‘If we don’t deal with these allegations in an open and truthful manner, they will come back to haunt us for years and years.”
These were my words to ANC secretary general Kgalema Motlanthe in mid-2001 after giving him information I had in relation to the controversial arms deal. Over the preceding months I had similarly warned Tony Yengeni (then chief whip in Parliament), Jacob Zuma and ministers Manuel, Erwin and Lekota. Soon afterwards, I resigned as an ANC MP in protest against the government’s refusal to allow an unfettered investigation into the deal.
During my time as the ranking ANC member on Parliament’s public accounts committee (PAC), I had listened to all of these ministers and the president vociferously deny that there was any corruption in the deal. In fact, in a vitriolic letter, the president wrote (but had Zuma sign) that he accused Gavin Woods and the PAC of questioning the integrity of the Cabinet, the government and “prestigious international companies” of high standing (that is, the arms manufacturers who won contracts to supply South Africa with tens of billions of rands of weapons).
The president went on to say, on at least two occasions, that those of us who were attempting to investigate the deal were attempting to bring down the government. All we were doing was performing our constitutional responsibility as members of Parliament and, in my case, as a proud member of the ANC.
As recently as last week at the World Economic Forum in Davos, the president restated that there was no corruption in the deal. He also implied that, just as Tony Blair had shamefully closed down a long-standing investigation into corruption in the world’s largest arms deal between Saudi Arabia and the United Kingdom, the British prime minister should abort his country’s Serious Fraud Office (SFO) investigation into the South African deal.
So the view of the ANC and the South African government is clear: no corruption in the arms deal and nothing to hide.
But what do we now know: first of all, the ANC’s chief whip at the time and former chairperson of Parliament’s defence committee, Yengeni, who made elaborate and intimidatory attempts to stop the PAC even starting its investigation, has been jailed for covering up his receipt of a large discount on a luxury vehicle from one of the bidders in the deal. The relevant senior official at EADS, the company concerned, has admitted guilt in a Munich court and paid a fine of around 15 000 marks.
Schabir Shaik, financial adviser to then deputy president Zuma, has been sentenced to 15 years in jail for fraud and corruption. One of the counts against him concerns hundreds of thousands of rands received on behalf of Zuma. In return for this money, Zuma was to further the interests of one of the “prestigious corporations” so beloved of the president, Thomsons CSF (now Thales), and to protect it from investigation in relation to the deal.
So, bidders for the contracts made payments in cash or kind to senior members of the government who would decide who received those contracts. On the basis of these two facts alone, both proven in courts of law, there was corruption in the arms deal.
But there is more, lots more: as reported in the Mail & Guardian, the UK’s SFO is investigating payments of between £70- and £80-million allegedly made on behalf of BAE to various middlemen, officials and politicians involved in the deal. They have already identified a significant payment allegedly made to Joe Modise’s adviser, Fana Hlongwane. We do know that BAE won its contract despite of the fact that its main competitor’s jet, which was half the price of BAE’s, was the preferred choice of the South African Air Force. The Cabinet sub-committee, chaired by Thabo Mbeki, went to extraordinary lengths to award the contract to BAE. It even decided to omit cost as a criterion in what is still the single biggest procurement in our democratic history.
In last week’s M&G, the former secretary of defence, Pierre Steyn, admitted that he resigned from this position in 1998 because it was clear to him that then defence minister Modise had decided that BAE would win the contract before bidding even started. Was this because BAE had made a donation of R5-million to the MK Veteran’s Association of which Modise was life president? Or might it have had something to do with a part of the £70-odd million that the SFO is investigating?
Meanwhile, in Düsseldorf, German prosecutors are investigating payments of $25-million made by Thyssen (part of the German Frigate Consortium, GFC) to similar actors in the transaction. On Monday, the highly regarded German magazine, Der Spiegel, provided compelling evidence to suggest that “Chippy” Shaik (head of acquisitions in the South African National Defence Force (SANDF) at the time of the deal and brother of the more famous Schabir), allegedly solicited and received $3-million from Thyssen.
