Reality:

• Bain did not have a full picture of what had transpired at SARS until after the Baker McKenzie investigation of SARS was completed in December 2018, after our testimony to the Nugent Commission. This hindered Bain’s ability to answer questions from the Commission in 2018. We apologised to the Nugent Commission for this at the time. View document
• We now know that Massone displayed poor judgement in the way he attempted to build Bain South Africa’s government practice.
• After an exhaustive review, we are confident that while he behaved inappropriately, his behaviour was in no way criminal. Paragraphs 55-61 of Stuart Min’s affidavit to the Zondo Commission provide detail of how that review was conducted.
• Following the conclusion of the Baker McKenzie investigation, we proactively reached out to relevant authorities, including the Directorate for Priority Crime Investigation (DPCI), the National Prosecuting Authority (NPA), and the Investigating Directorate established in the office of the NPA to offer cooperation. Bain also offered to consult and discuss matters with the Zondo Commission. In most cases Bain received no response at all to any of these letters. Paragraphs 94-103 of Min’s affidavit describe Bain’s outreach; copies of all outreach letters and responses are here.
• We remain ready to work cooperatively with any authority that approaches us and welcome the opportunity to clear our name.

Zondo Commission:

• Bain cooperated with the Zondo Commission: we offered documentary evidence to the Commission’s investigators and evidence leaders, provided affidavits as and when requested, and even offered a meeting with our legal representatives. The Commission did not take up our offer of a meeting. View document 
• The Zondo Commission never approached Bain to provide witnesses. The Commission requested answers to questions, which we provided. Although Chairperson Zondo informed our counsel that we would have to produce a witness to support our motion to cross-examine Athol Williams, Bain had already decided to withdraw the motion to cross examine. It was apparent that no cross examination was necessary because Williams already admitted to having no first-hand knowledge (Williams was not an employee of Bain at the time of the SARS work) and it was already clear from his own words that most of his “evidence” was opinion-based and speculative.

Nugent Commission:

• Our attempts to cooperate with the Nugent Commission in 2018 fell short of expectations. Bain did its best to cooperate with the Commission, but what we did was not enough. We directed Massone to appear before the Commission and to provide all documents and affidavits requested. After his first appearance before the Commission, Bain began to doubt the truthfulness of his testimony. As a result, he was advised to obtain his own legal representation separate from Bain.
• Bain submitted all documents requested by the Commission. Judge Nugent informed us that our documents would only be acceptable if we also brought forward a witness to provide oral testimony before the Commission. When Massone left South Africa claiming ill health and returned to Italy without any advance consultation with Bain, there was no obvious candidate to take his place.
• Bain SA did its best to comply with the Commission’s requests, but we as a firm were still trying to discern exactly what had happened at SARS. The Baker McKenzie investigation was launched concurrently. The only person with direct knowledge of the meetings with Zuma and Moyane was Massone, who took no notes. On 25 September 2018, Bain’s General Counsel Stuart Min testified voluntarily before the Nugent Commission in Massone’s place. Min did not have personal knowledge of the SARS issues under investigation and was criticised for his inability to answer many of the Nugent Commission’s questions.
• As a result of this, Bain concluded that putting up further witnesses with no personal knowledge would further frustrate the Commission. While we answered documentary requests, we declined to provide more oral testimony because we had no witnesses with personal knowledge of the material facts that Nugent had sought clarification on. Other employees were involved in certain aspects of the SARS work, but the written affidavits of Fabrice Franzen and Stephane Timpano demonstrate that they attended few meetings with Moyane and no meetings with Zuma and lacked the level of detail required.
• In hindsight, we realise we were wrong. Despite our best efforts to cooperate, not providing further witnesses created the appearance of non-cooperation. We should have offered testimony from those who worked with Massone on the SARS work even though no one else had the same level of first-hand knowledge.

Reality:

