Arms deal: Conflict of interest twist raises alarm

There are concerns that Judge Willie Seriti, as the chairperson of the Arms Procurement Commission, could face a conflict of interest because – while sitting as interceptions judge – he might have authorised the tapping of the phone conversations that led to the dropping of arms deal corruption charges against President Jacob Zuma.

But the spokesperson for the commission, William Baloyi, answering questions put to Seriti by the Mail & Guardian this week, said the Supreme Court of Appeal judge could not recall whether he had signed the forms granting the National Prosecuting Authority  the authority to tap conversations between its own head, Bulelani Ngcuka, and Scorpions head Leonard McCarthy.

Baloyi said the judge could not be expected to divulge confidential information. "At any rate, he [Seriti] cannot recall whether he handled the specific matter, due to the format in which such applications are bought and the nature of the reporting relating thereto."

In April 2009 the acting national director of public prosecutions, Mokotedi Mpshe, announced that corruption charges related to the arms deal against Zuma would be dropped. He cited the tapped phone conversations as the reason for his decision. This came after Judge Hilary Squires had convicted Zuma's former financial adviser, Schabir Shaik, of bribery and corruption involving Zuma in 2005.

The M&G asked Seriti whether he did not think that, if he had signed the forms for the tapping of the phone calls, this might present a potential conflict for him. But Baloyi responded that the commission did not believe it would have precluded him from taking the post as its chairperson.


Legal experts differed over the issue. One thought it might present a tenuous conflict, but others felt it could lead to a direct conflict of interest because someone appearing before the commission might want to challenge the validity of an interception Seriti might have authorised.

Potential conflict
David Unterhalter, a professor of law at the University of the Witwatersrand, said it could not be ruled out that a potential conflict could arise during commission proceedings.

"If the issue of the legality of the intercept order were to become an issue in the commission, then it may be said that Judge Seriti has already made up his mind on that point," Unterhalter said. "But if the fact of the intercept order is simply part of the overall evidence of the commission, then it is hard to conceive that Judge Seriti has determined any issue in advance of the matters requiring consideration by the commission."

When Seriti appeared before the Judicial Service Commission (JSC) to be interviewed for a vacancy on the Constitutional Court in 2009, he was asked why he left out of his curriculum vitae the fact that he had served as an interceptions judge. A report in the Star newspaper had alerted JSC members to the fact that he was an interceptions judge at the time when Ngcuka's and McCarthy's calls were tapped.

Seriti told the JSC he had felt that it would be against the law to disclose the information.

Although the commission has said its legal team is hard at work and might have to extend its term from two to three years, a legal figure close to the arms deal said it might just be a way of the commission "burying a hot potato and letting it sit on the back of the stove".

The growing disquiet among those who have challenged the government over the arms deal centres on whether Zuma will eventually release the commission's final report to the public, because there is nothing in the terms of reference of the commission compelling him to do so.

The fact that Zuma himself faced several corruption charges related to the arms deal only added to concerns, said arms deal activists Richard Young and Terry Crawford-Browne.

"It is completely up to the president to decide whether to release any report, draft or final, to the public," said Young, a defence contractor whose company, CCII, lost the tender for the navy's corvettes and resulted in him producing a bomb-shell affidavit to back his claims of corruption.

Premature
"Here we have a president who is not just a president, but is implicated in the arms deal scandal. He could be found guilty and this opens up other legal problems."

Presidential spokesperson Mac Maharaj said it was premature to say whether the final report would be released. "It is not in the terms of reference and we need to wait for the outcome," he said.

The focus had to be on ensuring that the arms deal commission succeeded in its quest to uncover the truth, he said. "No one is questioning the commission's credibility and its powers are wide-ranging," Maharaj said. "People should just let the commission finish its work and co-operate with it. It is a proper judicial commission."

A former banker who went to court to ask for a judicial commission into corruption surrounding the arms deal, Crawford-Browne wrote a letter to the commission this week, urging it to cancel the arms deal contracts, return the equipment and recover an estimated R70-billion from fraudulent contracts.

He has obtained legal opinion from Geoff Budlender SC, who examined the legal validity of the arms deal in the light of section 217 (1) of the Constitution.

This provides that, when an organ of state contracts for goods and services, it must do so in accordance with a system that is "fair, equitable, transparent, competitive and cost-effective".

Budlender explored how the arms deal was subject to substantial offset provisions, under which the sellers of the equipment were required to make investments in South Africa, or in other ways to facilitate economic activity in the country.  

Budlender said at the heart of the criticism of offsets was that they could and did distort government acquisition processes in various ways and could be an obstacle to transparency. That lack of disclosure and oversight could facilitate corruption.

He said that when a contract was found to be invalid and cancelled, the principle of restitution usually applied.


Suspended senior police official hired

The Arms Procurement Commission has hired the former police divisional commissioner of legal services, Lindiwe Mtimkulu, as one of its legal investigators. She was suspended and quit her police job during her disciplinary hearing in 2010.

Her suspension was linked to a 400-page report into police legal services, compiled by law firm Edward Nathan Sonnenberg. It was claimed two years ago that the report alleged that Mtimkulu presided over a department that was grossly mismanaged.

But, she told the Mail & Guardian this week, she had challenged the validity of the report and the charges against her had been dropped.

Fired national police commissioner Bheki Cele told Parliament at the time that she had not followed police protocols, but she told the M&G that the final charges against her had been that she had used a vehicle and not paid for the mileage. "I am not really a friend of newspapers," she said. "I have had my fair share of flak. I decided to leave the job because it had become an unfriendly setup."

This is not the first time the commission has courted controversy with its legal appointments. In June the M&G revealed that attorney Riena Charles, who was accused but acquitted on fraud and corruption charges following her removal as the chief of Mpumalanga's health department nine years ago, was also hired as a legal investigator. Charles appeared in the Nelspruit Regional Court in 2008 to face 12 fraud and corruption charges involving the alleged violation of financial and tender controls. Despite her acquittal, legal figures in Mpumalanga said they were "quite astounded" to learn she was working at the commission.

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