‘The Company has carried
out intensive internal investigations with support of Debevoise and Plimpton to
analyse if and where non-compliant behaviour.’
German industrial giant Ferrostaal forked out over R300 million in
“questionable” payments to secure the sale of submarines to South Africa.
This is among the claims made by an internal audit of the company by
American-based law firm Debevoise and Plimpton. The US-based law company were
hired to help “clean up” Ferrostaal following a series of corruption scandals
and the arrest of Ferrostaal board member Klaus Lesker by the German Public
Prosecutions Authority last year.
No Ferrostaal executives have ever been charged in relation with corruption in
the South African arms deal, however in 2008 the Sunday Times ran a front-page
article claiming that Ferrostaal gave former South African President Thabo Mbeki
around R30 million in bribes and that, after sharing this with Jacob Zuma, Mbeki
handed some of the cash to the ANC as a donation. The source of these
allegations was an unsourced investigation report carried out by a foreign
investigations company – who were not named by the Sunday Times.
Both Mbeki as well as Ferrostaal denied the claim, however neither sued for
defamation. Lesker, currently on bail and under investigation for corruption and
other offences, wrote a letter to the Sunday Times warning that their “false”
reporting was placing thousands of jobs in jeopardy.
While Ferrostaal yesterday indicated they would not release the Debevoise and
Plimpton report, a German newspaper, Sueddeutsche Zeitung, claims to have a
leaked copy of the report – which, according to the newspaper, shows that the
company paid bribes to Libyan dictator Muammar Gaddafi – and forked out over 30
million euros in “questionable” payments to SA during the 1999 R60 billion arms
Spokesman for Ferrostaal, Dr Maria Lahaye-Geusen, told The Citizen “I would not
like to comment on the Sueddeutsche Zeitung article in detail. The report was
confidential and we are concerned how the German media obtained it.
“I would, however, like to state that Ferrostaal has been taking great efforts
to clear up allegations of non-compliant behaviour in the past.
“The newly appointed executive board of Ferrostaal (who took office in May/June
2010), implemented all the necessary measures to support the ongoing
investigations of the (German) Public Prosecutor.”
Lahaye-Geusen did not deny the allegations of payments being made to South
Africa in return for arms deal contracts. At the time of the 1999 arms deal
German law allowed for payments to foreign politicians by German companies to be
claimed as expenses against tax returns – allowing companies to claim bribes as
Asked whether her company would co-operate with South African investigators,
Lahaye-Geusen said: “If we were to be approached by South African Public
Prosecutors of course we would assist them and co-operate.
“Our compliance programme encompasses systematic measures that are designed to
prevent legal offences as well as violations of the corporate guidelines, in
particular the anti-corruption regulations. A clear message was sent from the
new executive board that Ferrostaal has a zero-tolerance approach to
Advocate Paul Hoffman SC, director of the SA Institute for Accountability, said
he believes the new claims are: “another reason why we have to have a judicial
commission of inquiry into the arms deal. With the Scorpions closed down we no
longer have any independent corruption fighting agencies – so we need to have a
commission of inquiry to investigate the corruption in the deal.
“We have already had a British Cabinet minister admit that BAe Systems paid
“commissions” to obtain contracts to sell us jets and trainers.
“We have SAAB admitting they paid bribes to get the fighter jet deal. Now we
have evidence that Ferrostaal bribed to get the submarine contracts.”
Lahaye-Geusen said that the US law firm report was partly commissioned to help
the company comply with anti-corruption legislation.
With acknowledgement to
Paul Kirk and The Citizen.
All of this information, other than the direct
follow-up with Ferrostaal, was available off the Internet.
What more lurks out there?
Plenty Plus Plus.
We also have compelling evidence that Thyssen bribed to get the corvette
We also have compelling evidence that Thales bribed to get the corvette combat