Publication: Sunday Tribune Issued: Date: 2001-01-01 Reporter: Sam Sole Editor:

Let's Not Follow Britain's Example 

Publication  Sunday Tribune
Date 2001-01-01
Reporter Sam Sole
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If the probe into South Africa's arms deal is a major test of our democracy - which it is - then the British government long ago failed that test. Sam Sole explains

It is easy to see why some people in the government might be concerned at the approach taken by our Public Accounts Committee to investigating South Africa's multi-billion rand arms purchase. The committee has been bold. It has held public hearings and issued a public report. It wants a crusader like Judge Heath to be involved in the investigation. It wants the deal examined in great detail to see where kickbacks, "commissions" and other padding might be concealed. By contrast in Britain - where similar allegations of "commissions" emerged in the giant R200 billion 1980s Al-Yamamah deal with Saudi Arabia - the British Public Accounts Committee took a much more "responsible" approach to the possible clash between accountability and the national interest. That committee assigned just two of its number to discreetly check out the allegations. They produced a report - which the rest of the committee was not even allowed to read. Nevertheless, the committee accepted its findings that no impropriety had taken place in terms of the "country-to-country" contract between the United and Saudi kingdoms - and that suspicions at what might have taken place at the level of the actual contractors and sub-contractors were beyond the terms of reference of the committee. Case closed.

It is understandable that some ANC figures might be offended at the contrasting brashness of our own committee. There is, of course, one important difference. In the British case it was Saudi money which was ultimately paying the bill. Here it is ours. Nevertheless, it is instructive to take a closer look at the Al-Yamamah deal, because it places in a new light the assurances given by the British government in respect of our own deal. It involved many of the same contractors as are now beneficiaries of our deal - and some individuals who have now become players - directly or indirectly - on the South African scene. The biggest foreign bidder in South Africa's R40 billion arms acquisition is British Aerospace Systems (BAe), responsible for the Hawk trainer and with a share in the Gripen fighter, which have both been selected. Allegations have been made that BAe paid substantial "success fees", amounting to tens of millions of rands, for securing the deal, including to senior ANC figures. BAe has repeatedly denied any wrong-doing and has specifically denied paying any commissions in the South African case. However, BAe and other British arms firms appear to have a track record of paying "commissions" to secure arms sales, details of which emerged from media probes into the Al-Yamamah arms sale. After years of denials from both Conservative and Labour governments, David Trigger, a former executive of defence company BMARC, admitted in a court case last year that commissions were paid on the Al-Yamamah project. According to the British Guardian newspaper, he told the court that he negotiated an Al-Yamamah contract between Royal Ordnance and British Aerospace for aircraft armaments, in which commissions were paid to intermediaries, despite the fact that - like our own case - it was a government to government deal. He refused to disclose the size of the commissions, citing the Official Secrets Act. The Guardian also reported that the British firm Vosper had to pay 15% commission to Saudi royal middlemen on Saudi purchases of mine sweepers. It also found that the giant GEC-Marconi defence conglomerate had agreed to pay R45 million in kickbacks for each frigate purchased by the Saudi regime. The "commission" would be paid to a company owned by the second son of Saudi King Fahd, Prince Mohammed. GEC is now part of BAe. Commission At least one of those who featured prominently in allegations around the Al-Yamamah deal is now a high-profile player in South Africa - Prince Bandar al Saud, son of the Saudi defence chief, Prince Sultan, and long-standing Saudi ambassador in the US. Bandar is a friend of President Thabo Mbeki and is regarded as a key intermediary in attempts to secure a Saudi purchase of G5/G6 howitzers.

Mark Thatcher, son of the British prime minister at the time the deals were done, was alleged to have received more than 10 million in commission on the Al-Yamamah deal. Thatcher is of course now a resident of South Africa and lives in Cape Town. In 1994 Tam Dalyell, a Labour MP, submitted documents to officials in the House of Commons - a US intelligence report and an internal British Aircraft Corporation memo - which he claimed proved that Mark Thatcher was involved in Al Yamamah. Questions around Thatcher's role were never answered as the UK Public Accounts Committee decided not to investigate the allegations as this was "outside their remit of issues concerning taxpayers' money". According to Dalyell's address in Parliament, the internal memo states "The same source also states that there is a sizeable payment to the Conservative Party (a huge sum)." This alleged use of arms deals to rake off money for a political party mirrors some of the allegations which are at the heart of the South African public accounts probe. The method to achieve these rake-offs in the British case are also mirrored by concerns voiced by the Auditor General regarding aspects of our own contract. The price paid by the Saudis was usually significantly inflated. According to British reports a Tornado fighter-bomber, which cost Nato 20 million, was to be sold to the Saudis for closer to 35 million.

The Auditor General has raised similar concerns about the high unit price to be paid by South Africa for the BAe Hawk trainer and the Gripen. It's also worth noting what happened to the "offset" or counter-trade aspect of the Al-Yamamah deal, despite the fact that the Al-Yamamah offsets were less "water-tight" than our own counter-trade agreements. Target Al-Yamamah committed the British to 1 billion in counter investment, effectively beginning in 1989. By 1998, the UK government put the sum total of offset investment at 450 million, less than half the target figure. In 1996, according to Middle East Executive Reports, independent research in Saudi Arabia found that UK contractors had actually achieved an even lower level of reinvestment - only 8% of their total obligation. What the UK experience teaches us is that we should not be lulled by the government's reassurance - and that an investigation which is not transparent and which does not probe deeply and effectively beyond the "country to country" contracts will not be an investigation at all.

With acknowledgement to Sam Sole and the Sunday Tribune.