Joburg man defends himself in court against the bank – and wins

Written by Ciaran Ryan. Posted in Uncategorized

Joburg court delivers crushing verdict against Sasfin bank

Joburg court delivers crushing verdict against Sasfin bank

Johannesburg businessman Damon Greville defended himself in the South Gauteng High Court this week against Sasfin Bank, which liquidated his 67 year-old business in 2012 and is now attempting to repossess his house. The judge found “substantive evidence” that the bank’s legal standing was in question after Greville presented evidence of securitisation and “contradictory” accounting by the bank.

Johannesburg businessman Damon Greville, whose 67 year old printing business was liquidated by Sasfin Bank in 2012, was this week gifted a victory in the South Gauteng High Court when his case was referred to trial.

The case is particularly interesting from at least one angle: Sasfin Bank pioneered securitisation in South Africa, and Greville claims that his loan has been securitised, thereby removing the bank’s legal standing to bring any action against him.

In addition to the securitisation argument, Greville says his debt to the bank has already been discharged. After accounting for payments already made from the sale of his company assets at auction, he says the bank now owes him close to R600,000.

The judgment handed down by the court could be a major victory for the “securitisation defence” as it has come to be known. Securitisation is the banks’ practice of bundling loans together and on-selling them to investors, though the banks continue to act as collection agents for the new owners, which is expressly forbidden in terms of Section 78 of the Banks Act.

Once securitisation has occurred, the banks – in theory – lose all legal title to these loans and cannot proceed against borrowers. This has been validated by case law overseas, but the courts in South Africa have tended to give the banks a free pass on this shadowy practice. This latest judgment is therefore a major victory for those arguing the securitisation defence.

Greville represented himself in court, presenting what the judge called “substantive evidence” casting doubt on Sasfin Bank’s legal standing in the matter. Greville provided evidence that his loan with the bank had been securitised, and was now owned by an entity called SA Securitisation Programme (HF) Ltd.

The judge also found discrepancies in Sasfin’s accounting. Greville claims that rather than he owing the bank money, the bank owes him. By his own calculations, the bank now owes him close to R600,000, but is trying to foreclose on his house claiming an outstanding debt of R333,000.

“I feel vindicated that the court found merit in my arguments that the bank had destroyed a viable business employing 24 people, when I provided evidence in court that Sasfin had securitised my loan, which means they don’t have legal standing in the matter. Now the matter must go to trial, which is a victory for me, as it means we can call bank officials to the witness stand and interrogate them.”

Greville adds that Sasfin sold his business’s assets for roughly 20% of their worth, and then tried to foreclose on his house. This was the point when he started to investigate the law and study up on securitisation.

In papers placed before the judge, Greville claimed not only that the bank’s accounting was bogus, but asked for R20 million for restitution and damages for the destruction wrought by the bank’s actions.

“What is heartbreaking is that the business has been around for 67 years, longer than Sasfin Bank. It was a viable and solvent business,” he says.

The Judge found discrepancies in the Certificate of Balance presented by the bank’s lawyers before the court. The bank, having previously liquidated Greville’s business and equipment, had applied to the court to execute on his house.

This judgment reads: “The Applicant (Sasfin) also decided to re-cast its case in its Replying Affidavit, thereby furnishing a new Certificate of Balance, which did not even reflect the name of the Applicant. In doing so, the Applicant went further to amend its Notice of Motion in order to cover the inaccurate calculations of the amount allegedly owed by the Respondents (Greville and Advance Printing). I must point out that although the Applicant in the new case that it makes out with Amended Notice of Motion, seeks to rely on the new Certificate of Balance, the order sought in the Amended Notice of Motion in relation to the date from which interest is to be paid, contradicts what is provided in the said Certificate of Balance.”

This amounts to a searing indictment of the case the bank presented to the court.

The battle is not yet over for Greville, who is asking the court to award him R20 million in damages for what he claims were reckless and unlawful actions taken by the bank that resulted in the closure of his business. The case should provide legal fodder for thousands of other South Africans under the threat of the banks’ knives.

The facts of the case are this: in 2008 Greville asked Sasfin to finance the purchase of a building to accommodate his expanding business, and the bank agreed. According to Greville’s papers before the court, Sasfin decided it would rather take its security on the plant and machinery of his business, Advance Printing, in preference to registering a bond over the factory property. It then seems the bank changed its mind and took out bonds on both the plant and machinery, and the factory building.

The finance agreement for the purchase of the building had suddenly turned into a lease for equipment, which was previously owned unencumbered by Advance Printing. This, says Greville, makes the loan agreement defective.

By 2011 the credit crunch was reaching its peak, and Nedbank withdrew Advance Printing’s overdraft facility. The business fell three months into arrears with its Sasfin debt. A meeting with Sasfin Bank seemed in order to resolve the matter. It seemed the only way out was to sell the factory building and plant so the bank could recover its money. So far, so good.

At this meeting Greville asked whether his loan had been securitised and, after a pregnant pause and much humming and hawing, he left none the wiser. He says he was then put under pressure to sign an irrevocable power of attorney authorising the bank to sell the property at auction “at a reasonable market related price,” and a reserve price of R1,75 million was agreed in writing and emailed through to the bank. In February 2012 Greville says he received an offer for R1,9 million for the building, which he rejected as too low.

Just a couple of months earlier a similar building directly across the road had been sold for R2.5 million.

On 6 October 2012 Greville was advised by Alon Berman of Sasfin Bank that the property would be sold for R1.6 million. Greville immediately protested, and fired off a letter to the bank revoking his power of attorney. The bank ignored this and went ahead with the sale anyway.

The factory equipment was also put up for auction. One item, a Fuji 65IIP printing machine was sold for R35,000 when Greville had a buyer lined up prepared to pay R120,000.

After liquidating his business and selling of his assets, the bank still claimed an amount of R348,000 from Greville and approached the court for an execution order on his house, “when in all likelihood they were aware that they (Sasfin) were in fact indebted to respondents in the amount of R383 625. Included in the applicant’s Notice of Motion they inadvertently inserted a Certificate of Balance in the name of the South African Securitisation Programme (HF) Ltd., giving prima facie and unrefuted evidence that the loan agreement had indeed been securitised,” according to papers before the judge this week.

The bank later tried to have this piece of evidence withdrawn. This, says Greville, is clear evidence that Sasfin no longer has legal title to his loan, because it has been on-sold to SA Securitisation Programme (HF) Ltd.

“On being challenged in the respondents’ Responding Affidavit, the applicant changed their claim to R333 131 and sought to withdraw and replace their incriminating Certificate of Balance.”

Greville says in his papers that as it is “impossible for the applicant to restore the respondents to their positions prior to the applicants fraudulent action, i.e. to reconstitute Advance Printing Company and put it back in business, and to re-employ the staff who lost their jobs, and to make up lost income.” He is seeking restitution and costs of R20 million, plus further damages.

