Defence department 'baffled' by R99bn report


The defence department is baffled by a report which claims that R99-billion has been secretly spent since 1994 through the Defence special account.

Finance Minister Pravin Gordhan had exempted the special defence account from sections of the Public Finance Management Act for three years. (David Harrison, M&G)

"I don't know where they got this R99-billion figure. I don't know what calculation this is. I am baffled," defence ministry spokesperson Siphiwe Dlamini commented on Monday about a report in the Star.

"The auditor general has not even once given us a qualified report on that account. It has been unqualified since its inception in 1974."

The Star newspaper reported that it had calculated the amount had been spent through the military account, which has a block on public access.

It reported this was double the R49.6-billion that the auditor general told the Truth and Reconciliation Commission had passed through the account from 1974 to 1994.

Nearly R14-billion more was reportedly due to go into the account over the next two years.

Disclosing spending details
Last week, the Star reported that Finance Minister Pravin Gordhan had exempted the Special defence account from sections of the Public Finance Management Act for three years.

The national treasury said this was so the account would not have to publish separate financial statements and disclose spending details.

The paper reported that although the budgets show how much money is transferred into the account each year, it did not give details of what the money was for or how much was spent.

The Star quoted anti-arms-deal activist and former banker Terry Crawford-Browne as calling Gordhan's exemption illegal, citing the PFMA and the Constitution, which both require transparency in government expenditure.

"Like his predecessor, Gordhan has no authority to flout the Constitution," he said.

"Both the TRC and the auditor general were clearly unhappy about continuance of these funds after 1994 and the lack of proper auditing. Yet, 14 years later, the minister of finance is still complicit in these shenanigans," said Crawford-Browne.

Funding covert activities
According to the newspaper, the account is for buying weapons and equipment, funding covert activities and spending on the arms deal.

In the 2007 budget, the defence department said it was for "special defence activities and purchases, including procuring defence main equipment and strategic armaments, operating and maintaining defence main equipment and financing intelligence-related defence activities", the paper reported.

Dlamini said it was gazetted by law and managed by the defence department and national treasury. Certain aspects of it were not for public consumption, he said.

"When we procure equipment for the defence force, it happens sometimes over a long period of time. There's nothing secret about it," he said.

"That account allows us to use money we have budgeted for ... and if the item or equipment is not available at that specific time, we keep the money until the item is available ... That may sometimes take two to three years." – Sapa

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