Publication: Business Day Issued: Date: 2011-06-30 Reporter: Editorial

Arms deal probe cannot be avoided



Business Day



Reporter Editorial
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New prima facie evidence of serious irregularities in the arms deal now makes it impossible for President Jacob Zuma to avoid authorising a full inquiry if he wants to retain any credibility as a leader serious about rooting out corruption

The weight of prima facie evidence of serious irregularity in the award of contracts in the multibillion- rand arms deal has now grown to the point where it is impossible for President Jacob Zuma to avoid authorising a full judicial inquiry if he wants to retain any credibility as a leader who is serious about combating corruption.

Documents obtained by Democratic Alliance MP David Maynier seem to show that public-servant- turned-defence-consultant Fana Hlongwane was paid at least R100m to facilitate aspects of the deal. While the contracts were signed after Mr Hlongwane resigned as adviser to former defence minister Joe Modise, the way in which the payments were structured show a clear intent to hide them from scrutiny.

It is unclear what legitimate services Mr Hlongwane could possibly have provided that would justify such huge fees and bonus payments, especially since he ostensibly no longer had a direct influence on the progress of the deal. The obvious inference is he was the middle man whose job was to pass on bribes to the ultimate decision-makers.

In addition to the documents released by Mr Maynier, the Mail & Guardian newspaper’s investigative team has obtained records of the British Serious Fraud Office’s investigation into BAE Systems, which won the contract to supply SA with fighter jets and training craft in a joint venture with Swedish arms manufacturer Saab.

Revelations in the Swedish media recently forced Saab to admit that BAE secretly paid Mr Hlongwane R24m for "consultancy services", but the documents obtained by the M&G team show this was merely the tip of the iceberg. There is now clear evidence that BAE set up a complex channel to facilitate the payment of up to R1bn to various "advisers" on the arms deal.

The focus in the South African media over the past week has been on whether the Hawks investigative unit will now be obliged to reopen its investigations into the arms deal. However, the scale of the alleged wrongdoing is now so great, and the political implications so grave, that it is no longer sufficient for a body that falls under the control of the executive to conduct the investigation.

Former national director of public prosecutions Vusi Pikoli was fired for resisting executive interference. The Scorpions, which reported to him and were therefore insulated from direct political influence, were scrapped when they refused to stop sniffing around the arms deal. What hope do we have of the already compromised Hawks making meaningful progress in this area?

As important as a proper investigation of the arms deal has become, there are other structural reforms that need to be undertaken if SA is to avoid such incidents in future. The most important of these is transparency when it comes to party funding, the absence of which is the source of much of the large- scale corruption that afflicts SA .

It is clear that while individuals like Mr Hlongwane and the late Mr Modise benefited personally from the arms deal, the bulk of the millions paid covertly by hardware suppliers to ensure they were awarded inflated contracts must have ended up in ruling party coffers.

This is impossible to prove at present because SA’s political parties are legally entitled to keep the identity of major donors secret. Until they are obliged by law to open their books to public scrutiny there will be an entrenched incentive for state tenders to be corrupted ­ and a disincentive for the executive to act against guilty parties.

The arms deal was where corruption on a grand scale started in the democratic era, but unless action is taken it will not be where it ends. There has been a proliferation of grand but unnecessary projects on the scale of the Soccer World Cup stadiums, such as PetroSA’s proposed refinery and the mooted high- speed rail link between Jo burg and Durban, that seem designed mainly to generate multibillion-rand tenders. These threaten to be the arms deal scandals of the future.

With acknowledgements to Business Day.

Just as it is impossible for President Jacob Zuma to avoid authorising a full inquiry into the Arms Deal if he wants to retain any credibility as a leader serious about rooting out corruption, it is impossible for President Jacob Zuma and many of his friends and countrymen to avoid staying out of jail if he does not avoid authorising a full inquiry into the Arms Deal.

It's a classic Catch-22.

But he'll go for the latter because he and many of his friends and countrymen care a diddly squat about rooting out corruption in this country.

Indeed which of them actually care about this country at all?

They didn't fight for what they could give to the country, but for what the country could give to them.

My tax.

In a trough.