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Hello and welcome to the So What podcast, in which political economic analyst JP Landman

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discusses the issues uppermost in the minds of South Africans. You can find a written

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version of this content on JP's website, jplantman.co.za. I am Ruda Landman and I am your host.

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These first few recordings were done at our dining room table, but we will soon be moving

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into a studio. Hello and a very warm welcome to another discussion based on JP's latest

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newsletter. This one is dated the 20th of September 2023. The heading is neither a one-day nor

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a one-person job. It's your annual update on what's happening with measures to counter

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corruption in South Africa, but you start in the US with research done on corruption

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in that country between, what is it, 1865 and 1941. That was a period infamous for its

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corruption. What did the researchers find? Yes, indeed. It was a sort of dark period

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in American history and a period in which there was a lot of particularly corporate

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corruption. The two researchers found four things. The first one is it is possible for

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a system to transition from one which is absolutely corrupt to one where corrupt behavior is seen

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as aberrational. So we can get out of this. You can get out of it. That is the bottom

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line. I think we as South Africans can take some comfort from that. The fact that we now

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find ourselves in a system which is systemically corrupt doesn't mean we will stay there forever.

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That was the first finding. The second finding I think is equally important for South Africa

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and that is that the change in the US was not a linear one. It was incremental. It was

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uneven and it was slow. Incremental, uneven and slow. So there was no big bang. There

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was no upward graph that just went from the left bottom to the top right. And again, I

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think that is applicable to us here in South Africa. We tend to think, you know, if the

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NPA loses one case, then that is the end of all action against corruption. And that is

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simply not correct. The third one is, if you want to have a systemic curbing of corruption,

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then you must be willing to put resources behind it. The idea that the smallest state

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gives you less corruption is simply nonsense in the view of the researchers. It is the

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opposite. What you in fact need is for more money, more resources, more power in the hands

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of the law enforcement agencies to curb crime and corruption. I don't think we have a particular

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problem with that in South Africa, except perhaps for budget cuts. You know, we must

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be careful not to go too far with that. And then the fourth and the last finding was that

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it is not just about having high profile prosecutions, arrests and prosecutions. It is also about

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systemic change in the rest of the civil service. It's about ongoing institutional reform that

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gives you more effective institutions. And I think this last one is particularly important

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for South Africa. And I focus this note on that point. It struck me so much that I thought,

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well, it is worth mentioning it and then worth writing about that, which is what we do here.

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What are the institutions that you see that are coming through, which we didn't know before?

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Two in particular stand out. Both of them were initiated in February 2019 by the president.

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The first one is the SIU Tribunal, Special Investigative Unit Tribunal. Now, you may

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remember the SIU started its life during Mr. Mandela's term as president. Legislation was

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passed towards the end of the 1990s. And it's basically a unit government agency that specializes

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in reclaiming money that was lost through corruption or maladministration. And they

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use civil proceedings. It's not a prosecutorial agency. It is a civil litigation agency that

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reclaims money lost through corruption or maladministration. Is it part of the NPA?

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It's not part of the NPA. It's part of the Department of Justice, but it stands next

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to the NPA. Now, as I say, this dates from the days of Mr. Mandela. The problem that

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developed over time was because it's civil litigation, the unit always had to go to the

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high court. Nothing wrong with that, except that the queues in the high court are very,

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very long. And in 2019, the president announced that he's creating a tribunal which will

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hear SIU cases. Now, what is a tribunal? It is simply judges of the high court who sit

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as a tribunal specializing only on SIU cases. So no other cases served before them, and

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they only deal with SIU cases. So the role is not so overpopulated? The role is not overpopulated.

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The only people that can bring cases to that role, or put cases on the role rather, is

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the SIU, the Special Investigative Unit. Now, it is noticeable that since this change was

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made in 2019 by way of government gazette and presidential proclamation, the activities

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of the SIU have picked up quite considerably. So we quote the numbers in the book, in the

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note rather, in 2022, the SIU recovered funds and assets to the value of nearly 6 billion

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Rand, and they set aside contracts to the value of 5.5 billion Rand. So if they go through

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Transat, for example, or through ISCOM or any other place in the public sector, and

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they find that there are contracts which were inappropriately awarded, they can apply to

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the tribunal to have it set aside, and in fact this has happened. So it has got nothing

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to do with orange overalls. People are not being prosecuted, but it has to do with getting

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back the money, the ill-gotten gains of the corrupt, and it certainly is having a great