I was liquidated over fictitious R7 million loan, says Durban businessman

Written by Ciaran Ryan. Posted in Journalism

In what must rank as one of the most bizarre legal cases in recent times, Durban-based businessman Ian Brakspear had his family business liquidated in 2009 for a R7 million bank loan he says he never asked for or received, writes Ciaran Ryan.

And, he claims the signature on the liquidation order that stripped him of everything he owns has been forged. It’s not just Brakspear saying that. The police and a top-flight forensic investigator agree with him.

Either he is a delusional – as the opposing attorney claims – or he has stumbled on something rotten in the justice system.

Brakspear, as you can imagine, is pretty angry at the unfortunate turn his life has taken of late. The R7 million which was supposedly loaned by Nedcor-owned Fairbairn Private Bank in Jersey to the Westley Trust, of which he was a beneficiary, is a complete fiction, he says.

“The loan never happened. It was all based on fraud. From start to finish. I’ve been cleaned out.”

Up until this point he was a reasonably wealthy man – a successful futures trader, and beneficiary of a UK brewing business established by his father.

He was doing alright. He once owned a beautiful 87ha wine estate in Franschoek, with the Ruperts as neighbours on the one side and Tokyo Sexwale on the other.

What could go wrong?

Well, as it turns out, just about everything. Today, Brakspear – having lost just about everything in the liquidation – is now under threat of losing his house and whatever else he still owns. He went from millionaire to pauper in the blink of a banker’s eye and was forced to send his mother to the UK where she now lives in a friend’s garage.

Declaratory order

We’ll get to how the liquidation came about in a minute. But let’s fast forward a bit. Brakspear is now seeking a declaratory order from the Durban High Court to determine whether a liquidation order based on a forged court registrar’s signature is legal and binding or null and void. If null and void, then he will apply to have the whole liquidation set aside. If legal and binding, he will then apply to have the liquidation set aside on the grounds that it was based on a fraud.

Should he succeed in his declaratory order, the ensuing damages claims against Nedcor and its subsidiaries should be large enough to melt a few faces at Nedbank’s head office at 135 Rivonia Road in Sandton. Even if he doesn’t succeed in the Durban High Court, he plans on taking the case all the way to the Constitutional Court. Nedcor’s attorneys say he doesn’t stand a snowball’s hope in hell, and are now preparing to sequestrate him.

How did Brakspear end up in this position?

This all goes back to 2008 when West Dunes Properties 5 (Pty) Ltd, the company set up to acquire the wine farm in Franschoek, was placed in liquidation. But let’s wind back the clock to happier times, around 2003, when money was seemingly plentiful and the property boom was in its infancy. The Franschoek farm – called Klein Normandie – came on the market, and Brakspear teamed up with some partners to acquire and develop the property. They approached Nedbank Private Bank to see if they could raise a mortgage bond, and the subject turned to offshore structures and how everyone was doing it. Brakspear already had an offshore trust, the Brakspear Trust, registered in the Isle of Man. These were the days when South Africans were being suckered into shady offshore structures they knew little about. Smooth talking bankers were parachuted in to Johannesburg and Stellenbosch to round up the suckers and ship their money abroad where they could be fleeced for outrageous fees.

Brakspear was persuaded to move funds from the Brakspear Trust in Isle of Man to Fairbairn Private Bank in Jersey. Noseweek covered the story in 2010, showing how convoluted was the structure set up by the bankers: “The bank would set up a new trust, the Westley Trust, which would invest the money in a specially created company on the British Virgin Islands, which would provide a bank guarantee to a South African holding company, which would borrow the money locally (using the guarantee) to buy the shares in another company, West Dunes Properties, set up to buy the farm.”

Brakspear had no idea what was going on, but he slept soundly believing he had the best bankers money could buy on his side.

When the bankers decided to fire the old trustees and replace them with trustees of their own, Brakspear didn’t bat an eyelid. He thought they knew what they were doing. After all, they were his bankers.

In anyone’s book, this is a disaster waiting to happen. Having bankers as your trustees while arranging bank loans and guarantees on your behalf….

“Yes,” concedes Brakspear. “I woke up too late.”

Disaster arrives

The disaster wasn’t long in coming. The trust secured a guarantee of £500,000 (then worth about R7 million) which made it possible for RMB to advance a mortgage loan for the wine estate. Brakspear later found out that his partners had paid R4 million more for the farm than they let on, and pocketed the difference. He eventually booted the partners, only to find that the farm itself was a black hole that swallowed money faster than it coughed it out again.

It wasn’t long before West Dunes fell behind on its bond payments, and RMB called up the R7 million guarantee.

It was all downhill from there. Brakspear attempted to sell the farm and rid himself of the headache. He found a buyer for R37,75 million – a good R18 million more than he paid for it. That would have been an elegant exit from an otherwise fraught business engagement, but then MD of Fairbairn Trust, Justin Thomas, let on to the buyer that this was a distressed sale.

Enter the vultures. The R37,75 million offer suddenly disappeared and RMB attached the farm and put it up for auction at R18 million. The same buyer who previously offered R37,75 million managed potentially to save himself R18 million simply by withdrawing his offer and picking up the farm at auction.

Brakspear’s UK counsel, Adv Philip Sinel, sums up his argument in a letter to the opposing counsel: “The first major falsehood put forward by the Fairbairn group was designed to produce some excuse for bankrupting West Dunes and thus preventing suit against the Fairbairn Group for damages consequent upon its breaches of trust.” (This relates to Justin Thomas’ cock-up wherein he let the buyer know the farm sale was distressed, thereby reducing the potential sale price from R37,75 million to R18 million).

And, Sinel again: “…the Fairbairn Group and its advisors have now invented an indebtedness by Westley to JAMBOT (the Brakespear family trust).”

What Sinel is saying is that the Fairbairn Group were terrified Brakspear would come after them for the R18 million loss in property value caused by Justin Thomas’ indiscretion. According to Brakspear, they then decided the best defence is attack: liquidate him and suck the oxygen out of his lungs.

Liquidation

ENS brought the application for liquidation in December 2008, brandishing an affidavit from one Nico Theo Botha, who purported to be chairman of BOE (a Nedbank acquisition) which, according to the Hawks, he most certainly was not. Botha claimed that Westley Trust had advanced the R7 million in June 2008 to West Dunes at the “latter’s special insistence and request” and that the loan was was due and payable in December 2008 and was now in default.

Brakspear was the sole director of West Dunes. He would surely have known whether or not he had asked for and received an amount of R7 million. This is where it gets murky.

“I was the only person who had the authority to bind West Dunes to any contractual obligation,” says Brakspear. “I had no knowledge of this loan, and West Dunes made no request for this loan, made no board resolution to authorise any borrowings or enter into a loan contract and absolutely did not sign any loan contract. These are the documents I have been asking to see for five years, plus proof of payment and bank statement depicting payment of this loan. To date I have received nothing. Zilch.”

