflated. The national attention to the crisis in Limpopo is in no small part a reflection of the politics of the province. It is the home of Julius Malema, the polarizing leader of the A.N.C.’s youth league, who was suspended from the party for five years for his incendiary remarks and harsh stance against the president, Mr. Zuma. Limpopo’s provincial leader, Cassel Mathale, is a close political ally of Mr. Malema.
But many other provinces face a lesser version of the same crisis, analysts say. “It is not unique to Limpopo — it is all over the country,” said Moeletsi Mbeki, a political analyst and businessman. “It is a general form of self-enrichment by the politically connected.”
Mr. Brown, the deputy director general at the treasury, said that politics played no part in the decision to intervene in Limpopo. The crisis threatened the country’s financial reputation. “If you are sitting in New York and you are an investor in South Africa and you see a provincial government that cannot pay its teachers and nurses,” he said, “what does that tell you about South Africa?”
Source: New York Times
Zuma 'disconnected from reality' on corruption: DA
President Jacob Zuma's remarks about corruption show he is "completely disconnected from reality", the Democratic Alliance says.In his reply on Thursday to debate on his state of the nation address, Zuma said "most of the corruption you read about in the media is exposed as a result of the work of government and its agencies", DA spokesman Dion George said. "These are the words of a president who is completely disconnected from reality."
South Africa's major corruption scandals had not been broken by government, but by the media, and the opposition. These included the arms deal, to which former president Thabo Mbeki, Zuma, and then defence minister Joe Modise were all linked, he said. Another was the so-called travelgate scandal, involving a number of high ranking ANC MPs misusing parliamentary travel vouchers. George said others included the so-called oilgate scandal, which traced the involvement of an ANC-linked company in diverting money from a state contract to the coffers of the ANC. There was also the SA Police Service lease scandal, in which former public works minister Gwen-Mahlangu Nkabinde and suspended national police commissioner Bheki Cele were involved. Another was the Chancellor House/Hitachi controversy, which saw the ANC's front company landing lucrative contracts with the state.
"Nowhere is the government's attitude towards exposing corruption more clear than in its determination to see the Protection of State Information Bill pushed through Parliament in its current form," George said. Should this law be passed, journalists and whistle-blowers who reported on what government deemed secret would face up to 25 years in prison. It would be illegal to expose corruption and serious crime and the poorest of the poor would continue to lose out as government resources were redirected away from service delivery. "Government is not the last line of defence against corruption. The media and the opposition are."
This was why the DA continued to fight against the bill as it currently stood, and would fight for a strengthened public interest override to ensure that ordinary citizens and the media retained the right to know, George said. On Thursday, Zuma told the National Assembly South Africa was the only country with a "programme" to fight corruption. Zuma said it was "important to emphasise that most of the corruption you read about in the media is exposed as a result of the work of government and its agencies".
Amid laughter from opposition benches, he continued: "What we should remember is that South Africa is the only country that has a programme to fight corruption. It's not being fought anywhere else."
Source: Times Live
South Africa's major corruption scandals had not been broken by government, but by the media, and the opposition. These included the arms deal, to which former president Thabo Mbeki, Zuma, and then defence minister Joe Modise were all linked, he said. Another was the so-called travelgate scandal, involving a number of high ranking ANC MPs misusing parliamentary travel vouchers. George said others included the so-called oilgate scandal, which traced the involvement of an ANC-linked company in diverting money from a state contract to the coffers of the ANC. There was also the SA Police Service lease scandal, in which former public works minister Gwen-Mahlangu Nkabinde and suspended national police commissioner Bheki Cele were involved. Another was the Chancellor House/Hitachi controversy, which saw the ANC's front company landing lucrative contracts with the state.
"Nowhere is the government's attitude towards exposing corruption more clear than in its determination to see the Protection of State Information Bill pushed through Parliament in its current form," George said. Should this law be passed, journalists and whistle-blowers who reported on what government deemed secret would face up to 25 years in prison. It would be illegal to expose corruption and serious crime and the poorest of the poor would continue to lose out as government resources were redirected away from service delivery. "Government is not the last line of defence against corruption. The media and the opposition are."
This was why the DA continued to fight against the bill as it currently stood, and would fight for a strengthened public interest override to ensure that ordinary citizens and the media retained the right to know, George said. On Thursday, Zuma told the National Assembly South Africa was the only country with a "programme" to fight corruption. Zuma said it was "important to emphasise that most of the corruption you read about in the media is exposed as a result of the work of government and its agencies".
Amid laughter from opposition benches, he continued: "What we should remember is that South Africa is the only country that has a programme to fight corruption. It's not being fought anywhere else."
Source: Times Live
Friday, February 17, 2012
Minister: Land grabs 'out of touch with reality'
The idea of claiming land without compensation is "out of touch with reality", Land Reform Minister Gugile Nkwinti said on Friday. "Land grabs are not an option, there is no policy like that. By doing so you will have to change the Constitution," he said. "It is an option that is completely out of touch with reality."
Nkwinti was briefing reporters in Boksburg on the East Rand after a meeting on the progress of the land reform green paper. His deputy Lechesa Tsenoli, said six groups had brought feedback on what had emerged from different aspects of the green paper. "These timelines are a key thing. We need to devise new timeframes to bring forward those projects that were meant to be done at a later stage," Tsenoli said. "We must take stock of where we are at and in mid-March complete and merge with consolidated reports -- then be able to brief Cabinet."
He said the issue of land reform needed to be dealt with "sensitively". "For some it is an issue of life and death. For the state, doing it speedily will prevent that," he said. "The right thing to do is to establish policy and legislation to redistribute land in a fair manner."
He said several groups did not accept the historical statistic that 87% of the land was white owned. "They said that we must commission professors to research the statistics."
Source: Mail & Guardian
Nkwinti was briefing reporters in Boksburg on the East Rand after a meeting on the progress of the land reform green paper. His deputy Lechesa Tsenoli, said six groups had brought feedback on what had emerged from different aspects of the green paper. "These timelines are a key thing. We need to devise new timeframes to bring forward those projects that were meant to be done at a later stage," Tsenoli said. "We must take stock of where we are at and in mid-March complete and merge with consolidated reports -- then be able to brief Cabinet."
He said the issue of land reform needed to be dealt with "sensitively". "For some it is an issue of life and death. For the state, doing it speedily will prevent that," he said. "The right thing to do is to establish policy and legislation to redistribute land in a fair manner."
He said several groups did not accept the historical statistic that 87% of the land was white owned. "They said that we must commission professors to research the statistics."
Source: Mail & Guardian
Varsity to 'deal with' Facebook culprits
The University of KwaZulu-Natal students and staff who engaged in a racial war of words on Facebook are to be "dealt with accordingly" by the institution. "The protest at the Westville campus has nothing to do with race, gender or social class. All those making racial remarks will be dealt with accordingly. Racial remarks do nothing but incite hatred and will do nothing to resolve the problems on campus," the university's spokesman Nomonde Mbadi said yesterday.
The flurry on racist posts on the university's Facebook page came on Wednesday after a student posted: "Indians will never understand us blacks because we are raced [sic] differently. We are born to kill that why tomorrow we will wipe out all Indians on campus. Don't come otherwise you will go straight to heaven". Tensions were already running high as students and staff had to flee the campus on Monday and Tuesday morning when violence erupted during a strike over financial aid and accommodation. Coupled with their anger against the university over confusion about when lectures would resume, students and staff, who said they were offended by the post, then began racial name-calling. One student said "Blacks are stupid and want everything for free", while another wrote: "Kill the Indians and the whites. This is our country". The posts have since been removed.
"We are extremely disappointed that at this point in our democracy young students, who are the future leaders of our country, are engaging in racial slander on a social media network. The protest action was not about racial prejudices," Mbadi said. She said the university prided itself as a diverse institution of higher learning where different cultures are welcomed and celebrated. "The emancipation of South Africans has given us the freedom to embrace each other, to understand each other and to show tolerance of the highest order. The university's transformation charter aims to heal the divisions of our nation's past, bridge racial and cultural divides and lay the foundations for a university that is united in its diversity," she said.
The university's pact, Mbadi explained, commits every staff member and student to treat each other with respect and to abide by the rules and regulations of the institution.
The South African Human Rights Commission said that it had not received any complaints. "People must understand their inherent respect as they engage in such important platforms. We call on people to use these spaces more responsibly. Our doors are open to anyone who wants to bring a complaint and we will seek to address the issue," the commission's spokesman Vincent Moaga said. "We are hoping the Department of Higher Education, which has always [addressed] the problems affecting students, will continue to engage with the relevant authorities to address such issues."
Source: Mail & Guardian
The flurry on racist posts on the university's Facebook page came on Wednesday after a student posted: "Indians will never understand us blacks because we are raced [sic] differently. We are born to kill that why tomorrow we will wipe out all Indians on campus. Don't come otherwise you will go straight to heaven". Tensions were already running high as students and staff had to flee the campus on Monday and Tuesday morning when violence erupted during a strike over financial aid and accommodation. Coupled with their anger against the university over confusion about when lectures would resume, students and staff, who said they were offended by the post, then began racial name-calling. One student said "Blacks are stupid and want everything for free", while another wrote: "Kill the Indians and the whites. This is our country". The posts have since been removed.
