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PRESS STATEMENT                                                                                  ecaar@icon.co.za 

                                                                         


TERRY CRAWFORD-BROWNE FILES CONCOURT APPLICATION 

(CCT 161/16) TO SET ASIDE SERITI COMMISSION REPORT 


 

The Arms Procurement (Seriti) Commission’s report released by  President Jacob Zuma in April 2016 was immediately
discredited by the South African public and media as a whitewash that cost taxpayers R137 million and wasted four
years. Despite public commitments to an open and transparent investigation, the Commission proved a repeat of the
2001 stunt by President Thabo Mbeki to cover-up the arms deal scandal.

Having in  2010 made the application  in the Constitutional Court (case CCT 103/10)  that forced President Zuma’s
reluctant appointment of the  Seriti Commission, I have last week  filed another application (case CCT 161/16) in
the public  interest requesting the  Court to set aside the Commission’s  report, and to instruct the Minister of
Finance to recover  monies -- now estimated at over R70 billion --  that were irrationally and fraudulently spent
on the arms deal.

The huge volume  of evidence against  British Aerospace (BAE), the  German Submarine Consortium (GSC)  and German
Frigate Consortium (GFC) that was the very cause of Commission’s creation was left lying, un-investigated, in two
shipping containers  at the Hawks’ premises in Pretoria.  Examination of other evidence was  deliberately blocked
by Judge Willie Seriti. 

The report does however reveal (obviously inadvertently) on pages 25 and 26 that the Commission colluded with the
National Treasury to block examination of an  estimated 17 000 pages of the International Offers Negotiating Team
and Financial Working Group papers on a false claim that these documents are “privileged.”  

These 17 000  pages were distilled into the 57 page affordability study, which  in August 1999 warned the Cabinet
that the  arms deal  was a reckless  proposition that could lead  the Government  and South Africa  into mounting
economic, fiscal and financial difficulties.

The  Cape High Court  in 2003 (case 5129/2002)  awarded me  discovery of these documents. In so doing, that court
rejected  spurious arguments  by former Minister  of Finance Trevor Manuel and then Director General of Treasury,
Maria Ramos  that it  was not in  the national interest  to disclose  how the government  conducts its  financial
arrangements. Accordingly, these documents are not “privileged” albeit Manuel and Ramos in 2003 refused to comply
with that court’s discovery order.

In addition to colluding with the National  Treasury to  “silence the Terry Crawford-Brownes of this world,”  the
Commission embarked on  a “red herring” in  an attempt  to divert attention  from the  corruption inherent in the
absurd but deceitful “rationale” of  the arms deal – namely,  that R30 billion spent on  armaments would generate
R110 billion in offsets, and would create over 65 000 jobs.  With the complicity of our government, massive fraud
has been  perpetuated against  the people of South Africa,  especially our most  impoverished communities, by the
arms deal suppliers and foreign governments.

Compounding the  cover-ups since  the 1990s, BAE, Barclays Bank and the  British government usurped the oversight
roles of  Parliament.  Members of  Parliament and even the Auditor  General were prevented from investigating the
offsets  because  of conditionality  clauses imposed  by  the  British  government  that  offset  contracts  were
“commercially confidential.” 

The Minister of Defence and Veterans Affairs has  acknowledged in Parliament that many of the BAE fighter aircraft
are “in storage” and that South Africa lacks the pilots  to fly them. Likewise, the Minister of Trade and Industry
admitted in 2012 that the offset “benefits” did not materialise. 

As the Debevoise & Plimpton report on Ferrostaal and the German-supplied submarines confirms, offsets were simply
vehicles to pay bribes – euphemistically  referred to in Germany as “useful business expenses.”   About 160 pages
of affidavits  from the “Scorpions” and  the British Serious Fraud Office  detail why and  how BAE paid bribes of
£115 million (R2 billion) to secure its contracts, to whom the bribes were paid, and which bank accounts in South
Africa and overseas were credited.

The Minister of Trade and Industry informed Parliament that BAE had delivered only 2.8% of its National Industrial
Participation  (NIP)  offset  obligations,  whilst  the  GSC  and  GFC each delivered only 2.2%.  Although BAE had
described its  arms deal  bribes as “commissions,”  the Debevoise & Plimpton  report revealed  that the  submarine
bribes were  mainly in the  form of what  were described as  “non-refundable loans.” Yet in contradiction of those
cabinet ministers, the Seriti Commission report glowingly recorded:

·         that all the arms and equipment acquired are well-utilised, 

·         the projected number of jobs was achieved, and would be higher than 11 916,

·         that the anticipated offsets have substantially materialised, and

·         the Commission found no evidence of “undue or improper influence.”    

Section 217 (1) of the Constitution, the Public Finance Management Act and Treasury regulations all stipulate that
government procurements  must comply “with a system which is  fair, equitable, transparent,  competitive and cost-
effective.”  The arms deal clearly failed this obligation, and was therefore both unconstitutional and fraudulent.

As predicted back in the 1990s, the arms deal has unleashed a culture of corruption. South Africa faces investment
downgrading to  junk status,  hence the  urgent necessity  to take remedial  action. Given  the multiple crises of
confidence presently facing South Africa, it is therefore hoped that the Constitutional Court will act speedily to
assert the supremacy of the Constitution as the foundation of our country’s hard-won constitutional democracy. 

In addition to  the attached notice of motion and my  founding affidavit, appendices TCB1, TCB2, TCB3 and TCB4 are
available on request by email to ecaar@icon.co.za.  These are:    

TCB1: A legal opinion  by Advocate Geoff Budlender SC on  section 217 (1) and the internationally-accepted remedy
for fraud,

TCB2: The 20 year  Barclays Bank loan  agreement for the BAE Hawk and BAE/Saab Gripen contracts signed by Manuel,
and guaranteed by the British government.  The default clauses of this agreement, verified in the Cape High Court
in  2003  as authentic,  have been described as potentially  catastrophic for  South Africa,  and are a  textbook
example of so-called third world debt entrapment by European banks and governments, 

TCB3: The BAE and BAE/Saab offset Defence Industrial Participations (DIP) a nd National Industrial Participations
(NIP) obligations contract with Armscor,  the Department of Defence and the Department of Trade and Industry, and

TCB4: The  “affordability study” that warned the Cabinet in 1999 that the arms deal was reckless.

 

Terry Crawford-Browne 

• Founding Affidavit
• Notice of Motion