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impact. So that's the first institution, was the tribunal that was created to assist the

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SIU. The second reform, civil service reform or institutional reform that took place was

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that also in 2019 the president created an investigative directorate. Now this is a unit

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inside the NPA, and they specialize just on state capture and corruption cases. Hermione

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Conier was the first director, you may remember. Unfortunately, she resigned after about two

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and a half years and left, and Andrea Johnson is now the head of that unit. Now what is

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important about the ID or the investigative directorate is that it is a prosecutor-led

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agency. So when they investigate a criminal case, unlike the SIU which do civil litigation,

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the investigative directorate does prosecution. So it's a criminal process. They aim to put

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people in jail. They aim to put people in jail or orange overalls. And the way that

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they do it is to have a prosecutor-led investigative teams. The experience is that the prosecutor-led

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institution is just more effective and efficient than one where the prosecutors are not involved

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from the beginning. We had that in the scorpions. Can the ID, are they stepping into those shoes

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or not quite? Yes, they are. Conceptually they are. But remember, their mandate is more

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limited. They are only mandated to look at state capture and corruption, whilst the old

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scorpions could investigate any case. But yes, it is in principle exactly the same thing.

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So in that sense, the scorpions are coming back. Now what is very important is that legislation

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is now before parliament. It was introduced in September to make the ID a permanent unit.

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When the president created it in 2019, he did so by way of a presidential proclamation.

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Now that implies you can also abolish the unit with a presidential proclamation. And

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you will recall that the scorpions indeed were abolished, not by proclamation, but by

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an act of parliament. Now to give more permanence to the ID legislation is now before parliament.

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To make them permanent, to give them the prosecutorial powers and investigative capabilities. And

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to appoint permanent staff. At the moment they must rely on staff seconded from the

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Department of Justice or the Saratoga Police Service or the Intelligence Service or from

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the Revenue Service to come and do work in the investigative directorate. This should

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also increase their independence. It will certainly increase their independence and

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it will give them more oomph. And they are now busy recruiting people on the basis of

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this permanence. Now I was just pointing out that in parliament there was a lot of criticism

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of the legislation. Not because anybody is against it or at least not the people who

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criticized, but they wanted more. They wanted the ID to be made a chapter 9 institution.

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My approach to this is that one must not make the perfect enemy of the good. And to delay

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the whole process and go through a constitutional amendment and in the meantime you leave the

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ID at the mercy of a presidential proclamation is as far as I'm concerned not good politics.

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Because to introduce them into chapter 9 of the constitution. Will require a constitutional

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amendment process which is much more onerous than just an act before parliament. In any

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case I think the mood has shifted a lot since the time that the scorpions were abolished.

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Remember that abolition was tested in the Constitutional Court. The court found it

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was okay. Well it found that it was legal. It found it was legal. Quite correct. It found

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it was legal and fitted in with the constitution. One doesn't know whether the Constitutional

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Court today would again make such a ruling. Now right now at the moment the ID is working

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on 97 state capture investigations. They have enrolled 35 cases in court involving over

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200 people or 200 accused. Amongst the accused you find senior politicians, civil servants,

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former CEOs and also companies, corporate institutions, corporate heavyweights like

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Tongard Hewlett's, ABB, McKinsey and others. And the ID has also secured restraining orders

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valued at over 7 billion rand. So while the cases are going on the money gets frozen so

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that it cannot be spent. I must point out that one of the biggest victories of the NPA

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is that in December last year they extracted a punitive fine from the international engineering

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company ABB for fraud committed at ESCOM. This was in addition to 1.6 billion rand which

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ABB paid back in 2020 already for fraud committed at ESCOM. So clearly you know it's an indication

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of how corruption is not just a one-way street. You need two parties to participate in corruption.

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And once again it is not uniquely South African. And it's absolutely not uniquely South African.

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Because this is a well-known international, good repute.

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It's Swedish companies. Yeah, absolutely. Then the third institution that has developed

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is the Anti-Corruption Task Team or ACTT for short and it's exactly what the title suggests.

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It is the bringing together of several branches of the state. The intelligence services, the

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police services, prosecutorial services and so on to oversee joint action against suspects

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in particular cases. And to date as a result of the existence of the ACTT 554 people were

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arrested and 142 of them have been convicted up to the end of 2022. It's a unique thing

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in the sense that these arrests and prosecutions were the function of coordination.