"We are extremely disappointed that at this point in our democracy young students, who are the future leaders of our country, are engaging in racial slander on a social media network. The protest action was not about racial prejudices," Mbadi said. She said the university prided itself as a diverse institution of higher learning where different cultures are welcomed and celebrated. "The emancipation of South Africans has given us the freedom to embrace each other, to understand each other and to show tolerance of the highest order. The university's transformation charter aims to heal the divisions of our nation's past, bridge racial and cultural divides and lay the foundations for a university that is united in its diversity," she said.
The university's pact, Mbadi explained, commits every staff member and student to treat each other with respect and to abide by the rules and regulations of the institution.
The South African Human Rights Commission said that it had not received any complaints. "People must understand their inherent respect as they engage in such important platforms. We call on people to use these spaces more responsibly. Our doors are open to anyone who wants to bring a complaint and we will seek to address the issue," the commission's spokesman Vincent Moaga said. "We are hoping the Department of Higher Education, which has always [addressed] the problems affecting students, will continue to engage with the relevant authorities to address such issues."
Source: Mail & Guardian
Water poisoned with cyanide in KwaZulu-Natal
The raw water supply for the northern KwaZulu-Natal town of Dundee and surrounding areas has been poisoned with cyanide, uThukela Water said on Friday. The 'spill' was discovered on Thursday morning when cows died after drinking from a stream near a site outside Newcastle, spokesman Dumisani Thabethe said. Residents appeared to have escaped harm so far. “There is no one who has been reported to have been affected by the spillage,” he said. “Our concern is people getting water directly from the river. “We are told that about 11 cows have died, but by late evening it was 50, but I am not too sure about the accuracy of the figures.
As a precaution, uThukela Water broadcast a warning on the Newcastle community radio station. The spill might have come from a site where synthetic rubber was being manufactured, but this was still being investigated, Thabethe said. The Ngagane river was flushed with water from the Ntshingwayo dam in an attempt to dilute the chemical content. Water was being released from the dam at 16,000 litres per second.
Thabethe said HTH, chlorine used in domestic swimming pools, was poured into the river before it was flushed. “They were hoping to stimulate a chemical reaction between the HTH and the cyanide.”
SourceL The Sowetan
As a precaution, uThukela Water broadcast a warning on the Newcastle community radio station. The spill might have come from a site where synthetic rubber was being manufactured, but this was still being investigated, Thabethe said. The Ngagane river was flushed with water from the Ntshingwayo dam in an attempt to dilute the chemical content. Water was being released from the dam at 16,000 litres per second.
Thabethe said HTH, chlorine used in domestic swimming pools, was poured into the river before it was flushed. “They were hoping to stimulate a chemical reaction between the HTH and the cyanide.”
SourceL The Sowetan
Thursday, February 16, 2012
‘Sell assets’ to pay fine of R4,5bn, Telkom told
THE Competition Commission had little sympathy for Telkom yesterday, suggesting that SA’s biggest fixed-line operator should raise R4,5bn on the open market to pay the fine it was facing, or sell some of its assets. The Competition Tribunal this week heard closing arguments in a case that started in 2002 with complaints about Telkom’s excessive pricing, and its refusal to give a competitor access to an essential facility when it was economically feasible for it to do so.
More than 20 value-added network service providers, including Internet Solutions and the South African Value-added Network Services Association, had complained about Telkom’s conduct. The commission said yesterday Telkom had behaved "conspicuously badly", and reaffirmed its recommendation that it pay an administrative penalty of more than R4,5bn for contraventions of the Competition Act.
Telkom hit back by saying the penalty was a "jaw-dropping, inappropriate fine", and should it be found guilty — it still maintains it is not — the appropriate fine for the two complaints before the Competition Tribunal should rather be R26,8m. At the tribunal hearing yesterday, Alfred Cockrell SC, appearing for Telkom, argued that the way the commission had calculated the fine was punitive, and could even be unconstitutional, if regard was given to previous decisions on such calculations.
He said the appropriate fine for a company was on the benefits that accrued from the contraventions. The way the commission had calculated Telkom’s fine amounted to double-counting, as it included income that did not form part of the complaints, Mr Cockrell said. If the tribunal accepts the commission’s calculations, the Telkom fine will be the largest yet levied in SA. Pioneer has paid the most so far — 10% of affected turnover for one year, which amounted to nearly R200m.
The commission had calculated the Telkom fine for excessive pricing on 30% of affected turnover in 2004, the last year of the contravention, multiplied by five for the number of years in which the contravention had occurred. That amounted to R3,5bn. The commission asked for an additional fine of R1bn for Telkom’s refusal to give a competitor access to an essential facility.
Martin Brassey SC, appearing for the commission, argued that it was crucial in the determination of a penalty that the punishment fitted the crime. It should act as a deterrent, but it should also divest the wrongdoer of ill-gotten gains. He said Telkom had raised its defences at every opportunity and had fought the case tooth and nail, when the matter could have been resolved from the start. The reason it had not been resolved might have been a "cost-benefit calculus" by Telkom, wanting to see whether the benefit of delays outweighed the benefit of a settlement, Mr Brassey said. "Telkom’s conduct in this matter has been thoroughly spurious."
Mr Brassey said he had seen nothing that would make the commission diverge from its standpoint on the fine, and suggested Telkom raise the money to pay it on the open market, or sell some of its assets. Mr Cockrell said Telkom’s sense of the case was that it was travell ing in a time machine, as the conduct of which it had been accused had occurred in a totally different time frame. He said the penalty would have little deterrent effect, as the market now bore little resemblance to the one that existed after the liberalisation of SA’s telecommunications in 2005.
Tribunal chairman Norman Manoim interrupted and said that had been the most important point Mr Cockrell had made so far in his deliberations. He said the purpose of a penalty in the act was to deter a company or other companies from engaging in similar conduct. Given the fact that it had already been eight years after the turnover period in which the offences had been committed, it would be a moot point if the penalty could be used to regulate conduct, as it would not change the behaviour.
Mr Cockrell agreed and said Telkom could not possibly engage in any similar conduct, as the market had changed so much since 2005. Mr Brassey disagreed and said it could not be assumed all problems had gone away: "It didn’t."
Willem van der Linde SC, also for Telkom, argued that the company’s interpretation of the telecommunications legislation at the time of the contraventions entitled it to refuse to grant access to a facility if it was convinced that it would be used illegally. The tribunal’s Yasmin Carrim asked Telkom to provide it with alternative remedies in lieu of a fine. Mr Brassey said he had had lengthy discussions with the commission’s leadership to find possible structural or behavioural remedies for Telkom’s conduct, but they could not come up with any. Telkom has until next week to submit suggested remedies for the tribunal to consider. The tribunal will consider the facts before deciding on the matter.
Meanwhile, Telkom announced yesterday that it might tap international bond markets for the first time to refinance domestic debt due in April. Chief financial officer Jacques Schindehutte said it "plans to approach the local bond and loan market" and may tap international investors "if it makes commercial sense" from a pricing and covenant perspective.
The company, which is 40% owned by the government, has R1,06bn of bonds maturing in April, according to Bloomberg. "Telkom’s credit rating remains two notches above investment grade rating and therefore the one-notch downgrade received from Moody’s is not expected to materially affect Telkom’s refinancing options," Mr Schindehutte said.
Source: Business Day
More than 20 value-added network service providers, including Internet Solutions and the South African Value-added Network Services Association, had complained about Telkom’s conduct. The commission said yesterday Telkom had behaved "conspicuously badly", and reaffirmed its recommendation that it pay an administrative penalty of more than R4,5bn for contraventions of the Competition Act.
Telkom hit back by saying the penalty was a "jaw-dropping, inappropriate fine", and should it be found guilty — it still maintains it is not — the appropriate fine for the two complaints before the Competition Tribunal should rather be R26,8m. At the tribunal hearing yesterday, Alfred Cockrell SC, appearing for Telkom, argued that the way the commission had calculated the fine was punitive, and could even be unconstitutional, if regard was given to previous decisions on such calculations.
He said the appropriate fine for a company was on the benefits that accrued from the contraventions. The way the commission had calculated Telkom’s fine amounted to double-counting, as it included income that did not form part of the complaints, Mr Cockrell said. If the tribunal accepts the commission’s calculations, the Telkom fine will be the largest yet levied in SA. Pioneer has paid the most so far — 10% of affected turnover for one year, which amounted to nearly R200m.
The commission had calculated the Telkom fine for excessive pricing on 30% of affected turnover in 2004, the last year of the contravention, multiplied by five for the number of years in which the contravention had occurred. That amounted to R3,5bn. The commission asked for an additional fine of R1bn for Telkom’s refusal to give a competitor access to an essential facility.
Martin Brassey SC, appearing for the commission, argued that it was crucial in the determination of a penalty that the punishment fitted the crime. It should act as a deterrent, but it should also divest the wrongdoer of ill-gotten gains. He said Telkom had raised its defences at every opportunity and had fought the case tooth and nail, when the matter could have been resolved from the start. The reason it had not been resolved might have been a "cost-benefit calculus" by Telkom, wanting to see whether the benefit of delays outweighed the benefit of a settlement, Mr Brassey said. "Telkom’s conduct in this matter has been thoroughly spurious."
Mr Brassey said he had seen nothing that would make the commission diverge from its standpoint on the fine, and suggested Telkom raise the money to pay it on the open market, or sell some of its assets. Mr Cockrell said Telkom’s sense of the case was that it was travell ing in a time machine, as the conduct of which it had been accused had occurred in a totally different time frame. He said the penalty would have little deterrent effect, as the market now bore little resemblance to the one that existed after the liberalisation of SA’s telecommunications in 2005.