Within the procurement process, it was understood that two non-German companies had been short-listed for the contract to build corvettes. But after a visit to Germany by then deputy president Mbeki, the tender was reopened. A third Shaik brother, Mo, surprisingly became South Africa’s consul-general in Hamburg, home to the consortium, for a few months and, lo and behold, the GFC won the contract. In addition to the alleged $3-million that might have gone to Chippy, Schabir’s company ADS became the GFC’s BEE partner in South Africa. And what role might the balance of Thyssen’s $25-million of alleged payments have made in this decision?
Not that I was surprised to read these allegations. At the time that the PAC was looking into the arms procurement, I was told an almost identical story by two separate bidders. They described meeting Chippy at his Pretoria office and being taken down to a coffee shop in nearby Church Square. Over their steaming beverages, Chippy advised that if they wanted to be successful in their bids for main contracts they needed a BEE partner to whom they would, in turn, give sub-contracts. Both sources claim that Chippy suggested they contact his brother, Schabir, in order to reach such an agreement.
This information led me to believe that pressure on the companies bidding for the main contracts compelling them to appoint favoured sub-contractors before they would be awarded the main contracts was a crucial flaw in the procurement process. Government disingenuously continues to say that it had nothing to do with the sub-contracts.
I also always suspected that Chippy Shaik, by dint of his powerful position in the SANDF, his role as secretary to the Cabinet sub-committee and his participation on most of the bodies involved in the decision making, was the fulcrum on which the deal turned.
In addition to these extremely serious allegations in Der Spiegel, it is known that Chippy misled Parliament when he appeared before the PAC in 2001. He claimed to have physically recused himself from meetings, in which his brother’s interests were discussed. In fact, when we were given copies of the original minutes of at least one of the meetings it was clear he hadn’t left the room and had, in fact, continued to participate in the discussions.
I alerted the then speaker of Parliament to this information, suggesting that action should be taken against Chippy to protect Parliament’s integrity. She never replied and no action was ever considered. This was but one instance of many in which the ANC undermined the integrity of Parliament in order to ensure that the deal was never properly investigated.
The neutering of both the PAC and the subsequent investigation in order to prevent the full truth of the arms deal emerging was, I believe, the beginning of the loss of accountability, humility and integrity that had characterised the early years of the ANC in government. It created the environment that allowed the catastrophic delays and obfuscation in relation to the HIV/Aids pandemic to flourish with far more tragic consequences than a corrupt arms deal.
And before anyone suggests that corrupt arms deals are a particularly African phenomenon, let us not lose sight of the allegations of Mark Thatcher’s receipt of £12-million from the Saudi arms deal or the role of the “prestigious international companies” that continue to make these payments around the world. For where there are corrupted politicians and officials, so too are there corrupting corporations and governments.
That corruption was evident in South Africa’s multi-billion rand arms deal is proven. What we do not yet know is how deep that corruption runs. We still need answers to the following questions:
- Did the late Modise receive any benefit himself from the deal, as has been alleged by numerous people within and outside the ANC?
- In addition to Modise’s now proven interference, what influence did then deputy president Mbeki have on the two highly dubious decisions that favoured the British and German bidding companies?
- Is it true, as I was told by a senior member of the organisation’s national executive committee, that the ANC received money, directly or indirectly, from one or more of the successful bidders
?
The arms deal and the subsequent cover-up were the beginning of a sad moral decline in the ANC, a decline that, in the words of its president, has left this most remarkable of political movements facing “the greatest crisis in our history”.
The ANC-led government now has a clear choice: either start to regain some of the moral high ground by allowing an unfettered, indepen-dent investigation into all aspects of the arms deal, or wait, impotent and tawdry, as international investigations reveal more and more of the detritus that characterised this stain that continues to haunt both the ANC and our extraordinary, young democracy.
Andrew Feinstein’s political memoirs After the Party will be published by Jonathan Ball later this year