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So this is not, I think South Africans are a bit cynical about more task teams, more

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coordinating bodies etc etc. So you think this one actually works?

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Yeah, look it's really simple. I mean crime is evolving all the time and crime is getting

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better financed, it's getting better organized, crime is becoming more professional. So you

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can't have that development on one side and the other side you don't take steps to make

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the anti-crime agencies not also more professional and better coordinated and better integrated.

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You know the one must balance the other. So no I'm not cynical about it at all, I think

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it helps to balance the forces between the people who commit crime and the crime fighters.

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And SARS is also participating in this fight? Absolutely, SARS has scored a number of important

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victories. They're using lifestyle audits and they're now busy with an unexplained wealth

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initiative which is most welcome. There was a bit of a rampage a few months ago when people

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who want to take their money out of the country had to declare where the money came from and

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some people misinterpreted this perhaps willfully as an extra form of exchange control. It's

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got of course nothing to do with that. It's got to do with where does the money come from

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that you want to take out and that you pay your due taxes on it. It's as simple as that.

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So SARS is also upping the game which I think is very good. And once again that is not unique

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to South Africa. Friends of ours who wanted to get money out of the UK had to go back

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in their own history for about 15 or 20 years and declare where it came from. Absolutely,

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they had to explain to the British bank the origin of the funds that they had in the UK

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before they could repatriate it. I suspect the grey listing also has something to do

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with this but I don't have concrete information on that. The private sector is getting involved

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in many areas of our public life. Can they play a role in this? Yes, there are three

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areas in which the private sector on an organised basis is helping government. The first one

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is energy, the second one is logistics, ports and railway lines or railway operations rather

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and the third one is crime and corruption. And it's the crime and corruption that is

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important here. Now a couple of things, the private sector created a thing called the

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Resource Mobilisation Fund and there is some 100 million rand I think in there and from

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that fund they give help with energy, with logistics but also to the NPA on crime and

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corruption. So the partnership is not between the NPA and individual companies. I think

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that's very important. It is with this collective institution. So there is no one on one partnership,

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no individual companies and secondly... So no one can buy the NPA? No one can buy the

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NPA and secondly the assistance that the NPA can get is only in kind, it's not money. So

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for example qualified legal people can be seconded to the NPA to help with prosecutions

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and I think that's what will happen and we also know that the private sector is helping

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to resuscitate the forensics laboratory of the police which should have a big impact.

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So yes the private sector is showing up and having a partnership with government which

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should give some dividends. All of these are new institutions, new approaches, what's happening

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with what you call the old workhorses of the NPA in the meantime? Yeah I think it's important

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not to forget what is there and there are basically three of them that we can refer

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to. The first one is the asset forfeiture unit which investigates cases of organized

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crime and can seize assets, money, assets, the proceeds of crime after they obtain the

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court order. So they have to investigate a case, build it up and convince the judge to

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give them that order. Over the past five years the asset forfeiture unit has obtained 1630

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freezing orders to the value of 12 billion rand. It's quite a big amount of money, it's

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quite a big amount of money and again it indicates that it's not just about audience overalls.

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The asset forfeiture unit has got nothing to do with prosecutions but they have to do with

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going after your government gains and getting it back. The money gets paid into CARA, the

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criminal asset recovery account and I will talk about that a little bit more just now.

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But the second unit apart from the asset forfeiture unit is the specialized commercial crimes

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unit in the NPA and they pursue amongst other things corruption involving the state and

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state owned companies. What is interesting here is that they have got 87% conviction

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rate of all government officials that they have charged. I mean that is a very good number.

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The other interesting thing about specialized commercial crimes is that they obtained 52%

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more convictions of people from the private sector than from people in the public sector.

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So clearly it's not just people in the, it's not just public servants who put their fingers

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in a cookie jar. And on the other hand it's not just public servants who are prosecuted.

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No absolutely. The private sector does also come into it. Yeah more people in the private

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sector are prosecuted and found guilty. And then of course the biggest unit in the NPA

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is the prosecuting services and they deal with 850,000 cases per year. Now you know

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how much is 850,000 cases per year? Well it works out if you work on 250 working days

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it comes to about 5,550 cases per day or 700 per hour. Now the country is big and you have

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got many towns and regional cities and so on. But still think about that for one central

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service to handle 700 cases per hour. It is quite a big operation. It's quite a big operation.

