Court documents have for the first time put a figure on Armscor’s illicit deals with Saddam Hussein _ an amount valued at more than 18 times this year’s total official arms exports. Stephen Laufer reports
DETAILS of South Africa’s illicit arms dealings with Saddam Hussein are emerging for the first time in a Pretoria court action in which a Palestinian businessman is suing Armscor for unpaid commission on weapons sales.
South Africa supplied Iraq with weapons valued at US$4,5- billion during Saddam Hussein’s war with Iran which ended in 1989, according to court papers.
Though Armscor no longer denies having sold weapons to Iraq, this appears to be the first time a dollar figure has been put to the arms transfers between Pretoria and Baghdad. If accurate, the figure before the court reflects sales valued at more than 18 times this year’s total official exports by the South African arms industry.
The legal action against Armscor and its international marketing subsidiary, Nimrod International, by Palestinian businessman Walid Saffouri, who is alleging breach of contract and conspiracy to defraud, will add to South African embarrassment at having helped arm Iraq in the run-up to the Gulf war.
The Armscor hardware fuelled two wars in which millions died. It is said to have included powerful G5 howitzers, military electronics, missile-upgrade kits which may have enhanced Iraq’s ability to hit Israeli targets during the Gulf war, and munitions, including deadly anti-personnel cluster bombs.
Bought for use during the Iraq-Iran war, many of the weapons are believed also to have been used against Allied forces in the Gulf war.
The morals of the deal don’t seem to have concerned the South African authorities much: Iraq is alleged to have paid for the weapons with oil, desperately needed in South Africa as the mid-1980s embargo noose tightened.
Armscor this week confirmed that it had supplied weapons to Iraq “prior to the Gulf war” and that it is “currently involved in a court case and is contesting claims for damages”. But it refused to reveal the magnitude or nature of the sales, saying to do so would prejudice the case “because it is about how much commission is owed. For us to put a figure on the sales would weaken our legal position.”
An Armscor spokesman denied emphatically that the weapons had been swapped for oil, but declined to say how they had been paid for.
Hearings in the case _ the amount in dispute is valued by Saffouri at $495-million, or 11 percent commission on assumed sales of $4,5-billion _ are set down for April and May 1995.
Both sides have engaged high-powered legal teams and are apparently still working feverishly behind the scenes in an attempt to reach an out-of-court settlement. Shielded for many years by the wide-ranging Protection of Information Act, Armscor must now fear that it will be forced under new constitutional provisions to reveal the nature and scope of many of its illicit international weapons deals in open court.
Armscor has already submitted 171 lever-arch files of pre- trial disclosure documents to the court. The second respondent in the case, the Cochrane family of Zimbabwe and South Africa, has submitted 22 files. But lawyers for Saffouri, fearing the Protection of Information Act still bars public access to the files until the Act is challenged in the Constitutional Court, remain reluctant to discuss details of the case.
Saffouri, who is based in Cyprus and whose company, Silver Falcon Enterprises, is registered in the Channel Island of Guernsey, says Armscor and Nimrod are in breach of contract because, though he brokered the contracts with Iraqi officials which led to the weapons deals and was to receive a cut on any sales made, he has seen only $150 000 in commission.
Saffouri set up Silver Falcon Enterprises in the early 1980s to formalise a 1982 business arrangement with Edward, John, William, Steven and Una Cochrane’s Guernsey company, International Technology Operations (ITO). He was to represent them in Iraq, Saudi Arabia and Jordan on a commission basis.
The Cochranes were keen to sell a cluster bomb they had developed for use by the Ian Smith regime in former Rhodesia. Cluster bombs helped make the Iraq-Iran war one of the bloodiest conflicts in human history.
Guernsey was chosen as the seat of ITO and Silver Falcon because the Channel Islands are well known as a base for offshore activities by companies keen to avoid European company taxes and close government scrutiny. Companies are allowed under Channel Islands law to operate with nominee directors, thereby allowing the true ownership of companies trading there to be kept under wraps.
Armscor and its subsidiaries and other government sanctions- busting agencies of the apartheid years are known to have registered front companies in the Channel Islands of Guernsey and Jersey.
Saffouri alleges Armscor acquired an interest in the Cochrane’s cluster-bomb business and, via them, in ITO. Nimrod marketing director Richard Wright, an Ulsterman, became a director of ITO, say Saffouri’s lawyers. And if ITO was not an Armscor subsidiary, it functioned as a front for the South African weapons dealer.
Aware of Saffouri’s connections in Iraq, Armscor/Nimrod asked him via the Cochranes to approach Iraq with a range of products. Sales were to be made under the ITO umbrella to avoid the United Nations embargo on weapons trade with South Africa. No written contract was ever signed between Saffouri and Armscor _ not unusual under the cloak-and-dagger circumstances of South Africa’s sanctions-busting operations. Silver Falcon did have a written contract with the Cochrane family.
Saffouri says that on trips to Baghdad he introduced the relevant Iraqi military procurement officials to the G5 howitzer and a range of shells for specialised tasks. He also says that in 1984/85 he was party to discussions about setting up the technology to manufacture the G5 in Iraq.
Major sales were then made to Iraq and “included large orders of howitzers, munitions, battlefield electronics”, in which South African manufacturers are considered world leaders, and “equipment to enhance Iraq’s rocketry potential,” said Saffouri’s legal adviser Sam Taylor this week from Cyprus.
Their case centres on the allegation that Armscor induced ITO to break its 11 percent commission contract with Silver Falcon. Further proceedings have been instituted against the Cochrane family in Guernsey, alleging breach of contract.
Saffouri says he has thus far only been paid $150 000 as 11 percent of what the Cochranes claim was their royalty on sales of $22-million worth of cluster bombs to Iraq. The family says it only earned a royalty because it had sold its cluster bomb to Armscor.