• From the Baker McKenzie investigation, we know that between August 2012 and 2014 Massone attended approximately a dozen meetings at which Jacob Zuma was present. Most of these meetings involved other senior and well-respected South African business leaders and as explained by Massone, were aimed at supporting the government to formulate and execute policy over a broad range of areas, such as information and communications technology policy, energy, infrastructure deployment, entrepreneurship, and supporting delivery of the government’s National Development Plan. Only Massone attended these meetings—no other Bain employee was present.
• No new business came from these meetings.
• We were aware that Massone was meeting with Zuma to build Bain South Africa’s government practice, but Massone’s failure to involve others at Bain in these meetings meant we were not aware of the number and frequency of their meetings until the investigation painstakingly pieced together all the available evidence by reviewing vague calendar and diary entries, interviewing Massone’s driver, and cross-referencing expenses and travel logs.
• In 2018, after media allegations surfaced, Baker McKenzie and Bain conducted a thorough review of Massone’s electronic devices. All materials identified that related to any meeting at which Zuma may have been present were provided to the Nugent Commission as part of our efforts to be transparent and to cooperate with the Commission. The evidence which is available in the public domain exists solely because we uncovered and publicly disclosed it.
• Massone’s poor record keeping of these meetings has allowed room for speculation.  For example, even though Athol Williams acknowledged he had no first-hand knowledge of the meetings with Zuma, in his testimony before the Zondo Commission he was allowed to “express my guess at what might be happening” at these meetings. Williams’ entire testimony is full of dozens of similar examples of admitted speculation such as “in my mind”, “in my opinion” or “my interpretation”. There is simply no factual evidence to support these kinds of speculative assertions that were made before the Zondo Commission. Our statements to the Zondo Commission on this topic are in paragraph 88-91 here.
• Bain has subsequently implemented a policy requiring at least two Bain attendees and contemporaneous notes at any similar meetings.

Reality:

• It is clear we made some serious mistakes leading up to and including our engagement with SARS. We erred in our judgement in taking on a piece of work which contributed to damaging a critical public institution.
• While we made mistakes in our work with SARS, we remain confident that we did not in any way wilfully or knowingly set out to weaken or destroy SARS, nor support state capture at SARS or elsewhere:
  • Bain retained Baker McKenzie to conduct a privileged investigation in connection with the contracts awarded to Bain by SARS between 2015 and 2017, with a focus on the allegations and questions that arose from testimony given before the Nugent Commission. Baker McKenzie’s investigation was comprehensive and thorough, and “no evidence of any intention by Bain to destroy or undermine SARS was identified.” View document
  • The Nugent Commission extensively reviewed all of Bain’s work for SARS and did not conclude that Bain SA was motivated by a desire to weaken or damage SARS. Instead, while Nugent harshly criticised Bain SA for the support it provided to Mr Moyane, he concluded that Bain and Mr Moyane acted “each in pursuit of their own interests that were symbiotic, but not altogether the same. Mr Moyane’s interest was to take control of SARS. Bain’s interest was to make money.” View document
• We kept working at SARS even as it became clear that the SARS leadership had a different agenda than ours. We should have walked away instead of seeing out our contract through March 2017. Failing to walk away was a fundamental error and in doing so we failed to live up to our core operating principles and values.

The Zondo Commission’s final report suggested that Bain’s role at SARS was “unlawful”. Although it did not specifically state the basis for this statement, it did say that: Bain “colluded” with SARS in “flouting the procurement legislation” by extending the Phase I contract instead of issuing RFPs for Phase II and III contracts. It also said that SARS found a way to extend Phase II and III contracts to Bain by making Bain a “single source provider” which is “an unlawful use of the deviation provisions”.

Reality:

• The Zondo Commission has made many specific recommendations for prosecution in relation to many other parties, but no such recommendation was made in relation to Bain. Bain made mistakes in procuring the SARS work. Massone had advance notice of both Moyane’s appointment as Commissioner of SARS and an upcoming request for proposal (RFP). A Bain partner produced a draft of the Phase 1 RFP, although to our knowledge, that draft was never used by SARS, and the final RFP was significantly different. The presence of Jonas Makwakwa, a SARS employee, at meetings prior to Moyane’s appointment as Commissioner should not have been tolerated. These mistakes are embarrassing, but not unlawful.
• Our investigation found no evidence that the SARS RFP process was manipulated in a way to exclude other bidders or specifically advantage Bain. Bain competed for the bid award alongside other candidates pursuant to a competitive tender process and, on 26 January 2015, SARS awarded Bain the contract based on its competitive offer (a discount of 50%) and strong references. View document
• The email correspondence shows that Bain had no intention to receive SARS work, or extensions, outside of normal procurement processes. Bain participated in all procurement processes as they were outlined by SARS. View document 1 | View document 2 
• The obligation to ensure that proper procurement processes are followed sits with the government agency—in this case, SARS—and not the service provider, and there is no evidence that Bain colluded with SARS to undermine that process. Baker McKenzie asked SARS for additional information regarding the procurement process which only SARS had access to, but SARS never responded to the request. View document
• Baker McKenzie sent a letter to the Zondo Commission to state that the investigation found no evidence of illegal behaviour by Bain or any attempt by Bain to undermine the operation of SARS. View document

