Publication: Noseweek Issued: Date: 2001-11-01 Reporter: Editor:

Hi-Tech Rear Admiral Steams to the Rescue




Date November 2001, Issue 37

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Predictably, by the time the only critical witness testified at Selby Baqwa's bumbling arms deal hearing, the mainstream media had come to the end of their short attention span. A pity! A wealth of interesting material emerged from Richard Young's evidence.

Dear, oh, dear! It all happened as we predicted in Nose 34. Vice-Admiral Robert Simpson-Anderson, the dapper, recently retired chief of the navy, found himself in rather stormy weather at the arms deal hearings and emerged with his mainsail in tatters over arms acquisition chief Chippy Shaik’s recusal.

Just to remind you: at his first appearance the vice-admiral testified that Shaik had disclosed his connection (via his brother Schabir) with one of the parties (ADS) tendering for the corvette (and submarine) combat suites.

"He proposed to recuse himself [and] it was agreed that whenever the combat suites were discussed, I would take over the chair and he wouldn’t take part in any discussions or decisions... This process was followed throughout the period."

But Noseweek and Richard Young had seen confidential documents the navy never dreamed would be revealed - Project Control Board minutes which showed that on at least one occasion Mr Shaik had remained in the chair and contributed to the discussion and decision-making on the combat suites.

During his evidence, Young quoted extensively from this document and others, much to the anger of the authorities. Several times counsel for the Department of Defence, Michael Kuper SC, tried to probe Young on how he had got access to these classified documents.

Rather than being concerned at the evidence of irregularities the authorities, want to strangle the whistle-blowers.

After the hearing, the project officer of the corvette programme, Rear Admiral Johnny Kamerman, threatened an investigation that would endanger the secret-level security clearance held by Young and his company, CCII Systems, as contractors of the Defence Force and Armscor.

Without such clearance, which Kamerman claimed had been called into question by Young's evidence, the company will not be allowed to compete for contracts.

But nevertheless the Navy clearly felt it had to trundle Simpson-Anderson back onto the stand to respond. The Admiral struggled manfully to revise his definition of recusal. This didn't mean Shaik had to leave the room - although, mysteriously, on several occasions when he recused himself, he did in fact depart. It didn't mean he didn't contribute to the discussion. His contribution was merely "of an informative nature". It meant he was not part of the "decision-making processes", whatever that meant. In any case, the admiral argued, coming up for air, Mr Shaik had great integrity and his conflict of interest was more apparent than real.

This led to the following exchange with Young's counsel, Owen Rogers SC, in one of the only small windows of cross-examination granted him by Baqwa.

Rogers: Now if we can put Mr Shaik to one side and speak to you as a man of integrity who would value fairness. If you were involved, as you were, in a procurement process of this kind and you had a brother who was involved - as a shareholder and director in a potential supplier of equipment to the navy - would you think it fair and proper that you should be involved in decision-making relating to that company in which your brother was involved?

Simpson-Anderson: No! I think it would not have been proper.And later:

Rogers: [Mr Shaik] was then very much the linchpin in communication between all the relevant role players?Simpson-Anderson: Yes.

Rogers: Accordingly the person conveying to the Project Control Board the view of a particular body such as the Minister's Council, was a person who had this conflict or potential conflict of interest?

Simpson-Anderson: Yes.

Rogers: And the person conveying the views of the Project Control Board to the Minister's Council or other bodies with whom he liaised was this same person?

Simpson-Anderson: Mmh, Yes.

Rogers: It therefore appears to me - I put this for your comment - that leaving aside any role that he may or may not have had within the decision-making of the Project Control Board itself, it was this Mr Shaik with this conflict or potential conflict of interest who was colouring what came to the Project Control Board and what went out of it?

Simpson-Anderson: What do you mean with colouring? What is colouring?"

Rogers: What indeed?

Fortunately for the sinking Admiral, in addition to modern high-tech ships, the Navy is getting modern high-tech officers. One of these came steaming to the rescue in the form of Rear Admiral (Junior Grade) J.E.G. "Johnny" Kamerman.

Believe us, and remember you read it here first: this man will be Chief of the Navy, white skin or not.

First, he established his credentials as a man of action such as most of us can only dream of being. He served at sea for 15 years and was the weapons officer who fired the first missile in the Southern Hemisphere. He also commanded an operational combat vessel for four years.

Currently the director of the Corvette acquisition and overseer of the submarine programme being executed in Germany, Kammerman is SA’s senior military officer stationed in Europe.

Next, he showed his deep respect and solicitude for Young and "his fine little company". He even referred to the fact that Young had in the past phoned him at home in the early hours of the morning (a detail Young denies) to beg for bridging funding from the Navy when there was a lag in the formal allocation of project finance and that somehow they had made a plan to accommodate him.

Denying that Young had any legitimate expectation of the contract for the combat suites, Kamerman was a picture of manly sympathy: "So I can't counter the fact that Mr Young feels aggrieved and I can't give him any absolution except a shoulder to cry on but we never ever gave Mr Young the assurances that he is alluding to and I will come to that in our evidence." Little Kamerman’s evidence was put to Young for his comment.

This situation wouldn’t be allowed in court, but slips by in the Protector’s hearings where Selby is empowered to make the rules.

Much of Kamerman's evidence, convincing as it was, had to do with technical interpretation and will have to await the test of a real court case (and the discovery of ALL relevant documentation).

But some areas which were noticeably thin, though apparently not thin enough for Baqwa's bedazzled panel to see through.

At the heart of the debt-disaster that is the corvette deal is a contract which Kamerman was apparently closely involved in authoring, and which the German contractors, together with their grasping French and SA partners, could drive a corvette through.

The contract directed that in quoting a price "allowance must also be made for prime contractor responsibility".

In other words, in terms of the bid document, bidders were to quantify their perception of risk up-front. That was why they were given extremely detailed lists of the nominated SA suppliers. The responsibility then lay with the Germans to say, No, this is a risky South African product; we will have to build in a risk cost if you want us to use that. Instead, the question of risk was only raised after the Germans and ADS became preferred bidders.

How could they get away with this? There was another little clause which stated: "The final costs will only be apparent after negotiation with the preferred vessel contractor in particular the integration and business-risk costs have to be determined." The contractors could therefore "determine" cost increases in cosy collaboration with those who could also benefit.

Young showed that the real cost increase of the whole arms package from November 1998, when the Cabinet announced the deal, to November 1999, when the final contracts were signed was R1 503 million.The price of the Corvettes increased by R872 million, mainly due to some R800 million added cost of the Corvette Combat Suite.

That claim was never challenged.

With acknowledgment to Noseweek.