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And therefore once again the point that we can learn from the Americans, you have to

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keep on putting resources into that. You have to keep on building those institutions to

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make them more efficient, help them to cope with bigger and bigger volumes. There's just

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no ways around that. The prosecuting service actually has a very good track record that

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I don't think people know about. Yes in the High Court their conviction rate is 90%, in

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the regional courts it's 82% and in district courts it's 95%. These are impressive numbers.

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Some people will probably argue they only take cases which they know they can win, but

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what does they do? They take cases which they know they will lose. Don't people watch law

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and order? Indeed. I think the bottom line of these numbers is once you are charged by

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the prosecuting service, it's better to admit and get it over and done with than to run

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the gauntlet with these kinds of conviction numbers. And then CARA, you said you talk

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more about that? Yes, CARA is the Criminal Asset Recovery Fund. Now monies that are expropriated

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by the Asset Forfeiture Unit and by the SIU go into CARA, into this Criminal Asset Recovery

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Account and then the money is reallocated to fight priority crimes and it is there for

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the benefit of the victims of crime. Now many billions of rands have already gone into it.

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Currently it's about 3.5 billion rand, 3.4 billion rand and that is earmarked for building

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forensic capacity and to fight illegal mining operations. So the money comes back and you

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can use it again. But a bit of a, we've now said that they are actually doing better than

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one thinks, but then your next heading is they cannot do it alone. Yes and I think this

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is a very important point. That is why the heading of the piece as a whole is it is not

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just a one person job. There are two institutions which are completely independent of the NPA

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but which really impacts on the NPA's performance. The one is the South African Police Service

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because they do, remember they do the investigations, they have to take the statements, they have

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to collect the evidence and the other one is the court system. Now the South African

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Police Service is, there is a ton of empirical evidence available from for example the Institute

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for Security Studies on how the South African Police Services has become a dysfunctional

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organization as their budget has increased and parliament has given them the money. As

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their budget has increased by more than 80%, their performance has actually gone down.

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So there is clearly a need for huge people and institutional reform in the police. I

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think it is a matter of common knowledge that the Crime Intelligence Service is not giving

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us the kind of information that one would like. So there is work to be done in the police.

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The president has taken the trouble to start both people and institutional reform in the

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police. It seems to be the next area of work has to be the police service. Likewise there

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is the court system. Now the court system is completely independent of the civil service.

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They have their own budget, their own personnel, their own head office even and they fall under

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the control of the Chief Justice. But you know the Chief Justice becomes the Chief Justice

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because he is a good legal person, not because he is necessarily a good manager. And there

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are numerous cases where our court system is just not functioning properly and more

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work needs to be done to reform that as well. So these two institutions, the police service

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on the one hand and the court system on the other hand, are as I say standing next to

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the NPA, independent of the NPA, but it influences what is going on in the NPA.

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A bit of a side issue, but I think something that people really worry about. Consequences

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after the July 2021 KZN riots. It's now two and a quarter years later.

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Yeah I thought it would be interesting to just follow up on that. And that's what I

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do here. And I just do a very superficial reference to both the January 6 attack on

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Capitol Hill in the United States in 2021. We had the President Atoll riots in July

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2021. And then of course in January 2023 there was the similar attack on the Capitol on parliamentary

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building of Brazil after Bolsonaro lost the election and Lula de Silva won. So you've

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got actually three of these cases that you can look at. And what I found interesting

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was that the first prosecutions in South Africa for KZN riots took place 14 months after the

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riots. In the United States it took exactly 14 months before the first people were convicted

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in court. You know now the Americans have got a formidable police and crime fighting

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machine. If it took them 14 months to get a prosecution, then maybe one can look at

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the KZN thing in a slightly different light. What have we actually done in KZN? Well we've

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seen 63 people charged up to date, until the date of the note, and 28 preservation orders

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that have been obtained by the asset forfeiture unit. For example one of them was a guy that

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was found guilty of commit of looting and creating damage. But he also lost his bucket,

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which was used to transport some stolen goods. So you know that's the role of the asset forfeiture

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unit. It's interesting to compare what we are doing and what the United States have done

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to Brazil. In Brazil the judiciary created what they called fast track courts to deal

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precisely with the January 23 riots. And they had their first case I think nine months after

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the riots took place. The riots took place in January and the first conviction was in

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September. So maybe it's something that we can learn from then in the spirit of institutional

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reform is to establish fast track courts for criminal for serious crimes like illegal mining,

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attacks on infrastructure, that sort of thing. That you get it through the court system much

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quicker and you can lock people up and claim their assets. So with all this data, so what?

