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Auditor-General's Presentation & Opposition Reactions

Grand-standing and conflicts of interest - November 15, 2001

For a copy of the report visit : Arms Deal Reports

By Paul Stober

The South African government has been cleared of charges of widespread corruption in the awarding of contracts for its strategic arms procurement package, however the arrest of corrupt officials is set to continue and the deal is likely to stay before the courts for quite some time.

While clearing the government of widespread corruption, Bulelani Ngcuka, head of the National Directorate of Public Prosecutions (NDPP), warns: The area of conflict of interest of government officials is cause for concern and is viewed as extremely serious. We will be taking action within the next 24 hours.

Conflict of Interests

Ngcuka absolutely refuses to say anything more, however the joint report of the investigation by independent state agencies into the allegations of corruption in the arms deal, fingers Chippy Shaik, the Head of Acquisitions for the Department of Defence, for a conflict of interest. The report concludes that Shaik, whose brother has interests in the Thomson Group and African Defence Systems (ADS) - companies that won contracts to provide weapons suites to the navy for its new ships - did not recuse himself properly from the tender process.

Richard Young, the chairman of C2I2, a rival company who lost out to Thomson and ADS, who has threatened to sue the government because he was not awarded certain contracts, is leaving his options open about whether or not to pursue legal action. Presently, he has studied the report and deciding a course of action.

Cars and Corruption

Ngcuka has already charged Tony Yengeni, the former ANC Chief Whip, with fraud and corruption - after he allegedly promised the European Aeronautics Defence Systems (EADS) that he would influence the procurement process in their favour. The case is due to come up in court again, early next year.

Michael Woerfel, former head of EADS in Southern Africa, has been charged with Yengeni. German prosecutors are also investigating whether he broke that countrys anti-corruption laws. If they find he has, the German government can take steps to cancel the contracts it has been awarded.

Terry Crawford-Browne, of Economists Allied for Arms Reduction (ECAAR) indicates that his organisation will probably go ahead with court action aimed at forcing government to drop its plans to buy the weapons. In a nutshell, ECAAR is arguing that given the gravity of poverty facing the country, the government has no right to spend money on weapons. Crawford-Browne says their lawyers will obviously consider the results of the report by the agencies, but the court papers are ready and he doubts the outcome of the investigation will change anything.

Government to Press On

Despite the threat of court cases and further arrests by the NDPP, government is taking the report as a green-light to go-ahead with the arms deal. The decisions of the acquisitions process stand - there will be no further review, says Mosioua Lekota, the minister of defence. Besides clearing the arms deal of widespread corruption, the report also says the government's costing of the package and its procurement procedures were sufficient and on par with other countries - even if there were breaches.

Trevor Manuel, the finance minister, and Penuell Maduna, the justice minister, were visibly annoyed that government had been forced to appoint an investigation into the deal when many of the allegations had proven to be baseless.

Maduna slammed those who had promised to bring hard evidence of widespread corruption in the deal - and then failed to present the investigation with anything substantial. He named Patricia de Lille, the PAC MP who had first raised allegations of wrong-doing in the allocation of contracts, as one of these.

Opposition grand-standing However, initial reaction by political parties indicate they are less interested in the truth, than in political grand-standing. The DA staged a walk-out of the special Parliamentary briefing where the report was presented to MPs, claiming it falls far short of the specific formal accountability arrangements that are expected for a briefing of this nature.

The PAC described the report as a "white-wash and a sad cover-up". De Lille, again seemingly without evidence, is reported to have said she was sure the version of the report released had been sanitised.

The investigation was run by the Office of the Auditor-General, the National Directorate of Public Prosecution and the Public Protectors Office. The three have dismissed all allegations that their investigation was not thorough or that the final report was influenced by the executive.

With acknowledgement to SABC News.