It’s Judgment Day for the Public Protector

The Constitutional Court will on Monday 22 July deliver judgment on whether Public Protector Busisiwe Mkhwebane must pay 15% of the Reserve Bank (SARB’s) legal fees de bonis propriis – Latin for “out of her own pocket”.

Mkhwebane had asked direct access to the Constitutional Court in April 2018 to set aside a High Court judgment which found she was biased and did not fully understand her constitutional duty to be impartial and to perform her functions without fear, favour or prejudice.

The case before the court has its roots in Mkhwebane’s 2017 decision that the Special Investigation Unit (SIU) must recoup R1.125-billion from Absa after the Reserve Bank in the apartheid years gave an illegal “lifeboat” to the bank’s predecessor, Bankorp.

(Neither the merits of this “lifeboat”, nor Mkhwebane’s actual findings are before the Constitutional Court. Mkhwebane’s recommendations were reviewed and set aside by the High Court in 2018. It is Mkhwebane’s conduct in this investigation and the High Court’s findings about it that are the subject of the current case before the Constitutional Court.)

In return, the SARB opposed Mkhwebane’s application, and also filed a conditional cross-appeal: If the Constitutional Court decides to hear Mkhwebane’s case, the SARB then also asks the court to declare that the Public Protector abused her office in the Bankorp/Absa investigation.

Arguments in this matter were heard in November 2018. Sitting in Braamfontein, Johannesburg, the Constitutional Court will, after a curious silence that left the door open for much speculation that all is not well at the highest court in the country, deliver judgment on Monday at 10am.

The Constitutional Court's decision may affect more than just Mkwhebane’s fate. It will have a “sobering” effect on every investigative government official with a mandate to represent their office and conduct their business without fear, favour or prejudice, the SARB argued.

That is, if the Constitutional Court agrees that it must pronounce on the matter at all. If Mkwhebane’s application for direct access is dismissed, the High Court’s judgment will stand with no further recourse for the Public Protector in this specific case. Such a decision will open the Public Protector to a broadside from her detractors, long wanting to force a decision by Parliament to remove her from her position.

If the Constitutional Court decides on the matter – whether they accept or dismiss the Public Protector’s arguments – it will also influence the Public Protector’s standing in the eyes of supporters who laud her as a hero and detractors who want to see her kicked out of her job.

The court’s decision will also strengthen or weaken the pending review applications of Public Enterprises Minister Pravin Gordhan in the SARS case and President Cyril Ramaphosa in the Bosasa case.

Gordhan has already filed the first papers in his review application, arguing that the Public Protector’s conduct is wanting, that she has ulterior motives and is biased. Ramaphosa announced on Sunday evening, on the eve of the Constitutional Court’s judgment, that he will urgently initiate review proceedings against Mkhwebane’s “flawed” report.

Mkhwebane’s case before the Constitutional Court

A full bench of three judges in the High Court in Gauteng was scathing about Mkhwebane’s investigation process in the Bankorp/Absa-matter as well as how she conducted herself in subsequent litigation against the SARB and Absa.

The case before the High Court was a challenge to Mkhwebane’s findings and recommendations in her Bankorp/Absa investigation, brought by SARB, Absa, the minister of finance and national treasury.

The judges found that Mkhwebane’s remedial action was unlawful, that she did not understand her constitutional duty to be impartial, that she was biased and procedurally unfair in her dealings with SARB and Absa, that her conduct was inconsistent with the Constitution, that she acted mysteriously in not disclosing meetings and the contents thereof with then-president Jacob Zuma and the State Security Agency, that she had lied to the court and that she did not take the court in her confidence.

The SARB was particularly perturbed by handwritten notes, contained in the confidential section of the records, which indicated a meeting between the Public Protector and then minister of state security David Mahlobo. In a section of the notes dealing with the SARB this question was scribbled down: “How are they vulnerable?”

Even though the SARB interpreted this as an attack on the central bank’s independence, Mkhwebane took the extraordinary step to never – not in the High Court and not in the Constitutional Court – explain what this note in conversation with Mahlobo was all about. She also did not explain why it was necessary to meet Mahlobo.

“The Public Protector did not conduct herself in a manner which should be expected from a person occupying the office of the Public Protector...She did not have regard thereto that her office requires her to be objective, honest and to deal with matters according to the law and that a higher standard is expected from her. She failed to explain her actions adequately,” said High Court judges Cynthia Pretorius, Nomonde Patience Mngqibisa-Thusi and Dawie Fourie.

In conclusion, the judges said it is “necessary to show our displeasure with the unacceptable way in which she conducted her investigation as well as her persistence to oppose all three applications to the end”.

Mkhwebane’s findings and recommendations in her Bankorp/Absa investigation were reviewed and set aside.

The High Court also held a dim view of her conduct, and in addition ordered that Mkhwebane – out of her own pocket – pay 15% of the SARB’s legal cost, including costs of three counsel. The cash-strapped Office of the Public Protector was ordered to pay 85% of the costs of SARB, as well as the full costs of Absa, including three counsel.