Tribunal chairman Norman Manoim interrupted and said that had been the most important point Mr Cockrell had made so far in his deliberations. He said the purpose of a penalty in the act was to deter a company or other companies from engaging in similar conduct. Given the fact that it had already been eight years after the turnover period in which the offences had been committed, it would be a moot point if the penalty could be used to regulate conduct, as it would not change the behaviour.
Mr Cockrell agreed and said Telkom could not possibly engage in any similar conduct, as the market had changed so much since 2005. Mr Brassey disagreed and said it could not be assumed all problems had gone away: "It didn’t."
Willem van der Linde SC, also for Telkom, argued that the company’s interpretation of the telecommunications legislation at the time of the contraventions entitled it to refuse to grant access to a facility if it was convinced that it would be used illegally. The tribunal’s Yasmin Carrim asked Telkom to provide it with alternative remedies in lieu of a fine. Mr Brassey said he had had lengthy discussions with the commission’s leadership to find possible structural or behavioural remedies for Telkom’s conduct, but they could not come up with any. Telkom has until next week to submit suggested remedies for the tribunal to consider. The tribunal will consider the facts before deciding on the matter.
Meanwhile, Telkom announced yesterday that it might tap international bond markets for the first time to refinance domestic debt due in April. Chief financial officer Jacques Schindehutte said it "plans to approach the local bond and loan market" and may tap international investors "if it makes commercial sense" from a pricing and covenant perspective.
The company, which is 40% owned by the government, has R1,06bn of bonds maturing in April, according to Bloomberg. "Telkom’s credit rating remains two notches above investment grade rating and therefore the one-notch downgrade received from Moody’s is not expected to materially affect Telkom’s refinancing options," Mr Schindehutte said.
Source: Business Day
Judges opposed to spouse, children disclosure
SENIOR judges and leaders in the judiciary said yesterday they were never against calls for judges to disclose their financial and other interests, but remained opposed to the disclosure of the financial interests of their family members, especially their spouses and children. The heads of court, who are some of the country’s most senior judges, were responding to media reports in which several lawyers’ associations and other interested parties in the legal and academic fraternity have voiced support for calls on judges to disclose their financial interests.
While MPs’ financial interests are open to the public, the heads of court want the information on their financial interests to be confidential. The heads of court comprise of Chief Justice Mogoeng Mogoeng; the president of the Supreme Court of Appeal, Lex Mpati, and his deputy, Kenneth Mthiyane; and the judges president of the high courts and specialist courts. Following a number of comments by legal bodies stemming from oral submissions by a delegation of judges to the parliamentary ad hoc joint committee on the code of judicial conduct on disclosure of interests last month, the heads of court said they felt it was necessary to set the record straight.
The judges said at the end of a consultative meeting in Cape Town last Friday that they had never been opposed to calls for disclosure, subject to the issue of confidentiality, on which they hoped to have further discussions with the relevant authority. They said their main and unequivocal opposition was to the current provisions’ call for disclosure of the financial interests of judges’ family members. "Quite frankly, we do not see what public interest would be served by the disclosure of spouses’, partners’ and children’s financial interests as the provisions currently call for. We vehemently oppose wholesale disclosures in so far as our spouses, partners and children are concerned. "However, we welcome wholeheartedly, as we have always done, calls for judges to register their financial and other registrable interests, especially in so far as it would help prevent any possible corruption or perception thereof," the heads of court said.
The judges said they would also welcome any investigation of any retired or sitting judges and their family members suspected of any improper or other misconduct that could bring the judiciary into disrepute.
Last week, the Black Lawyers Association said as custodians of the interpretation and application of the constitution, which was unequivocal on issues of transparency and accountability by all arms of government, the judiciary had a duty to lead on transparency.
Earlier this month, the Council for the Advancement of the South African Constitution and the National Association of Democratic Lawyers (Nadel) were in support of the principle of disclosure by judges. Nadel said it accepted that it was arguable that disclosure of the financial and business interests of a judge’s family members infringed their right to privacy. However, it said that right was not absolute. Nadel said the obligation on the judge and his or her family to disclose was in the national democratic interest and should be supported.
Source: Business Day
While MPs’ financial interests are open to the public, the heads of court want the information on their financial interests to be confidential. The heads of court comprise of Chief Justice Mogoeng Mogoeng; the president of the Supreme Court of Appeal, Lex Mpati, and his deputy, Kenneth Mthiyane; and the judges president of the high courts and specialist courts. Following a number of comments by legal bodies stemming from oral submissions by a delegation of judges to the parliamentary ad hoc joint committee on the code of judicial conduct on disclosure of interests last month, the heads of court said they felt it was necessary to set the record straight.
The judges said at the end of a consultative meeting in Cape Town last Friday that they had never been opposed to calls for disclosure, subject to the issue of confidentiality, on which they hoped to have further discussions with the relevant authority. They said their main and unequivocal opposition was to the current provisions’ call for disclosure of the financial interests of judges’ family members. "Quite frankly, we do not see what public interest would be served by the disclosure of spouses’, partners’ and children’s financial interests as the provisions currently call for. We vehemently oppose wholesale disclosures in so far as our spouses, partners and children are concerned. "However, we welcome wholeheartedly, as we have always done, calls for judges to register their financial and other registrable interests, especially in so far as it would help prevent any possible corruption or perception thereof," the heads of court said.
The judges said they would also welcome any investigation of any retired or sitting judges and their family members suspected of any improper or other misconduct that could bring the judiciary into disrepute.
Last week, the Black Lawyers Association said as custodians of the interpretation and application of the constitution, which was unequivocal on issues of transparency and accountability by all arms of government, the judiciary had a duty to lead on transparency.
Earlier this month, the Council for the Advancement of the South African Constitution and the National Association of Democratic Lawyers (Nadel) were in support of the principle of disclosure by judges. Nadel said it accepted that it was arguable that disclosure of the financial and business interests of a judge’s family members infringed their right to privacy. However, it said that right was not absolute. Nadel said the obligation on the judge and his or her family to disclose was in the national democratic interest and should be supported.
Source: Business Day
Foreclosures (2012 Robosigning and Foreclosure Abuse Settlement)
The end of the housing boom in 2006 set in motion a vicious circle that led to disaster for millions of homeowners whose property has been seized or threatened, and for the lenders themselves, who have had to write off tens of billions in losses. Foreclosures helped accelerate the fall of property values, helping to spur more foreclosures. The losses they created brought the financial system to the brink of collapse in the fall of 2008. The steep recession that followed led to even greater homeowner delinquencies, as homeowners who lost their jobs often lost their homes. Tens of millions of others found themselves in homes worth less than their mortgages, unable to sell or refinance. All told, roughly four million families lost their homes to foreclosure between the beginning of 2007 and early 2012.
In late 2010, evidenced emerged that the foreclosure process may have been deeply tainted by sloppy recordkeeping, cut corners and possible fraud, epitomized by high-profile cases of “robo-signing’' — cases in which foreclosures took place based on forged or unreviewed documents. More than 40 states attorneys general began investigations into foreclosure abuse, and worries about the legal fallout from the scandal led to a sharp slowdown in the rate of foreclosure filings and of repossessions in 2011. In February 2012, government authorities and five of the nation’s biggest banks agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners.
Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out; earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected. Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. And because of a complicated formula being used to distribute the money, federal officials say the ultimate benefits provided to homeowners could equal a larger sum — $45 billion in the event all 14 major servicers participate. The aid is to be distributed over three years, but there are incentives for banks to provide the money in the next 12 months. In addition to disagreements over the total amount, negotiations had been held up over the question of how much latitude authorities would have in pursuing investigations into mortgage abuses. In the agreement’s expected final form, the releases are mostly limited to the foreclosure process, like the eviction of homeowners after only a cursory examination of documents.
The prosecutors and regulators still have the right to investigate other elements that contributed to the housing bubble, like the assembly of risky mortgages into securities that were sold to investors and later soured, as well as insurance and tax fraud. Officials will also be able to pursue any allegations of criminal wrongdoing. The banks involved in the settlement in February were Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
In a sign of how pervasive the problems were, an audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation. The courts have also become more aggressive about challenging foreclosures. In January 2011, Massachusetts’s top court voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures, and courts in several states are considering similar cases.
Background
The root of today’s problems goes back to the boom years, when home prices were soaring and banks pursued profit while paying less attention to the business of mortgage servicing, or collecting and processing monthly payments from homeowners.
Banks spent billions of dollars in the good times to build vast mortgage machines that made new loans, bundled them into securities and sold those investments worldwide. Lowly servicing became an afterthought. When borrowers began to default in droves, banks found themselves in a never-ending game of catch-up, unable to devote enough manpower to modify, or ease the terms of, loans to millions of customers on the verge of losing their homes. Now banks are ill-equipped to dealwith the foreclosure process.
The revelations about the sloppy paperwork emboldened homeowners and law enforcement officials in many states to challenge notarizations — including those by so-called robo-signers,’ employees who approved hundreds of documents in a day — and to question whether lenders rightfully hold the notes underlying foreclosed properties. Evictions were expected to slow sharply — good news for many homeowners. But at the same time, the freezes further disrupted an already shaky housing market.
As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed. In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.
The swelling outcry over fast-and-loose foreclosures thrust the Obama administration back into the uncomfortable position of sheltering the banking industry from the demands of an angry public. While Mr. Obama did block a law passed by Congress that was seen as unintentionally making it easier to speed up foreclosures, his aides spoke out against calls from many Democrats for a national freeze on evictions, fearing that a moratorium could hurt still-shaky banks.