There is no dispute that RMB called up a guarantee of R7 million on 5 July 2007 and the money flowed out of the Brakspear Trust via Fairbairn Private Bank to RMB to reduce the bank’s mortgage bond exposure on the wine estate. Brakspear had no problem with this – he wanted to get rid of the wine farm and reduce his exposure to the bank. But this money belonged to the Brakspear family trust. In other words, says Brakspear, it was family money. It was not a loan. The records show it was reflected as a distribution from the trust to Brakspear. When West Dunes was liquidated in 2008, this distribution suddenly became a loan that was owed to the bank. The liquidators of course have an entirely different view of this, and argued that there was indeed a loan that had been made, and that Brakspear is trying to fudge the issue with futile legal arguments.

That’s not your money, it’s ours

If this sounds all too weird and complex, hang in there. What Brakspear is saying is equivalent to a bank paying you out your own hard-earned money, and then coming back to you 18 months later and saying the money you took is not yours, it was a loan and now you better pay it back.

So where is the loan agreement? I visited the offices of ENS and spoke to attorneys Leonard Katz and Justine Hoppe, who represented Nedcor in this matter, and put the question to them.

I was shown a loan facility agreement made out by Fairbairn Private Bank in Jersey (later acquired by Nedcor) and Fairbairn Trust re: Westley Trust, reflecting the fact that a facility for R4 million had been made available. This was dated May 2004, and was in any event repaid by the Brakspear Trust on 30 July 2008. I was also shown a “guarantee and indemnity” in consideration for certain bank facilities made available to the Westley Trust by Fairbairn Private Bank. It was undated and unsigned by the Fairbairn Private Bank representative.

But still no loan agreement for R7 million.

“You do realise that loan agreements do not have to be in writing,” said Katz.

Huh? You mean a bank will lend R7 million based on a handshake?

Katz: “Is there a nice neat loan agreement that says here are the parties that on such a day the loan was (advanced)? No there’s not. We made a best assessment as lawyers where the contractual relationships lay. There’s no doubt in my mind that Westley Trust is a creditor.”

Brakspear is buying none of it. He has accused the Nedcor group of perverting the course of justice to secure a fraudulent winding up order.

Evidence

These are serious accusations against a bank with deep pockets, so Brakspear had better have some convincing evidence to back up his claims of fraud and skulduggery.

As it turns out, he does. Let’s start with the Hawks, the elite police investigations unit.

The first question we need answered is whether Judge Balton actually granted the provisional liquidation order in the Durban High Court on 23 December 2008. Here’s what the Hawks found:

Exhibit A: High Court stenographer and IT manager, Strinivasan Naidoo, claims in an affidavit presented to the Hawks that there is no record of the Brakspear liquidation case ever taking place in the Durban High Court on 23 December 2008. This was the date that the provisional liquidation order was supposedly granted. This order was made final in February 2009, and there is a transcript available of this hearing. But what actually happened in court on the day of the provisional liquidation hearing is hotly disputed. Naidoo says Judge Balton presided on other matters on that day, but not the Brakspear case.

(Katz says in his replying affidavit that the matter was heard in chambers by Judge Balton on 23 December, and the provisional liquidation order was granted that day. ENS typed up the order, as is common in such cases, and took it to the court registrar for signing, though he has no recollection of who signed.)

Exhibit B: Court Registrar Chetty who supposedly signed the provisional liquidation court order for the Brakspear case on 23 December 2008 confirms in an affidavit to the Hawks that the signature on the court order is not hers and has been forged.

Exhibit C: Forensic document examiner, Yossi Vissoker, says the signature on the court order is not by the hand of Ms Chetty and, after comparing it to her actual signature, adds: “the dissimilarities are shocking.” After examining several other court orders supposedly signed by Ms Chetty, he goes on: “The need to forge Ms Chetty’s signature wasn’t a once off occasion, but an ongoing occurrence in the court. The purpose of which is unknown to me.”

This in itself should set the entire Durban court system alight. Of course, it may be that other people in the office are signing on behalf of the registrar, but forging Ms Chetty’s signature?

It begs the question: how many liquidation orders with forged signatures have been issued by rogue elements operating out of the Durban court?

But wait, there’s more.

Exhibit D: An affidavit by Lt Mbhele, the Hawks’ investigating officer, states: “When the liquidation was eventually heard at the high court, it is clear that most of the documents have been created. The signatures on important documents are fraudulent and I base this on the statements of the responsible officials.”

The court officials interviewed by the Hawks found the documents riddled with flaws, while there is no record of the hearing ever having taken place.

There is no dispute that the lawyers actually turned up at court on the day of the provisional liquidation. Leonard Katz and Justine Hoppe of ENS were the appointed attorneys for Nedcor, with counsel Brendan Manca SC and Juliette Nicolson assigned the task of arguing the bank’s case in court. Brakspear’s attorney Fiona Scott and his appointed counsel Sydney Alberts also showed up.

What happened next is something of a mystery. Brakspear says he opposed the winding up order from the outset, and instructed his lawyers accordingly. If this is the case, his lawyers defied his instructions and sold him down the river. In an affidavit drafted last year, Brakspear’s then attorney Fiona Scott says she phoned her client from the court on 23 December 2008 to keep him apprised of developments and that “despite us opposing the merits, it would be to the advantage of West Dunes Properties to consent to the Order being taken….” This would mean the farm would no longer go on auction for R18 million, but could be sold to the Rupert-controlled company Applemint Properties 9 for a much fatter R25,2 million. Brakspear, after being briefed along these lines, consented to the order being granted, according to Scott.

No so fast, says Brakspear. “I always opposed the liquidation. I would never consent to a provisional liquidation that was based on fraud.”

But it was too late. Judge Balton granted the provisional liquidation order…or so it seemed.

Exhibit E: Does Judge Balton remember the case perchance? Apparently not. In a letter to Brakspear deputy Judge President Jappie says he spoke to Judge Balton and the registrar for Judge Gorven (who gave the final liquidation order) and neither recall hearing the matter.

I asked Katz about the accusation of the forged signatures on the court order, as alleged in the Hawks investigation: “It’s complete crap, man. Have you read the affidavit? It’s totally fucking illiterate.”

Katz further says it is not his responsibility to attend to court administrative issues. “If there’s something funny going on in the registrar’s office how can it be my fault?”

And: “There’s only one thing more delusional than Brakspear and that’s…Lt Mbhele’s letter, it is beyond belief.”

I put it to him that his paper trail in this case was not clean. “My paper trail is completely clean,” he fired back.

The Hawks investigators twice held meetings with Nedbank and Nico Theo Botha, the employee who deposed on behalf of the bank. Botha was represented by his lawyers at these meetings, according to the Hawks.

