Publication: The Witness
Reporter: Adriaan Basson
The year has hardly begun and the controversial arms
deal is front-page news again. Adriaan Basson reports on this albatross around
South Africa's neck.
There's more chance of the Democratic Alliance
winning the next election than of President Thabo Mbeki appointing a judicial
commission to investigate South Africa's R30 billion arms deal.
the view of businessman and arms deal critic Dr Richard Young, responding to the
DA's request to Mbeki at the weekend to appoint such a probe.
after Britain's Serious Fraud Office (SFO) confirmed that its investigators are
on their way to South Africa to look for dirty trails related to the purchase of
24 Hawk training aircraft under the arms deal.
Yet another year. Yet
another chapter in the arms scandal. And still more questions about the
government's most expensive shopping spree in the new South Africa.
DA can probably not be blamed for its request to Mbeki. While Eddie Trent, the
DA's spokesman on the arms deal, has probably stopped counting how many times he
has already called for such a commission of inquiry, it probably still remains
the logical thing to do. Even though Young says there's more chance of the moon
being made of Roquefort cheese than of Mbeki acceding to the DA request.
Mbeki's critics would agree: the only judicial inquiry to ever have
flowed from the arms deal controversy was the Hefer Commission and in the end
the issue ended up being less about greased palms and dirty money and more about
Why does the head of state keep refusing to appoint a
proper inquiry to thoroughly expose the albatross that returns to haunt the
government year after year?
Young believes Mbeki will not initiate
anything that could eventually backfire on him.
Mbeki, in turn,
repeatedly points to the report of the Joint Investigation Team (JIT) on the
arms deal. This team, which consisted of the auditor general (AG), the public
protector (PP) and the national director of public prosecutions (NDPP), found in
November 2001 that there was no evidence of improper or unlawful conduct by the
Mbeki even referred to it in Parliament on the day he
relieved former deputy president Jacob Zuma of his duties. This after Judge
Hilary Squires had ruled in Schabir Shaik's trial (a ruling endorsed by the
Appeal Court) that Shaik had benefited from the arms deal through Zuma's
At the time the JIT report was already
viewed as highly suspect.
Young, whose C2I2 firm was unsuccessful
in its bid to equip the navy's four new corvettes with combat suites, fought a
fierce court battle against the AG to obtain access
to earlier versions of the JIT report.
In January 2005 these documents
were handed over to him. They told a frightening
story: sensitive parts about mistakes and irregularities relating to the
procurement process were omitted from the final report.
The final JIT report was softened and changed to leave the
One of the issues someone clearly wanted to
keep out of the report was the purchase of Hawk training aircraft from Britain's
BAE Systems at very high prices.
South Africa could have saved millions
of rands by going for the less expensive Italian option which was the Air
Force's preference in any case.
Damning, too, was an interview conducted
by the AG's investigators with Lieutenant-General Pierre Steyn, former secretary
of defence. Steyn had expressed doubts about the legal basis
for embarking on the arms acquisition process, said that the purchasing
process was littered with irregularities, claimed
that there was political manipulation and stated that
Defence Force recommendations were blatantly ignored.
did not make these statements before a commission of inquiry broadcast on
national television (like Hefer) but to the government's accounting officer.
- "How they acquired the Hawk never really convinced me. I emphasise again, as
an accountable official, that it is irregular to
consider an option for which no price exists", Steyn said.
And between the AG, PP, NDPP and the cabinet (which saw the provisional
report before the final version was issued) Steyn's criticism ended up in the wastebasket.
And somewhere between
Shaik's trial, Zuma's prosecution and Tony Yengeni's prison
antics, the Hawk deal sort of just sank into
Until the past weekend, that is, when London's
authoritative Guardian broke the story that the SFO investigators are on their
way to South Africa.
The Scorpions, who have handled the Shaik, Zuma and
Yengeni cases up to now, will assist the SFO in their investigations here.
The SFO is under massive pressure to perform following the recent
controversial decision by that office and Tony Blair to abandon the
investigation into an arms deal between BAE and Saudi Arabia. The investigation
into the al-Yamamah deal was apparently threatening
Britain's diplomatic ties with Saudi Arabia.
The South African
visit forms part of a worldwide investigation into BAE's activities, including
activities in countries such as Romania, the Czech Republic and Tanzania.
According to the Guardian, the SFO seems to be particularly interested
in the relationship BAE had with the late Joe Modise and his advisor, Advocate
Modise, minister of defence from 1994, died of cancer in
BAE is alleged to have paid large sums of money to Hlongwane.
Hlongwane is currently chairman of the Ngwane Defence Group, of which his friend
and former defence chief, General Siphiwe Nyanda, is CEO.
The SFO will probably also be interested in the original version of
the JIT report, in which it was found that Modise personally influenced
the decision to go for the Hawk rather than for the cheaper Italian training
Another aspect of the SFO investigation is the role of Dr
Richard Charter and his Osprey Aviation. Charter, who drowned in 2004, was BAE's
agent in South Africa with regard to the arms deal.