The Three Waves
Overall, there have been three distinct waves in foreclosures. The initial spike involved speculators who gave up property because of plunging real estate prices, and the secondary shock centered on borrowers whose introductory interest rates expired and were reset higher. The third wave represents standard mortgages, known as prime, written to people who had decent credit ratings, but who have lost their jobs in the economic downturn and are facing the loss of homes they had considered safe.
Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis. Economy.com said in 2009 that it expected that 60 percent of the mortgage defaults that year would be set off primarily by unemployment, up from 29 percent in 2008.
The slowdown in evictions may give such borrowers time to accumulate some capital or more leverage in settlement talks with their lender. Some analysts said that could conceivably help the housing market get back on its feet, by ending the undermining effect of a steady stream of foreclose houses going up for sale. Others, however, worried that blocking sales in an already weak market would drive prices down even further, continuing a spiral that has been deeply destructive to banks and communities.
A Mess Years in the Making
Interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials.
Almost overnight, what had been a factorylike business that relied on workers with high school educations to process monthly payments needed to come up with a custom-made operation that could solve the problems of individual homeowners.
To make matters worse, the banks had few financial incentives to invest in their servicing operations, several former executives said. A mortgage generates an annual fee equal to only about 0.25 percent of the loan’s total value, or about $500 a year on a typical $200,000 mortgage. That revenue evaporates once a loan becomes delinquent, while the cost of a foreclosure can easily reach $2,500 and devour the meager profits generated from handling healthy loans.
And even when banks did begin hiring to deal with the avalanche of defaults, they often turned to workers with minimal qualifications or work experience, employees a former JPMorgan executive characterized as the “Burger King kids,” walk-in hires who often barely knew what a mortgage was.
At Citigroup and GMAC, dotting the i’s and crossing the t’s on home foreclosures was outsourced to frazzled workers who sometimes tossed the paperwork into the garbage. And at Litton Loan Servicing, an arm of Goldman Sachs, employees processed foreclosure documents so quickly that they barely had time to see what they were signing.
San Francisco Foreclosure Audit
Anecdotal evidence indicating foreclosure abuse has been plentiful since the mortgage boom turned to bust in 2008. But the detailed and comprehensive nature of the San Francisco findings released in February 2012 suggest how pervasive foreclosure irregularities may be across the nation.
The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.
Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.
In a significant number of cases — 85 percent — documents recording the transfer of a defaulted property to a new trustee were not filed properly or on time, the report found. And in 45 percent of the foreclosures, properties were sold at auction to entities improperly claiming to be the beneficiary of the deeds of trust. In other words, the report said, “a ‘stranger’ to the deed of trust,” gained ownership of the property; as a result, the sale may be invalid, it said.
In 6 percent of cases, the same deed of trust to a property was assigned to two or more different entities, raising questions about which of them actually had the right to foreclose. Many of the foreclosures that were scrutinized showed gaps in the chain of title, the report said, indicating that written transfers from the original owner to the entity currently claiming to own the deed of trust have disappeared.
The audit also raises serious questions about the accuracy of information recorded in the Mortgage Electronic Registry System, or MERS, which was set up in 1995 by Fannie Mae and Freddie Mac and major lenders. The report found that 58 percent of loans listed in the MERS database showed different owners than were reflected in other public documents like those filed with the county recorder’s office.
The report contradicted the contentions of many banks that foreclosure improprieties did little harm because the borrowers were behind on their mortgages and should have been evicted anyway. “We can deduce from the public evidence,” the report noted, “that there are indeed legitimate victims in the mortgage crisis. Whether these homeowners are systematically being deprived of legal safeguards and due process rights is an important question.”
Source: New York Times
In late 2010, evidenced emerged that the foreclosure process may have been deeply tainted by sloppy recordkeeping, cut corners and possible fraud, epitomized by high-profile cases of “robo-signing’' — cases in which foreclosures took place based on forged or unreviewed documents. More than 40 states attorneys general began investigations into foreclosure abuse, and worries about the legal fallout from the scandal led to a sharp slowdown in the rate of foreclosure filings and of repossessions in 2011. In February 2012, government authorities and five of the nation’s biggest banks agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners.
Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out; earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected. Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. And because of a complicated formula being used to distribute the money, federal officials say the ultimate benefits provided to homeowners could equal a larger sum — $45 billion in the event all 14 major servicers participate. The aid is to be distributed over three years, but there are incentives for banks to provide the money in the next 12 months. In addition to disagreements over the total amount, negotiations had been held up over the question of how much latitude authorities would have in pursuing investigations into mortgage abuses. In the agreement’s expected final form, the releases are mostly limited to the foreclosure process, like the eviction of homeowners after only a cursory examination of documents.
The prosecutors and regulators still have the right to investigate other elements that contributed to the housing bubble, like the assembly of risky mortgages into securities that were sold to investors and later soured, as well as insurance and tax fraud. Officials will also be able to pursue any allegations of criminal wrongdoing. The banks involved in the settlement in February were Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
In a sign of how pervasive the problems were, an audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation. The courts have also become more aggressive about challenging foreclosures. In January 2011, Massachusetts’s top court voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures, and courts in several states are considering similar cases.
Background
The root of today’s problems goes back to the boom years, when home prices were soaring and banks pursued profit while paying less attention to the business of mortgage servicing, or collecting and processing monthly payments from homeowners.
Banks spent billions of dollars in the good times to build vast mortgage machines that made new loans, bundled them into securities and sold those investments worldwide. Lowly servicing became an afterthought. When borrowers began to default in droves, banks found themselves in a never-ending game of catch-up, unable to devote enough manpower to modify, or ease the terms of, loans to millions of customers on the verge of losing their homes. Now banks are ill-equipped to dealwith the foreclosure process.
The revelations about the sloppy paperwork emboldened homeowners and law enforcement officials in many states to challenge notarizations — including those by so-called robo-signers,’ employees who approved hundreds of documents in a day — and to question whether lenders rightfully hold the notes underlying foreclosed properties. Evictions were expected to slow sharply — good news for many homeowners. But at the same time, the freezes further disrupted an already shaky housing market.
As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed. In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.
The swelling outcry over fast-and-loose foreclosures thrust the Obama administration back into the uncomfortable position of sheltering the banking industry from the demands of an angry public. While Mr. Obama did block a law passed by Congress that was seen as unintentionally making it easier to speed up foreclosures, his aides spoke out against calls from many Democrats for a national freeze on evictions, fearing that a moratorium could hurt still-shaky banks.
The Three Waves
Overall, there have been three distinct waves in foreclosures. The initial spike involved speculators who gave up property because of plunging real estate prices, and the secondary shock centered on borrowers whose introductory interest rates expired and were reset higher. The third wave represents standard mortgages, known as prime, written to people who had decent credit ratings, but who have lost their jobs in the economic downturn and are facing the loss of homes they had considered safe.
Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis. Economy.com said in 2009 that it expected that 60 percent of the mortgage defaults that year would be set off primarily by unemployment, up from 29 percent in 2008.
The slowdown in evictions may give such borrowers time to accumulate some capital or more leverage in settlement talks with their lender. Some analysts said that could conceivably help the housing market get back on its feet, by ending the undermining effect of a steady stream of foreclose houses going up for sale. Others, however, worried that blocking sales in an already weak market would drive prices down even further, continuing a spiral that has been deeply destructive to banks and communities.
A Mess Years in the Making
Interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials.
Almost overnight, what had been a factorylike business that relied on workers with high school educations to process monthly payments needed to come up with a custom-made operation that could solve the problems of individual homeowners.
To make matters worse, the banks had few financial incentives to invest in their servicing operations, several former executives said. A mortgage generates an annual fee equal to only about 0.25 percent of the loan’s total value, or about $500 a year on a typical $200,000 mortgage. That revenue evaporates once a loan becomes delinquent, while the cost of a foreclosure can easily reach $2,500 and devour the meager profits generated from handling healthy loans.
And even when banks did begin hiring to deal with the avalanche of defaults, they often turned to workers with minimal qualifications or work experience, employees a former JPMorgan executive characterized as the “Burger King kids,” walk-in hires who often barely knew what a mortgage was.
At Citigroup and GMAC, dotting the i’s and crossing the t’s on home foreclosures was outsourced to frazzled workers who sometimes tossed the paperwork into the garbage. And at Litton Loan Servicing, an arm of Goldman Sachs, employees processed foreclosure documents so quickly that they barely had time to see what they were signing.
San Francisco Foreclosure Audit
Anecdotal evidence indicating foreclosure abuse has been plentiful since the mortgage boom turned to bust in 2008. But the detailed and comprehensive nature of the San Francisco findings released in February 2012 suggest how pervasive foreclosure irregularities may be across the nation.
The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.
Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.
In a significant number of cases — 85 percent — documents recording the transfer of a defaulted property to a new trustee were not filed properly or on time, the report found. And in 45 percent of the foreclosures, properties were sold at auction to entities improperly claiming to be the beneficiary of the deeds of trust. In other words, the report said, “a ‘stranger’ to the deed of trust,” gained ownership of the property; as a result, the sale may be invalid, it said.
