Draft Reports Ignite Smouldering Embers (2)

Joel Netshitenzhe, head of the government communication and information service, confidently asserts that renewed suspicions about the arms deal are much ado about nothing. His optimism may be premature, however.

Suspicions of corruption were rekindled recently by the release of the draft documents that preceded the final report of the joint investigation into the arms deal. The draft documents differ in significant ways from the final report.

Several political analysts have concluded that the changes were made at the behest of members of the cabinet sub-committee that negotiated the arms deal. A number of opposition politicians endorse this conclusion and the Democratic Alliance (DA) has called for a judicial commission of inquiry into the matter.

The special investigators - the auditor general (Shauket Fakie), the public protector and the national director of public prosecutions - admit that they met with members of the cabinet sub-committee prior to writing their final report. However, Fakie contends that this was a routine meeting to clarify issues.

Netshitenzhe notes that the draft documents emanated from an aggrieved South African defence contractor, Richard Young, who lost out to a rival bidder to supply the combat suite for four new corvettes. But that does not discount the possibility that Young has a case, particularly as the chief of acquisitions in the arms deal, Shamin 'Chippy' Shaik, is the brother of Durban businessman Schabir Shaik, who had a stake in the company that won the subcontract.

Gavin Woods (IFP), former chairman of Scopa (the standing committee for public accounts), believes the draft documents provide evidence that 'significant and material changes' were made to the final report. He also believes the meetings between Fakie and president Mbeki during the investigation were inappropriate as Mbeki was head of the cabinet sub-committee which was 'central to the arms deal' and thus under investigation.

The draft documents run to more than a thousand pages. Thus vigorous editing was required to produce the final report, which is less than 400 pages. Intriguing handwritten notes by an unknown person appear on several of the draft documents. One of these, headed, 'Add to overall conclusion', reads: '1. The joint investigation team found no evidence of impropriety, fraud or corruption by cabinet or government. 2. Government co-operated with the investigation team and assisted them with their endeavours.' The first sentence, only slightly modified, appears in the final report.

Of pivotal importance is the identity of the writer and whether he was issuing an instruction in his own capacity or relaying an instruction from a higher authority. The possibility that the instruction emanated from the cabinet sub-committee cannot be excluded.

Several omissions from the final report may also be important. The draft documents state that Joe Modise (defence minister during the procurement phase of the arms deal) pressed the case for British Hawk and Swedish Gripen fighter aircraft above a less expensive Italian plane and 'caused the Hawk to be selected', in part by insisting that cost not be one of the criteria by which rival bids were appraised.

In a review of the selection process published in September 2000, the auditor general, Shauket Fakie, described the use of a non-costed comparison as a 'material deviation from the originally adopted value system'. The final report, however, describes the choice as 'unusual' but 'neither unlawful nor irregular'.

Another intriguing disclosure contained in the draft documents is the existence of two sets of minutes for a crucial meeting at which the cabinet sub-committee decided whether to opt for the Hawk-Gripen or the Italian Aermachii tender. According to the final report, the sub-committee recommended the Hawk-Gripen option with no dissenting voices. The draft documents record that the sub-committee decided that both options should be placed before cabinet pending an investigation into which would deliver the most benefits to local industry.

The arms deal, the cost of which stands at about R50 billion today, was sold to the public on the grounds that it would pay for itself through off-set investments in the South African economy by the contracting companies, optimistically valued at around R110 billion. However, several companies have failed to meet their target dates on investments and Victor Moche, CEO of the state-owned manufacturing company Denel, describes the programmes as 'practically 100 per cent loss-making contracts'.

The words of Joe Slovo shortly before his death in January 1995 bear repeating: 'We need to be told clearly what the purpose is of all the high-tech, high-cost weapons systems… and why the current equipment is not sufficient. There (is) little doubt in my mind that South Africa's greatest defence will be a satisfied population.'

The full version of this article appears in Focus 37 (March 2005).

Focus is published by The Helen Suzman Foundation, tel +27 11 880 3352, info@hsf.org.za

With acknowledgements to Patrick Laurence and The Helen Suzman Foundation.