State Nets Small-Fry Yengeni While Big Fish Slip Away |
Publication | Sunday Times |
Date | 2003-07-13 |
Reporter |
Hennie van Vuuren |
Web Link |
The media cacophony following Toni Yengeni's fraud conviction in April presented the perfect distraction. It allowed German businessman Michael Woerfel to exit the South African stage after the state, without much explanation, dropped its charges of fraud and corruption against him.
Woerfel, the former local head of the European Aeronautic Defence and Space (EADS) company, was one of a number of weapons' peddlers keen to supply the SA National Defence Force with equipment for its strategic procurement package in the late 1990s.
DaimlerChrysler Aerospace, incorporated into EADS in July 2001, made numerous overtures to high-ranking SANDF officers and parliamentarians, which included flights to exotic destinations and discounts on luxury vehicles.
The startling revelations in the British House of Commons recently have shown that British Aerospace, another key weapons supplier in the SA arms deal, admitted to paying "agency fees" in the SA deal.
The common ground between the BAE and EADS deals is that we don't have details of all the recipients.
EADS never clinched the big deal. However, companies with which it had links managed to land contracts of more than R400-million for missiles and radar equipment.
When the state decided to drop corruption charges against Yengeni and settle for a conviction of fraud, observers assumed it was after bigger fish. The conjecture was that possibly a deal had been struck which would see Yengeni let off lightly for helping net Woerfel.
However, Woerfel was let off the hook and Yengeni was left carrying the can. Why? The lack of consistency is a strange signal for the prosecution to send out to international businessmen inclined to use bribery in South Africa.
However, all is not lost. According to information received from a German non-governmental organisation, the Munich state prosecutor is continuing its bribery investigation into Woerfel, which it launched in 2001.
It has had contact with South African officials who may have benefited from corrupt transactions.
This investigation is continuing despite the national prosecuting authority's decision to drop charges against Woerfel.
Under German law, the bribery of foreign public officials attracts a penalty of up to five years' imprisonment - part of a move to punish large corporations for exporting bribery to developing countries.
Perhaps the Munich prosecutor could deal with questions like how many of those who benefited from Woerfel's generosity were public officials, did they record the benefit and what did the arms-maker demand in return?
Is Woerfel perhaps hiding the unpleasant truth? Bulelani Ngcuka's team has left this vexing question unanswered.
Woerfel's preference for a discounted Mercedes-Benz is not a mere coincidence. EADS has strong business ties to DaimlerChrysler, the makers of Mercedes-Benz. Daimler has deep roots in South Africa. Its global CEO, Juergen Schrempp, cut his teeth as head of the South African operation in the 1980s. He is also a member of President Thabo Mbeki's investment council.
If Woerfel were indeed intending to corrupt South African officials, did DaimlerChrysler, the company that supplied the discounted vehicles, have knowledge of this?
If so, was the SA company or head office, due to its joint interest in both the weapons business and luxury cars, aware of this cosy "off-set" arrangement?
There are many reasons the public has a right to know, not at least because transparency, coupled with access to information, is an essential preventative measure to ensure that corruption does not creep into future state procurement deals.
If Woerfel were to be proven guilty of corruption, on behalf of EADS, it might be important to scrutinise other public-procurement deals which the company has been awarded.
South African Airways, for example, announced its acquisition of a new fleet of 41 Airbus airliners to the tune of $3,5-billion, amid much hype last year. The ownership of Airbus is in the hands of two names in the arms deal : EADS (owns 80% of Airbus stock) and BAE Systems (a 20% stake).
There has been no hint of corruption in the SAA deal. However, as long as the list of recipients of EADS's largesse remains a secret, the public can only speculate if there is a connection between the Airbus deal and the car discounts given to VIPs in the "civil airlines" sector.
We may despise Yengeni's taste in silk suites, yet he is only one character in a complex plot.
Until we know why those implicated in bribery walk free, justice could be charged with dealing an unequal hand - a charge which a vibrant democracy must wrestle with.
With acknowledgements to Hennie van Vuuren and the Sunday Times.