/ 20 July 2001

The Modise house that Denel built

Paul Kirk

Joe Modise, the former minister of defence and one of the figures central to the multi-agency probe into corruption in South Africa’s R50-billion arms deal, had a six-bedroom mansion constructed partly at the expense of state-owned armaments company Denel which operates with taxpayers’ money.

This week the National Directorate of Public Prosecutions confirmed Mail & Guardian information on Modise’s home but said it will not be prosecuting. It says Modise agreed to repay the money spent by Denel to help build his home.

The soft line taken by the prosecutions authority over Modise’s expensive gift from a state entity that was, at the time, partially under his ministerial control, raises fresh questions about the integrity of the arms deal probe.

Colm Allan, head of the Public Service Accountability Monitor at Rhodes University, this week said: “On the face of it this appears to be a case of blatant corruption the abuse of public office for private gain … Reading the ministerial handbook, Modise seems to have opened himself up for possible prosecution. The ministerial handbook reads: ‘Members of Cabinet may not use their position … to enrich themselves or improperly benefit others.'”

A senior Denel official, who was in place at the time Modise used the company to build his home, told the M&G that the former minister only began to pay back the funds once he realised the Investigative Directorate for Serious Economic Offences was probing the matter. Documents relating to the home had, the source said, been handed over to arms deal investigators.

The M&G has established that Modise kept the home a secret from his colleagues in Parliament and the Cabinet. The property is not registered in his own name but in the name of a trust that does not bear his name.

Records at the Pretoria deeds office show that the property Erf 3403 of Eldoraigne Extension 3 in Midrand, Gauteng and two adjoining Mpumalanga Province plots are owned by an entity called the Modiba Trust. This trust, the M&G has established, is a trust set up by a Gauteng lawyer who acts on behalf of Joe Modise.

Erf 3403 of Eldoraigne boasts a plush home that was specially built for Modise. Work started on the residence in early 1996, while Modise was still the minister of defence. At no time did Modise record his interest in this residence, nor the two Mpumalanga plots, in the parliamentary register of interests. The only residence Modise declares in the register of interests is a home in Germiston.

As a Cabinet minister Modise would have had two residences at the time. One residence would have been maintained at his own cost, the other by the state. This would have allowed Modise to have a home in Cape Town for Parliament and also a home in Gauteng where his ministry is located.

According to rules laid down in the ministerial handbook, maintenance at his official home would have been for the account of the state generally through the Department of Public Works. In no way would the ministerial handbook have allowed for a Cabinet minister to use state resources under his own control for his own private purposes.

The M&G has established that after having the Eldoraigne home only partly built by his own builder, Modise booted out the private builders and called in workers from Denel Properties, a subsidiary of the state-owned arms manufacturer, which is 100% owned by the state.

Although Denel was making a small profit at the time of the construction, the arms producer had embarked on a campaign of retrenchments and could ill afford the expense. Income fell more than R200 million from 1996 to 1997 the period the Modise retirement home was being built.

A spokesperson for the national director of public prosecutions, Sipho Ngwema, said the agency had taken note of the deal. Said Ngwema: “There was an investigation, I can confirm that. We have investigated thoroughly and there is no hard evidence of impropriety that could be used in court. The minister claimed he took a loan from Denel and that he would repay it. He has indeed been paying the moneys back.”

But even if Modise does pay the money back he should still have recorded the deal in the register of interests. The only way he could have avoided admitting the expense to Parliament would have been if the work on his house was of less than R350 in value the limit at which MP’s have to declare any benefits.

Exactly when Modise began to repay the money could not be established. However, it is understood the repayments started in late 1997 or early 1998. It is claimed that the Investigating Directorate of Serious of Economic Offences was then already probing the matter, and that the Scorpions later also investigated.

At the time the house was built, the board of Denel read like a who’s who of Joe Modise’s family and business partners.

The director of corporate affairs at Denel, Thembi Tulwane, said the work undertaken was of a very minor nature. She also pointed out the debt was being repaid.

Modise could not be reached at any of his businesses, while his legal representative was in court at the time of going to press.

@Sparks fly as DA finalises its constitution

Jaspreet Kindra

Some Democratic Party members fear a New National Party takeover of their recently formed alliance as a debate over representation in the grouping’s federal council rages on.

Sparks have begun to fly as the Democratic Alliance goes about finalising its constitution, which is scheduled to be completed by the end of this month. A clause specifying how many members of the DP and the NNP are elected to the federal council is to be included in the proposed constitution.