“I have found out that there is no copy of the request by West Dunes for a R7 million loan from Westley Trust in June 2008,” according to a statement from Lt Mbhele of the Hawks.

“There is no copy of proof of R7 million payment by Westley Trust Jersey to RMB in or about June 2008.

“There is no copy of receipt of R7 million by RMB in or about 2008.”

Further, the Hawks found no evidence that the Westley Trust had R7 million in the first place to lend to West Dunes, and – damningly – “there is no evidence that Nico Theo Botha was the chairman of BOE, no evidence that Nico Theo Botha had personal knowledge and could swear positively to the facts contained in the affidavit (presented in the liquidation hearings).”

What will an attentive judge make of all these facts? Brakspear attempted to have his case heard late last year, but the judge said his papers were missing. Another strange twist to this tale. Brakspear says they were not missing. “They were sitting all correctly filed in the senior court registrar’s office. Someone had created a file – what the registrar called a ‘dummy file’ and placed that dummy file in front of the judge. They tell me it is an old trick to delay the matter from being decided on. The Court Registrar, a Mrs Bothma, has got both the dummy file and the original file under lock and key and the offices of the Minster of Justice and Chief Justice have been notifed of this irregularity. ”

In any event he has since taken on a new attorney to help him get the case heard in an open court. He also plans to take on Fairbairn Private Bank (acquired by Nedcor) in the UK courts. This, after all, is where his trouble all started.

We await with interest the court’s deliberations on this rather fascinating case. Either Brakspear is delusional as the opposing attorney says, or has the bank attempted – as Brakspear alleges – to pervert the course of justice?

Watch this space….

View at source.

 

Mass civil disobedience over e-tolls could sink the ship

Written by Ciaran Ryan. Posted in Uncategorized

Despite the recent Supreme Court of Appeal victory for government over its plans to introduce e-tolls, the matter seems likely to go before the Constitutional Court. If this fails, mass civil disobedience will sink this ship, writes Ciaran Ryan 

Spare a thought for Nazir Alli, CEO of SA National Roads Agency, whose job it is to sell the South African public on the wondrous benefits of e-tolls.

The Supreme Court of Appeal (SCA) this week just tossed out the case launched by Opposition to Urban Tolling Alliance (OUTA) challenging the legality of the tolls, but Alli’s problems are just beginning. The Freedom Front has indicated it will challenge the SCA decision in the Constitutional Court, and OUTA will decide next week what action it plans to take.

At the very least, mass civil disobedience seems certain. OUTA says it may choose to defend any motorist who is charged for non-payment of the tolls. If SANRAL loses just one case, it is game over for e-tolls.

Not in 20 years has the South African government faced such committed opposition to a policy plan. The ANC voted in lockstep – and in complete disregard for the near universal opposition to this blighted plan – when it recently hammered through Transport Laws and Related Matters Amendment Bill, paving the for e-tolling. A few days later, OUTA lost its case to have e-tolling declared unlawful in the Supreme Court of Appeal.

Not a great week for the people of South Africa.

Still, there was Nazir Alli claiming the opposition to e-tolling is exaggerated, and that the SCA concurred with SANRAL’s claim that it had acted within the law.

Consider the following: in October 2007, barely a year after the Gauteng Freeway Improvement Project (GFIP) was conceived, SANRAL took out expensive advertisements in national newspapers inviting comment from the public, as it is required to do by law. It got a total of 28 responses. SANRAL could then claim that it had adequately canvassed comment from the public and so fulfilled its legal obligations in this regard. This in a country of more than 50 million people is somehow deemed by SANRAL to be adequate public consultation.

With that box now ticked, by 2010 it had moved on to the implementation phase, erecting 45 e-toll gantries across Gauteng, all in preparation for the April 2011 launch. Opposition to e-tolls was by now in full cry, led by OUTA, but supported by opposition parties, Cosatu, the ANC Youth League, business and civic organisations. The April 2011 launch date came and went. In fact, five launch dates have since come and gone. Now government is promising to launch before Christmas this year and as of this week, the freeway tariffs have started appearing on billboards across Gauteng.

In June of this year, the Presidential Commission for the Review of State-Owned Entities recommended that “funding for social infrastructure, including roads, should rely less on the user pays mechanism (ie. e-tolls) and more on taxation.”

In other words, the government’s plans to proceed with e-tolls contradicts its own policies.

As OUTA has pointed out, had government slapped a 9 cents a litre surcharge onto the fuel levy in 2006 when GFIP was first floated, this – together with the R5,7 billion allocated by Treasury to the project in 2012 – would have covered the entire R17,1 billion cost of the freeway upgrades, and there would be no collection costs.

OUTA further points out that roughly 30% of the e-tolling maintenance and operational costs will go to collection. Specifically, the European group Kapsch (what a great name) that owns the majority interest in the e-toll company, has said it will earn R670 million a year from the project.

The basis of OUTA’s case is as follows:

  • that SANRAL had clearly failed to conduct a meaningful public participation process before it decided to declare Gauteng’s freeways toll roads. The three million or so members of Gauteng’s road using public were not properly informed of SANRAL’s plans nor given the opportunity to participate in the decision at all, as is required by the SANRAL Act;
  • the Minister of Transport failed to properly consider the exorbitant costs of e-tolling that would be borne by the public when approving SANRAL’s plans to declare Gauteng’s freeways toll roads. The very person who had to safe-guard the public from an overly expensive scheme did not properly consider the expense of the collection process;
  • the enforcement of e-tolling would be practically impossible because of the sheer numbers of users of the GFIP. Gauteng’s courts and law enforcement system would be unable to deal with thousands of expected defaulters per month.
  • that the levying and collection of e-toll is a scheme that had not been introduced according to the law, and would violate the constitutional right of road users not to be arbitrarily deprived of property.
  • Last year OUTA launched a case in the North Gauteng High Court, which astonishingly decided that  the public consultation conducted by SANRAL prior to 2008 had been adequate. The Court failed to deliberate on the alleged unlawfulness of e-tolling. The matter was then taken on appeal.

“Astoundingly, the SCA in its judgment responded by refusing to consider and decide on the unlawfulness of e-tolling,” said OUTA in a statement issued today.  “Instead, the SCA decided the appeal largely on the technical basis that there has been too long a delay in challenging e-tolling. The property challenge was also dealt with on the basis that it was defeated by delay. In short, the SCA has said it is too late, and has closed its eyes to the fact that e-tolling may be unlawful.”

The government and SANRAL have interpreted the SCA judgment as affirmation that SANRAL’s public consultation was adequate. OUTA says the judgment makes no such claim. Road users still have no clarity on the lawfulness of e-tolling. Therefore, “it remains open to any citizen to lawfully decide not to pay e-tolls and defend his/her prosecution for failure to pay e-tolls on the basis that the toll declarations and the approval by the Minister of Transport of e-tolling was unlawful,” says OUTA.

