Allegations of dirty money and influence-buying at the heart of South Africa’s multibillion-rand arms deal have emerged from a British investigation of BAE Systems, the defence conglomerate that secured a R30-billion South African order for Hawk jet trainers and Gripen fighters.
The allegations are listed in an application by the United Kingdom’s Serious Fraud Office (SFO) for legal assistance from South Africa.
BAE developed an extensive web of influence in South Africa. The Mail & Guardian charts who the main players are and what they have to say about the SFO’s allegations.
Fana Hlongwane
Known as ”Styles” because of his fast-lane lifestyle, Hlongwane is said, by several sources in the defence and political sectors, to be a sharp lawyer and a tactical businessman. He returned to the country in the early Nineties and played a key role at the Kempton Park discussions in the sub-group on defence. They credit him as being the power behind former defence minister Joe Modise. Hlongwane was Modise’s adviser.
However, at least one source who knew BAE agent Richard Charter says Hlongwane was advising Charter and BAE at the same time. Hlongwane ended his term as adviser when Modise stepped down as minister of defence in 1999, but by that time he had been appointed a director of Denel, at the time a potential acquisition target for BAE.
”Fana was batting for BAE,” said one official of the Department of Trade and Industry (DRI). ”We started a dialogue around the restructuring of Denel late 1997, early 1998. Hlongwane intervened to stop the analysis. We were told that BAE didn’t want DTI doing an analysis on the aerospace industry.”
BAE had apparently come to an understanding with Modise about the future of Denel, and Hlongwane, one senior Denel source claimed, used his relationship at the time with public enterprises minister Stella Sigcau’s daughter to keep his hand on the Denel rudder. ”In the background was Joe Modise,” the source claimed. ”Fana Hlongwane was his man and Hlongwane was linked to BAE.”
When Jeff Radebe took over at the Department of Public Enterprises, a new team found BAE’s conditions to bail out Denel impossibly onerous and rejected the deal.
Hlongwane clearly impressed some BAE executives. Following the conclusion of the arms deal he was appointed as southern-hemisphere president of a Swiss company called Wingate Capital, led at the time by Allan MacDonald, a former director of BAE for Africa and Asia.
It was MacDonald who, together with Richard Charter, had helped drive through the Hawk-Gripen deal in South Africa, before leaving BAE in 1999. Despite repeated attempts, Hlongwane could not be contacted for comment.
Basil Hersov
Hersov was slightly evasive this week when questioned by the M&G about his relationship with BAE. He claimed not to recognise the company FTNSA Consulting, which allegedly received R77-million.
After some prodding he admitted to having had an early representative arrangement with BAE in South Africa, which he claimed was later ”stolen” by the late Richard Charter of Osprey Aerospace.
He confirmed having been paid out a sum by BAE in recognition of that agreement, but claimed the figure of R77-million was too high. He said the payment was properly disclosed to the authorities, including the South African Reserve Bank.
Hersov was certainly influential. He was the founder of the Airborne Trust, chaired by Charter, which concluded a memorandum of understanding with the MK Military Veterans’ Association in March 1998, shortly before BAE was selected to supply Hawk and Gripen aircraft.
BAE pledged to donate R4,5-million to the trust to fund a project to train and reintegrate ex-combatants from MK, but the project went nowhere and Hersov admitted only a few hundred thousand rands had been disbursed.
Hersov declined to answer further questions about his role in support of BAE, citing another engagement.
The late Richard Charter
Charter’s Osprey group was the declared agent of BAE on the South African deal, but BAE would never reveal how much had been paid to Osprey in particular or on commissions in general.
According to the SFO, Osprey was paid R27-million, but other investigations have suggested that it was just one payment in a pattern of overt commission payments run through a Swiss legal office.