In 6 percent of cases, the same deed of trust to a property was assigned to two or more different entities, raising questions about which of them actually had the right to foreclose. Many of the foreclosures that were scrutinized showed gaps in the chain of title, the report said, indicating that written transfers from the original owner to the entity currently claiming to own the deed of trust have disappeared.
The audit also raises serious questions about the accuracy of information recorded in the Mortgage Electronic Registry System, or MERS, which was set up in 1995 by Fannie Mae and Freddie Mac and major lenders. The report found that 58 percent of loans listed in the MERS database showed different owners than were reflected in other public documents like those filed with the county recorder’s office.
The report contradicted the contentions of many banks that foreclosure improprieties did little harm because the borrowers were behind on their mortgages and should have been evicted anyway. “We can deduce from the public evidence,” the report noted, “that there are indeed legitimate victims in the mortgage crisis. Whether these homeowners are systematically being deprived of legal safeguards and due process rights is an important question.”
Source: New York Times
Mortgage-Backed Securities Fraud
To outline all the steps involved in how a mortgage becomes a mortgage-backed security and then becomes a source of fraud would take pages of complex legal and financial jargon. Here is a basic outline of one of the most common series of steps that led to the latest financial crisis:
First, a bank or mortgage-lender gives a borrower a loan at a certain interest rate.
Second, many of the nation's largest financial institutions (such as the now-defunct Bear Sterns or Lehman Brothers) purchased and pooled these loans together into large pools called mortgage-backed securities (MBSs), which represented a claim on the cash flows coming from the mortgages (i.e., the amount that individual must pay the lender each month, year, etc., for the amount borrowed). By buying these loans from lenders, they allowed that lender to loan even more out to new home-buyers, often to increasingly riskier customers.
Third, the nation's largest financial institutions repackaged thousands of loans into one investment called a collateralized debt obligation (CDO), a structured asset-backed security (in this case, back by mortgages) where the different levels, called tranches, represent the varying levels of risk, with the highest tranches representing the safest loans and the lowest tranches representing the riskiest. What essentially occurred prior to the 2008 credit crunch was that financial institutions were able to take the lowest levels of certain CDOs and repackage them into entirely new CDOs (that were relatively diverse). Because credit rating agencies like Moody's tend to look at the level of diversification in order to determine the value of the investment, they gave these other "diverse" CDOs good ratings, thus securing consumer confidence.
Fourth, while mortgage-backed securities are a relatively safe investment in normal economic times, they can quickly turn sour if homeowners start defaulting on their loans. If loan payments aren't being met, money owed to investors disappears and, in the blink of an eye, a CDO "worth" billions and relatively well-rated can become absolute junk.
What regulators are discovering with increasing frequency was that many of the nation's largest financial institutions began to realize in 2007 that these asset-backed securities (ABSs) were essentially worthless. All that these complex financial tools had done was spread the risk around and make it more complicated and expensive. When the companies realized that they could potentially be carrying billions of dollars in risk on their books, they quickly thought of ways to sell off these ABSs to potential victims without disclosing their true risk.
Source: cheatingculture
First, a bank or mortgage-lender gives a borrower a loan at a certain interest rate.
Second, many of the nation's largest financial institutions (such as the now-defunct Bear Sterns or Lehman Brothers) purchased and pooled these loans together into large pools called mortgage-backed securities (MBSs), which represented a claim on the cash flows coming from the mortgages (i.e., the amount that individual must pay the lender each month, year, etc., for the amount borrowed). By buying these loans from lenders, they allowed that lender to loan even more out to new home-buyers, often to increasingly riskier customers.
Third, the nation's largest financial institutions repackaged thousands of loans into one investment called a collateralized debt obligation (CDO), a structured asset-backed security (in this case, back by mortgages) where the different levels, called tranches, represent the varying levels of risk, with the highest tranches representing the safest loans and the lowest tranches representing the riskiest. What essentially occurred prior to the 2008 credit crunch was that financial institutions were able to take the lowest levels of certain CDOs and repackage them into entirely new CDOs (that were relatively diverse). Because credit rating agencies like Moody's tend to look at the level of diversification in order to determine the value of the investment, they gave these other "diverse" CDOs good ratings, thus securing consumer confidence.
Fourth, while mortgage-backed securities are a relatively safe investment in normal economic times, they can quickly turn sour if homeowners start defaulting on their loans. If loan payments aren't being met, money owed to investors disappears and, in the blink of an eye, a CDO "worth" billions and relatively well-rated can become absolute junk.
What regulators are discovering with increasing frequency was that many of the nation's largest financial institutions began to realize in 2007 that these asset-backed securities (ABSs) were essentially worthless. All that these complex financial tools had done was spread the risk around and make it more complicated and expensive. When the companies realized that they could potentially be carrying billions of dollars in risk on their books, they quickly thought of ways to sell off these ABSs to potential victims without disclosing their true risk.
Source: cheatingculture
Hawks' KZN boss faces suspension
KwaZulu-Natal Hawks boss Major-General Johan Booysen is facing suspension and his unit, Durban's so-called police hit squad, has been shut down. But the developments in the investigation that led to his pending suspension will not be made public.
Hawks national spokesman McIntosh Polela yesterday confirmed that Booysen had been served with notice of intent to suspend him and that he had been given five days to respond to "certain allegations". Polela refused to elaborate on the allegations and said the Hawks did not plan to go public with Booysen's response. "It is true that there are new developments but we would not like to elaborate on this because we would like to give General Booysen the dignity and respect to involve himself in an internal process," Polela said. "Only after this process has been exhausted would we be at liberty to comment about it. This is an internal process."
Polela confirmed that Hawks head Anwa Dramat had permanently disbanded Booysen's Cato Manor unit and that its 24 officers would be transferred to the head office in Durban.
The KwaZulu-Natal head of crime intelligence, Major-General Deena Moodley, has also been served with a notice of intent to suspend him on an allegation unrelated to the Cato Manor unit. Booysen and the unit have been under investigation since December when reports of a police death squad surfaced.
The Sunday Times reported allegations that, under Booysen's command, the unit had committed scores of assassinations, some in retaliation for suspected cop killings and others related to taxi wars. It reported that Colonel Navin Madhoe - an officer in the provincial procurement office charged with trying to bribe Booysen with R2-million to drop a R60-million corruption case - had given the Hawks boss a memory stick, a hard drive and two CDs containing hundreds of photographs showing what appear to be gruesome killings of suspects by the police. The images include several of post-killing celebrations by members of the Cato Manor unit. In an affidavit, Madhoe said Booysen asked him to acquire the CDs as they contained "incriminating evidence of serious crimes in a unit under his direct command".
Independent Complaints Directorate spokesman Moses Dlamini yesterday confirmed that the investigation of the Cato Manor unit was continuing. "Once we have concluded the investigation we will hold a media briefing to reveal the outcome . The time frame will be dictated by what we uncover during the investigation," he said.
Source: Mail & Guardian
Hawks national spokesman McIntosh Polela yesterday confirmed that Booysen had been served with notice of intent to suspend him and that he had been given five days to respond to "certain allegations". Polela refused to elaborate on the allegations and said the Hawks did not plan to go public with Booysen's response. "It is true that there are new developments but we would not like to elaborate on this because we would like to give General Booysen the dignity and respect to involve himself in an internal process," Polela said. "Only after this process has been exhausted would we be at liberty to comment about it. This is an internal process."
Polela confirmed that Hawks head Anwa Dramat had permanently disbanded Booysen's Cato Manor unit and that its 24 officers would be transferred to the head office in Durban.
The KwaZulu-Natal head of crime intelligence, Major-General Deena Moodley, has also been served with a notice of intent to suspend him on an allegation unrelated to the Cato Manor unit. Booysen and the unit have been under investigation since December when reports of a police death squad surfaced.
The Sunday Times reported allegations that, under Booysen's command, the unit had committed scores of assassinations, some in retaliation for suspected cop killings and others related to taxi wars. It reported that Colonel Navin Madhoe - an officer in the provincial procurement office charged with trying to bribe Booysen with R2-million to drop a R60-million corruption case - had given the Hawks boss a memory stick, a hard drive and two CDs containing hundreds of photographs showing what appear to be gruesome killings of suspects by the police. The images include several of post-killing celebrations by members of the Cato Manor unit. In an affidavit, Madhoe said Booysen asked him to acquire the CDs as they contained "incriminating evidence of serious crimes in a unit under his direct command".
Independent Complaints Directorate spokesman Moses Dlamini yesterday confirmed that the investigation of the Cato Manor unit was continuing. "Once we have concluded the investigation we will hold a media briefing to reveal the outcome . The time frame will be dictated by what we uncover during the investigation," he said.
Source: Mail & Guardian
Tuesday, February 14, 2012
An unambiguous attack on constitutional democracy
In 1934 the Appeal Court in the case of Sachs v Minister of Justice; Diamond v Minister of Justice had to consider the validity of a banning order issued by the Minister of Police. Banning orders, which prohibited a person from being present in specific areas because the Minister was satisfied that the person “is in the area promoting feelings of hostility between the European inhabitants of the Union on the one hand and any other section of the inhabitants of the Union on the other hand”, was a powerful tool used by the authorities to restrict the political activities of those opposed to the policies of the government. In rejecting the challenge to the banning order, Stratford ACJ made the following statement about the nature of parliamentary sovereignty in South Africa:
Regardless of the spin later put on his words by presidential spin doctors, President Jacob Zuma’s latest comments about the judiciary reflect a yearning to return to this system of Parliamentary sovereignty. President Zuma said that there was a need to review the powers of the Constitutional Court because judges were not “special people”, but fallible human beings. As proof of this statement he pointed to the phenomenon of split judgments, saying:
Judges were “influenced by what’s happening and who are influenced by you guys (the media)”, Zuma said. If the decisions of Parliament and the executive could be challenged, there was nothing wrong in questioning the decisions of the judiciary, he said.