“This we must stress, is a very positive implication of the SCA judgment for the rights of individuals.”

Perhaps the main argument against e-tolling is that it will bankrupt itself due to the administration costs of chasing up tens of thousands of unpaid bills each month. On this basis alone, it seems doomed.

OUTA has a couple of avenues open to it. It could take the matter to the Constitutional Court, but is seriously short of funds. Or it could defend a motorist charged for non-payment of e-tolls, or encourage a campaign of civil disobedience.

Either way, the e-toll saga is far from over.

View at source.

South Africa’s silent revolution

Written by Ciaran Ryan. Posted in Uncategorized

V_for_Vendetta_mask_-_20071024In 1990 John Kane-Berman of the SA Institute of Race Relations wrote a book called The Silent Revolution in which he detailed the extent to which apartheid was crumbling under its own weight. All former president FW de Klerk did was legitimise facts on the ground.

It was, Kane-Berman declared, a “silent revolution” where race and other laws were simply ignored. A culture of disobedience had taken root that no amount of enforcement could deracinate.

This is what happens when market forces collide with tyranny. What brought down apartheid was disobedience on a massive scale. “Ordinary people simply ignored the pass laws not because they deliberately sought to defy them but because they were seeking better economic opportunities in the towns,” says Kane-Berman. Disobedience, and fiscal bankruptcy, eventually sank apartheid.

When the regulatory over-burden becomes intolerable, people will ignore laws that inhibit their ability to survive. There are signs this is happening again. The culture of disobedience that the ANC so successfully implemented to make the country ungovernable in the apartheid years may come back to haunt it. For a start, take a look at electricity: it is reckoned that 10% of South Africa’s electricity generation – equivalent to 3,600 megawatts, or one full-blown coal-fired power station – is lost to non-payment or theft. That totals about R5,3 billion a year.

Then there is trade union group Cosatu’s call for civil disobedience should the SA National Roads Agency proceed with e-tolling in Gauteng. On this it has the backing of more than 10 civil society groups, including the SA Council of Bishops. The Democratic Alliance, too, has slammed the planned introduction of e-tolls. This is a litmus test for government – should it lose this battle, ordinary citizens will scent blood and demand cheaper petrol, electricity, phone charges, to name a few. The only way to give people cheaper anything is to free up these markets. What’s unique about the e-toll battle is that the opposition is highly organised, and it helped that Cosatu led from the front. If government loses this battle, it is on a hiding to nothing. Consumer activists will pounce on any number of grievances, from bank to fuel and call charges. It could get messy.

The culture of disobedience that sank apartheid has resurfaced in other ways. South Africa lost more work days to strike action in 2011 than any other country in the world, bar Canada, and the figure was likely topped by last year’s strike action. In 2010, 20,6 million days were lost to strike action, in which one million workers participated in 74 strikes. Many of these strikes were unprotected, or illegal (in terms of the Labour Relations Act). It is not known how many workers in these unprotected strikes lost their jobs, but probably not many. So, in the area of labour law, disobedience pays.

The informal sector is often seen as a convenient tax dodge by the Treasury. It has been suspected for years that small tax-paying businesses often liquidate and then re-surface as informal sector enterprises, operating below the tax radar. Hence, business liquidation stats – as indicative of the country’s economic health – are probably useless. The fact that they are falling does not necessarily suggest an economic recovery is underway, merely that the laundering of toxic credit from the system has run its course for the time being.

Then there’s the perennial headline “Tax evasion costs South Africa billions.” It gets trotted out every year whenever a new amendment to the Income Tax Act aimed at plugging loopholes is introduced. Finance minister and former SARS boss Pravin Gordhan, in 2011, lamented that in most countries, including South Africa, tax administrators were 10 years behind tax planners. So what we get is ever more complex tax codes on which tax planners have a 10 year head start. SA Revenue Services has taken to the airwaves with some emotional feel-good stories that shows our tax money is being put to good use, which at least softens the threats it standardly issues at those it feels are not paying their fair due.

For the truly big figures, you have to look at what fraud and corruption is costing the country: R100 billion a year, according to the Open Democracy Advice Centre in 2011. According to Business Day, the Public Service Commission recently published findings showing that financial misconduct in the public service had grown from R100 million in 2008/9 to R346 million in 2009/10 and soared to R932 million in 2010/1. The Public Service Commission estimates that financial misconduct in 2011/12 could exceed R1 billion. Yet, only 19% of officials found guilty of financial misconduct were discharged from the public service. The majority of perpetrators remain in their positions and often continue to commit financial misconduct, according to the report. So in the public sector, disobedience pays.

Not that fraud and corruption can be compared to protests against e-tolls, but it it is illustrative of a growing culture of disrespect for the law.

One need only look at recent history to understand the power of civil disobedience, which is nothing more than an expression of elemental market forces. The pass laws, for a start, had been ignored in many parts of the country since the 1970s. Hillbrow in Johannesburg by 1985 was widely acknowledged to be the most racially integrated precinct in the country. Landlords overlooked the Group Areas Act and rented properties to blacks, who were by then defying racial prohibitions by pouring into the cities in search of work.

Bantu education was another pillar of apartheid that crumbled under the weight of market forces. Wealthy blacks, in defiance of the laws of the time, had their children admitted to the best schools in the country. In some schools, 60% of the students in the 1970s were non-white. Schools openly defied the government, which threatened to withdraw registration of the offending schools. But its bark was worse than its bite. Eventually it introduced permits to replace blanket prohibition on the integration of private schools.

In fact, every pillar of the apartheid edifice had started to atrophy long before racial separation was abandoned as official government policy in the early 1990s.

The Influx Control Act was intended to keep blacks out of white areas. Recognising that such a law could not be enforced by mere edict, the National Party layered its imperial vanity with a host of race-based laws, such as the Natives (Prohibition of Interdicts) Act, the Natives Resettlement Act, the Population Registration Act, the Promotion of Bantu Self-government Act – all intended to strip blacks of citizenship and deprive them of recourse to the courts.

All told, it required more than 50 pieces of legislation to deal with the separation of the races, and nine more anti-terrorist and security laws to suppress rebellion. All this was quite a hefty burden on the treasury, and that’s before counting the billions of rands spent on creating self-governing homelands.

For all that, hundreds of thousands of blacks poured into Johannesburg, Cape Town and Durban. Throughout the 1970s and 1980s, the police were ordered to burn down illegal shanties and deport the inhabitants. The Riekert Commission was set up in the late 1970s to debate the wisdom of continuing with pass laws. Its final report in 1979 decided the pass laws should stay, but relaxed some controls on blacks already in the cities, while tightening restrictions on anyone else planning to move to the towns. The Urban Foundation mobilised the business community to lobby government not for relaxation of influx control, but its complete abolition. This was, says Kane-Berman, “probably the most successful business achievement in the dismantling of apartheid that South Africa has yet seen.”