The SFO investigation suggests Charter was also the beneficiary of Huderfield Enterprises, which got R350-million, but one of the executors of Charter’s estate, Brian Eaton, denied that Huderfield belonged to Charter or the estate. He appeared to be familiar with the name, however, and evaded questions about what he knew of Huderfield
Charter served as the chairperson of BAE Systems South Africa, established in 1997, as well as the chair of the Airborne Trust, whose patron was Modise.
Charter had a long-standing relationship with the old South African Defence Force, supplying parachutes and other equipment. He also had an interest in SA Airlink, which was sold after his death.
Following the BAE deal he built a luxury private farm on the Orange River, complete with golf course.
Charter’s widow, Janet, who has taken over as a director of most of his companies, did not answer a message left on her cellphone.
One source said Hlongwane was an adviser to Charter, from before 1998, but that the two had fallen out when Hlongwane muscled in on the sale of Airbus aircraft to South African Airways. Before his death, Charter denied having any business relationship with Hlongwane.
John Bredenkamp and Jules Pelissier
Jules Pelissier, an ex-Rhodesian special-branch police officer, has long been considered Bredenkamp’s right-hand man in the arms-sales business.
Bredenkamp made his fortune trading tobacco and sanctions-busting out of the old Rhodesia, and moved into international arms broking, allegedly making lucrative business out of the Iran-Iraq war.
Bredenkamp’s United Kingdom premises were raided by the SFO last year in a move apparently linked to its BAE investigation.
When the M&G phoned Bredenkamp’s Breco head office in the UK this week and asked for Pelissier, his secretary was about to put us through to him when she asked who was calling. Suddenly, Pelissier was not available.
Bredenkamp’s spokesperson, Costa Parfitis, said his boss denied having anything whatsoever to do with the South African arms deal as far as BAE was concerned. He said he had ”availed himself” to the SFO and had nothing to hide.
However Bredenkamp — and Pelissier — have also long been associated with the company Aviation Consultancy Services, which is an agent for a number of aircraft manufacturers around the world, including BAE.
One well-placed source told the M&G that ACS was the declared agent for Augusta during the South African deal. Augusta was selected to supply light helicopters to the South African National Defence Force.
David Clark
Clark, based in Neuchâtel, Switzerland, is clearly a money man and may well be a front for someone else. He refused to comment on the SFO claims. A Briton, he appears as a director in three South African companies: Bluebay Capital, Chesnomprop and Elm Investments.
Joe Modise
Modise, who died of cancer in 2001, is very much the ghost at the arms-deal banquet, and the web of sleaze allegations surrounding his conduct has never been adequately cleaned up. The former Umkhonto weSizwe commander was minister of defence from 1994 to 1999, and played a central role in the policy-making and procurement processes of the arms deal.
He has consistently been accused of improperly influencing the decision to buy BAE Systems’ Hawk trainer aircraft instead of the cheaper Aermacchi jets preferred by technical assessors. He personally intervened to eliminate price as a criterion, moving the Hawk to the top of the list.
While still minister of defence he acquired shares in Conlog, an electronics company that stood to benefit substantially from ”offset” contracts that suppliers like BAE were required to enter into in terms of the arms deal.
The report of the joint investigating team to Parliament described his conduct as ”extremely unfortunate”, but cleared him of corruption.
The M&G subsequently reported that two members of his extended family were directors of a company called Futuristic Business Solutions (FBS), which concluded a R1,2-million deal with warship supplier Thyssen to influence purchase decisions in the arms deal while Modise was still minister.
Before Modise’s death, Scorpions investigators made considerable progress in probing the Conlog deal as well as Modise and Hlongwane’s involvement in the arms deal more generally.
After Modise died, Scorpions boss Bulelani Ngcuka allegedly backed off the investigation, a decision some in the National Prosecuting Authority acknowledge has helped create the impression that Zuma is being unfairly treated. At the time of his death, Modise’s closest associates were a group of white arms-company executives drawn from the greasy brotherhood of the sanctions-busting era — a strange legacy for a man claimed as a hero of the liberation struggle.