BAE has admitted
that commissions were paid to Charter and Osprey but said those were for
legitimate services rendered.
Charter and Hlongwane had a common
interest in Tsebe Properties, of which Hlongwane is still a director.
The British investigation is not the only international investigation
into alleged bribery relating to South Africa's arms deal.
In July last
year the German prosecution authority in Dusseldorf confirmed that it was
investigating corruption relating to the purchase of four new corvettes for the
The German Frigate Consortium (GFC), headed by the industrial
conglomerate ThyssenKrupp, won this contract of R6,87 billion in 1998. The
tender for the corvettes' combat suites, in connection with which Shaik was
found guilty, was worth about R1,3 billion.
The German investigation
caused a stir at the time of Mbeki's visit to the recent World Cup Soccer
tournament in Germany for the official acceptance of South Africa as hosts of
the 2010 tournament.
The government claimed at the time that the
publicity about the German investigation had been planned to cast Mbeki's visit
in a bad light.
The weekly magazine Der Spiegel revealed that the
offices of ThyssenKrupp, Blohm+Voss, HDW and MAN-Ferrosteel, which all form part
of the GFC, had been searched and that bribes of R137 million were being
The investigators know that with the sale of the corvettes
[to South Africa], so-called "essential expenses", a euphemism for bribes by
German companies abroad" were written off against tax requirements, until this
practice became illegal in Germany [in 1999]. However, they are not yet sure who
approved the payments, reported Der Spiegel.
The German authorities
apparently received a document from South Africa as far back as in 2001 which
contained allegations that a high-ranking South African politician had received
millions of rands via Switzerland for his part in the awarding of the GFC
Der Spiegel's investigation emphasises the navy's first tender
process for corvettes (Project Sitron) in 1994 and the fact that Britain and
Spain were the only countries on the shortlist at the time.
decision did not stand for more than four weeks. On his visit to Germany in 1995
[as deputy president], Mbeki surprised Klaus Kinkel, Germany's minister of
foreign affairs, and the GFC, by announcing that "the race is still
The German prosecution authority is not willing to comment on
progress in its investigation, but it is known that Independent Democrats leader
Patricia de Lille, who went public in Parliament at the time with the "De Lille
dossier" detailing allegations of corruption, leaves for Dusseldorf soon to meet
with the body.
It will be nine years this year since the cabinet
approved the Defence Force's arms deal in 1998.
In these nine years the
arms deal has landed two people (Shaik and Yengeni) behind bars and cost Chippy Shaik, Schabir's brother and former head of the
defence force's arms procurement, his job *1. Zuma's sacking was also
obviously related to Shaik's demise.
Up to now, little has come of the promised 65 000 jobs and R104 billion worth
of investments that were to flow into the country as a result of
countertrade agreements. Latest figures indicate that arms companies have
created only 13 000 jobs here thus far. On the other hand, South African
taxpayers have already coughed up R29 billion for the armaments.
However, developments in the past few months have made it clear that the
arms-deal saga is far from over.
This year should bring clarity in a few
Trent and the
DA remain hopeful. As with the information scandal, it will take a long time to
get to the bottom of the arms deal, but the whole truth will
eventually be exposed.
- Will Zuma be charged with corruption again?
- If he is, will he call Mbeki as a witness?
- Will Mbeki remember about the meetings he had with the
French arms firm Thales, as Dr Essop Pahad, the minister in the
- Will the German and British investigations lead to prosecutions?
- Will there be penalties or fines imposed on arms contractors who are in
default with respect to their countertrade obligations?
*1 Officially, according to the
DoD, Chippy Shaik resigned on his own accord in April 2002, six months after the
JIT submitted its final report to Parliament, in order to pursue other
Indeed, the DoD, Armscor and SANDF gave Chippy a grand
Despite his conduct having been found suspect during
mid-2000, Chippy was allowed to remain in his position for two years and at the
same time to influence investigations into the Arms Deal.
had been disciplined by the DoD some time before he resigned, but according to
the DoD, this was in respect of handling of certain classified documents. It is
understood that, once indicated of irregular conduct by the JIT's final draft
report, he furnished his attorney with certain classified documents to support
But my conclusion is that after Lekota took over from
Modise, Shaik's conduct had become an embarrassment and liability to the MoD due
to his acting in contravention of his declared conflict of interest as well as
his blatant acts of cronyism, nepotism and self-dealing - but they could not get
rid of him on these counts because that would have at the same time constituted
a severe indictment on the DoD.
The entire Chippy Shaik saga is entirely
unsatisfactory and has not been dealt with adequately by the AG or
*2 One way or another Mbeki will be made to
remember his meetings he had with the French arms firm Thales on 17 December
1998 - hopefully under adversarial cross--examination by a senior counsel in the
High Court (things might get a little like the recent cross-examination of his
biographer Ronald Suresh Roberts).