14 May 2001

Honourable Madam Speaker
Parliament
Cape Town

Dear Madam

You will recall that the 14th Report on the allegations of impropriety in the handling of the multi-billion arms deal was submitted by the Chairperson  of SCOPA Mr Gavin Woods and was endorsed by Parliament.

Upon endorsement by Parliament the Honourable Speaker did not proceed to take the matter further until there was an outcry and pressure from  the patriotic media of the country. At that point the Honourable Speaker identified some fine points of legality as the reason for stalling the report.

This resulted and/ or was coupled by a similar rejection of the report by the Executive including the person of the Deputy - President.
Consequently it was referred back to SCOPA.

In further discussions held at SCOPA on the said Report as a result of its rejection by yourself and the executive, members in the ruling party sitting in SCOPA who had earlier supported it reneged on the consensus agreed upon earlier and identified themselves with the stance of the executive and the Speaker.

Your grounds for stalling the report were that SCOPA had no legal authority to contract out to outside agencies.

We now know that three agencies viz the Public Protector, Directorate of Public Prosecutors and the office of the Auditor-General commenced the probe, before there was any finality on the proceedings in SCOPA which followed the referral of the report to that committee. The Heath Special Investigative Unit which had been recommended by SCOPA together with the above agencies was excluded from the probe which had thus commenced.

In the light of the fact that SCOPA had not reached finality on the matter and parliament was left in limbo by the rejection of the report, by the executive and ANC members in SCOPA,

(a) Who authorised the probe?

(b) What are the Terms of Reference and who drew them up?

(c) Was parliament approached to seek its views before the Heath Investigative Unit was withdrawn, or did parliament simply succumb under pressure from the executive?

(d) The public perception is that these state agencies are not consulting with SCOPA neither is there any evidence of a formal linkage between them and this parliamentary body. Are they therefore working clandestinely with the executive? If so can their findings be legitimate in the eyes of the tax payer on whose behalf this probe should have been undertaken?

Your public pronouncements both inside and outside parliament leave much to be desired and have cast more shadow on the credibility of the investigation. It can be inferred that you and the executive are monitoring and directing the investigation by these agencies while SCOPA is systematically sidelined. The report tabled to SCOPA by the Deputy-Auditor-General earlier this year on the current investigation had no status and this was registered by parties other than the ruling party.

Your conduct has come under critical public scrutiny in the wake of revelations of allegations of improper conduct by some parliamentarians with regard to "gifts" of motor vehicles by companies who have been awarded the arms procurement contracts. Your abrupt and undemocratic termination of the debate of the Tony Yengeni affair is a case in point. Yet the next day you allowed him to defend himself. We are aware that there are serious public concerns inside and outside the ruling party circles about your attitude in these matters.

In the absence of any transparent Terms of Reference for the probe the UDM proposes that there must be clarity on the Authority responsible for directing the investigation. That Authority, it is submitted should consider the following points in the drawing up of the Terms of Reference:-

1. The probe must be officially gazetted with clear Terms of Reference and time frames.

2. In the light of further revelations of the possible proliferation of irregularities in the entire deal, the investigations must go beyond examining sub-contracting procedures and cover the entire arms procurement transaction including the main contractors.

3. Attention must be drawn to the sub-committee, which was chaired by the President, which apparently positioned itself as the "Tender Board" in the allocation of contracts with the view to bringing clarity in its role in the whole saga.

4. The need to empower the investigating agencies with the same authority previously enjoyed by the Heath Special Investigative Unit i.e. powers to cancel irregular contracts, etc.

5. Were any monies paid to individuals or political groups by tendering companies in order to facilitate the granting of contracts to themselves, such as in the case of British Aerospace which paid the ANC an amount of R5 million just prior to the awarding tenders?

6. Special focus be made on the possibility of individuals or groups holding public office being beneficiaries of monies or shares from international companies which have been awarded contracts.

7. The role played by individuals in the sub-committee chaired by the President in the awarding of contracts and whether any of them received any payments or shares.

8. Are there any family members of the Mbeki sub-committee or close associates benefiting from the awarding of these contracts?

9. Whether the Black empowerment companies who were awarded sub-contracts have the capacity to perform or they were mere fronts for the main contractors?

10. What were the motives for EADS in donating 30 motor vehicles to politicians and VIPs as they have publicly confessed?

11. Whether the executive deliberately misled parliament and the public about the true cost of the arms procurement exercise when they quoted it at R30billion when in reality it is +R50 billion to date.

12. Whether the Defence Review which identified the defence needs which culminated in the current arms procurement was a genuine analysis of our national defence needs or a smokescreen to cover self-enrichment by individuals in the ruling party circles.

    1. With special reference to the estimated R4 billion which will be earned by ANC members who own sub-contracted companies in the arms procurement deal; viz:-
                         - African Defence Systems (ADS)
                         - Futuristic Business Solutions
                         - Applied Logistics Engineering
                         - Nkobi Tom
                         - Temoso Technology
                         - M.K. Technologies
                         - X Cell
                         - Dynamic Cables

    2. Are these companies conduits for channeling arms procurement funds back to ANC coffers? This must be investigated.

    3. Were these companies lobbied by the main international contractors who were awarded procurement contracts? Were they paid any monies by them and if so how much?

    4. Did these sub-contractors lobby any members of parliament and ministers? If so did they pay them any monies and how much?

It should be clear to the Honourable Speaker that all tender proceedings in this deal were ignored by the executive and the functions of the Tender Board were usurped by President Mbeki's sub-committee. This is a highly questionable conduct on the part of the executive. If there should be any looting of state resources as a result of unorthodox procedures followed, the tax payers are entitled to redress for such losses incurred.

There is a very disturbing feature in this arms procurement deal, where the then Minister of Defence, Joe Modise induced government to underwrite the Defence Review and arms purchase as a national priority and in the process form sub-contracting companies which will earn several billion Rands while he himself is listed as one of the main beneficiaries of the procurement deal.

Madam Speaker, UDM stands by the 14th Report regardless of what the executive and the ANC are saying and doing because it is the right thing to do, notwithstanding the numerical superiority of the ruling party which enables it to impose its will.

I trust that you will treat these matters with the urgency they deserve.

Yours sincerely



HB Holomisa
United Democratic Movement: President

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With acknowledgement to Bantu Holomisa and UDM on the Web.