How Modise's Visionary Approach' Cost SA R15bn |
Publication |
Business Day |
Date |
2005-01-07 |
Reporter |
Tim Cohen |
Web Link |
After a massive three year legal battle, Auditor-General Shauket Fakie has released the draft versions of the arms deal investigation, conducted by his office, the public protector and the National Directorate of Public Prosecutions in 2001. The battle culminated in a court order following a preliminary contempt of court finding in terms of which Fakie would have had to spend time in jail had he not complied.
Why was a body notionally dedicated to transparency and integrity of public finance and constitutionally a servant of Parliament so determined to avoid the release of a set of documents the courts decided repeatedly were legitimately the public's to view?
The answer is apparent from the documents. More than 10000 pages of draft versions of the arms deal report reveal great swathes of the original were excised, including allegations that public servants were intimidated, minutes of meetings substituted, preferred suppliers changed and doubts expressed.
Only the tip of the iceberg is visible from the final report.
But it is the sections of the report that were added that betray the real motives of the politicians and officials who had a hand in making the changes: they wanted to ensure the report could not become the basis for legal challenges by losing contractors.
Before we get there some history is appropriate. Under political pressure from opposition parties and from within its own constituency for spending roughly R30bn on arms at a time of supposed fiscal austerity government reluctantly agreed to an investigation into the arms deal. But it was clear government expected the report would clear the air rather than find culprits.
When the report appeared finally in November 2001, the reviews were mixed. Opposition parties, disappointed by the findings, cried "cover-up". Press commentary was noncommittal.
The report recorded a number of deviations from agreed tender evaluation procedures, pointing out the successful bidder for the corvettes, the German Frigate Consortium, did not comply with a minimum criterion specified in the defence industrial participation value system and "should have been disqualified from proceeding to the next round of evaluation". It found the Spanish bidder for the corvettes, Bazan, was the only bidder that complied with all the minimum criteria for technical and defence industrial participation evaluations.
Few people were named in the report, but one was the head of the procurement process, Chippy Shaik, who the report said had a conflict of interest because of his brother's financial interests in defence companies that were part of the consortium's successful bid.
The other was former defence minister Joe Modise on his death bed when the report was released who was criticised lightly.
The crucial finding, the first paragraph of the conclusion chapter titled "key findings and recommendations", was expressed this way: "No evidence was found of any improper or unlawful conduct by the government. The irregularities and improprieties referred to in the findings as contained in this report, point to the conduct of certain officials of government departments involved and cannot, in our view, be ascribed to the president or the minister involved in their capacity as members of the ministers' committee or cabinet. There are therefore no grounds to suggest that government's contracting position is flawed."
Odd that this paragraph does not appear in any but the latest versions of the drafts. It appears only after the auditor-general met President Thabo Mbeki to discuss the report.
On what basis was this conclusion arrived at? The draft version goes into great detail to demonstrate that massive irregularities occurred. Some irregularities even made it through to the final draft.
Further, the draft provides crucial details of the thinking of various players. One suggests that the most senior defence force members were solidly against buying more jet aircraft. In a revealing paragraph, the draft notes that the international offers negotiating team found after consultation with the chiefs of the air force, navy and defence force as well as the defence minister that acquiring fighter planes should be deferred.
The logic at the time was obvious: the air force had 50 supersonic Cheetah fighter aircraft able to operate until 2012, and only nine pilots able to fly them. "There is therefore a capacity constraint in terms of absorbing the Gripen," it said.
It is incredible that SA ended up buying the planes. Again, the final version is not useful in explaining how this happened. It merely justifies the result on the basis that it was ultimately the cabinet's responsibility to make the final decision.
But the draft shows exactly how it happened. It says, in effect, that SA bought the planes because Modise wanted them.
There is a section in the draft on how Modise intervened in the process: "Decisions of the minister of defence that could have influenced the process". The drafts describe a complex argument about a two- and three-tiered air force structure being developed. They also describe how the Hawk jet trainer and Gripen light fighter started as the most expensive package, drawing the derisive comment that the planes were "double the price for 15% more utility". It describes how the rules were changed to allow this group more latitude in the industrial participation programme. It explains the genesis of the "noncosted option", and describes how Modise called for a "visionary approach" and how military men were told to "let the politicians decide".
It also describes how they decided to spend almost R15bn on planes SA clearly did not need and could not use. The only thing the drafts do not explain is why why he was so, so desperate to buy these superfluous, massively expensive jets.
Cohen is editor at large.
With acknowledgements to Tim Cohen and the Business Day.