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The first thing that strikes me is that we are not unique, number one. And number two,

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that as you said in the beginning, that the pattern internationally is that progress is

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incremental, uneven, slow. Yeah absolutely. I think those two points stand. I mean as

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we're sitting here talking, it is quite clear that some army generals, military elite in

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China is being prosecuted, locked up, whatever. We don't quite know. Even in Ukraine? In Ukraine

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there was a problem. So you know corruption is not a uniquely South African feature. And

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like those societies, we're fighting to move a system to a better place. And I think the

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other thing that you've already alluded to is the fact that the progress is incremental,

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uneven and slow. Forget about the quick fixes and quick solutions. There's no such a thing.

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You know some member of the commentary art said that the NPA or the investigative director

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should be involved in some 900 corruption cases. Well that simply doesn't have any

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contact with reality. You know the British have got an office similar to the investigative

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directorate known as the SFO, the Serious Fraud Office. It's older than the ID, much older.

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It's older than the NPA in fact. And it's quite a well-resourced resource company or institution

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rather. They've got 500 people working there. They limit themselves to about 100 cases at any

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given time. So the idea is specialized, focused, prioritized. Then you get the best results.

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And I think that's what one must bear in mind when we talk about let's just have prosecutions.

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But another so what that you lift up is that it's not just the institutions, it's also

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the people, the population that we must start seeing things in a different way.

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Absolutely. It's all about values. And what we learned from UN development is that value shift.

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Values are not permanent. And societies where they are permanent run into trouble.

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Now if you think about shifting values in South Africa, there was a time when the most wonderful

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people put themselves into contortions and twists to defend the inappropriate spending of the

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Kandla. Now it is a condition of the ANC that to run for office you can't have any serious charges

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against you. You know that is we've come a long way in a few years. And that process will carry

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on. That's how you move a system from one state to another. And the work that we're doing around

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institutions, around fighting corruption, around claiming money, reclaiming money and so on, it's

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all part of that process. And then there's as you say ongoing civil service reform but it has to go

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wider than the NPA. Yeah I think we've discussed that at length and don't have to but it's clearly

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a priority. It's clearly a priority the president must attend to. What about accountability in the

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private sector? I think that is an equally important point. We cannot shift the system away from

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tolerance of corruption while you have extensible corruption going on in the private sector.

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We hear about health professionals who fleece the system. We know about the advocates and lawyers

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who simply charge outrageous fees to the taxpayer. That kind of nonsense must also be taken up.

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It's about adherence to the rule of law and that can't be done by the NPA or even the government.

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It's the regulatory bodies in the private sector that must do that. The regulatory bodies for the

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legal profession, for the medical profession, for the auditing profession and so on and so forth.

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And it's corporates. It's corporates that mistake action against people who participate or

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assist in these processes. SAS is a very good pointer on that. They have prevented two or three

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deals that went ahead with the concurrence of big commercial banks. And when SAS brought tax claims

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and so on the deals fell apart. Now that for me is an indication of where the role should be played

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by the private sector. And then you end on quite a bleak note that there are new battle fronts in

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South African crime. Yeah look I think it's quite clear if you watch the news that organized crime

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gangs, illegal mining and extortion are crimes that are on the rise and that are causing havoc

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in certain communities. And obviously the crime fighting authorities must respond to that.

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So I think it's a fairly safe bet to say that once the ID legislation is passed by parliament

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and provided parliament provides money in the budget that we will get more IDs, more investigative

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directorates that will specialize on illegal mining, extortion, kidnapping and organized crime

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gangs. And that's the way that it should be. That's the way it should be and at least we are pursuing

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that. So it's not just a one-way street. I think that's the overall conclusion that I take away

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from doing this research and writing this note. There's a lot of pushback going on and all of us

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must climb in behind the pushback and help it. If you say it's not a one-way street what do you mean?

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Well what I mean is that you know it's not everything is done to favor the criminals.

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It's not that the criminals are running wild and getting away with things. The Guptas got away with

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her enormous amount of stealing and I'm sure a lot of that is still going on on the smaller scale.

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But the fact is the Guptas are no longer here. The fact is they're on the run. The fact is a lot of

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proceeds of corrupt activities have been confiscated either by the SIU or the asset

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forfeiture unit or frozen by the ID. So the money is being recovered and it's recycled into

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further crime fighting. So the battle is on and it's by no means lost. Thank you very much. Thank you.

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