Self-enrichment by MK veterans alleged.

The Heath investigating unit has formally applied for a proclamation authorising it to investigate allegations of corruption arising from SA's controversial R29,8bn arms deal that implicate ANC notables, including former Defence Minister Joe Modise, in reported self-enrichment scams.

The allegations emanate essentially from two sources:
After being approached by unidentified "concerned ANC MPs", PAC parliamentarian Patricia de Lille raised the issue in parliament amid vigorous barracking from ANC benches and demands to identify her informants; and
Terry Crawford-Browne, chairman of the SA branch of Economists Allied for Arms Reduction (Ecaar), who has submitted a copy of his document Betrayal of the Struggle against Apartheid to Gavin Woods, chairman of the parliamentary standing committee on public accounts.

The allegations, forwarded to Judge Willem Heath as long ago as last November, were given added impetus by the report of Auditor-General Shauket Fakie into the arms deal. Though the report does not confirm corruption, it  stops short of approving it as open and honest.

His report concludes that guarantees for the supposed R104bn industrial and defence offset, which protagonists of the deal cite in justification of it, "may not be sufficient" and recommends a forensic audit into the status and actions of subcontractors (Current Affairs October 6). 

The conviction that a judicial inquiry into the arms deal is imperative is not confined to the PAC and Ecaar. It is also endorsed by a wide range of organisations, including the SA Council of Churches, the SA Catholic Bishops Conference and the Church of the Province of Southern Africa, whose head, Archbishop Njongonkulu Ndungane, has called for a "robust" investigation.

Further indications of concern that taxpayers' money may have been misspent are the probes by the Public Protector and the Office for Serious Economic Offences. The once vocal Heath investigating unit seems to have withdrawn into a less conspicuous role since President Thabo Mbeki succeeded Nelson Mandela, who established the unit. This apparent retreat may have been induced by criticisms from Finance Minister Trevor Manuel and Justice Minister Penuell Maduna, who accused it of exaggerating its recovery of unlawfully spent public money and overstepping its mandate by expanding its operations from its Eastern Cape base to the whole of SA.

The Heath unit's formal application for a presidential proclamation authorising it to proceed puts the spotlight on the Mbeki administration: if it refuses to give Heath the go-ahead without appointing an alternative judicial inquiry, it may create the impression that it is covering up.

One of the most serious allegations concerns alleged favouritism by the Defence Department's arms procurement committee, headed by Shamin "Chippy" Shaikh, one of four brothers with strong ANC ties. One company that benefited substantially from the arms deal is African Defence Systems (ADS). It lists another Shaik brother, Shabir, as one of its directors. The fraternal tie suggests ADS may have benefited unfairly. It raises the question of whether the Auditor-General's report refers to that connection when it expresses concerns at the "potential conflict of interest" in the arms procurement deal.

Chippy Shaik, however, told the public accounts committee recently that he had recused himself from all decisions on SA involvement in the weapons deals. His defence provoked a riposte from Democratic Party defence spokesman Philip Schalkwyk: "He should not have been in a position to have to ask to be recused."

On the ADS board are two more men who have close ties with the ANC and its former guerrilla army, Umkhonto we Sizwe (MK): Lambert Moloi, a former MK commander and recently retired SA National Defence Force general, and his son-in-law, Tsepo Molai. The network connects ADS with another company that benefited from the arms deal, Futuristic Business Solutions (FBS), of which Moloi and Molai are directors.

Former MK commander Modise is alleged - in the document submitted to the standing committee - to havereceived "payment of R10m" for putting his signature to the contract with a German company to supply three submarines  to the SA Navy shortly before he retired.

Hence the accusation in the document that former MK leaders used the arms programme for "massive self-enrichment" and De Lille's demand that Modise account to parliament for "conflicts of interest that occurred in the allocation of [arms deal] contracts during his tenure of office . . ." 

With acknowledgement to Patrick Laurence and the Financial Mail.