/ 3 August 2008

Mbeki ‘paid R30m arms-deal bribe’

President Thabo Mbeki was allegedly paid R30-million to guarantee a German shipbuilder would receive a submarine contract in the arms deal.

Despite a pre-emptive strike by President Thabo Mbeki’s staff to discredit it, the Sunday Times has published explosive allegations that Mbeki was paid R30-million by a German shipbuilding company to guarantee it would receive a submarine contract in South Africa’s multibillion-rand arms deal.

According to the newspaper, a secret report compiled last year by a British specialist risk company revealed the deal. Mbeki allegedly gave R2-million of the money to Jacob Zuma and the rest to the African National Congress (ANC).

On Saturday, Mbeki’s spokesperson Mukoni Ratshitanga urged anyone with evidence of corruption against the president to come forward, South African Broadcasting Corporation radio reported.

”They [the allegations] do not warrant any response. Anybody who has got a case to make against any South African, including the president of the republic, must simply approach the law-enforcement agency,” Ratshitanga said.

He also told the Sunday Times that the allegations were ”of such fantastical proportions as not to warrant any response”, and ANC spokesperson Jesse Duarte apparently said: ”Anyone can write a document and claim it is authentic.”

In its exposé, the Sunday Times said the British consultancy was apparently commissioned to write the report by a leading central European manufacturer to investigate the business practices of shipbuilder MAN Ferrostaal, which had launched a hostile takeover bid against it.

MAN Ferrostaal, which led the German Submarine Consortium, won a contract worth more than R6-billion to sell three submarines to the South African Navy. In return, it apparently promised to build a R6-billion stainless-steel mill at Coega in the Eastern Cape, providing 1 000 direct jobs and 3 000 indirect jobs.

”The project, which promised billions of rands in export and local sales, has not happened,” said the newspaper.

It quoted from a section of the report that alleges: ”A former South African official who had access to such information informed us in confidence that Ferrostaal paid R30-million to current President Thabo Mbeki to gain the arms contract in the first place. When questioned by investigators in South Africa, Mbeki claimed that R2-million was given to his former deputy president, Jacob Zuma, and the rest went to the ANC.”

The report apparently says the information was unlikely to be leaked in the near future ”because Mbeki maintains a tight [rein] on the National Prosecuting Authority where this matter would be dealt with”. It also alleges that South African intelligence services have proof that MAN Ferrostaal paid Mbeki the bribe.

MAN Ferrostaal has dismissed the allegations as a ”fishing expedition” aimed at destroying the reputation of the company and the South African government.

The Sunday Times said a draft report into the submarine contract, drawn up by the Attorney General in May 2001, was ”diluted and sanitised” before being included in the final report of the joint investigation team set up to probe the arms deal.

The draft apparently says ”deviations from the approval process occurred” and that ”good procurement practices were lacking” during the submarine bidding process, the newspaper said. For example, Tipp-ex correction fluid was apparently used on the evaluation working papers — contrary to instructions — and corrections made were not initialled by anyone.

The Sunday Times also said Mbeki allegedly ignored an August 1999 affordability study and two independent steel reports that assessed the economic and financial impact of the arms deal and apparently warned that Ferrostaal’s stainless-steel offset project was ”high risk and likely to fail”.