Arms Deal

Seriti report part of state capture of the worst kind

Shabir Shaik, not called by Seriti
Shabier Shaik.JPG

South Africa needed the arms from the R70 billion plus procurement programme of the late 1990s but it fell victim to a process of state capture of the worst kind by a faction inside the governing ANC.

        NOTE: This article is considerably longer than our normal offerings. For that we apologise, but to offer complete perspective to our readers in lewer words was just not possible – in reality a lot more is actually needed.

As underlined by the conviction of Shabir Shaik in 2015 on two counts of corruption and one of fraud in what was described by the judge as a “corrupt relationship” between Shabir Shaik and President Jacob Zuma, the process of state capture was present from early on in the weapons procurement programme.

The capture process however, gained much momentum in 2007 at the ANC’s 2007 Polokwane congress. There it was decided that the National Prosecuting Authority’s multidisciplinary investigative directorate, known as the Scorpions, created in 1999 to deal with all national priority crimes, including police corruption, was to be disbanded and replaced with a unit of the South African Police Service (SAPS). It happened in October 2008 and the new unit became known as the Hawks.

This decision came despite the Khampepe Commission of enquiry appointed by ex-President Thabo Mbeki recommending that the Scorpions should stay under the NPA, rather than being incorporated into the police. It also suggested ways of dealing with the Scorpions' shortcomings.

It is also important to note that the formation of the Scorpions coincided with the signing of the International Convention Against Transnational Organised Crime in 2000 and shortly after the passing of the Prevention of Organised Crime Act (Act 121 of 1998).

It is clear that the decision to ignore the Khampepe recommendations was not in the first instance a government one. It was a political one of an ANC congress – the same congress where the Zuma faction captured control of the party and, by implication, of government.

The cover-up of what was happening with the arms deal, which saw Mbeki remove Zuma as is deputy, had started in earnest.

Helen Zille, then leader of the Democratic Alliance, got it spot on when in January 2008 in an interview with the Mail and Guardian she said: “The ANC is getting rid of the Scorpions in order to protect ANC members from corruption charges.”

And it was not just the arms deal that was at stake for the ANC. “Besides seven convicted criminals on the ANC’s national executive committee (NEC), six NEC members are currently the subject of criminal investigations. At least two of these are currently being investigated by the Scorpions,” Zille said at the time.

“In time, further investigations by the Scorpions would no doubt reveal the extent of the web of corruption surrounding the ANC,” she suggested.

As far as the arms deal is concerned, the attempt to white-wash the whole sordid affair was topped-off last week by the release of the Seriti Commission’s report – illustrating how a programme, that could have delivered hugely positive results, was sullied by a greed-inspired shadowy state capture operation.

South Africa needed the weapons procurement

Probably the greatest sin of all is that the country badly needed the weapons procurement programme, which could have had hugely positive spin-offs if managed properly.

Possibly one of the very few credible findings of the Seriti commission is that the SA National Defence Force (SANDF) had to acquire equipment via the Strategic Defence Procurement Package (SDPP). This was necessary in order to carry out its constitutional mandate and international peacekeeping obligations.

The fact is that the SDPP of 1998, followed on a process of assessing the country’s needs on that front, dating back to Mr. Nelson Mandela’s presidency.

It was ascertained that there was a need to modernise defence equipment, which included the purchase of corvettes, submarines, light utility helicopters, lead-in fighter trainers and advanced light fighter aircraft.

The disconnect between military requirements and military funding, according to some analysts, had its roots in the transition from apartheid.

It was a time when the overriding priority was to prevent a military coup, although there was a secondary nod to showing the rest of southern Africa that South Africa would never again be a threat. That meant disempowering the military rather than supporting it, and the subsequent swift policy changes did not help.

Something of the picture emerge from a 2013 report by the NewStatesman, which states: “The South African military – once feared across much of Africa – is today in steep decline. Its budget has been slashed; its equipment subserviced and unserviceable and its troops demoralised.

“In the 1980s – at the height of apartheid – the country spent four per cent of GDP on the military. Today that figure stands at around one per cent. While cuts were certainly justified, the scale of the reductions has done lasting damage to the Defence Force.”

To boot, in late 2014 SDPP critic Terry Crawford-Browne told the Seriti commission that the weapons acquired during the 1999 arms deal were not being used and are becoming derelict.