Of course, President Zuma is correct that judges are fallible human beings and that different judges might view a legal question differently. (What he did not mention is that judges are usually slightly more intelligent than the average politician and usually far more honest. After all, as far as I know, no South African judge has ever faced bribery and corruption charges in court; no person has ever been convicted in South Africa for bribing a judge; and no judge has had to resign because he went to visit his drug dealing girlfriend in a Swiss jail on state expense.)
Reasonable lawyers often differ about what a legal provision or a judicial precedent might mean in a particular case. That is why lawyers take cases to court: most of them believe that they have some chance of winning their case or of getting a better deal for their client (even if they do lose the case). If they thought they had no chance of swaying the judge this way or that, they would not bother to submit papers and present oral arguments to court. They only believe that because reasonable people could differ on the correct interpretation and application of the facts or the law.
There is therefore nothing strange about different judges in the same court sometimes disagreeing with one another and writing a majority and minority opinion. Unlike some politicians, South African judges usually do not disagree with one another because they took bribes from different parties before the court or because they have another direct interest in the outcome of a matter. They do so because there is a genuine intellectual disagreement between the judges about the meaning of a legal rule or principle.
When this happens judges write different judgments in which they motivate why they took the view they took and these judgments can then be analysed and critiqued, thus keeping judges accountable for their decisions (unlike politicians, who are not held accountable for each decision they take, but are only held indirectly accountable by their party who might or might not gain more votes in the next election).
There is therefore also nothing wrong with criticising judicial decisions. Even sharp criticism of judicial decisions that engages with the legal arguments developed in a judgement must be welcomed, as such criticism and analysis ensure some form of accountability for the judiciary. (Of course, if a politician whose friend was convicted of bribing that politician argues that a specific majority decision handed down by the Constitutional Court is wrong, one might well take that opinion of the politician with more than a pinch of salt.)
But President Zuma’s claim that the powers of the Constitutional Court need to be reviewed because those judges sometimes hand down split decisions makes no sense whatsoever. Either the Constitutional Court has the power to interpret and enforce the provisions of the Constitution, or this power is taken away via a constitutional amendment. It is not possible to tinker with the powers of judicial review currently enjoyed by the Constitutional Court. Where a majority of judges, whose independence is guaranteed, are not allowed to review and set aside acts of Parliament or the executive, one does not have a constitutional democracy under the Rule of Law but a different system in which people enjoy rights by the grace of the majority party.
One can, of course, abolish the powers of the Constitutional Court to declare invalid legislation or acts of the executive, returning to a system of Parliamentary sovereignty which was in place during the apartheid years when the Sachs case was decided. This would mean that we would no longer live in a country in which the human rights of everyone is protected by the courts and President Zuma would then be free to act in accordance with even the most draconian legislation which would not be revieweable by the courts.
If one favoured a system, say, in which individuals could legally be arrested and detained without bringing them to trail, in which political opponents could be silenced with legally imposed “banning orders”, in which women or any unfavoured group (say, somebody who speaks Xhosa instead of Zulu or is disabled instead of able bodied) could legally be discriminated against by the government, then this system would obviously look particularly attractive.
But that is not the system on which the ANC had agreed years before the current Constitution was drafted. Recall that in 1989 in the Harare Declaration the ANC committed itself to the kind of system of judicial review that is currently in place in South Africa, affirming that in a democratic South Africa:
There is no context which can explain away the words of the President about a need to review the powers of the Constitutional Court. Poor Mac Maharaj issued a statement in which he pretended that the President’s words could be interpreted to mean something completely different from what he actually said. But the statement about a need for a review of the Constitutional Court’s powers leaves no room for ambiguity or a different interpretation based on context. There is therefore no way to interpret President Zuma’s statement other than as an attack on the principles underlying a constitutional democracy.
In fact Maharaj’s statement added fuel to the fire by suggesting that the executive should be able to influence the judges. He stated that President Zuma’s statement that the powers of the Constitutional Court should be reviewed:
This statement does not only fail to explain away the shocking attack of the President on our constitutional democracy, but signals that the Presidency has a rather strange understanding of the principle of the separation of powers and the independence of the judiciary. How the study by the executive of the judgments of the Constitutional Court could “contribute to the shaping of our evolving constitutional jurisprudence” without an attempt by the executive to intimidate the judges is unclear.
Judges have a constitutional duty to be impartial and independent. They cannot be swayed or influenced by the views of the executive who might wish to shape their jurisprudence. So if the executive aims to “shape” the decisions of the Constitutional Court, then it is aiming to interfere with the independence of the judiciary and hence to undermine one of the pillars of the constitutional democracy. This means that even the spin by the Presidency trying to excuse the inexcusable, displays a shocking lack of respect for our system of separation of powers and checks and balances.
One cannot interfere – legally, at least – with the supremacy of the Constitution and the independence of the judiciary without changing various provisions of the Constitution, including the founding values in section 1 which states, inter alia, that the “Republic of South Africa is one, sovereign, democratic state founded on the values of … supremacy of the constitution and the rule of law.” Such an amendment would require a 75% majority in the National Assembly, something the ANC would not be able to muster – even if they managed to bribe a few small parties to support its anti-constitutional scheme.
This suggests that (in the absence of a coup d’état) President Zuma’s wish that the powers of the Constitutional Court should be reviewed and amended is never going to fly. He will just have to take his chances in the courts (as he has done on many previous occasions, often with great success) when various cases that could affect his corruption and bribery prosecution comes before the judiciary. Meanwhile, he should really think before he talks.
Source: Constitutionally Speaking
[O]nce we are satisfied on a construction of the Act, that it gives to the Minister an unfettered discretion, it is no function of a Court of law to curtail its scope in the least degree, indeed it would be quite improper to do so. The above observation is, perhaps, so trite that it needs no statement, yet in cases before the Courts when the exercise of a statutory discretion is challenged, arguments are sometimes advanced which do seem to me to ignore the plain principle that Parliament may make any encroachment it chooses upon the life, liberty or property of any individual subject to its away, and that it is the function of courts of law to enforce its will.
Regardless of the spin later put on his words by presidential spin doctors, President Jacob Zuma’s latest comments about the judiciary reflect a yearning to return to this system of Parliamentary sovereignty. President Zuma said that there was a need to review the powers of the Constitutional Court because judges were not “special people”, but fallible human beings. As proof of this statement he pointed to the phenomenon of split judgments, saying:
How could you say that (the) judgment is absolutely correct when the judges themselves have different views about it? We don’t want to review the Constitutional Court, we want to review its powers. It is after experience that some of the decisions are not decisions that every other judge in the Constitutional Court agrees with… There are dissenting judgments. You will find that the dissenting one has more logic than the one that enjoyed the majority. What do you do in that case? That’s what has made the issue to become (one) of concern.
Judges were “influenced by what’s happening and who are influenced by you guys (the media)”, Zuma said. If the decisions of Parliament and the executive could be challenged, there was nothing wrong in questioning the decisions of the judiciary, he said.
Of course, President Zuma is correct that judges are fallible human beings and that different judges might view a legal question differently. (What he did not mention is that judges are usually slightly more intelligent than the average politician and usually far more honest. After all, as far as I know, no South African judge has ever faced bribery and corruption charges in court; no person has ever been convicted in South Africa for bribing a judge; and no judge has had to resign because he went to visit his drug dealing girlfriend in a Swiss jail on state expense.)
Reasonable lawyers often differ about what a legal provision or a judicial precedent might mean in a particular case. That is why lawyers take cases to court: most of them believe that they have some chance of winning their case or of getting a better deal for their client (even if they do lose the case). If they thought they had no chance of swaying the judge this way or that, they would not bother to submit papers and present oral arguments to court. They only believe that because reasonable people could differ on the correct interpretation and application of the facts or the law.
There is therefore nothing strange about different judges in the same court sometimes disagreeing with one another and writing a majority and minority opinion. Unlike some politicians, South African judges usually do not disagree with one another because they took bribes from different parties before the court or because they have another direct interest in the outcome of a matter. They do so because there is a genuine intellectual disagreement between the judges about the meaning of a legal rule or principle.
When this happens judges write different judgments in which they motivate why they took the view they took and these judgments can then be analysed and critiqued, thus keeping judges accountable for their decisions (unlike politicians, who are not held accountable for each decision they take, but are only held indirectly accountable by their party who might or might not gain more votes in the next election).
There is therefore also nothing wrong with criticising judicial decisions. Even sharp criticism of judicial decisions that engages with the legal arguments developed in a judgement must be welcomed, as such criticism and analysis ensure some form of accountability for the judiciary. (Of course, if a politician whose friend was convicted of bribing that politician argues that a specific majority decision handed down by the Constitutional Court is wrong, one might well take that opinion of the politician with more than a pinch of salt.)
But President Zuma’s claim that the powers of the Constitutional Court need to be reviewed because those judges sometimes hand down split decisions makes no sense whatsoever. Either the Constitutional Court has the power to interpret and enforce the provisions of the Constitution, or this power is taken away via a constitutional amendment. It is not possible to tinker with the powers of judicial review currently enjoyed by the Constitutional Court. Where a majority of judges, whose independence is guaranteed, are not allowed to review and set aside acts of Parliament or the executive, one does not have a constitutional democracy under the Rule of Law but a different system in which people enjoy rights by the grace of the majority party.
