The Donen commission, appointed by President Thabo Mbeki to probe abuse of the Iraq oil-for-food programme, will not investigate political bribery first reported by the Mail & Guardian.
The Presidency announced the commission, led by senior counsel Michael Donen, last Friday. This was in response to last October’s report of the independent inquiry committee (IIC) appointed by United Nations Secretary General Kofi Annan to investigate international abuse of the oil-for-food programme.
The IIC listed six local companies, alongside more than 2 000 internationally, that apparently paid “after-sales service fees”, “inland transportation fees” or “surcharges” (all effectively kickbacks) to the Iraqi regime while doing business under the oil-for-food programme.
The oil-for-food programme was an exception to UN-mandated sanctions on Iraq: the regime could sell crude oil to pay for food, medicine and other approved items. The kickbacks contravened sanctions rules by putting cash in Saddam Hussein’s hands.
The IIC devoted a separate section of its report to Sandi Majali and his companies, Montega Trading and Imvume Management. Majali and Imvume are best known for their diversion of state oil funds to the African National Congress before the 2004 elections — the Oilgate scandal uncovered by the M&G.
The IIC focused on Majali as a case study of how Iraq sought to buy international support by making lucrative oil allocations to politicians, parties or those close to them. It found Majali and his companies had “profited from Iraq’s efforts to deliver business opportunities to South Africa in return for political support” and that they had “used their relationships with South African political leaders to obtain oil allocations”.
This echoed M&G disclosures that Majali pursued his Iraqi oil business with the backing of top ANC officials, including secretary general Kgalema Motlanthe and treasurer general Mendi Msimang, that Iraq had been promised the ANC “friendship”, and that Majali’s Iraqi oil trades were partly meant to fund the ANC.
But it appears Donen will not probe these issues. Mbeki’s draft terms of reference, likely to be gazetted this Friday, limit the commission’s probe to whether illicit payments were offered or paid, whether that is a prosecutable offence in South Africa, and recommendations on how to prevent a repetition, including “legislative measures or the establishment of systems and mechanisms”.
A major consideration appears to be South Africa’s lack of legal measures against citizens who break UN sanctions, despite its vaunted good international citizenship.
The UN relies on member states to police sanctions, but South African legislation to give teeth to UN resolutions is stalled. The Application of Resolutions of the Security Council of the United Nations Act was passed in 1993, but apparently never proclaimed by Mbeki or his predecessors.
Although his terms are limited, Donen may still encounter some political controversy.
The IIC did not include Majali’s firms on the formal list of those making illicit payments. However, the report on him included Iraqi documents showing he had promised to pay “return money”, and that $60 000 was paid to Iraq on Imvume’s behalf. The IIC could not establish by whom.
This means Donen will probe some of Majali’s companies’ activities. Motlanthe, too, may have questions to answer. The IIC report puts him in proximity with Majali’s kickback negotiations with the Iraqis.
The report reveals the following chronology:
- March 6 2002: Majali meets officials in Baghdad seeking an allocation of two million barrels of crude oil for Imvume. He promises to pay, in tranches, a kickback due from an earlier deal.
- March 7: A sealed letter from Motlanthe is forwarded, under cover of a letter from the Iraqi ambassador, to Iraqi deputy prime minister Tariq Aziz. The IIC could not trace Motlanthe’s letter, but noted Aziz and the then Iraqi vice-president’s approval of Majali’s application on the ambassador’s covering missive.
- May 10: Majali meets Aziz in Baghdad. A letter from Majali to Iraq requesting the rescheduling of his kickback payments indicates that Motlanthe also attended.
- May 20: $60 000 is paid as an “advance” kickback on Imvume’s account.
Majali and Imvume have not denied the kickback negotiations, but claim they never intended to pay, and did not pay. Majali has also claimed that Motlanthe was not at the meeting with Aziz. Motlanthe and the ANC have not answered M&G questions on the matter.
This week, Imvume said it would cooperate with the Donen commission, adding that it would “be able to show that Imvume has been unfairly targeted by the media” and identify the “political puppeteers” responsible.
The IIC also implicated Mocoh Services South Africa, a joint venture that includes Tokyo Sexwale and British-based oil trader Michael Hacking. The IIC listed illicit payments of $574 699 by Mocoh, with deposit slips reflecting Hacking’s name.
Mark Willcox, CEO of Sexwale’s Mvelaphanda Holdings, said it welcomed the opportunity to clear the air, but reserved full comment pending legal advice. Hacking did not respond directly.