Political drama unfolds, as fallout from weapons procurement exercise spreads through corridors of power

The national arms procurement exercise has been so controversial in conception, so convoluted in execution, and now so fractious in its aftermath, it is hard to believe public interest in the issue has not burnt out from total overload.

And yet, despite the past controversy, it is only now, years after the original contracts were signed, that the real consequences of the past decisions and indiscretions are playing themselves out in a human drama.

However, while the political consequences take centre stage, all the supersonic jets, combat systems and helicopters are being packed in boxes to be shipped to SA, or being welded into floating war machines.

Whatever else happens, whatever judgments are passed, government, wisely or unwisely, has spent billions of rand on rearming the defence force with foreign-made equipment.

Politicians come and go, but this cannot be undone. Was it the right decision? It is probably too late to ask.

According to a senior government official, when it comes to the arms deal, there are three kinds of people.

There are people against it simply because they do not believe in the efficacy or morality of military action.

There are those who are in favour of re-equipping the military but against this procurement exercise, either because it was too expensive or because so much of the equipment is foreign, or because of the particular make-up of the equipment.

And a third group are those benefiting in some way, either from the manufacturing work, or from offset programmes, or those who will get to use the new military hardware. They are, of course, vigorously in favour.

In the midst of this powerful static, it is hard to find a truly independent point of view. This is particularly so because overlaying the military polemic lies a political polemic.

It is impossible to ignore that jostling within government will inevitably follow as politicians seek to use the fallout from the arms deal to further their political careers, or even use the crisis as a stick with which to beat government.

Government may not be able to bluster its way through the latest round of criticism in the way it has managed to do in the past few years.

There is a real possibility that Deputy President Jacob Zuma will have to stand down because of his role in the post-deal drama. This will have a host of negative consequences for the country's reputation.

Much of this depends on the "floating vote" within the African National Congress (ANC). What will the consequences be of the party standing by Zuma? What will the consequences be of forcing his resignation, not long before the election?

The political questions are now on centre stage, and the military and quasi-military questions in the background. But for those interested in the facts, the background issues remain the most important elements of the affair, and they include issues which have never been properly resolved.

For example, right at the start of the process, the finance department did a thorough study on the affordability of the package. It has chosen not to release the findings. The obvious assumption is that the study found the deal too expensive.

So affordability lingers like a bad odour over the whole affair. It means government must not only fight the question of corruption and an instinctive public notion that where there are arms deals there must be back-handers, but also the larger question of whether it made the right call.

This debate is complicated by the fact that government ministers appear adamant on two controversial questions The first is that there was no corruption in the actual awarding of the contracts; and the second is that the decision to upgrade SA's military was the right one.

In both of these arguments, government has a stronger case than is generally acknowledged.

Take the question of whether to upgrade first. Government argues that after years of being excluded from the global arms market, the chance, necessity even, to upgrade was obvious.

The whole underlying logic of SA's military prowess changed fundamentally after apartheid, from one of landbased aggression to an all-round land, sea and air deterrent. Hence the focus on fast ships, corvettes, to shield fishing and trading lanes, and modernising the air force to defend airspace.

Also, buying from major European firms would have the effect of binding SA into what might be called the modern, western defence superstructure. It would have the effect of reducing the danger of SA developing the hints of its former "rogue military" odour.

In this sense, the arms package is more than procurement, but also an exercise in establishing the country's diplomatic bona fides, with all the significant trade advantages that flow from that.

Against these positive aspects, how ever, is the question of the allocation of scarce resources. At the time the contracts were signed, in late 1999, the total cost (excluding financing costs and the continuing upkeep costs) was $4,8bn. This rand cost at that stage was R28,8bn.

The current cost translates into R36bn, which taking into account inflation differentials and other cost factors means the effective price is about the same now as at signing.

However, there was that hair-raising moment in December 2001 at which the price was nearly R60bn.

In terms of cash that has changed hands so far, the budget reviews reflect payments of R2bn in 2001, R3,3bn last year and R3,9bn this year. Total so far R9,2bn, and these payments will continue for the next nine years or so.

Compare this with some other projects of the new government. Providing kids with peanut-butter sandwiches at school R226m a year. Extending old-age payout systems to children slightly more than R1bn a year. Land restitution R550m a year. Combating HIV/AIDS R323m a year.

