/ 30 March 2012

SA’s sovereignty: name your price?

‘Government influence cannot be bought”. So said the department of international relations and cooperation when asked by Dow Jones newswires about allegations of corruption and influence peddling in MTN’s bid for a lucrative cellular telephony licence in the Islamic Republic of Iran.

You could have fooled us. Cash, a house in Johannesburg’s northern suburbs, votes in multilateral forums, attack helicopters and drones were all allegedly on offer as the company sought to lock down a huge deal with an Iranian military front company in a “virgin” but politically risky market.

MTN’s defeated rival for the contract, Turkcell, filed papers in the United States District Court of Columbia in Washington DC late on Wednesday that make a compelling case that both South African and Iranian government officials were paid to help to make the deal go through, that South Africa’s votes at the International Atomic Energy Agency (IAEA) and the United Nations were influenced to secure favour with the Iranian regime, and that MTN helped facilitate planned weapons transactions between Iran and Denel.

The record includes internal documents from MTN and Denel that appear to show a plan directed by then-MTN chief executive Phuthuma Nhleko that brought to bear the considerable political connections of the company’s leadership, and a willingness to think “laterally”, as he euphemistically put it, in compiling a package of improper inducements.

MTN has said it believes the lawsuit — and Turkcell’s claim of some R32-billion in damages — is a corporate shakedown that doesn’t stand a chance in US courts. The company has, however, not yet contested the authenticity of the documents on which the claim rests.

If, as Turkcell claims to be able to show, South Africa’s ambassador to Iran at the time, Yusuf Saloojee (code-named “short John” by MTN), received a house from the company in return for his role in ensuring contact between MTN officials, the Iranian government and South Africa’s ambassador to the IAEA, Abdul Minty, then government influence has very much been bought.

The department of international relations and cooperation may argue that the positions taken by Minty were not swayed by the benefits received by Saloojee — but the evidence strongly suggests that Saloojee procured access to Minty for both Iranian and MTN officials. Similarly, MTN appears to have been directly involved in ensuring that contact was facilitated between Denel and Iran with the goal of ensuring that weapons sales could take place, notwithstanding international sanctions and the rules imposed by South Africa’s own national conventional arms control committee.

Denel’s perennial financial problems were particularly acute at the time of the deal, and big contracts with Iran, albeit secret ones, would have been enormously attractive to the struggling company and its backers in the Mbeki administration. Mbeki himself is mentioned in the documentation, rather than directly implicated, but former defence minister Mosiuoa Lekota is repeatedly cited as playing a role in backing an arms agreement.

On the face of it then, government influence has been bought — both with hard cash and the promise of trading opportunities. The case may or may not stand any chance of success in the US courts, but MTN and the South African government must answer to us here at home whether they were prepared to pay for lucrative commercial rights with the scrip of our sovereignty.