Reality:

• As office head of Bain South Africa, Massone had a great deal of autonomy. An office head is normally expected to serve as a check on questionable client development activities, but in this case Massone was the SARS client head, the architect of Bain South Africa’s government strategy and the office head. This combination calls for more active global oversight than in other situations where either the office head or client head can perform the required degree of oversight. This was a significant governance lapse, and we now require independent oversight of any government or public sector client where the local office head is also the client head leading the engagement.
• While there is no evidence that Massone’s decision to hire Ambrobrite as a paid third-party consultant to advise him on business development with the South African government was done for illegitimate purposes, it is nonetheless a good example of this governance failure. He did this without seeking prior approvals. Senior members of Bain’s Finance, Legal and Marketing teams only became aware of the contract after it had been signed and, while they raised objections, Massone dismissed their concerns. The local leadership team also objected to and raised concerns about this contract as well as his overall business development approach with government. These concerns were dismissed. Massone gave misleading reassurances to the head of his region, who then allowed Massone to proceed. This was wrong, and our new Global Risk function ensures this would not be possible at Bain today.
• As part of our remediation efforts to ensure that we do not repeat our past mistakes, we have put in place a new global policy in relation to third-party advisers.
• Since the events at SARS, we have established a Global Risk Function, independent of line leadership and accountable to our Board of Directors. We also established a South Africa Oversight Board, which provides risk oversight of client and project selection, scrutinises project outcomes for value, and offers advice to Bain South Africa’s partner team on corporate responsibility.
• While Bain’s global management team was not complicit in Massone’s activities, it takes responsibility for his actions. In hindsight, it is clear the firm trusted Massone and failed to carry out the required management oversight. Numerous red flags were missed. We got it wrong.

Reality: 

• In the last 10 years, the sum of all government work at Bain South Africa was R196 million across five entities, approximately R161 million [>80%] of which was our work with SARS from 2015-2017. The SARS fees were repaid in full plus interest in 2018. The balance of Bain’s work, excluding SARS, amounted to approximately R35 million.
• As has been reported in the media, Bain has also supported Telkom, which is 40% government owned, on several initiatives between 2013 and 2018. This period is generally considered a success for Telkom and its profits grew from ZAR 7bn to ZAR 11bn during this time.
• Bain has had no connection or involvement with the Guptas, or any other entities identified in the media as related to the Gupta family, at SARS or elsewhere. No evidence exists whatsoever of any business transactions concluded with, or through, the Guptas or anyone associated with them. Bain was approached by Trillian in 2016 around potential work at Transnet and decided to have no partner relationship – informal or formal – with Trillian. This has been previously reported in the media. Bain & Company’s submissions to the Zondo Commission on this topic are available here. See paragraphs 92 – 93.
• Bain has never worked for Eskom, Transnet or Denel.

Reality:

Bain paid back all fees in full, plus interest, for our work at SARS on 16 November 2018.

The full set of documentation showing when and how Bain repaid the fees is here.

The Zondo Commission’s final report stated that Athol Williams “rejected numerous attempts from Bain & Co to give him large sums of money in return for his silence”.

Reality: 

• Athol Williams rejoined Bain South Africa in June 2019, after he completed his oversight role of the Baker McKenzie investigation. In the report he shared with Judge Nugent, he did not cite evidence of unlawful conduct or of a "grand scheme" of state capture involving Bain. To the contrary, he said, "From what I have seen and heard, understanding their motivations, Bain was not party to the macro-plan to cause damage to SARS". When Williams announced his resignation from Bain South Africa later that same year, Bain entered a discussion of separation terms with him, as it does with all departing partners. When senior employees resign, it is standard practice that they sign agreements that include a financial settlement of amounts owed to or from the departing employee as well as confirmation of the client confidentiality obligations that all partners, including Williams, agree to in their global partnership agreement.

• These negotiations were not an attempt to offer a payment in return for his silence, nor did we offer or make any payments to prevent truthful testimony. In fact:
  • Williams suggested the idea that Bain fund his PhD at Oxford as a part of the financial component of his settlement. His affidavit attests to this. View document
  • The separation agreement stated that Bain would forgive money owed by Williams to Bain as long as he adhered to standard confidentiality provisions, but no more. Importantly, it gave Williams express written permission to cooperate with any government agency or participate in any commission such as the Zondo Commission. View page 4, Clause 8

Bain & Company’s submissions to the Zondo Commission on this topic are available here. See paragraphs 114 – 120.