The implication is clearly that the 1998 SDPP did not live up to expectations.

Estimations in 1998 put the total cost of the shopping expedition at R29.9 billion. It would end up costing R70-billion. The Seriti commission itself cost taxpayers a reportedly R113 million over the four years it lasted.

What went wrong

The NewStatesman report come to the conclusion that at the time, hanging over the debate about the state of the SANDF “is the perennial question of the corruption in the $4.8bn 1999 Arms Deal. This is a ghost that refuses to depart.”

In 2004 President Zuma in Parliament said that allegations of corruption surrounding the SDPP “is another imagined issue. It’s just a figment of the imagination because honourable members have not paid attention to what benefits have been brought by the arms deal in terms of the industry and the country.”

However, barely a year later, in June 2005, Zuma’s own erstwhile financial advisor and benefactor, Shabir Shaik was convicted for corruption and fraud connected to the SDPP and relating to:

  • payments into the account of a politician holding high political office; and
  • incorrect journal entries in the financial statements of the accused’s companies.

Throughout the trial, which lasted from 21 January 2002 to 17 February 2005, Shaik’s relationship with then Deputy President Zuma, was in question, yet Zuma was never called to testify either for the state or the accused.

 “Evidence of what the state claimed was a ‘generally corrupt’ relationship between Zuma and Shaik is convincing and really overwhelming," said Judge Hillary Squires when passing judgement.

Interestingly, neither was the Squires judgement considered by, nor Schaik or Mr Zuma called to testify before the Seriti Commission.

This despite Colonel Johan du Plooy of the Hawks telling the Commission that the court’s findings in the Shaik trial “strongly support the conclusion that there are reasonable grounds to believe that Zuma and Thales were complicit in the commission of the offences in respect of which Shaik and his companies were convicted.”

The fact is that the SDPP was shrouded in controversy from almost the word go, especially after then member of parliament. now mayor of Cape Town and original whistle blower on the arms deal, Patricia de Lille, raised the issue in September 1999 in parliament.

She revealed that she was in possession of a briefing document full of allegations of corruption signed by “Concerned ANC MPs,” and called for a commission of enquiry, which finally came about eleven years later.

Seriti and controversy

Considering the controversy surrounding the closing down of the Scorpions and the transfer of their files, including those on allegation of corruption associated with the SDPP to the Hawks, it was expected.

What followed. however, made the Scorpios/Hawks issue look like the proverbial Sunday school picnic – starting within days of its appointment.

The list of controversies includes:

  • Within days after his appointment as one of the commissioners, Judge Willem van der Merwe – who had previously acquitted Jacob Zuma on rape charges – resigned for “personal reasons”;
  •  In January 2013 Advocate Norman Moabi, senior investigator for the commission resigned, amongst others complaining about a “total obsession with the control of the flow of information to and from the Commission by the Chairperson. He criticised the way in which briefs appeared to be clandestinely prepared and not shared and he claimed that the Commission was operating according to a “second agenda” intended to discredit critics of the Arms Deal”;
  • The third commissioner, Judge Francis Legodi, also resigned for “personal reasons,” only days before the commission would start with its public hearings in early August 2013;
  • In March 2013 attorney Kate Painting, another researcher at the commission resigns due to concerns about the Commission's approach and credibility, also claiming that, soon after beginning work with the Commission, “another agenda soon emerged.”  She also claimed “fear is a common theme at the Commission and any non-compliance with the second agenda is met with hostility;”
  • Chairperson, Judge Willie Seriti, ruled the law firm Debevoise & Plimpton’s report into activities of Ferrostaal, one of the arms companies involved with the SDPP, inadmissible as it had been ‘leaked;’
  • Late in October 2013 it became known that contracts of eight lawyers employed by the Commission – two senior researchers, an assistant legal researcher, four legal practitioners and the head of legal research – will not be renewed due to the need to save money and the completion of the necessary work. Reports, however; claimed the employees had been sacked as they were insufficiently loyal to Judge Seriti and that they were unwilling to support the ”second agenda”;
  • In March 2014 Advocate Tayob Aboobaker, the chief evidence leader at the Commission, resigned after previous rumours that he had threatened to resign due to “nepotism, infighting and unprofessionalism,” but had been convinced to stay on;
  • Two evidence leaders, Advocates Barry Skinner and Carol Sibiya, resign in July after Dr Richard Young, a prominent Arms Deal critic, was attacked by the Commission’s Fanyana Mdumbe for failing to appear for his hearing despite Young having informed the Commission that he would be unable to attend due to medical and other issues. Both also complained that they were unable to re-examine witnesses, that documentation was withheld from them and heavily criticised the decision not to consider the Debevoise & Plimpton report;
  • Three independent witnesses – campaigners and researchers Andrew Feinstein (a former ANC MP), Paul Holden and Hennie van Vuuren – in August 2014 withdrew from the Commission in protest because witnesses were not allowed to speak about documents they have not personally authored, and called for the Commission to be dissolved entirely and for those implicated in corruption to be prosecuted; and
  • In October 2014 some 40 civil society organisations, including international organisations like the World Peace Foundation, called for an end to the Commission, amongst other thigs for the refusal of access to documents, hamstringing of independent witnesses and failure to call witnesses from arms companies.

