EDITORIAL: Shifty Bain falls short of clarity
Its shifting stance will make South Africans question why they should take Bain & Co’s ‘independent’ investigation seriously
What is one to make of Bain & Co’s attempts to explain away its activities with the SA Revenue Service (Sars)? It’s been a slow-moving scandal that the company at some point looked to be in control of. The decision to voluntarily appear at the Nugent commission of inquiry and explain its work at Sars seemed to be a masterstroke, and reinforced the idea that it would at least avoid being another McKinsey, which found itself at the centre of corruption and mismanagement at Eskom. With its reputation in tatters, McKinsey was forced into an embarrassing mea culpa, eventually paying back almost R1bn.
But Bain’s strategy began to unravel very quickly during managing partner Vittorio Massone’s appearance at the commission, where he endured a torrid time, failing to answer some pretty basic questions. Then reports emerged that far from being an unwitting, perhaps naïve, cog in the capture project at Sars, Massone may have played a much more central and sinister role.
Considering the serious nature of the allegations which if true would mean Bain, or at least its representatives, took an active role in undermining SA’s democracy, this would seem to insult the country’s collective intelligence
The consultancy still hasn’t cleared up the question of whether Massone met former president Jacob Zuma in 2013 and 2014. But what’s on public record, based on his own testimony to the Nugent inquiry, is that he gave a presentation on Sars to Tom Moyane a year before SA’s voters and taxpayers had any inkling that the then prisons boss would take over what is arguably the most important institution of government, responsible for collecting revenue that’s needed to fund everything from welfare grants to health services.
Then on Sunday the company issued a statement in which it announced that Massone would be stepping down as head of the SA office and that it would return the R164m it had earned in fees from Sars “plus VAT and interest”. The bit about VAT is important.
It also said it would launch an independent investigation led by a global law firm to focus on “understanding the facts relating to people, processes and governance that resulted in us getting and accepting the work”. It accepted that “our engagement with Sars fell short of our operating principles”. So far so good.
But what we didn’t know then is that before we were even halfway through the week, there would be two “clarifications”. The first one related to Massone. In this case “stepping down” was misleading as he was merely stepping away from the day-to-day running of the firm. Far from being sacked, as the initial statement might have led reasonable people to conclude, he would “rotate” to another senior role at the firm in December, as previously planned.
This is a rather important detail to have been left out of the original statement. The implication of this “clarification” is that Bain has concluded that Massone has done nothing wrong and that a departure from SA would be nothing out of the ordinary and definitely nothing to do with his alleged contacts with Zuma and Moyane.
Considering the serious nature of the allegations which if true would mean Bain, or at least its representatives, took an active role in undermining SA’s democracy, this would seem to insult the country’s collective intelligence. Companies like Bain are said to hire only the smartest and the brightest. And one would assume therefore that most of them would have had a little bit of knowledge of SA’s history and the struggles and sacrifices it took to get the country where it is.
The company’s shifting stance will have achieved nothing more than to make the people of this country question why they should take its “independent” investigation seriously.
And then there is the VAT. Questioned on why Bain came to owe this when it surely should have been handed over to SA’s tax authorities at the point of sale, Bain simply updated the original statement and removed the reference to VAT. This may have been a typo, so we’ll give them the benefit of the doubt.
But if the company is to retain any semblance of credibility — not just here in SA as this scandal is likely to raise questions about how it behaved in other places — it will have to do a lot better.