Publication: Institute for Security Studies Issued: Date: 2003-09-18 Reporter: Reporter: Reporter:

Challenging the Corrupt : How the Case Against Shaik Implicates Deputy President



Institute for Security Studies (ISS)
Issue 0008



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Challenging the corrupters – challenging the corrupt

Deputy President Jacob Zuma, addressing the 9th International Anti-Corruption Conference (IACC) in Durban on 15 October 1999 rightly pointed out that, ”There is a need to continuously send a message to those who thrive on corruption that we have the will to deal with them decisively. The extent of corruption in all spheres of our lives has touched us, even as we conclude this conference an act of corruption is being committed somewhere….”

Indeed as the allegations surrounding him, his financial adviser Shabir Shaik and certain French arms peddlers have once again shown, corrupt relationships, particularly those in large public sector procurement deals, involve both public servants in the South and large multinationals in the North. Around the time of Zuma’s speech, according to the charge sheet produced by the Scorpions against Shaik, a deal was being cobbled together involving the three aforementioned parties: alleged bribe-payer, alleged bribe-taker and alleged intermediary. At present a French magistrate is considering an application by the National Prosecuting Authority for legal assistance in order to get Mr. Alain Thetard and Jean Paul Perrier, both former representatives of the French arms company Thompson CSF (now Thales) to testify in South Africa. According to newspaper reports the French Ministry of Justice will make the final decision based on the magistrate, Edith Boizettes’ recommendations. Their evidence together with that presented in the Shabir Shaik trial is key to ensuring that the cloud hanging over the head of Jacob Zuma, since he was a implicated in a case of corruption but not charged, is finally cleared – one way or the other.

However, as the Lesotho experience (See Top SADC story) shows there is a need to challenge the corrupters as well (See Industries). Powerful multinational companies apparently have little to loose when offering lucrative bribes to public officials. Should a deal be made with the French Ministry of Justice to secure the co-operation of the Thales officials – this should not include their immunity from prosecution in both France and South Africa. That would rob both the South African judiciary of an opportunity to test this case and equally importantly allow France to escape its legal obligation to prosecute citizens for bribing foreign public officials (see Profile section on the OECD Convention). This situation would no doubt suit many parties – and not least the arms companies. The South African prosecuting authorities have demonstrated political will by investigating allegations of corruption involving the Deputy President. The French authorities should now show equal adherence to the rule of law by investigating the affairs of the Vice-President and CEO of Thales International, Mr. Perrier as well as his colleague Mr. Thetard, the officials implicated in the Shaik charge sheet.

Equally concerning are the allegations that Bulelani Ngucka was an apartheid spy. If Ngucka was a spy, then the pending cabinet investigation must prove this convincingly. Alternately it smacks of the kind of political intrigue adverted to by Xolela Mangcu regarding Steve Biko. An icon of our struggle for liberation, Biko was once falsely accused of working for the CIA (See National Administration).

Whatever the allegations however, where appropriate the law must be allowed to take its course to ensure that justice is equally applied. In similar vein we must guard against pronouncing Deputy President Zuma corrupt until he has had an opportunity to defend such accusations in a court of law.

It would ultimately be at our own expense – and that of somebody in the position of Jacob Zuma if we accepted his argument also made at the 9th IACC that, “There is something that I have always believed, … and legal people might not agree…. We work out our constitutions that identify and clarify how the countries and society should be run, legislate the laws and place greater emphasis on the rights of all of us …, but…the counter balance of this has not yet been addressed. If members of society violate these rules and laws how do we deal with that situation? And of course after violating them quote the very rules as important to protect their rights in many ways. How do we balance these two? For I believe if we don't work out particularly in the judicial systems the way to deal with this, you find a contradiction - a contradiction of the very interpreters of the law for an upright society. In the legal profession having to be the one to defend the offenders to the hilt, to me this seems to be a contradiction. Whilst we respect and should respect the right of any citizen to be defended I think we also need to promote the right of society, not to be hurt by us.”

Indeed the rights of victims have to be recognised. However, those accused of paying bribes, or taking them or spying for the apartheid regime must be afforded an opportunity to prove their innocence. Anything else is tantamount to favouring mob law – something that will do our often sterling collective efforts to combat corruption in South Africa an injustice.

