Publication: Business Day Issued: Date: 2003-05-21 Reporter: Paul Kirk, Tim Cohen

How State "Edited" Arms Report to Parliament



Business Day

Date 2003-05-21


Paul Kirk, Tim Cohen

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The earlier draft reports threaten to reopen the arms deal scandal

It is now clear that the final report on the R60bn arms deal, given to Parliament after an investigation by SA's auditor-general, public protector and prosecutions chief, was heavily edited.

This has emerged in draft reports, released last week, which threaten to reopen the arms deal scandal and could undermine efforts by government to escape more political damage from the affair.

The final, sanitised version of the report omitted findings on gifts received by key players during the arms procurement process, as well as "inaccuracies" in a defence department presentation to Parliament's select committee on public accounts (Scopa), Business Day has learned.

The drafts were released to CI MD Richard Young, one of the losing bidders in the arms deal, after he won a court action forcing auditor-general Shauket Fakie to hand them over.

The differences between the drafts and the final version provide support to a vociferous lobby that has complained that the report was significantly edited before it was published.

However, Fakie took "strong exception" yesterday to the implication of a cover-up, saying there were good reasons for not including some items in final report. He denied the changes were made at the behest of senior members of government.

The draft was available to Young after a lengthy legal battle in terms of the Promotion of Access to Information Act. Young alleged that three of his company's electronic systems were deselected from being used in SA's patrol corvettes due to irregularities in the procurement process.

Young's application for the release of draft versions of the report was initially opposed by the Fakie, the public protector, and national director of public prosecutions Bulelani Ngcuka.

But on November 15 last year, judge Willie Hartzenburg ruled that Young had the right to the documents and ordered Fakie to hand over all records relating to the corvette programme, including all draft reports. Fakie and his fellow respondents withdrew their joint request for leave to appeal the day before the case was to be heard on March 13.

Omitted in the final report was a section titled "Inaccuracies in the presentation to Scopa", which lists three pages of differences between what was presented to the committee and the factual situation as uncovered by investigators. One of these "inaccuracies" reveals that the defence department's presentation, made in October 2000 and headed by former arms acquisition chief Chippy Shaik, claimed that a winning contractor, African Defence Systems (ADS), had no connection to French arms giant Thomson when the contract was awarded.

Shaik told Parliament that ADS a company now partowned by his brother Schabir had no links to his brother at the time the contracts were submitted. It was claimed that Schabir gained an interest in ADS only after Thomson the SA subsidiary of which he is a director and shareholder bought the company from Altech. But the draft report states: "This is not correct. As was pointed out, Thomson International bought the first 50% of the shares of ADS on 24 April 1988."

Other "inaccuracies" relate to whether the CI product, a combat suite for frigates, was a "nominated" or "preferred" bidder.

The draft states: "In the Scopa presentations it is stated at no point in the entire tender process did the SA Navy indicate a preference for the CI IMS (information management system) product or technology, even though the SA Navy being (sic) a co-owner of the CI IMS technology'.

"It is the view of the investigation teams that the CI IMS was the preferred databus of the SA Navy, at least up to a point".

The fact that this crucial finding was omitted from the final draft has infuriated Young, since it is apparently contrary to several earlier statements by Fakie that there were no substantial changes to the report.

"I am presently instructing my legal team regarding the formulation of criminal charges against the auditor-general," he said.

"I intend bringing criminal charges of perjury, contempt of court and defeating the ends of justice, as well as offences in terms of the Promotion of Access to Information Act against him personally, as well as the office of the auditor-general, as soon as possible," Young said.

In response, Fakie insisted that, taken as a whole and not considering only selective parts of it, the draft report and the final report conveyed the same message. "For those aspects, which were not included in the final report, there were good reasons for not including these .

"It was part of our review process where, in our view, matters that lacked adequate evidence or had to be further followed up by the national director of public prosecutions (NDPP) for further possible criminal investigation were left out of the final report.

"In this regard, the final report clearly states that (it is) based on the evidence in our possession at that time and that matters of a criminal nature are being followed up by the NDPP," he said.

With acknowledgements to Paul Kirk, Tim Cohen and the Business Day.