At the time the civil society organisations said in their statement they “have lost faith in the Seriti Commission’s capacity to reveal the truth behind the arms deal. It has lost its legitimacy in the eyes of the public,”

Reaction to the report

Now that the Seriti Commission’s report has finally been made public, hardly anyone besides President Zuma and the ANC attach any credibility to it.

After the release of the report Fernstein, Holden and Van Vuuren in a joint statement said: “We are disappointed‚ but hardly surprised‚ that the Commission has come to these findings‚ which are tantamount to a cover-up.”

They were also seeking legal advice as to the legality of the commission’s conduct and the viability of a legal review to have the report set aside.

Amongst other things they and others list the following shortcomings in the Commissions work:

  • The Commission refused to admit vital documentary evidence of wrongdoing during the public hearings, including some 4.7 million computer pages and 460 boxes of evidence against BAE, the German Frigate Consortium and the German Submarine Consortium, collected by the Scorpions, in two shipping containers at the Hawks premises in Pretoria;
  • The Commission’s refusal to allow critical witnesses to testify about documents that they had not written, or events to which they were not personally witness;
  • The Commission failed to provide documents to witnesses to which they were entitled under the terms of their subpoenas, sometimes despite repeated requests;
  • The commission has failed to call witnesses from the arms companies, from the list of known or suspected middlemen or from any of the foreign law enforcement agencies that have investigated parts of the arms deal;
  • The Commission only gathered selected information and conducted no forensic investigations; and
  • The preclusion of witnesses to refer to any information that is not within their own personal knowledge, meant that only those with direct personal knowledge of corruption in the arms deal – effectively those who were party to it – were in a position to give evidence of that corruption.

The Right2Know campaign added its voice to the wide range of rejections of the report and Corruption Watch’s legal head, Leanne Govindsamy, said the process had been compromised from the start;

The Commission should have been forewarned and nobody surprised by this result. In his evidence before the Commission Du Plooy, referring to the disbanding of the Scorpions and its replacement by the Hawks, said it hampered the investigation, as the Hawks did not have the same direct access to specialist prosecutors and forensic investigators as they had had in the past. 

Is the saga over?

The Seriti report looks hardly like the end of saga.

Besides Fernstein and co seeking legal advice, there is the matter of the High Court in Pretoria which in March reserved judgment in the DA's  action seeking a review of a decision to drop charges of corruption (related to the SDPP) against President Zuma in 2008.

A decision on the matter is expected soon and is likely to open a next round in the saga, which might make end up in the Supreme Court of Appeal and/or Constitutional Court.

Then there is the matter of Shaik who has been waiting now for three years for a reply on his request for a presidential pardon.

After the release of the Seriti report he said he was considering a fresh challenge against his guilty verdict.

At the same time a report in The Mercury mentions someone claiming he was present at a meeting between Zuma and representatives from Thomson CSF in which he (Zuma) demanded funds to build his home in Nkandla which amounted to millions of rands.

While Shaik denied that he was the origin of this claim, he confirmed that he is claiming the repayment of a loan of R2 million he made to Mr. Zuma.

There is also a rumour doing the rounds that he is planning to write a book about his experiences.

South Africans are likely to hear a lot more about the whole saga in future and, Mr. Zuma’s former financial adviser might just be sitting on a future best seller.

Also read: Will the Treasury clip the political wings of the Hawks?

by Piet Coetzer

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