Mungo Soggot
A respected arms expert, who was finance director for a South African company implicated in a massive weapons smuggling case in the United States, has been picked to run Armscor.
Llewellyn Swan, who started as managing director of the weapons procurement company last week, has worked in the local arms industry for 22 years.
He was formerly finance director at Fuchs Electronics, a division of the Reunert weapons empire, which was fined $11-million last year for smuggling equipment from the US in breach of its arms export legislation.
Fuchs pleaded guilty to 11 criminal counts involving the sale of US artillery fuses to Iraq before the Gulf War. Armscor was also charged, and paid $1-million after admitting to setting up a front company to channel weapons.
Swan was never indicted, nor questioned by US officials, but said he received “some veiled threats in terms of a letter”.
“I was mentioned because I knew about our dealings with the States and our export countries. I was not directly involved. My problems with the States were very small. I was one of the guys they would have liked to talk to, but I think they would have liked to talk to lots of people,” he said.
Swan rose through the ranks in the Reunert empire to become the group’s executive director in 1992, a position he retained until he left the company this year. Between April 1997 and March 1988 he was also a director responsible for special projects.
He was head-hunted by the new government, which is clearly impressed with his experience and knowledge of the industry, as well as his plans to make the state’s weapons agency less white.
One high-ranking former Umkhonto weSizwe officer, who is now in government, enthusiastically endorsed Swan this week, saying he was very much in favour of “transformation”.
Swan says his appointment reflects the Ministry of Defence’s drive to “put the right people in the right jobs. In time I will be replaced with a black person,” he said. He added that one of his tasks would probably be to groom a black successor.
Swan has a strong reputation in the industry. The head of the Institute for Security Studies, Jakkie Cilliers, said this week Swan was a “hard-nosed business appointment” needed to steer Armscor through a “very tough time” for the struggling local defence industry.
Armscor, once at the heart of the former government’s total onslaught strategy, focuses almost exclusively on weapons procurement, leaving manufacturing to Denel.
The operation, staffed by about 1 000 employees, also manages a few strategic installations such as the Institute for Maritime Technology, a research centre for the South African National Defence Force, and Gerotek, a vehicle testing installation.
Armscor will also monitor foreign investment in the local arms industry – investment that forms part of the government’s “package” acquisitions of foreign military hardware. These “counter-trade” deals involve substantial investment by foreign companies in South Africa.
Armscor retrenched about 180 people earlier this year. Swan declined to be drawn on whether more lay-offs were on the cards, but said most of the “right-sizing” needed for Armscor to become a procurement agency had been implemented.
The arms smuggling case last year proved to be a thorny chapter in US- South Africa relations, as the US imposed sanctions on the South African companies. The embargo was lifted in a top-level agreement between the two countries, allowing Denel to operate in the US.
Swan said the local industry was “trying to put all that behind us.We have a compliance programme with the US. And when that is over in three years, it will be business as usual with the US.”
The case was settled in February 1997. The US government agreed at the time to drop criminal charges against seven executives from South African companies, in exchange for their co- operation in pinning down top arms dealer Robert Ivy, who was accused of illegally shipping military technology to South Africa. Ivy was subsequently imprisoned for six months.