It was the quiet, non-confrontational nature of this disobedience that allowed the government to turn a blind eye. A campaign of defiance intended to challenge the government’s hold on power might well have prompted a more aggressive response.

There are many who celebrate South Africa’s culture of disobedience, since it exposes the limits of government and creates a new morality that eventually translates into law or, better still, the abolition of laws that achieve the exact opposite of what they promise, as Simon Watson of the Ludwig Von Mises Institute SA recently pointed out. Disobedience occurs when government flagrantly violates market forces and the will of people to operate in a free and voluntary manner.

Original article here.

The surveillance state is fighting for its life

Written by Ciaran Ryan. Posted in Uncategorized

The surveillance state is terrified of this man

The surveillance state is terrified of this man

UN Secretary General Ban Ki-moon has criticised NSA whistleblower Ed Snowden for “misuse” of government data.

Excuse me?

What about the galactic-scale misuse of private data by the US National Security Agency (NSA) where Snowden recently worked?

South Africans should realise by now that all of their emails and potentially other electronic communications reside on a giant server somewhere in the US for possible scrutiny at a later stage. Try as you might to live an honourable life, that angry and ill-conceived email you wrote five years ago to a former boss or ex-wife could be dredged up some time in the future to paint you in a particularly unflattering light. South Africans should also realise that our own intelligence agencies standardly break the law by snooping without warrants, as the Mail and Guardian reported.

Some congressmen in the US are calling for Snowden’s arrest for treason, while Mr Apprentice himself, Donald Trump, thinks he should be assassinated. Even more shocking is the response from US media outlets, more concerned with investigating Snowden’s personal life than the staggering revelations of government abuse he has disclosed to the world (and, by all accounts, will continue to do).

Recently,  Spain, Portugal and France prevented over-flight of a plane carrying Bolivian president Evo Morales on the grounds that it was believed to be also carrying Snowden, which it was not. These same countries were quite happy to allow suspected “terrorists” to be renditioned (for torture) over their air space by the CIA, but not the president of a peaceful nation.

The surveillance state is terrified. It will not go down without a fight. A principle of investigative journalism: he who protests the loudest has most to hide. Bear that in mind next time you hear shrill defence of the surveillance state. Where is the evidence that any of this mass snooping has made us any safer, other than pompous assurances from self-serving intelligence apparatchiks? Civil libertarians have long arued that the state amplifies fears over terror and crime to arrogate unto itself greater and more draconian powers. Hence, the “war on terror,” “war on drugs,” “war on poverty.” Unwinnable wars, all of them, but unarguably noble and saleable to the gullible. To win these wars, the state needs access to our emails and phone calls. It needs to know where we live and where we bank, hence the ridiculous RICA and FICA laws.

But surely if you have done nothing wrong you have nothing to fear? That’s the standard argument of politicians and bureaucrats who sup at the trough of trashed civil liberties. The answer to that is: what about the presumption of innocence, embodied in common law for centuries? There is indeed a war going on here, but not the one we’re told. That war is between liberty and tyranny, between ruler and ruled.  It manifests itself in many ways, such as surveillance cameras, FICA, RICA, ID documents. We accept these encroachments as if they are normal, believing they somehow serve our interests.

What about the crime-fighting surveillance cameras in Johannesburg and Cape Town, or those placed in residential developments? That’s a matter for residents to decide, and on the face of it does not constitute an invasion of privacy. Grabbing your emails without permission certainly does. That’s private property, protected by the Constitution.

It’s time to turn the surveillance apparatus on those in power. These, after all, are public servants we employ and they have forfeited their right to privacy by acceptance of office. We have not.

Section 14 of the Bill of Rights entrenches the right to privacy:

Everyone has the right to privacy, which includes the right not to have :
a) their person or home searched;
b) their property searched;
c) their possessions seized; or
d) the privacy of their communications infringed.

Remember this any time you hear a politician or political lackey defend the right to snoop on your emails and phone calls, or to prevent disclosure of their misbehaviour. I’m all in favour of the press being accountable, of the Press Ombud, defamation laws and other remedies for those who have been wronged. The problem is the law is used aggressively by those in power to silence exposure of their wrong-doing.

Continues at source.

My brush with black magic

Written by Ciaran Ryan. Posted in Journalism

“Do you believe in black magic?” asked Tinus, a well-educated Ghanaian who has travelled abroad and now worked as an accountant for one of the larger companies in Accra.

“What do you mean?” I was a little stumped by this non-sequitor.

“In Ghana, we have bad people who cast evil spells so they can take away all your money, or steal your wife or your job.”

Tinus professed to be a devout Christian and I had visited his church with him in Accra, where he is revered as an elder. We had been working together on a gold concession that had produced handsomely for several months, until the gold suddenly dried up. I accepted this as an inevitable fact of geology, but Tinus was trying to convince me that I had been cursed.

“A preacher friend of mine contacted me this week and told me he had a vision. He knew we were mining gold, and that the gold had suddenly stopped coming. He is a man I have trusted for a long time. He told me that ju-ju men are taking the soil on which you walk and using it to make black magic, so the gold disappears and then you give up and walk away from the site. Then they will come and continue mining, so they can collect the gold you leave behind.”

The conversation was getting stranger by the minute. “Who do you think is doing this?” I asked.

“Frank, your foreman.”

“Frank! Impossible. He saved us many times from doing stupid things. Look,” I said. “I judge people by their actions and their results. Frank is the best thing that has happened to us. I cannot accept what you are saying.”

This had turned into a bizarre and somewhat alarming discussion, the intended effect of which was to poison me against Frank. I was aware of the petty jealousies that can sometimes arise between colleagues and co-workers, but this was a stretch too far.

“What I want to do,” said Tinus, “is bring a pastor with experience in these matters to reverse the spell that has been cast on the site.”

“Do what you want,” I replied.

The feticheur’s curse

Years earlier in Congo, while prospecting for diamonds there, I fell seriously ill with malaria and typhoid, losing 10 kgs in two weeks. My Congolese colleagues were convinced that I had been cursed. They regaled me with horrifying stories of feticheurs as they called them (witchdoctors) raining death and misery on their targets.

As my colleague Dominique told it, one man had approached a feticheur to solve his money problems. He was told to dig a hole in a certain pre-determined spot, wherein he would find an abundance of diamonds. Apparently all this worked out as planned. But the hapless individual, now rich beyond his wildest dreams, was told he should never again sleep on a bed. He had to sleep on the floor. Years later, while in the capital Kinshasa, he got drunk and was carried by friends to his hotel room. He woke up in the morning and, realising he was in a bed, had a heart attack and died on the spot.

