In 1998, the Department of Defence announced that South Africa was going to spend R29,8 billion on arms, and a list of preferred bidders to supply the equipment was released. The equipment included corvettes, light utility helicopters, Gripen fighter jets, Hawk trainer aircraft and submarines. To many, this came as a complete surprise, as the Department had stated only two years earlier that South Africa faced ‘no discernible foreign military threat'.

Government is adamant the deal will create spin-offs worth R104 billion for the local economy, 65 000 jobs, and around R4 billion in sub-contracts for local arms manufacturers.

The supposed business gains are a scam, says Terry Crawford-Brown, spokesperson for Economist Allied for Arms Reduction. He predicts that the final cost of the R29,8 billion deal will actually be about R151,2 billion, and that the taxpayer will foot this bill. Equally sceptical is the Institute for Democracy in South Africa (Idasa). In one of its reports it asks, ‘If it is possible, by spending R29,9 billion, to achieve economic benefit of R104 billion, why does every developing country in the world not spend its entire budget on arms? The answer seems to lie in the fact that offsets are an internationally discredited manner of promoting arms transactions.'

The main objective is that the billions should rather be spent on poverty alleviation and healthcare. Parliament was also not informed of all the deal's particulars, including the risks of foreign exchange fluctuations, making it far more pricey than initially expected. And this is aside from the personal interests some officials are reported to have had in it.

Schabir Shaik, a very wealthy Durban businessman who says he was very poor six years ago, worked closely with Deputy President Jacob Zuma, former Minister of Transport Mac Maharaj and the late Minister of Defence Joe Modise in exile during the struggle. After years of being Zuma's friend and financial advisor, Shaik is accused by the Scorpions of paying Zuma almost R1,2 million between 1995 and 2002 for various contractual benefits. Shaik is the chief executive of Nkobi Holdings, the company that benefited from the string of government contracts, including the arms deal. Shaik has been charged with corruption, fraud, ‘cooking the books', tax evasion and money laundering.

Enter Shaik's brother, Shamin ‘Chippy' Shaik. He was Modise's right-hand man and head of acquisitions in the Department of Defence at the time the arms deal was being put together. In January 1997, he was implicated in the arms deal when classified military documents went missing from his car. He was suspended from the department and went on to resign.

As Minister of Defence, Modise oversaw a major proportion of the procurement and acquisition process. His close links with Schabir Shaik raised many questions, but the investigation into his involvement in any corruption ended when he died.

Zuma allegedly received more than a R1 million from Thomson-CSF/Thales, a French arms company that got contracts. In papers before court he is also alleged to have agreed to protect Thomson and Nkobi Holdings in any investigation. Zuma has constantly maintained his innocence, but National Director of Public Prosecutions Bulelani Ngcuka says the Scorpions have a prima facie case against Zuma, although he won't press charges at this stage.

Former ANC chief whip and MP Tony Yengeni chaired Parliament's Defence Portfolio Committee at the time the deals were being negotiated. He has been sentenced to four years in prison for defrauding Parliament by failing to disclose a 47 percent discount (worth R167 387) on a Mercedes-Benz ML320 4x4. He bought the car from European Aeronautic Defence Systems, one of the companies that benefited from the arms deal. Yengeni's bail has been extended pending appeal.

Former Transport Minister Mac Maharaj is allegedly to have accepted several donations from Schabir Shaik while he held office, including payment of a R15 000 bill for accommodation on a trip to Disneyworld in July 1996, which Maharaj allegedly failed to declare. Shaik or his companies are alleged to have paid more than R500 000 to Maharaj and his wife Zarina.

In November 2001, a 380-page report cleared the Government of all responsibility for any ‘irregularities and improprieties' and it stated that there was no ‘improper and unlawful conduct on the part of the Government in the arms deal'. The Scorpions, however, were tasked to continue investigating the deal, which they are still doing.

With acknowledgements to Gill Gifford and the Fairlady.