One can, of course, abolish the powers of the Constitutional Court to declare invalid legislation or acts of the executive, returning to a system of Parliamentary sovereignty which was in place during the apartheid years when the Sachs case was decided. This would mean that we would no longer live in a country in which the human rights of everyone is protected by the courts and President Zuma would then be free to act in accordance with even the most draconian legislation which would not be revieweable by the courts.
If one favoured a system, say, in which individuals could legally be arrested and detained without bringing them to trail, in which political opponents could be silenced with legally imposed “banning orders”, in which women or any unfavoured group (say, somebody who speaks Xhosa instead of Zulu or is disabled instead of able bodied) could legally be discriminated against by the government, then this system would obviously look particularly attractive.
But that is not the system on which the ANC had agreed years before the current Constitution was drafted. Recall that in 1989 in the Harare Declaration the ANC committed itself to the kind of system of judicial review that is currently in place in South Africa, affirming that in a democratic South Africa:
All shall enjoy universally recognised human rights, freedoms and civil liberties, protected under an entrenched Bill of Rights. South Africa shall have a new legal system which shall guarantee equality of all before the law. South Africa shall have an independent and non-racial judiciary.
There is no context which can explain away the words of the President about a need to review the powers of the Constitutional Court. Poor Mac Maharaj issued a statement in which he pretended that the President’s words could be interpreted to mean something completely different from what he actually said. But the statement about a need for a review of the Constitutional Court’s powers leaves no room for ambiguity or a different interpretation based on context. There is therefore no way to interpret President Zuma’s statement other than as an attack on the principles underlying a constitutional democracy.
In fact Maharaj’s statement added fuel to the fire by suggesting that the executive should be able to influence the judges. He stated that President Zuma’s statement that the powers of the Constitutional Court should be reviewed:
must therefore not be viewed as an attempt by government to undermine the independence of the judiciary and the rule of law which are entrenched in our Constitution. This is an exercise that falls within the mandate of the Executive of formulating and reviewing policies of government which seek to advance the transformative character of our Constitution. It is anticipated that the outcome of this exercise will not only assist in developing value-based solutions to address the legacy of the past but will contribute in shaping our evolving constitutional jurisprudence.
This statement does not only fail to explain away the shocking attack of the President on our constitutional democracy, but signals that the Presidency has a rather strange understanding of the principle of the separation of powers and the independence of the judiciary. How the study by the executive of the judgments of the Constitutional Court could “contribute to the shaping of our evolving constitutional jurisprudence” without an attempt by the executive to intimidate the judges is unclear.
Judges have a constitutional duty to be impartial and independent. They cannot be swayed or influenced by the views of the executive who might wish to shape their jurisprudence. So if the executive aims to “shape” the decisions of the Constitutional Court, then it is aiming to interfere with the independence of the judiciary and hence to undermine one of the pillars of the constitutional democracy. This means that even the spin by the Presidency trying to excuse the inexcusable, displays a shocking lack of respect for our system of separation of powers and checks and balances.
One cannot interfere – legally, at least – with the supremacy of the Constitution and the independence of the judiciary without changing various provisions of the Constitution, including the founding values in section 1 which states, inter alia, that the “Republic of South Africa is one, sovereign, democratic state founded on the values of … supremacy of the constitution and the rule of law.” Such an amendment would require a 75% majority in the National Assembly, something the ANC would not be able to muster – even if they managed to bribe a few small parties to support its anti-constitutional scheme.
This suggests that (in the absence of a coup d’état) President Zuma’s wish that the powers of the Constitutional Court should be reviewed and amended is never going to fly. He will just have to take his chances in the courts (as he has done on many previous occasions, often with great success) when various cases that could affect his corruption and bribery prosecution comes before the judiciary. Meanwhile, he should really think before he talks.
Source: Constitutionally Speaking
Buthelezi tackles Zuma on corruption
Warning that corruption was on the verge of making South Africa dysfunctional, IFP leader Mangosuthu Buthelezi told President Jacob Zuma on Tuesday that he was shying away from tackling it. “Corruption is the bane of our country,” he said during debate in the National Assembly on last week's State of the Nation address. Buthelezi described corruption as a fundamental threat to South Africa's constitutional democracy. “Yet, sir, you shy away from this issue.”
He said a measure of Zuma's leadership could be taken less by what the president had said than by what he had not said. “How can we embrace hope when our leadership refuses to acknowledge the many problems confronting our country, or the causes that lie at their root? Year after year, the State of the Nation address shifts, without ever addressing previous failures.” Buthelezi said it was an “unspoken fact” that corruption had resulted in the axing of two ministers - Sicelo Shiceka and Gwen Mahlangu-Nkabinde. “The national police commissioner, Mr Bheki Cele, is still suspended pending an investigation into corruption. “The Speaker of the KwaZulu-Natal legislature, Ms Peggy Nkonyeni, and MEC Mr Mike Mabuyakhulu are facing corruption charges in court,” he said.
Two of the nine provinces had “all but collapsed” and the administration of the state was “in shambles”. “Limpopo has been rendered bankrupt through corrupt activities and five of its departments have been taken over by national government.” “In the Eastern Cape, the education system has completely collapsed due to maladministration and corruption, forcing national government to intervene.”
In Gauteng, the provincial government had sought help from the National Treasury for its health department, which was on the verge of collapse. The Free State had sought help after discovering financial mismanagement and non-compliance in supply chain processes in its police roads and transport department. “How, Mr President, do we explain the contamination of public service and commercial interests? It is fatal and yet pursued relentlessly from the lowest to the highest levels of government. “Too many, and I dare say the overwhelming majority, are trying to make money on account of holding public office, being in politics or exercising public power.”
Last year, Special Investigating Unit head Willie Hofmeyr told MPs that 20 percent of South Africa's procurement budget was lost to corruption each year. “According to Transparency International's 2011 Corruption Perceptions Index, South Africa is perceived to be becoming more corrupt with each passing year.” This perception was rooted in reality. “On a scale of 0 (being highly corrupt) to 10 (being very clean), we have fallen from a ranking of 5.1 in 2007, to 4.1 in 2011. “The unspoken fact is that we are on the verge of joining the ranks of dysfunctional states, as the effects of corruption debilitate all spheres of life,” Buthelezi said.
The IFP leader, who turns 84 this year, also criticised Zuma for his support, last Thursday, of the South African Democratic Teachers' Union (Sadtu). “Mr President, you praise the trade unions, and even Sadtu, as if they should be thanked for doing less than the full measure of their destructive capabilities. “Praising the South African Democratic Teachers' Union for its diligent teachers was a step too far in placating the unions.”
The ANC-aligned union continued to act like an organisation “hell-bent on destroying the future of our children”, and should be rebuked, not praised, for its actions, he said, to cries of support from opposition benches. “Instead of acting like responsible educators, some members of Sadtu have, on numerous occasions, proven themselves irresponsible, unprofessional and unfit to educate South Africa's learners.”
Buthelezi also suggested that the ruling party was too close to the country's four major banks. “Another major policy mistake is maintaining the four retail bank policy and tolerating the collusion and other restraints of trade openly practised by our banks.” A lack of “real competition” meant they were not forced to take risks they did not want to take, forcing all the “risky business” onto the Industrial Development Corporation and the Development Bank of Southern Africa. “It would seem as if your government, Mr President, has a greater commitment to serving the banks than the people we represent.”
On the economy, Buthelezi said Zuma had not explained how two sectors that should be booming as a result of high international demand - agriculture and mining - were “in reverse due to government's many policy failures”. Another unspoken fact was that the latest Global Competitiveness Rankings of the World Economic Forum highlighted how corruption, wasteful expenditure and government red-tape was increasingly hindering business development, SMMEs and investment in South Africa.
Buthelezi said there was a “disconnect” between the government and the reality of everyday life in South Africa. He told Zuma his address had lacked accountability. “It lacked accountability on the crisis in health, the crisis of education and the crisis of corruption. “What you have said looks good on paper, but what you have not said can prevent the fulfilment of the best-laid plans."
Source: IoL
He said a measure of Zuma's leadership could be taken less by what the president had said than by what he had not said. “How can we embrace hope when our leadership refuses to acknowledge the many problems confronting our country, or the causes that lie at their root? Year after year, the State of the Nation address shifts, without ever addressing previous failures.” Buthelezi said it was an “unspoken fact” that corruption had resulted in the axing of two ministers - Sicelo Shiceka and Gwen Mahlangu-Nkabinde. “The national police commissioner, Mr Bheki Cele, is still suspended pending an investigation into corruption. “The Speaker of the KwaZulu-Natal legislature, Ms Peggy Nkonyeni, and MEC Mr Mike Mabuyakhulu are facing corruption charges in court,” he said.
Two of the nine provinces had “all but collapsed” and the administration of the state was “in shambles”. “Limpopo has been rendered bankrupt through corrupt activities and five of its departments have been taken over by national government.” “In the Eastern Cape, the education system has completely collapsed due to maladministration and corruption, forcing national government to intervene.”
In Gauteng, the provincial government had sought help from the National Treasury for its health department, which was on the verge of collapse. The Free State had sought help after discovering financial mismanagement and non-compliance in supply chain processes in its police roads and transport department. “How, Mr President, do we explain the contamination of public service and commercial interests? It is fatal and yet pursued relentlessly from the lowest to the highest levels of government. “Too many, and I dare say the overwhelming majority, are trying to make money on account of holding public office, being in politics or exercising public power.”
