Former secretary of defence Pierre Steyn has spoken out for the first time about the arms deal, revealing that he resigned in November 1998 over the decision to force through the purchase of British Aerospace (BAE) Hawk jet trainers at twice the cost of those of the Italian bidder favoured by the air force.
‘In the end I resigned because, as secretary for defence, I was going to have to account for the costs to Parliament, which I couldn’t do,†Steyn told the Mail & Guardian.
Steyn has never before spoken publicly about the deal, although extracts have been published of an interview he gave to investigators from the auditor general’s office during the arms deal investigation.
His comments come in the midst of renewed focus on the controversial multi-billion rand weapons purchase.
Independent Democrats leader Patricia de Lille, who first publicised allegations of corruption in the arms deal, this week flew to Europe to meet with investigators from Britain’s Serious Fraud Office (SFO), which is probing the contract for Hawk trainers and Gripen fighters. She will also meet with German prosecutors who are investigating large commissions paid on the deal to sell corvette warships to South Africa.
The M&G last month revealed that commissions of more than R1-billion were paid by BAE on the South African deal to some eight entities, including to the consulting business of Fana Hlongwane, the special adviser to the then defence minister, the late Joe Modise.
In his interview with the M&G, Steyn emphasised the role in the Hawk decision played not only by Modise, but by his two close associates, Ron Haywood and Llew Swan.
Modise appointed Haywood as chairperson of Armscor, the state defence procurement agency in 1995 and Swan as CE in August 1998.
‘It was always Modise and his friends Haywood and Swan who had had their minds made up from the start,†Steyn recalled. ‘And there was, of course, also Chippy Shaik, whom I was told to appoint. It was clear he was there to follow the minister’s orders.â€
Modise also brought Haywood, and later Swan, into Arms Acquisition Council (AAC) meetings where Modise intervened to shift the goalposts radically in favour of the purchase of the Hawk.
To keep down costs, the Air Force had initially proposed a two-tier approach, which would see pilots make a jump from the existing Pilatus propeller trainers straight to the proposed new frontline fighter, meaning the Hawk would not feature.
In November 1997 Modise insisted on a three-tier system, which meant calling for bids on a jet trainer that would allow pilots to get jet experience before taking on a supersonic aircraft.
Then, during the adjudication process, Modise urged officials to adopt a ‘visionary approach†in the case of the jet trainer purchase. ‘The most inexpensive option may not necessarily be the best option,†he told one AAC meeting.
Finally, when it was clear that, in terms of the official selection criteria, the Hawk would lose out to the Italian MB339, which was half the price, Modise instructed officials to prepare a ranking based on a ‘non-costed option†where price would not be a factor.
In his 2001 interview with the auditor general, Steyn’s anger was palpable: ‘Their choice for Hawk was patently clear from the start … It was clear to most of us that the preferred choice of the minister and those who supported him, Haywood, Swan and company; the cost of that particular solution was almost double that of the MB339.â€
Even at the crucial Cabinet subcommittee briefing on August 31 1998, where the decision to go for the BAE Hawk and Gripen was taken, Haywood and Swan were allowed to stay while Modise continued deliberations with then deputy president Thabo Mbeki and other ministers. But Steyn, as well as another top official who had raised objections to cost and procedure, had to leave.
Both Haywood and Swan deny pushing the Hawk. Swan points out he only joined Armscor in August 1998, when the tenders were already adjudicated. Asked about the Cabinet subcommittee meeting, Swan says he ‘kept quiet†as he had ‘just arrived†and ‘didn’t know what was going onâ€. ‘I didn’t have a clue,†he said.
Now Steyn says that with pressure being brought to bear in favour of the Hawk jets, as well as other contracts that he considered ‘rather expensiveâ€, he could do ‘little more than alert the relevant structures to the lack of need for a three-tier system and the unaffordability of it allâ€.
‘Minister Modise was clearly under the impression that this was a good idea and that costs shouldn’t matter, because we were going to get lucrative offset deals that would give us 65 000 jobs,†says Steyn. ‘I warned that the offers that were coming in merely contained vague promises of the kind that were not enforceable, but they wouldn’t listen.
The Hawk, according to Steyn, was ‘outdated even then — and way too expensiveâ€. However, Cabinet had taken a so-called ‘strategic†view; in keeping with Modise’s ‘visionary approachâ€; contracts would be decided not only by cost, but also on the basis of which partner in the European defence industry South Africa was going to develop long-term relations with.
On that basis it could be argued that the ‘biggest slice should go to the UK [United Kingdom]â€, as a defence official put it recently.
However, says Steyn, ‘It is one thing to order the materials you need from a preferred trading partner and quite another to have trading partners decide what they want to sell and then modify your requirements to serve their wishes.†And that, Steyn thinks, is what happened.