Fantastic stories such as this keep alive the lore and mystique of black magic across Africa. In Ghana, the artisanal gold miners (known as galamsey) often turn to ju-ju to tilt the tides of fortune in their favour, but you seldom meet a successful galamsey. Success, in my experience, is more likely to favour those who prospect. The interest in black magic is still very much alive, though not nearly as robust as it was 50 years ago.

There are, however, some cultural peculiarities which are hard to explain. Luba women in Congo’s Katanga province are renowned as particularly faithful. If they are unfaithful to their husbands, Luba culture dictates that they may not return under the same roof as the husband, or else terrible tragedy will be visited on her, the children or the husband. In Mbuji Mayi, in Katanga province, there is a quarter housing unfaithful women who have deserted their families for fear of bringing disaster to their former homes. They often survive by prostitution, as if to confirm their diminished social status. I spoke to many Luba people about this, and there was no doubt in their minds that this cultural edict was so powerful that tragedy was certain if a Luba woman was unfaithful.

My conversation with Tinus sat uncomfortably with me for a few days until I could bear it no longer. Frank, in addition to being our foreman, was my friend. I discussed the matter with my Russian partner. We had noticed a change in Tinus’ demeanour of late, a kind of demonic greed that incubates and breeds in people of unsound mind.

What was Tinus’ plan? Did he want to cleave Frank away from us and then steal our mining equipment? My mind swirled with dark imaginings.

We decided to come clean with Frank.

Frank was outraged. “If God put the gold there, how can a ju-ju man take it away? If there is no gold there, it is because God did not put it there in the first place.” This was the sanest reading of the situation I had heard in weeks.

To accuse someone of witchcraft in Ghana, or anywhere in Africa, is no laughing matter. Frank reported the accusations to the chief of the village, who immediately summoned Tinus to account for his behaviour.

The village court

Tinus arrived the next day with wife and pastors in tow. To refuse a summons from the chief is likewise a serious matter.

The charges were read out against Tinus, his head bowed in shame.

One of our workers, it turned out, had spread the rumour that Frank had been involved in black magic for many years, that he had built his house over the corpse of a dead man, that someone else had died in one of his mining pits, and that he had invoked ju-ju spells on our mining site.

The chief turned to the worker from whence the rumour sprang: “When you first came here, your words were sweet. Now they are so bitter. Why is that?”

The worker, let’s call him Kweku, sat in stunned silence at the charges levelled against him.

The chief continued: “I myself am an elder of the Pentecostal church here. It was I that blessed Frank’s house when he started to build. Where did you get this information about black magic?”

Kweku denied emphatically that he was the source of the information.

The chief fired back: “I have a witness standing outside that I can call that will say you started the rumour.”

Kweku, Tinus and his wife Abigail suddenly fell to their knees to beg Frank for forgiveness.

Begging for forgiveness in Ghana is an admission of guilt.

Frank asked the supplicants to rise from their knees and in ceremonial flourish, granted them forgiveness.

A little later it was reported to us by a security guard at the site that Tinus had despatched two pastors to conduct their rituals to undo the supposed curse.

“Now the gold will appear,” proclaimed the pastor.

Emboldened by the pastor’s divine assurance, Tinus immediately shipped a dredge to the site to claim the gold he was promised would appear.

Our relationship with Tinus had soured beyond repair, so we watched events from a distance.

The daily tally of gold recovery was reported to us by our security personnel: one gram, two grams, four grams. Barely enough to pay the diesel to operate the dredge or pay the workers.

“They have failed totally,” laughed Frank, as we sat one evening to discuss the episode. “I told them that if God did not put the gold there in the first place, then they will find nothing. And so it is.”

And so it is.

Riot alert: look out Argentina, South Africa, Turkey and India

Written by Ciaran Ryan. Posted in Journalism

If history teaches us anything, it is that inflation usually ends in violence.

The Johannesburg-based economic research house ETM Analytics, which has a strong Austrian bias, puts out a monthly “riot alert” based on the speed with which countries are debasing their currencies. It has been scarily accurate in predicting where trouble is most likely to erupt.

The research shows that those countries printing money the fastest are also those experiencing the most social unrest. ETM measures inflation in terms of the Continuous Commodities Index (CCI)*, which reflects inflationary trends almost immediately on the basis that monetary expansion debases the currency and increases the prices of commodity imports such as fuel and food.

Look who’s on the danger list: the world’s worst monetary abusers

 

 

 

Continues at source….

 

 

 

Proof that inflation leads to violence

Written by Ciaran Ryan. Posted in Journalism

inflationNEW research appears to show a direct link between inflation and South Africa’s social violence. In the months before the Marikana massacre, in which more than 30 miners died, there was a spike in nondiscretionary inflation — the inflation the poor experience — from 3% to more than 10%. The same is true of the xenophobic attacks in 2008. Just before these attacks, nondiscretionary inflation surged to 20%. The recent violence in Sasolburg was also preceded by an acceleration in inflation.

Chris Becker, an economist with ETM Analytics, which produced the research, says SA could be headed for a world of trouble based on recent trends in the inflation rate experienced by the poor.

The consumer price index (CPI) averaged 5,6% last year, while average nondiscretionary inflation was 6,1%, spiking to 10,3% in October. The difference between the two inflation rates may appear marginal, but it is the volatility of nondiscretionary inflation that seems to be causing the trouble.

Nondiscretionary inflation hits the poor hardest. It is more volatile than the CPI, which is smoothed by the inclusion of items such as mortgage and technology costs. Taking these discretionary or luxury costs out of the calculation, ETM came up with what it calls nondiscretionary inflation.

 

Continues at source:

 

Apartheid’s social engineers are still among us

Written by Ciaran Ryan. Posted in Journalism

Apartheid Museum 4 by Alejandro Gabriel Alonso

Social engineering gone mad
Photo: Alejandro Gabriel Alonso
Flickr.com

More than 20 years have passed since Nelson Mandela was released from prison, yet many – if not most – South Africans still labour under the falsehood that apartheid was a kind of Frankenstein creation spawned by Puritanical Afrikanerdom.

It was anything but. Scholarship on the origins and ideological praxis of apartheid has tended to focus on the political rise of the National Party in the years leading up to 1948 as a kind of spontaneous flowering of racial hatred directed at black South Africans. Unless we search for the truth behind this terrible chapter in South Africa’s history, schools will continue to spout half-baked slogans as a substitute for actual history. That would be a pity.

One need only read pre-apartheid South African history to know that racial harmony was fairly common in many parts of the country where government influence was weak.  Lawrence van der Post in Lost Sands of the Kalahari writes that he never witnessed apartheid in practice until he visited Natal as a young man in the early 1900s. Throughout much of the 1800s, commerce, trade and even inter-marriage between black and white was fairly common in areas such as the Eastern Cape.

