Erwin says action will be taken no matter who is implicated.

DURBAN SA regulators gathered yesterday to lay the ground rules for a joint investigation into a scandal-blighted, multibillion-dollar arms deal with European defence contractors. 

The unprecedented multi-agency probe aims to get to the bottom of allegations of corruption involving government officials, which could turn out to be the most serious case since the ruling African National Congress (ANC) came to power in 1994. 

Five key investigating and prosecuting units met in Pretoria to thrash out terms of their joint probe. The joint probe brings together the office of the auditor-general, the Heath special investigation unit, the Office for Serious Economic Offences, the public prosecutor's office and the public protector.

"The objective is to see if we can establish a structure within which the five units can work together," said Gavin Woods, head of Parliament's public accounts committee. Attempts to get comment on the outcome of the meeting were unsuccessful last night. 

Initial areas of investigation will be on subcontractors in SA, flawed procedures, possible exercise of undue influence on the contract process and the failure of government to reveal the true cost of the deal at the time.
Fresh controversy was sparked by a weekend newspaper report that President Thabo Mbeki's right-hand man, Minister in the Presidency Essop Pahad, had attempted at an ANC meeting to derail the planned investigation to protect Mbeki. 

Pahad denied the report in the paper but left unchallenged the paper's statement, based on an unnamed ANC source, that Deputy President Jacob Zuma had rebuffed Pahad's move. Meanwhile, Trade and Industry Minister Alec Erwin yesterday dismissed as "nonsense" the contention that defence department head of procurement Chippy Shaikh should not have been part of the state's controversial R43,8bn arms deal. 

"To suggest that anyone with a relative in the private sector should not have a role in state procurement is nonsense. No country would be able to function like that," Erwin said. He said government supported the investigation into the arms deal and was "confident that the deal was fine and nothing untoward had occurred".

Shaikh told parliament's public accounts committee last month that his brother Schabir is a director of one of the suppliers, African Defence Systems. Shaikh's wife, Zarina, is an employee of African Defence Systems. Erwin said allegations that the whole arms deal was "corrupt and rotten" were totally untrue and that if the investigation revealed any corruption at all, "action will be taken no matter whom" it might implicate. He said recommendations, "as those from the auditor-general", that a forensic audit be conducted into the subcontracts, would be welcome.

"If such investigations end in recommendations that challenge a policy decision, we will oppose it, and if they reveal procedural problems we will correct it," said Erwin. He defended the deal, arguing that as government had been democratically elected, it acted in the best interests of SA. "It's strange that no one questions a white person in similar circumstances. Just because an Indian is involved, must something be wrong?" asked Erwin. 

With acknowledgement to Nirode Bramdaw, Reuters & Sapa.