Officers got gifts before signing deal
Special to Business Day

More evidence of poor disclosure by the state in the final reports to Parliament in the R60bn arms deal scandal has come to light, with the weekend emergence of a draft of the public protector's final report.

Last week Business Day published extracts from drafts of the final report of Auditor-General Shauket Fakie, showing that mention in his draft report of gifts to senior naval officials, and inaccuracies in submissions by the defence force to Parliament, were left out of his final report.

The effect of those omissions has been to hide from public view information showing that companies held or partly held by Schabir Shaik, brother of the chief of arms procurement at the time of the arms deal, and a financial adviser to and confidante of Deputy President Jacob Zuma, may have been favoured in the procurement process.

The drafts were handed over to a losing local bidder in the arms deal, C²I² MD Richard Young, who won a court order against the auditor-general, forcing him to surrender all drafts of the arms deal reports.

A potentially serious omission in the final draft of the public protector's report, handed to Young, also appears to favour Schabir Shaik's company, ADS, in the race to sell the combat suite to the navy for its new corvettes.

A combat suite integrates the weapons systems of a warship and allows them to be deployed in conjunction with data from the ships radar and sonar systems.

A draft copy of the report of the public protector shows his staff overlooked or ignored evidence that the navy was purchasing inferior equipment from Shaik's group.

Section 10.2.5 of the draft report of the public protector reads: "From the overwhelming evidence presented to us in this regard, it appears that the Detexis databus (Shaik's) that will form part of the combat suite of the patrol corvettes, is in all respects at least equal to the C²I² IMS databus (Young's)."

However a navy report, mentioned in hearings conducted by former public protector Selby Baqwa, casts doubt on that claim.

"Both Thompson and GFC (the German Frigate Consortium building the corvettes) recognise the IMS (Young's) system is a superior product," says the report.

Thomson and ADS nevertheless won a R2,6bn contract to supply the combat suites. Attempts yesterday to contact the former public protector, who has since joined the Nedcor group, were not successful.

Young is suing the state for R150m in damages as a result of losing the combat suite contract he believes through corruption and irregularities.

Business Day has also established that gifts presented to senior naval officers involved in the equipment order won by Shaik from Young were made before, and not after, final contracts were signed.

In the last of Fakie's draft reports (the passage was removed from the final report) he says that "on 10 December 1999, the project officer accepted a farewell gift of R7 000 from ADS and other subcontractors, the receipt of which had not been authorised by a superior officer, nor was it reflected in a gift register. It was, however, handed over openly at a farewell function in the presence of staff of Armscor, the navy and subcontractors."

The project officer of the corvette programme was Rear Admiral Johnny Kamerman. ADS obtained contracts related to the corvettes on 3 December 1999. An e-mail from an ADS official, Doug Law-Brown, confirms this.

A separate e-mail from Law-Brown confirms, however, that Kamerman received the gift as he requested, in cash on or before 1 December and before he initialled the deal.

Young says he plans to bring criminal charges against Fakie. In terms of Young's high court victory Fakie was ordered to hand over all drafts of the arms report.

In Fakie's affidavit to oppose Young's motion he claimed it was a logistical nightmare to do this as he held more than 200 000 pages of records relating to the investigation.

However, Young says he has received only a little more than 700 pages, of which almost 500 were copies of his own correspondence with the AG's office.

With acknowledgement to Business Day.