It has long been suspected that this move by Mrwebi, the powerful head of the National Prosecuting Authority's (NPA) specialised commercial crimes unit, reflected a battle for supremacy between opposing factions in the NPA and the police's crime intelligence division.
Under cross-examination at prosecutor Glynnis Breytenbach's disciplinary hearing last week Mrwebi, perhaps unwittingly, revealed the real reason for why he stopped Breytenbach from prosecuting senior intelligence officers, including Mdluli and his co-accused. Heine Barnard.
The NPA investigation spearheaded by Breytenbach came to an end in early 2012, but the Hawks have continued their investigations.
The two intelligence operatives allegedly defrauded the secret services account, a covert fund used to finance undercover crime intelligence operations, of millions of rands.
Breytenbach's suspension was purportedly based on a complaint to the NPA by mining company Imperial Crown Trading related to her alleged lack of impartiality in investigating fraud charges against it.
She has consistently maintained that her suspension was a ruse by Mrwebi and the NPA's acting head, Nomgcobo Jiba, to stymie the Mdluli prosecution.
Her efforts to have the case against the two men reinstated were derailed when Jiba suspended her on April 30 last year.
In his testimony on January 23, Mrwebi dropped a bombshell when he said that his decision to drop charges stemmed from secret representations made to him in February last year — two months before Breytenbach's suspension — by various implicated intelligence officials.
In these representations — in the form of a report dated February 22 2012, which the Mail & Guardian has seen — the intelligence officials claimed that the police and the NPA did not have the jurisdiction to investigate intelligence matters.
And Mrwebi accepted that.
He made it clear at the Breytenbach hearing that he agreed with the report's view that the NPA "was entering territory it was not legally allowed to be in".
In addition to entertaining this report Mrwebi also admitted that he had held trysts with "senior" intelligence officials, including the unit’s chief financial officer, Solly Lazarus.
Lazarus was suspended from crime intelligence alongside Mdluli last year, following allegations that he, too, had benefited from the secret slush fund.
Lazarus is expected to appear in court later this month with Barnard, on fraud, theft and corruption charges following the ongoing Hawks' investigation.
In an echo of the campaign that led to the demise in 2009 of the Hawks predecessors, the Scorpions, these representations attack the credibility of the Hawks' investigation of Mdluli, referring to their "abuse of the criminal justice system" and saying that Mrwebi was made aware of their "methods of threats and intimidation".
The representation also refers to Mrwebi's handling of an appeal by Mdluli's lawyers in November 2011.
It notes that the case against Mdluli and Barnard "was finally withdrawn on your instructions, after [Mdluli] successfully made representations to yourself".
The February 2012 report aims to create the perception that intelligence officials are being unlawfully and unfairly targeted by disgruntled prosecutors and former Scorpions investigators, and gives a worrying indication of crime intelligence's belief that it is untouchable.
In an astonishing claim, it argues that no one except the president has the right to scrutinise crime intelligence and its use of secret funds.
"One of the major impacts of the investigation under way concerns the Secret Services Act," it says.
"All annual approvals in terms of subsection (3)b(1) were done by the president personally. This means that the highest authority has been given to approve the division.
"This implies that the criminal intelligence carried out certain functions that the president
classified as secret services and for which the president has given the appropriate authority for being funded from the Secret Services account."
In terms of "a presidential minute" such functions should receive "total protection in terms of the Secret Services Act ... These functions can therefore never be made known."
Mrwebi's evidence suggests that he blindly accepted the argument that police could not investigate the alleged abuse of secret slush funds.
He also conceded that he had not solicited the advice of the inspector general of intelligence, Faith Radebe.
Earlier on at the hearing, Mrwebi insisted that investigations linked to intelligence were the "exclusive preserve of the inspector general of intelligence — who must investigate".
But in a letter dated March 19 last year, Radebe rejected this, saying that her mandate "does not extend to criminal investigations".
In a devastating assessment, she said that the NPA's reasons for withdrawing charges against Mdluli "are inaccurate and legally flawed" and that the matter should be referred back to the NPA "for the institution of criminal charges".
Breytenbach's advocate, Wim Trengove, earlier asked Mrwebi what the "basis in law" was for his contention that the police "do not have mandate to investigate" crime intelligence matters.
He replied that the "Intelligence Oversight Act states clearly that in relation to intelligence structures it is the inspector general ... who must investigate".
Trengove noted that, according to the relevant section, the inspector general has certain powers of investigation and that "nowhere does it say she has exclusive power to do those investigations".
Mrwebi said: "It is not a limitation on the Hawks, but they would have problems getting this information because they do not have the access; the inspector general and the auditor general are the only ones."
Mrwebi's final admission that he accepted the crime intelligence report took a few minutes, but its implications will be felt for much longer.
Not only does this illustrate that crime intelligence believes it is untouchable and unaccountable
to the public, it also demonstrates that a senior official within the criminal justice system appears to be naive.
Mrwebi seems to have indiscriminately swallowed crime intelligence's view that the police are not allowed to look into intelligence matters — this without even his own interrogation of the evidence before him.
This does not bode well for the precept of acting without fear, favour or prejudice.
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