Zondo report: Hawks should reopen criminal investigations into Arthur Fraser
Chief Justice Raymond Zondo has recommended the Hawks reconsider resuming criminal investigations involving former State Security Agency (SSA) chief executive Arthur Fraser over the controversial chief agent network project (BANG).
The recommendation against Fraser appears under the subheading: Cash Withdrawals, Cash Movement and Cash Liability.
The State Capture Board of Inquiry found that large sums of money in the millions had been withdrawn for secret projects in the SSA and had not been accounted for.
Zondo said a PAN report compiled by an internal investigative team revealed, among other things, at least prima facie criminal activity that recommended criminal investigations that may have implicated Fraser. After the report was given to the Hawks, he said, former state security minister Siyabonga Cwele “ordered the matter to be taken away from the Hawks”.
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“Resuming investigations should be reconsidered by the Hawks. Whoever was involved, including Mr. Fraser, may be exonerated, but investigations should be allowed to go their normal course,” Zondo said in the latest installment of the four-year government corruption probe.
He noted, however, that Cwele – now South Africa’s ambassador to China – had denied ordering the investigations to stop, “but it would remain an enigma why they stopped”.
In any event, he said, the denial is irrelevant to the commission’s recommendations.
Financial controls and accountability need to be strengthened.
“As already stated, the handling and use of cash is unavoidable, especially in covert operations. However, care should be taken to minimize the amounts involved.”
He said there should be consequence management, including recovering lost money.
He cited a case where money in the amount of R145 million was stolen from SSA offices, adding that former minister David Mahlobo also allegedly withdrew money, allegedly, for the former President Zuma to R2.5 million per month in 2015/2016 and later raised to R4.5 million per month in 2016/2017. The funds were approved by former ambassador to Japan Thulani Dlomo, the agency’s former director of special operations.
Zondo said large sums of money would be paid upfront and in cash for operations, but there were a lot of problems with that.
“For example, the purpose of the money would be obscure or undefined, nor would the ultimate destination (so-called agents). In summary, motivation would be insufficient; financial controls, as they existed, were poor or insufficiently applied.
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He said there would be no verification as to the use of the money because, “to begin with, the intended use would itself be obscure; there was no verification whether the intended recipient actually received the money, for example in the form of receipts and one of the service providers turned out to be non-existent.
“The lack of accountability has manifested itself in various ways. To give two amazing examples:
“First, where the person to whom an advance was paid was disqualified from taking another advance before accounting for the first, this rule would be circumvented.”
A different person would be used in whose name the money was withdrawn and returned to the disqualified person.
“One of the people whose name was used in this way told the commission.
“The second example was where a person simply acknowledged the debt in terms of money. They were unable to account for money amounting to millions without any actual recovery of the money. Instead, the money, amounting to millions, would be deducted from the person’s pension.
In some cases, these people simply quit afterwards, and one witness estimated that over the period 2012 to 2018, an amount of R1.5 billion was lost, he said.
Zondo said Dlomo, as head of the special operations unit, “handled a lot of money. In many ways, the use and destination of the funds remained unclear.
“Minister Mahlobo, as noted above, then Minister of State Security, also handled large sums of money. For example, according to the evidence, there was a time when he received 2.5 million rand per month and then increased to 4.5 million rand per month, which he says was intended for the former president Zuma.
The commission noted Mahlobo’s denials. He said, however, that there were at least two eyewitnesses and second, the details were too much to be a figment of their imagination.
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“The odds are overwhelming against David Mahlobo. After his appointment, the SSA’s budget increased enormously. This conclusion was based on examining the budget as documentary evidence relating to the budget.
Fraser also handled and had a lot of money withdrawn, he said, adding that the Veza project investigation team had said that an amount of around R125 million remained accounted for by Fraser, even then. investigations were still ongoing.
Zondo said the role played by Dlomo, Mahlobo, Fraser and others involved in the withdrawal, management and distribution of SSA money should be investigated by law enforcement.
“The Inspector General of Intelligence (IGI) should have more access to the activities of the country’s intelligence services. There has been evidence by the current IGI that attempts have been made to thwart some of its investigations.