Catching the corrupt no easy task

The Business Day reports that the Prevention of Corruption Bill, which is expected to be passed by parliament by the end of this year, criminalises a wide range of corruption offences related to tenders and the bribery of foreign public officials abroad. This includes the blacklisting of corrupt businesses and excluding them from bidding for state contracts. The article explains that “similar laws passed by the Organisation for Economic Co-operation and Development make it possible for people such as European Aeronautic and Space Company chief Michael Woerfel to face prosecution in Germany for the discount on a Mercedes Benz he gave former African National Congress chief whip Toni Yengeni in return for support for Woerfel’s company’s arms deal bid”. According to Daryl Balia, chairperson of Transparency SA, the current Corruption Act that allows only for the prosecution of a person who accepts a bribe and not the person who initiates it. “The cases against Yengeni, Woerfel and Deputy President Jacob Zuma, who was investigated for allegedly trying to solicit a R500 000 bribe from arms contractor Thomson CSF, show how difficult it can be to make a successful case”. Prof. Andre Thomashausen from UNISA says that a lack political will and the difficulty in proving causality are preventing convictions involving the controversial arms deal.

He goes on to add that “The bottom line is that the German civil code and other agreements hold that a contract that came about as a result of undue influence should be considered null and void. The risk is that in uncovering too much information, someone may suggest pulling the plug on the agreement”. Recently national directorate for public prosecutions head Bulelani Ngcuka said he was unable to press charges against Zuma because of a lack of evidence against him, but leaves open the possibility that the case can be reopened if new information emerges.
Full article in Business Day:

The Zuma controversy: How the case against Shaik implicates deputy president

The Sunday Times provides an overview of state’s charge sheet, as filed in the Durban Regional Court, that includes a breakdown of all payments Schabir Shaik made on Deputy President Jacob Zuma’s behalf while he was MEC for Economic Affairs and Tourism in KwaZulu-Natal, and later as deputy president. The charge sheet alleges that Zuma received R1.161-million from Shaik and Nkobi between October 1 1995 and September 30 2002. During this time Zuma’s duties included promoting the interests of business impartially as MEC from May 1994, leader of government business in Parliament from June 1997 and deputy president of the ANC from December 1997 and later attending Cabinet meetings related to the arms deal. Zuma’s impartiality comes in question during 1997 / 1998 period when South Africa requested offers from potential suppliers of military hardware. On May 11 1998 Thomson CSF (France) and Altech Defence Systems (ADS) in joint venture partners with German Frigate Consortium submitted an offer for corvettes. According to the report “ Thomson was worried about rumours that Mbeki did not approve of Nkobi as a business partner. Shaik’s brother Shamin or “Chippy (chief of arms acquisitions for the Department of Defence) met Thomson boss Alain Thetard on July 9 1998 and allegedly threatened to make things difficult if Thomson did not choose “convenient” business partners. Chippy confirmed that Zuma would be a member of the next Cabinet. Thomson CSF (France) had invested directly in ADS (not Thomson’s SA Subsidiaries). This effectively excluded Nkobi from the corvette bid”. Zuma used his influence as cabinet minister when “cabinet chose the German Frigate Consortium as preferred corvette supplier on November 18 1998. That same day Nkobi (represented by Shaik) and Thomson CSF (France) met at Nkobi’s Durban headquarters. Zuma attended the meeting as a ‘mediator to resolve the dispute’ and ‘also in the promotion of empowerment’. He allegedly helped Nkobi get shares in ADS. According to the charge sheet the “result of the above mentioned meeting was that Nkobi Investments became a joint venture partner with Thomson in the German Frigate Consortium and so joined the successful bidder in the corvette bid”. These allegations amongst others made on the charge sheet needs to weigh its substance in the scales of justice.
Full article in Sunday Times:

Zuma for sale

In the Mail & Guardian the “draft charge sheet in the Scorpion’s case against Shaik demonstrates just how thoroughly Shaik allegedly ‘owned’ the deputy president and deployed him as ‘political capital’. The charge sheet leads this allegation when it indicates how Zuma apparently lived beyond his own earning power, letting him therefore be ‘owned and subsidised’ by “Shaik or Nkobi to the tune of R29 000 to R37 000 a month”.
Full article in Mail & Guardian (29 August – 4 September) ...

It all started here

Two-and-a-half years ago a humble paragraph in the Mail & Guardian set in motion a train of events that led the Scorpions to focus on Jacob Zuma’s role in the arms deal. It started with questions surrounding shareholders in Nkobi holdings, Then with the assistance of a former Shaik employee who blew the whistle investigators were led to the “ March 2000 encrypted fax in which a Thomson/Thales representative told his colleagues about Zuma’s ‘confirmation’ of an alleged request for a R500 000 annual bribe. This information in turn led investigators, some time before or during August 2001, to Thomson offices in Midrand that seemed to corroborate the request. In October that year Ngcuka’s investigator’s raided Nkobi, Shaik and Thomson/Thales premises in South Africa and, with judicial assistance, abroad. The documentation obtained seemed to indicate a prima facie corruption case against Shaik, Thomson/Thales or some of its employees, and Zuma.”
Full article in Mail & Guardian (29 August – 4 September 2003) ...

