by Judith February & Chris Oxtoby
In late August, a joint investigation by Daily Maverick and News24 reported that Justice and Constitutional Development Minister Thembi Simelane had received a loan of over R500 000 from a company that had brokered unlawful investments into the since-collapsed VBS Mutual Bank by the Polokwane Municipality, at a time when the minister was the mayor of the municipality.
It was reported that the minister had used the loan to purchase a coffee shop in Sandton.
It is worth highlighting why the story has attracted so much attention, and why the issues it raises are so concerning.
The incident raises serious questions about the minister’s judgment, and her understanding of principles of ethics and conflicts of interest.
The allegations invited a comprehensive explanation of the circumstances under which the loan was received; the extent to which the minister had knowledge of the link to VBS Bank; and what steps she took to convince herself that the transaction was above board.
This is particularly so since she was mayor of the very municipality which had invested money into VBS.
There are also questions about why she received the loan from an entity which was not even a registered financial services provider.
In responding to the story, the minister had claimed that the loan was a purely commercial agreement which has since been repaid.
However, at the time of writing, and despite the minister having appeared before a parliamentary portfolio committee, no copy of either the loan agreement or proof of the loan’s repayment has been made public.
The very perception of corruption or conflicts of interest are extremely concerning, as they undermine public confidence in our systems of government.
AMBIT OF PARLIAMENT
In this case, such perceptions are all the more acute because, as minister of justice, Simelane bears political responsibility for law enforcement agencies – most crucially, the National Prosecuting Authority (NPA) – which are involved in ongoing investigations and prosecutions relating to the collapse of VBS.
Misgivings about the independence of the NPA make these concerns about the minister’s position even more serious. Freedom Under Law and fellow civil society organisations signed on to a joint statement which gave the minister the benefit of the doubt, by calling for her to account fully in response to the allegations.
On 6 September, the minister appeared before Parliament’s portfolio committee on justice and constitutional development.
Unfortunately, the minister’s appearance and the information that has subsequently been revealed (or not revealed) have only made matters worse.
To begin with, the extent of the minister’s commitment to clarifying the issue is not as clear as would have been hoped. When appearing at the portfolio committee, the minister made a “commitment” on her “availability” to respond to the allegations.
She has also been quoted as saying that the matter fell “outside the ambit of Parliament”, as she was not an MP at the time, but she had appeared before the committee for the purposes of transparency.
These are wholly inadequate responses, considering the seriousness of the allegations and in light of the minister’s duty to act consistently with the Constitution.
The allegations warranted a full, prompt and transparent response. Deferring an explanation or giving the impression that the explanations being given are not required of her only heightens concerns about the minister’s position.
‘RACE CARD’
The minister’s explanations do not address the concerns raised by the allegations. Indeed, they further call her judgment into question.
She has been quoted as saying that she took the loan because it was difficult to obtain a loan because of high interest rates available from commercial banks and as a black person.
With respect, this “race card” is tired and bears the hallmarks of deflection. It also does not answer any of the concerns about the loan she eventually received at a reported 47% interest rate.
The minister has still not made the loan agreement or proof of repayment public or given a reasonable explanation why the repayment was delayed.
The circumstances surrounding the link between the loan and the VBS funds also remain unclear.
It is especially concerning that it appears that the loan may only have been repaid once issues with VBS became public, raising pointed questions about why the loan was not repaid sooner and the precise circumstances under which it was made.
This highlights the need for urgent scrutiny of the terms of the loan, and for the loan agreement to be made public without delay. It is hard to understand why the minister would not have produced the loan agreement and proof of the loan’s repayment when she appeared before the portfolio committee.
Prior to the minister’s appearance in Parliament, the chair of the portfolio committee, Xola Nqola, commented that the allegations were damaging to South Africa’s image “as a country ridding itself of any form of corruption”.
Whether or not one accepts that this is an accurate depiction of the current state of South Africa, there can be no doubt that the episode paints an extremely troubling picture of the state of the nation’s governance.
LIGHTNING ROD FOR CONTROVERSY
As the saga drags on, concerns about the minister’s position only increase.
She holds a position of political responsibility over the NPA (the ministry is also in a public stand-off with the NPA regarding the Zondo commission of inquiry database), and nothing on the public record serves to assuage concerns about the potential impact on ongoing investigation and prosecutions relating to the collapse of VBS.
And there are other lurking difficulties.
In less than a month, the minister is due to sit as a member of the Judicial Service Commission (JSC) for the first time. The JSC is already an institution that has been a lightning rod for controversy.
While the minister was appearing before Parliament last week, a hearing took place across the road at the Cape Town High Court into the lawfulness of the delegation of former judge John Hlophe as a member of the JSC. The commission can ill afford to be embroiled in another controversy about its membership.
Consider a potential scenario in which it emerges during the JSC interviews that a prospective judge has taken a loan under contentious circumstances.
How much confidence can the public be expected to have in the minister’s assessment of a candidate for the judiciary, considering the allegations that have been made against her?
WHY SHE MUST QUIT
Indeed, one might go further and say that the entire controversy casts doubt on the minister’s capacity to assess whether a candidate is a “fit and proper person” to be appointed as a judge, as the Constitution requires.
In short, we have now reached the point where the minister can no longer remain in office.
While it is true that she is reported to be in the process of reporting to the country’s president on the allegations, it is hard to see what further information could be revealed that would alleviate the significant concerns that have remained unanswered for several weeks.
During the week, the minister appeared in a softball interview on eNCA (having unsurprisingly denied similar requests from News24 and the Daily Maverick), laced with just a tinge of hubris, merely repeating the unsatisfactory answers she had given in Parliament.
What is clear is that the minister fails to understand her constitutional duty to account to Parliament and the public. She is, like so many South African politicians before her, hoping to ride out the storm.
Simelane is also facing an investigation by the Public Protector and so it is clear that the allegations will not go away. All the while, the minister will continue to hold her position, with her credibility in tatters.
When the government of national unity was formed, much was made of its foundation on constitutional principles.
If these principles and values are to be protected, simply put, Simelane must step down or the president must relieve her of her position. She holds too important a position for there to be any compromise on this.
– February is the executive officer and Oxtoby is a research consultant at Freedom Under Law.