Yet it remains true that most groups do practice some form of discrimination, however benign, in favour of their own. Muslims and Jews prefer to marry within the faith, though even here the tendency is towards assimilation.

Apartheid, however, was something entirely different. It was an effort to define a person’s identity in terms of racial science – hence, the ridiculous “pencil test” in the hair to determine whether a South African was black or white.

The story of apartheid is one of racial science. Most South Africans have heard of Hendrik Verwoerd, who is generally credited as the architect of apartheid. He left for Germany in 1926 to study at the universities of Hamburg, Berlin and Leipzig, around the time that Nazi ideology had congealed around the failed artist, Adolf Hitler. Verwoerd was swept up by the radicalism of the Nazis though – and there is some dispute about this – he distanced himself from the Nazi obsession with racial genetics. He saw no real biological differences between the races, believing environmental factors were behind the “development of a higher civilisation by the Caucasian race,” as historian Herman Giliomee points out in his recently published book The Last Afrikaner Leaders.

Though born in the Netherlands, Verwoerd was an Afrikaner nationalist, obsessed with solving the problem of the “poor white,” which was a legacy of the Great Depression and the ingress of cheaper, black labour to the mines. He resolved to leave his mark upon this world with his grand scheme of racial separation as a kind of grotesque monument to the Old Testament. Giliomee believes Verwoerd was singled out for demonisation by the ANC, but was quite favourably received elsewhere.  “A week before his death Time magazine described him as ‘one of the ablest white leaders’ Africa has ever seen. The Financial Mail published a special edition, entitled ‘The Fabulous  Years’ on the period 1961 to 1967, when South Africa grew by 30 per cent in real terms,” writes Giliomee. “There are many misconceptions about Verwoerd. It was not his stance on apartheid that won him staunch support among Afrikaners but his unexpected success in winning a republic. In private he was remarkably flexible about apartheid.”

Giliomee does not dwell much on the cult of racial science, perhaps assuming that its role in shaping Afrikaner politics in the last century is over-stated or now irrelevant.

Szasz and the myth of mental illness

Written by Ciaran Ryan. Posted in Journalism

In 1961, the late, great Thomas Szasz wrote a book called The Myth of Mental Illness.

He followed this classic with several more, notably The Manufacture of Madness and The Therapeutic State. He was a brave man, viciously attacked by his psychiatric colleagues in the 1960s and 1970s, but he persisted with his exploration of truth and liberty. Szasz was born to Jewish parents in Budapest in 1920 and moved to the US in 1938. He studied medicine and psychiatry, and served two years in the US Navy in the 1950s.

What is astonishing about Szasz, like the Polish-born author Joseph Conrad, was his mastery of the English language. Szasz spoke not a word of English when he first arrived in the US (Conrad only learned English in his twenties when he moved to the UK). It was the author Bertrand Russell who alerted Szasz to “the beauty and power of incisive and unpretentious English prose.”

Szasz, who passed away last year, was a frightening adversary in debates, and few colleagues dared take him on. He was funny, caustic and ridiculed the absurdities of modern psychiatry: “If you talk to God, you are praying. If God talks to you, you have schizophrenia.”

He averred that psychiatry was unique among all professions in its capacity to commit people who have done no wrong to insane asylums by way of involuntary commitment (imprisonment). As such, it should more properly be labelled a branch of law than medicine. He was not against psychiatry per se, only what he called coercive psychiatry.

Szasz punctured the bloated pomposity of modern psychiatry by exposing its lack of scientific rigour. He coined the term “therapeutic state” to describe the control the state has assumed over one’s body, including the prohibition on self-murder. Suicide, he declared, is the most basic human right, as is the right to ingest psychotropic drugs or battery acid. Not that he advocated these positions – he was all about personal responsibility for one’s own decisions, good, bad or dangerous.

Szasz did a wonderful job of documenting the absurd history of this pseudo-science. Benjamin Rush, the founding father of American psychiatry, declared negritude (having a black skin) a disease, a form of leprosy. Fast forward 200 years and homosexuality became the disease du jour of the psychiatric movement. Fast forward a couple of decades, and kids fidgeting in class were labelled ADHD, drugged and zombified.

“Psychiatry…attached medical-sounding labels (“diagnoses”) to certain unwanted behaviours, exemplified by masturbation and homosexuality. Then, conflating diagnoses with diseases, they claimed to have discovered new brain diseases (Szasz 1991). In fact, they did no such thing. Instead, they medicalised human problems traditionally perceived in religious terms, transforming sins and crimes—such as self-murder, self-abuse, and self-medication—into sicknesses,” wrote Szasz.

This is where his forensic approach to language was brought to bear with such powerful effect. Like Voltaire, he demanded that the terms being used be properly defined.

There is no such thing as mental illness, declared Szasz, since it fails the standard scientific test for disease, as established by the German physician, Rudolf Virchow (1821-1902), the originator of cell theory: a disease is a bodily lesion, objectively identifiable by anatomical, physiological, or other physicochemical observation or measurement. In other words, for an illness or disease to be present, it must be observable at an anatomical level, such as under a microscope.

Cancer, pneumonia and tuberculosis all meet this test. Schizophrenia, bipolar disorder and Attention Deficit Disorders do not. These are simply forms of “misbehaviour” that psychiatrists have labelled and medicalised.

In fact, no mental “illness” satisfies the standard definition of disease. As pointed out by psychiatrist Peter Breggin, author of Toxic Psychiatry, there is no such thing as a chemical imbalance in the brain unless one starts taking anti-depressants or anti-psychotic medication. None of the hundreds of other disorders from the Diagnostic and Statistical Manual (DSM), which is the psychiatrists’ billing bible, meet the standard definition of illness.

Psychiatry hated Szasz for pointing this out.

In the space of a few hundred years the world has moved from theocracy to democracy to pharmacracy, he wrote. In times past, when people felt depressed, they talked to a friend, priest or doctor. Now they get prescribed anti-depressants. As Breggin points out, the most dangerous time is when you are first put on these medications, and then when you try to get off them. The withdrawal symptoms are horrendous. In Toxic Psychiatry, Breggin explains what happens: “Combining antidepressants [e.g., Prozac, Luvox] and psychostimulants [e.g., Ritalin] increases the risk of cardiovascular catastrophe, seizures, sedation, euphoria, and psychosis. Withdrawal from the combination can cause a severe reaction that includes confusion, emotional instability, agitation, and aggression.” Add to that suicidal thoughts and potentially violent behaviour.

All this is relevant in light of the recent mass shootings in the US. Virtually all shooters of the last decade have been on “therapeutic” levels of psychiatric drugs, something the mainstream press has belatedly recognised.

Tragic though these killings are, Szasz would at least be satisfied that psychiatry is at last getting the kind of spotlight it deserves.

Jon Rappoport over at lewrockwell.com spells this out brilliantly.