Armscor and Fuchs Electronics have offered R108-million to settle an embarrassing US court case, report Paul Stober and Eddie Koch
ARMSCOR is willing to pay up to R54-million in an out- of-court settlement to save its officials the embarrassment of being extradited to the United States for a trial involving charges of violating the international arms embargo against Pretoria in the 1980s, say government sources.
And Fuchs Electronics (Pty) Ltd, a former Barlow Rand subsidiary also implicated in the case, would have to pay a similar amount as part of the proposed out-of-court settlement.
The sources believe the trial is part of a concerted effort by US authorities to keep Armscor out of the lucrative international arms market. In June the US government issued a “denial order” against the South African parastatal and its subsidiaries, as well as against Fuchs. This effectively prohibits American firms from trading with these companies, and acts as an effective arms ban against South Africa — even though the official arms embargo imposed by the United Nations in 1977 has been lifted.
Official documents in the possession of the WM&G indicate that the US government is demanding the extradition of high-ranking Armscor and Fuchs officials.
They include Bert Quinn, former manager of the missile guidance group at Kentron, a former Armscor subsidiary which designed and manufactured guided weapons and missile systems for the corporation; Brian Scott, also known as Graham Craighness, then materials manager for Kentron; and former Kentron “frontmen” Johan Lombard, Gerrit Pretorius and Vern Davis.
Former Armscor agent, William Metelerkamp, and former technical director of Fuchs, Jaco Budericks, are also listed on the US charge sheet.
The men and the companies they represented were involved in multimillion dollar deals designed to provide countries with advanced war technology, in contravention of the 1980s international arms embargo. One of their deals allegedly included an arms- for-oil transaction that provided Iraq’s Saddam Hussein’s army with missile technology used against Allied forces during the Gulf war.
This week, South African arms manufacturer Denel, of which Kentron is now a division, referred all questions about the case to Armscor. Last week, Armscor refused to comment on the case or the list of names, but admitted that the corporation was involved in “sensitive” negotiations with the US government.
The South Africans, Armscor, Kentron, Fuchs and seven Americans face charges of conspiracy to evade the UN arms embargo against South Africa, fraud, money laundering, forgery and tax evasion, among others, in a Pennsylvanian court.
Most of the charges relate to illegal deals between an American firm, International Signal and Control (ISC), and Armscor.
The charge sheet says ISC smuggled missile components and guidance systems, parts of night-vision devices, air-navigation devices, missile-tracking systems and munition technology, worth tens of millions of dollars, from the US to South Africa, in defiance of US arms control laws.
The indictment also lists:
* Attempts by Armscor and ISC to sell US$300-million worth of South African missiles to the People’s Republic of China in 1984. It is not known if the deal went through.
* A deal, brokered by ISC, through which South Africa provided Iraq with bomb technology in exchange for crude oil, between 1985 and 1989.
* That Armscor and ISC set up a complex international network of front companies — stretching from Singapore to Belgium — to facilitate and conceal the transfer of arms and technology from the US to South Africa.
* That South African front companies took part in a conspiracy by ISC to inflate — to the tune of $1- billion — “the sales, costs and profits of ISC in order to secure financing and investors”.