Ngcuka’s balancing act does justice to Marshall’s legacy

Ronald Suresh Roberts argues in the Business Day that Bulelani Ngcuka, as director of prosecutions treads constitutional minefields as carefully as did the first chief justice of the US. Ngcuka proves that “revolutionary solidarity and clean governance are allies, and not enemies”. This is demonstrative of his preparedness to sting anyone – “within the presidency or elsewhere – who would cloak crookedness in the national flag”. The author compares Ngcuka to the US Chief Justice, John Marshall, as he explains that what “Marshall did for the independence of the US Supreme Court, Ngcuka has just done for the independence of the Scorpions. He has won the war by actively asserting the right of SA’s legal system to prosecute, if factually justified, a sitting deputy president. Meanwhile he has let pass the dangerous bait – the actual battle of dragging Zuma through the courts in a borderline case where a not-guilty verdict would destroy the Scorpions. Pragmatism in legal institutions is a scarce resource and Ngcuka is thankfully blessed with it. To see the extent of his victory, consider the fact that no sitting US president or vice-president could be prosecuted in a criminal court until after they stepped down. … In this country, our leaders now have no such comforts. This is a world-beating expression of the rule of law.”
Full article in Business Day:

Seeking to draw Scorpions’ sting

Mcebisi Ndletyana writes in the Sowetan that the Scorpions “is one of our finest post-apartheid achievements. Any pressures to silence it would be a shameful politically-inspired manoeuvre to hide elite corruption…. By appointing an African to prosecute other Africans dispells the racist stereotype that Africans do not hold each other to high ethical standards. The political leadership affirmed that the path of post-apartheid society would not be determined by anxieties arising from racial prejudices. Rather, the ruling elite would strive to be the best it could be, guided by its moral code… Surely our leaders have enough foresight to appreciate that the value of the Scorpions’ achievements far exceeds the political survival of an individual. After all, ANC leaders are in politics for the public good. Or are they anymore?”
Full article in Sowetan (August 27 2003) ...

Masters of political diversion do SA’s revolution no favours

The Director of the Steve Biko Foundation, Xolela Mangcu writes in the Business Day the question facing Africans today is whether we are going to allow the corrupt elite to define who we are, in the name of African solidarity, “Are we going to allow rumour-mongering to define and debase our political discourse”. According to Mangcu’s sources in the ANC it was Mac Maharaj “who started the vicious rumour that Steve Biko was a spy and that he black consciousness movement was a third force sponsored by the US' CIA…Maharaj repeated that allegation to Neville Alexander in Europe... However, the rumour was recycled throughout the 1980s, and more often than not became the basis of internecine violence between supporters of the ANC and black consciousness movement. Many young people lost their lives in the wake of that rumour.
Full article in the Business Day:

Arms scandal smouldered too long

Allister Sparks writes in the Cape Times that the “arms deal saga, culminating now in a bitter political conflict that threatens to tear apart the government, the country and some of our most important institutions, is a classic example of inept crisis management. The blunder goes right back to the beginning, to the government’s failure to clear up all questionable aspects of the arms deal as swiftly and comprehensively as possible. Instead it has weaved and ducked. …It first hassled Judge Willem Heath’s Special Investigation Unit, preventing it from an investigation into the arms issue, then pressurised parliament’s watchdog Public Accounts Committee (Scopa) to the point where its chairman, Gavin Woods, and the ANC’s own Andrew Feinstein quit in despair. Eventually a joint investigating team consisting of the Auditor-General, produced a report, which was heavily criticised by opposition parties in parliament. Now the highly successful Scorpions investigation unit, headed by the Director of Prosecutions, Bulelani Ngcuka, is caught up in an unseemly conflict with Deputy President Jacob Zuma, while the latter’s financial manager, Schabir Shaik, faces charges of corruption which implicate Zuma.” The writer concludes, “ that the whole issue should never have been allowed to reach this destructive stage. It should have been cleared up years ago.” According to the writer, “Good damage control is part of good governance.”
Full article in Cape Times:

With acknowledgement to the ISS.