JOHANNESBURG – The Constitutional Court on Monday upheld the Pretoria High Court’s order that Public Protector Advocate Busisiwe Mkhwebane should personally pay for 15% of the South African Reserve Bank’s (Sarb) legal fees in the Absa/Bankorp lifeboat matter.
In 2017, Mkhwebane ordered the Special Investigating Unit (SIU) to recover more than R1.125 billion of “misappropriated public funds” on behalf of the central bank from Absa – an “illegal gift” to Bankorp from the Reserve Bank in the 1980s. Bankorp was absorbed into Absa in 1992.
Last year, the High Court reviewed and set aside Mkhwebane’s report and remedial action, after having found that she did not fully understand her constitutional duty to be impartial and to perform her functions without fear, favour or prejudice.
Following the publication of her report, the central bank, the minister of finance, Absa and Treasury instituted review applications to set aside her directive that the SIU recover funds from Absa. These applications were later consolidated.
The High Court in Pretoria set aside Mkhwebane’s findings in February 2018, citing a “reasonable apprehension of bias” in her work. Mkhwebane was also ordered to personally repay 15% of the Sarb’s legal costs, while the Office of the Public Protector was ordered to pay the remaining 85%.
The majority judgment by Justices Sisi Khampepe and Leona Theron on Monday said Mkhwebane’s conduct warranted the personal costs order against her.
“Personal costs orders constitute an essential, constitutionally-infused mechanism to ensure that the conduct of public representatives does not fall egregiously short of what is required of them.”
These were the main findings by the ConCourt:
1. Acted in bad faith
The apex court upheld the Pretoria High Court’s finding that Mkhwebane had acted in bad faith and agreed that she had exceeded the bounds of her potential indemnification under the Public Protector Act from the personal costs order.
The Constitutional Court held that personal costs against public officials, like the Public Protector, whose bad faith conduct falls short of what is required of them, constitute an essential, constitutionally-infused mechanism to ensure that they act in good faith and in accordance with the law and Constitution.
2. Flawed investigation
The Constitutional Court held that the Public Protector’s entire model of the investigation was flawed and that she was not honest about her engagements during the investigation. In addition, she failed to engage with the parties directly affected by her new remedial action before she published her final report.
The Constitutional Court held that the Public Protector had failed to report, or why, contrary to her general practise, she did not produce transcriptions of her meetings with the Presidency or the State Security Agency (SSA).
The Sarb had stated in its supplementary affidavit in 2017 before the High Court, challenging Mkhwebane’s report, that she had a meeting with advisers of the Presidency and SSA before the release of her report ordering the mandate of the central bank to be changed.
The Constitutional Court found that the Public Protector had put forward a number of falsehoods in the course of litigation, including misrepresenting under oath before the High Court that the economic analysis which underpinned the final report was based on expert economic advice, which it was not.
In the Constitutional Court, the Public Protector’s various explanations of her conduct were found to be contradictory. The Constitutional Court concluded that the punitive aspect of the costs order against the Public Protector must stand in light of the standard of conduct expected from public officials and the number of falsehoods put forward by the Public Protector in the course of the litigation. It was these reasons that the Public Protector’s appeal was dismissed.