The bone of contention is the divergent views on how representation in the council should be calculated. The predominant view in the NNP is that representation should be calculated on the basis of membership, while the DP believes it should be calculated on the basis of votes received by a candidate.

The NNP, which has far more members than the DP in the Western Cape and the Northern Cape, could have more representation on the council than the DP.

Official spokespersons from both the parties are non-committal on the issue and put up a united front.

DP spokesperson on the DA management committee James Selfe denies that there is an “NNP view or a DP view on the issue”. He says members have different perspectives and “it is essential to listen to the membership”. He maintains everything in the DA is up for debate, and what is needed is to balance divergent views.

NNP spokesperson on the DA management committee Renier Schoeman agrees with Selfe and says the issue is still being debated.

DP members point out both parties have a system of representation based on membership. “Representation based on membership makes perfect sense, as it takes into account your activist support which is the committed support base unlike the voter support which could vary every five years,” says a member who wants to remain anonymous.

Sources say it was only when DP members realised they could be outnumbered by the NNP on the federal council that a counter-proposal of representation based on votes was mooted.

There is a feeling in the DP that it should have never entered into an alliance with the NNP. “We should have merely entered into an electoral pact with them as Helen Suzman had suggested,” says a senior DP member.

The NNP in the Northern Cape believes that representation on the council should be determined by the amount of members each party has.

The NNP membership in the Northern Cape outnumbers the DP by nine to one. Besides making Northern Cape eligible to nominate more NNP members to the council, DP members lament, the province with the smallest population could end up having more representatives than a populous province like Gauteng.

The NNP in the Western Cape is maintaining a dignified stance. Johan Gelderblom, spokesperson for the DA in the province, says it is “confident” that for the sake of forming a united opposition, it will come up with a proposal that will satisfy the majority.

There are members in the alliance who wonder what the fuss is about. One of these is DA leader in KwaZulu-Natal “Tino” Volker, who says: “Why don’t we have representation based on the new branches which were established under the DA umbrella before the municipal elections? We even campaigned for votes on a DA mandate so there is no question of a DP or NNP member.”

Not a single draft of the proposed constitution has been circulated in the provinces for comment yet, so the debate is likely to rage on for a while.

@New Bill ‘short-sighted’

Barry Streek

The text of the controversial Immigration Bill has finally been published with provisions that “prohibited immigrants” includes people who support organisations promoting “terrorism” and “social violence”.

Although the Bill states that the Department of Home Affairs will promote “human-rights culture in both government and civil society”, it explicitly states that “any person”, whether a South African citizen or not, will be obliged to identify themselves at any time to a departmental official or a police officer.

If they do not identify themselves, they may be taken into custody “without a warrant”.

The head of the Institute for Democracy in South Africa’s immigration project, Vincent Williams, said the Bill had been drafted without a clearly articulated government policy on migration and that the requirement that companies wanting to employ foreign workers had to play a levy to a training fund was “short-sighted”.

He said the Bill did not represent any strategic shift in mindset and was merely a sophistication of the worst provisions of the Aliens Control Act.

The Bill, which is due to debated in Parliament after it resumes sitting on August 21, provides that “prohibited persons” would not qualify for temporary or permanent resident permits.

Prohibited people include “a member of or adherent to an association or organisation advocating the practice of racial hatred or social violence” and “anyone who is or has been a member of or an adherent to an organisation or association utilising crime or terrorism to pursue its ends”.

Neither “social violence” or “terrorism” are defined in the Bill but on the face of it seems that a foreigner who supports the aims of organisations like the Palestine Liberation Organisation or Hamas would be denied a residence permit.

The Democratic Alliance’s spokes-person on home affairs, Francois Beukman, said these provisions were completely contrary to trends elsewhere in the world where entry provisions were being liberalised to facilitate the recruitment of foreign skilled workers.

He added that currently it took about two years to acquire a residence permit and the proposed provisions were going to impose further barriers.

Williams said the provisions to enter and search premises, and to detain suspected illegal immigrants were nothing but a euphemism.

“In the White Paper on international migration that preceded the Bill, it is noted that immigration officers will be armed and may be recruited from the ranks of the police and the army.

“It is not far-fetched to imagine a semi-private army conducting commando-style raids in areas where there are high concentrations of foreigners,” Williams said.