Last year, Special Investigating Unit head Willie Hofmeyr told MPs that 20 percent of South Africa's procurement budget was lost to corruption each year. “According to Transparency International's 2011 Corruption Perceptions Index, South Africa is perceived to be becoming more corrupt with each passing year.” This perception was rooted in reality. “On a scale of 0 (being highly corrupt) to 10 (being very clean), we have fallen from a ranking of 5.1 in 2007, to 4.1 in 2011. “The unspoken fact is that we are on the verge of joining the ranks of dysfunctional states, as the effects of corruption debilitate all spheres of life,” Buthelezi said.
The IFP leader, who turns 84 this year, also criticised Zuma for his support, last Thursday, of the South African Democratic Teachers' Union (Sadtu). “Mr President, you praise the trade unions, and even Sadtu, as if they should be thanked for doing less than the full measure of their destructive capabilities. “Praising the South African Democratic Teachers' Union for its diligent teachers was a step too far in placating the unions.”
The ANC-aligned union continued to act like an organisation “hell-bent on destroying the future of our children”, and should be rebuked, not praised, for its actions, he said, to cries of support from opposition benches. “Instead of acting like responsible educators, some members of Sadtu have, on numerous occasions, proven themselves irresponsible, unprofessional and unfit to educate South Africa's learners.”
Buthelezi also suggested that the ruling party was too close to the country's four major banks. “Another major policy mistake is maintaining the four retail bank policy and tolerating the collusion and other restraints of trade openly practised by our banks.” A lack of “real competition” meant they were not forced to take risks they did not want to take, forcing all the “risky business” onto the Industrial Development Corporation and the Development Bank of Southern Africa. “It would seem as if your government, Mr President, has a greater commitment to serving the banks than the people we represent.”
On the economy, Buthelezi said Zuma had not explained how two sectors that should be booming as a result of high international demand - agriculture and mining - were “in reverse due to government's many policy failures”. Another unspoken fact was that the latest Global Competitiveness Rankings of the World Economic Forum highlighted how corruption, wasteful expenditure and government red-tape was increasingly hindering business development, SMMEs and investment in South Africa.
Buthelezi said there was a “disconnect” between the government and the reality of everyday life in South Africa. He told Zuma his address had lacked accountability. “It lacked accountability on the crisis in health, the crisis of education and the crisis of corruption. “What you have said looks good on paper, but what you have not said can prevent the fulfilment of the best-laid plans."
Source: IoL
South Africa's capital of organised crime
Cape Town's image as South Africa's crime-free paradise is being tainted by international underworld figures who flock to the city to ply their dubious trade.
In recent weeks, Serbian fugitive Dobrosav Gavric, Russian Igor Russol and Moroccan Houssain Ait Taleb have made appearances in the Cape Town Magistrate's Court. They have all been branded by police as underworld figures with links to organised crime.
Yesterday, community safety MEC Dan Plato said he was concerned about these developments. "I am worried about the fact that so many high-profile underworld figures are involved in Cape Town. I am worried about the number of foreign nationals involved in organised crime in Cape Town. "My question is: why are all these foreign people heading for Cape Town, doing their business in Cape Town and finding Cape Town so cosy and appropriate?"
Plato said new names of underworld figures were daily being added to the list "known to us". The latest high-profile case involves local businessmen Mark Lifman and André Naudé, who both allegedly ran Specialised Protection Services, providing security to Cape Town nightclubs, without the necessary permits. On Friday, Naudé, the company's CEO, was released on R1000 bail after handing himself over to police. A warrant of arrest has been issued against Lifman, who is in China on business. Charges against 13 of the company's bouncers, including Taleb, were dropped last week.
Yesterday, Russol appeared in court accused of extorting R600000 and a Porsche Cayenne from businesses in and around Cape Town. His bail application was postponed to tomorrow. Next month, Gavric is set to appear in court on two cases. He is accused of fraudulently entering South Africa in 2007 and is also facing extradition to Serbia, where he has to serve a 35-year jail sentence for three murders.
The Serb was driving Cyril Beeka when Beeka was killed in a drive-by shooting last year. Beeka, too, has been branded an underworld figure. He is also said to have had links to SA Secret Service boss Moe Shaik. Last week, Western Cape police commissioner Lieutenant-General Arno Lamoer told parliament that drugs with a street value of R12-billion had been confiscated in the province since April , and that this was just the tip of the iceberg.
Plato said that though police had managed to prevent drugs from finding their way into the provinces via the roads, the ports were "wide open". He said: "We heard through the grapevine that [some] underground figures are also responsible for drug trafficking. "We're dealing with high-profile, professional and sophisticated gang and drug bosses and we need people to outplay them. I do not believe the SAPS in its current format is in that position," he said. Plato said this was a clear indication that specialised police units should be reinstated. Plato said he had met Lifman and businessman Jerome Booysen, who have both been linked to the underworld.
Booysen has been fingered in court as a possible suspect in the Beeka murder. He has also been linked to Specialised Protection Services and suspected of being a leader of the Sexy Boys gang. Both men, Plato said, wanted to clear their names and insisted they were not involved in crime. He admitted that he had been criticised for meeting the two, but said it was the right thing to do. "Many are saying: 'Don't speak to gangsters.' My take is, if we are not going to start speaking to these people, who is going to talk to them? Who is going to change their mindsets? "Booysen is the president of the Belhar Rugby Football Club. He deals with vulnerable youngsters. It was appropriate for me to face him and challenge him. But he said: 'I'm not giving them drugs'."
Plato said Lifman had denied being linked to the murder of Yuri "the Russian" Ulianitski. Ulianitski was killed in a late-night ambush that also claimed the life of his four-year-old daughter, Yulia, in May 2007. After meeting Plato, Lifman left the country. Lawyer William Booth confirmed a warrant of arrest had been issued against him.
Hawks spokesman McIntosh Polela said the elite unit had embarked on a "crackdown on the security industry in Cape Town".
Source: Times Live
In recent weeks, Serbian fugitive Dobrosav Gavric, Russian Igor Russol and Moroccan Houssain Ait Taleb have made appearances in the Cape Town Magistrate's Court. They have all been branded by police as underworld figures with links to organised crime.
Yesterday, community safety MEC Dan Plato said he was concerned about these developments. "I am worried about the fact that so many high-profile underworld figures are involved in Cape Town. I am worried about the number of foreign nationals involved in organised crime in Cape Town. "My question is: why are all these foreign people heading for Cape Town, doing their business in Cape Town and finding Cape Town so cosy and appropriate?"
Plato said new names of underworld figures were daily being added to the list "known to us". The latest high-profile case involves local businessmen Mark Lifman and André Naudé, who both allegedly ran Specialised Protection Services, providing security to Cape Town nightclubs, without the necessary permits. On Friday, Naudé, the company's CEO, was released on R1000 bail after handing himself over to police. A warrant of arrest has been issued against Lifman, who is in China on business. Charges against 13 of the company's bouncers, including Taleb, were dropped last week.
Yesterday, Russol appeared in court accused of extorting R600000 and a Porsche Cayenne from businesses in and around Cape Town. His bail application was postponed to tomorrow. Next month, Gavric is set to appear in court on two cases. He is accused of fraudulently entering South Africa in 2007 and is also facing extradition to Serbia, where he has to serve a 35-year jail sentence for three murders.
The Serb was driving Cyril Beeka when Beeka was killed in a drive-by shooting last year. Beeka, too, has been branded an underworld figure. He is also said to have had links to SA Secret Service boss Moe Shaik. Last week, Western Cape police commissioner Lieutenant-General Arno Lamoer told parliament that drugs with a street value of R12-billion had been confiscated in the province since April , and that this was just the tip of the iceberg.
Plato said that though police had managed to prevent drugs from finding their way into the provinces via the roads, the ports were "wide open". He said: "We heard through the grapevine that [some] underground figures are also responsible for drug trafficking. "We're dealing with high-profile, professional and sophisticated gang and drug bosses and we need people to outplay them. I do not believe the SAPS in its current format is in that position," he said. Plato said this was a clear indication that specialised police units should be reinstated. Plato said he had met Lifman and businessman Jerome Booysen, who have both been linked to the underworld.
Booysen has been fingered in court as a possible suspect in the Beeka murder. He has also been linked to Specialised Protection Services and suspected of being a leader of the Sexy Boys gang. Both men, Plato said, wanted to clear their names and insisted they were not involved in crime. He admitted that he had been criticised for meeting the two, but said it was the right thing to do. "Many are saying: 'Don't speak to gangsters.' My take is, if we are not going to start speaking to these people, who is going to talk to them? Who is going to change their mindsets? "Booysen is the president of the Belhar Rugby Football Club. He deals with vulnerable youngsters. It was appropriate for me to face him and challenge him. But he said: 'I'm not giving them drugs'."
Plato said Lifman had denied being linked to the murder of Yuri "the Russian" Ulianitski. Ulianitski was killed in a late-night ambush that also claimed the life of his four-year-old daughter, Yulia, in May 2007. After meeting Plato, Lifman left the country. Lawyer William Booth confirmed a warrant of arrest had been issued against him.
Hawks spokesman McIntosh Polela said the elite unit had embarked on a "crackdown on the security industry in Cape Town".
Source: Times Live
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