Publication: The Star Issued: Date: 2007-10-19 Reporter: Chiara Carter Reporter:

Germans Seek Help in Arms Deal Bribe Probe

 

Publication 

The Star
Date

2007-10-19
Reporter Chiara Carter

Web Link

www.thestar.co.za

  

Raids on ship-building companies lead to South Africa

The Justice Department has confirmed it has received a potentially explosive German request for help in probing alleged multi million rand kickbacks in the arms deal.

Justice Ministry spokesperson Zolile Nqayi said yesterday the formal request was with the department.

Nqayi said the request was still being processed and denied widespread, behind the scenes speculation that the matter had already been referred to the SA Police Service, not the National Prosecuting Authority (NPA), which has prior experience with probing the arms deal.

The request comes on the eve of the ANC's national conference and at the very time that NPA head Vusi Pikoli is suspended pending an inquiry into his fitness to hold office, while the Scorpions' investigation into SAPS Commissioner Jackie Selebi is being reviewed.

Most speculation about the reason for Mbeki suspending Pikoli has focused on the NPA's plans to arrest Selebi *2, with claims that Mbeki is protecting Selebi.

But some have suggested that several senior government and ANC leaders were not happy about Pikoli's independent approach, including on the question of whether to recharge ANC deputy president Jacob Zuma and the possibility of the Scorpions further probing so far little explored aspects of allegations about corruption in the arms deal *1.

Reports on the German investigation have suggested that Mbeki himself might have some questions to answer.

And this intensified as the succession battle rages on.

Then there's the position of Tony Georgiades, a shipping magnate who lobbied for German companies Thyssen and Ferrostaal in the arms deal.

Georgiades was allegedly a sanctions buster in the apartheid era and formerly close to ex-president FW de Klerk, who is now married to Georgiades's ex-wife, Elita.

Georgiades later reportedly developed relationships with influential ANC figures including former justice minister Penuell Maduna, former NPA boss Bulelani Ngcuka and Mbeki himself.

According to sources, Georgiades is central to an investigation into multimillion commission payments allegedly paid for German success in winning the warships contract.

Separately, from the probe into Georgiades's role, Der Spiegel magazine has reported that German investigators have documents allegedly referring to a meeting between the top brass of the German Frigate Consortium and South Africa's former defence acquisition chief, Chippy Shaik, who has denied any wrongdoing.

The German request for assistance comes after German investigators last year conducted several raids at companies linked to the German Frigate Consortium that won the contract in South Africa.

Der Spiegel reported that investigators' leads included a tip-off about a middleman paying money to a senior South African politician in Switzerland.

The magazine also reported that a subsidiary of ThyssenKrupp, the company that led the consortium, paid about $3-million to an offshore company and about $22-million to a company registered in Liberia.

A similar mutual legal-assistance request was previously made to South Africa by Britain, where investigators have been probing commissions allegedly paid by another arms deal company, BAE Systems.

The British have declined to say who they are investigating, but previous reports on possible problems with the BAE deal focused on the late defence minister Joe Modise, his adviser Fana Hlongwane, wealthy businessman John Bredenkamp and the late Richard Charter.

An investigation into massive kickbacks related to a BAE deal with Saudi Arabia was cancelled last year, with Britain's then prime minister Tony Blair saying the investigation was a threat to national security.

With acknowledgements to Michael Schmidt  and The Star.


*1       It is still my theory and I'm still sticking to it.


*2      This is simplistic first-order stuff.

The intrigue in The Republic has advanced far beyond first-order theories and analysts need to start considering second-order theories because the Government has very successfully effected damage control in respect of first-order risks.


*3      Georgiades is central to the German Strategic Alliance consisting of inter alia, the German Frigate Consortium (GFC), the German Submarine Consortium (GSC), EADS, Eurocopter, Daimer-Chrysler Aerospace, Divisions of BMW such as MTU (the suppliers of diesel engines for the submarine and frigates, Siemens, etc., which bid for the greater share of the larger Arms Deal Package Deal, before Mbeki et al conceived the smaller Package Deals for each equipment type.

This was mainly to leverage the advantages of having more suppliers rather than just one supplier.