Publication: Business Day Issued: Date: 2003-08-28 Reporter: Nigel Bruce

Testing Time for Parliament as Trial by Media Looms



Business Day

Date 2003-08-28


Nigel Bruce

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To restore transparency and credibility, assembly needs to let Scorpions conduct unfettered arms deal probe

There is certainly some reason to believe government had hoped last week to draw whatever irritating political teeth remained from the controversial R60bn arms deal. All that might remain thereafter would be miscreant subcontractors who could be sanitised later.

The Scorpions, the special investigators who have for three years failed to secure any prosecutions, had been appraised a few weeks before of their nemesis.

President Thabo Mbeki said they could be absorbed into the police force. After that, the chances of their pressing ahead with the prima facie case against Deputy President Jacob Zuma, suspected of soliciting a gift from one of the contractors, were probably remote.

Mbeki's refusal to countenance Judge Willem Heath's decisive investigating team's examination of the arms deal, and its disbanding soon after, must have weighed heavily on their minds.

Last week too the auditor-general appeared before the standing public accounts committee (Scopa) to sanitise accusations that there were material differences between a draft of his special report to the cabinet and the joint investigation team report eventually presented to Parliament.

If this had gone without a hitch, the auditor-general, and those who support him, would have felt he had gone a long way towards assumption of immunity from further criticism. He made it clear that he saw any criticism of his work to be subject to that part of the constitution that gives protection to officials whose impartiality is considered to be beyond doubt.

In short, he may not be held up to ridicule and scorn. Any criticism of his ability or integrity must be shown to be substantive. So it might be said that, armed with this assurance, he flexed his constitutional muscle before the committee and did so not without some hubris.

But there was a hitch. It came in the form of a letter from a company that had tendered for one of the arms subcontracts, ADS, in which Schabir Shaik has an interest, to the German frigate group, which supervised the tenders for the defence department. This letter made it clear ADS had been allowed to lower a tender price after the tender had effectively closed.

Certainly there were three references and some details of this particular tender in the joint team report. But even a close reading of them did not make clear what the letter has now revealed. Without doubt the joint team report had dissembled. The only question is whether it was deliberately done or not.

The letter came from CI, which had tendered for the contract and lost. It had gone to court to force the auditor-general to release to it documents pertaining to this tender, and the letter was among them.

The auditor-general told the committee that he had been requested by the cabinet to edit his draft report so that it was less repetitive and more easily readable. This, of course, does not explain why some sections were excised from previous drafts, not necessarily only from the draft submitted to the cabinet. There were numerous drafts worked on by 50 to 60 people.

A particular point in dispute was the degree to which CI was favoured by the navy for a particular tender. The joint team report acknowledged it had been favoured "up to a point". That is loose language not characteristic of a forensic audit, which is what the joint investigation was intended to be. This is clearly set out in point six of the preface to the report, signed by the august public protector and national director of public prosecutions as well as the auditor-general.

The purpose of the report is beyond doubt. It is to clear the cabinet of any responsibility for inequity and corruption that might have occurred especially in the subcontracts. Some former cabinet ministers are (or were) shareholders in companies that were awarded subcontracts. Mbeki chaired the cabinet subcommittee that dealt with the arms deal.

The report itself is at best a travesty of a forensic audit. It can be no more. There was certainly what appeared to be a logical procedure of awarding points for the suitability of certain purchases. But it is a system that itself was based largely on supposition.

As unattractive munitions prices were sweetened by the offer of industrial offset projects, so decisions to purchase became predominantly political. How in these circumstances can the general accounting principles normally applied by the auditor-general have any meaningful relevance? All that could be done was to detect corruption within a flawed process.

The benefits of the offset projects to the arms seller are not obvious from the joint team report. The offset investments were in total about three times the value of the initial purchase. Whether they are enforceable is a moot point, which the joint team report did point out.

While they are invariably held out as a vote of investment confidence in the economy of the purchaser, they amount to only a small part of what the seller will, over the life of the contract, extract from the buyer.

For the cost of an initial arms contract is usually only between 5% and 10% of what the seller will be locked in to by force of circumstances over the next 10 to 20 years.

There is, of course, no legal obligation over this period. But if the initial capability is to be maintained, the buyer has no choice. The cost of moving to another supplier at a later stage is usually prohibitive.

Industrial offsets, which remove or reduce utility as the main reason for purchase, are everywhere an invitation to sharp practice if not outright corruption. Their sustainable contribution to job creation and technology transfer are notoriously dubious.

The joint team report has never come under the close scrutiny of Parliament in a manner that allowed either a proper appreciation of its context or a close examination of its authors. On its completion, the speaker arranged for the three signatories to answer some questions at an informal sitting. As an exercise in transparency it was futile. As an example of parliamentary democracy it was perverse.

Sections of the report were then referred to relevant committees. This meant that when a debate eventually transpired, members found they faced substantial obstacles to a meaningful appreciation and public engagement on the totality of the matter. Not only were they subjected to the time constraints of the proportional representational system, but the piecemeal nature of the referral meant a comprehensive appreciation was discouraged, if not impossible.

The joint team report was initially held out as an interim one, but it appears now it will be the final effort of this team. The Scorpions, apart from deciding not to proceed against Zuma, have not yet brought anyone to book, although threats have been made and civil actions are inevitable.

What has become clear since the Scopa hearing last week and the access to additional information by the release of documents to CI, is that there was not just one draft but several, that substantial if not material changes were made, and that the quality of the forensic auditing was either inappropriate or inexpert. As only one tender has been opened to public examination, how much more dissembling and misinformation is contained elsewhere?

Only documents relating to CI have been released, but they are voluminous and will be the basis on which a civil action is planned. If what we have seen so far is anything to go by, there is going to be a steady stream of revelations as lawyers work through the documents and maybe litigate for more. With an election looming next year, controversy outside of Parliament is likely to intensify.

The auditor-general himself might have to face more than one substantive motion requesting a debate on his competence and integrity. If this is refused, Parliament will effectively have sidelined itself and left the door open for a trial by media which will be rough, tough and troublesome, as well as outside the limitations of parliamentary structures. There are no Queensbury rules. It could also be agonisingly protracted.

Maybe that is what is needed now. For Parliament has failed to achieve the transparency and depth of debate that is clearly required. It has failed the demotic test which is the essence of parliamentary democracy.

The irony, of course, is that it was the auditor-general who in the first place approached Scopa with misgivings about the arms deal. It was only after government removed those of its members from Scopa who shared this view, and the speaker and Zuma attempted to intimidate the chairman, that the auditor-general's resolve became palpably less resolute.

There seems to me only one honourable way ahead. The Scorpions must be encouraged to finalise their work and whatever obstacles they face must be swiftly and resolutely removed. A select parliamentary committee must be appointed to recommend, after due examination, how Parliament should attempt to restore its integrity and demonstrate its adherence to the democratic principles of transparency and open debate.

Without that the interests of the people will be entirely in the hands of the media and parliamentarians might as well go home.

Bruce is a Democratic Alliance MP.

With acknowledgements to Nigel Bruce and Business Day.