All of these are vitally important projects which were introduced in addition to normal state running costs. This constitutes, in other words, the real, discretionary spend of the ANC government. And all of these projects put together still total less than what government is paying every year to foreign companies for arms.

How anybody can sustain an argument that this is a sensible allocation of resources is simply beyond comprehension. How did government get itself into this awful, tragic mess? Just as in so many disasters, through good intentions combined with clever salesmanship.

On the international stage at the time, huge European military forces had just been rendered redundant by the fall of the Berlin Wall.

The biggest losers were the state and semistate defence companies built up on the assumption a Cold War stalemate would require constant military renewal.

With this at an end, Europe's citizens began calling for a "peace dividend" and governments were inclined to provide it. But in order to soften the blow for defence manufacturers often state-owned firms foreign arms sales became the kind of thing European heads of state would raise in private fireside conversations with their foreign counterparts.

In this country they found a naïve and trusting new government anxious to do the right thing. In other words, the perfect suckers.

And so, SA ended up paying over the odds for British aeroplanes rather than those on offer by the more distant ally, the Italians. And so the arms procurement package rose from R4bn at the start, to R6bn to R15bn ending up just less, in total, than the annual education budget.

The European governments were ably aided by people within the SA National Defence Force itself, and this raises the question of whether there was corruption in the procurement process. Here too, government's arguments are stronger than they are generally given credit for.

Its first argument is that the issue has been thoroughly investigated by SA's three most highly esteemed investigating bodies the auditor-general's office, the public protector, and the national prosecuting authority. The report was published years ago, and only minor infringements were reported, many blamed on former defence minister Joe Modise. By the time the report came out he was dead.

Government agencies are adamant they searched every nook and cranny, and that the searching was done by investigators of the old order. These investigators would have had no compunction in revealing corruption, but little was found.

And there is an additional, fallback argument. Government ministers have repeatedly pointed out that government's involvement relates to the primary contractors, not to arrangements between the primary contractors and subcontractors.

They have made this point partly, it seems, because of a feisty campaign launched by a losing tenderer, C²I² MD Richard Young. Young has been a dedicated thorn in the side of government during the whole process, and the fact the issue is still being fought is a tribute to his sheer endurance. He is bringing a case against government after his suspicious ousting as a top contender in one of the contracts, worth about R30m.

And there is no denying that on the face of it, things do not look good for government. The key is that the head of procurement was Chippy Shaik (he is no longer in office) and his brother Schabir was a key player in one of the contracting firms. Normally this would set off alarm bells, but the atmosphere at the time was comradely and trusting.

It did not help that Chippy Shaik was less forthcoming about the connection and its ramifications a fact that came out more clearly in the unpublished editions of the joint report of the investigating bodies.

But a suggestion of impropriety is different from proof of impropriety, and it is in the aftermath of the arms deal that the most tangible problems have arisen. This proves the old adage that it is not the original corruption that trips up politicians but their mad attempts to cover it up afterwards.

After all the heaps upon heaps of documents the arms deal has generated, it is a single-page, four-paragraph fax that could end up being the basis for most future arguments. The fax is terribly damaging for all concerned, including Shabir Shaik and most of all for Zuma. It was sent by Alain Thetard, local head of French defence company Thales, to his boss.

It says he had asked for a "clear confirmation" or an "encoded declaration" from "J Z" to "validate the request". This was received in the coded form, the fax says. The main objectives were the "protection of Thomson CSF (now Thales) during the current investigations" and the "permanent support of J Z for the future projects". The amount "500k ZAR". Ouch.

If the fax is genuine, it tells this story Thetard wanted confirmation Zuma really wanted the bribe. He prearranged a code, a typical precaution against listening devices. The parties met, and the code was transmitted.

Here is a situation where the second-highest office of the land was, on the face of it, plotting with arms contractors to subvert the official, state investigations in favour of a private company. This is not a grey area.

President Thabo Mbeki has written scornfully about "fishers of corrupt men", implying the usual suspects were on yet another fruitless fishing expedition. But if so, they seem to have hooked into a pretty big fish.

He might have been better advised to reserve his contempt for situations in which there is no documentary evidence on hand, particularly documentary evidence that cites names and numbers. As it is, the tide of impending political drama is on the rise.

Cohen is chief reporter.

With acknowledgements to Tim Cohen and Business Day.