When Mkhwebane asked for leave to appeal to the Supreme Court of Appeal, judges Pretorius, Mngqibisa-Thusi and Fourie decided there was no reasonable chances of Mkhwebane succeeding in another court.

This is how it came to be that Mkhwebane asked the Constitutional Court for direct access, and to set aside the order that she personally should pay 15% of the SARB’s legal cost.

Because the High Court's judgment can be used by Mkhwebane’s detractors in an attempt to kick her out of office, she asked the Constitutional Court to set aside the lower court’s finding that she was biased and did not understand her constitutional duties.

SARB’s opposing arguments in the Constitutional Court

Mkhwebane's affidavits and heads of arguments offered four main arguments as to why she should not be saddled with the personal cost order.

One, that it would have a “grave bearing on the soundness of our constitutional democracy” and that it will “stymie the fulfilment of a constitutional obligation by the Office of the Public Protector”.

She also argued that if, somewhere down the line, she was asked again to investigate the SARB and maybe found nothing wrong, the public would think she was intimidated by the thought of another personal cost order. It would be “undesirable” and would be similar to “constructive dismissal” if she were to become “gun-shy”.

Thirdly, she contended that the accusation of her acting in bad faith or in gross negligence has not been established.

“That the SARB does not accept it does not make her conduct one in bad faith,” Mkhwebane's heads of arguments state. “She did not act in bad faith...The instances from which the high court inferred bad faith arise from a mistaken appreciation of the facts...”

Mkhwebane argued in the High Court that an indemnification against personal liability is included in Section 5(3) of the Public Protector Act on the basis that the relevant Public Protector acted “in good faith”.

Mkhwebane further claimed that such an order may be construed as “interference with the proper and effective functioning of the Office” and that it would open the “floodgates” for similar actions against her.

SARB’s answering affidavit and heads of argument in these proceedings are stinging. The central bank argues that Mkwhebane conducted her investigation and subsequent litigation before the High Court in a manner that was inappropriate and showed a gross disregard for her duties. The answering affidavit is deposed by advocate JJ de Jager, general counsel in the legal services department at the SARB.

According to De Jager, Mkhwebane’s founding affidavit before the Constitutional Court “actually compounds the case against her”, rather than exonerating her conduct. There is much about Mkhwebane’s conduct that irks the SARB, who accused Mkhwebane of breaking “virtually every rule that applies to an organ of state when its decision is taken on review”. These are some of the main and most decisive points, which amounts to “an abuse of her office”:

• The meetings with then-president Jacob Zuma and minister of state security David Mahlobo

The SARB accuses Mkhwebane of changing her story in her various affidavits filed before the High Court and the Constitutional Court, of being mysterious by withholding important explanations and of being biased in her conduct.

The main arguments here are that Mkhwebane did not explain why it was necessary to have met with Zuma twice and once with Mahlobo. SARB argues that she seems to have lied about how these meetings came about, that she failed to provide transcriptions for these meetings, and that she did not offer SARB and Absa the same opportunities to meet with her.

It was by chance, argued SARB, that they came to know about Mkhwebane’s meetings. Her Bankorp/Absa-report did not note the meetings with Zuma and Mahlobo. These only came to light when SARB scrutinised handwritten notes filed into the record. It is in these notes, relating to Mkhwebane’s meeting with Mahlobo where the question “How are they vulnerable?” was posed.

Said De Jager: “Not only was this never denied, but no adequate explanation was provided for why this could possibly be the proper subject matter for a discussion with the State Security Agency pursuant to an investigation into the financial assistance that was given to Bankorp more than 30 years ago.”

De Jager further argued Mkhwebane’s varying explanations of these meetings lacked substance and were at times “patently false”.

• Economic experts Mkhwebane relied upon

Mkhwebane’s affidavit before the Constitutional Court states that she has gathered advice from economic experts during her investigation in order to release her Bankorp/Absa-report. SARB, however, argues that she did not, because the report of economist Dr Tshepo Mokoka was dated only after Mkhwebane’s Bankorp/Absa-report was released to the public.

In fact, the SARB’s heads of arguments claims, Mkhwebane’s economic analysis in her Bankorp/Absa-report seems not to have been underpinned by any expert economic advice.

Mkhwebane also plagiarised whole sections of Mokoka’s report into her affidavit. During oral arguments before the Constitutional Court, counsel for the SARB said it was “difficult to be polite” about Mkhwebane’s conduct, because first-year university students acting in a similar manner would have been disciplined for plagiarism.

Mkhwebane subsequently denied these allegations, saying that she did not misrepresent her reliance on Mokoka’s report.

• Public interest defence

Mkhwebane also argued that the High Court’s findings would result in a “gun-shy” Public Protector. The SARB had none of this, arguing that “the law on personal costs orders against public officials is clear. There is no risk of a personal costs order being granted against any public official unless they conduct themselves in an egregiously improper manner.” These orders have a “sobering effect” on public office-bearers, De Jager said in his affidavit.

Thus it came about that the SARB applied for a conditional cross-appeal, asking the Constitutional Court to declare that the Public Protector abused her office during the Bankorp/Absa investigation. DM