Shaik trial evidence flies in the face of arms deal probe findings

If deputy president Jacob Zuma was the proverbial elephant in the courtroom during the Schabir Shaik trial, then the controversial multi billion rand arms deal was the pink rhinoceros. Even if you tried, it was impossible to ignore.

Though Shaik's trial was not linked directly to the defence package, enough information has emerged in evidence to blow the lid off a keg that government believed it had sealed shut more than three years ago.

This week government said it stood by the findings of the 2001 report after a 13-month probe by the joint investigation team (JIT), comprising the auditor-general, the public protector and the national directorate of public prosecutions, into government's handling of arms deal contracts.

The Shaik trial provides further evidence that the investigation was tainted. Earlier evidence includes documentation, acquired by businessman Richard Young in a series of high court challenges that the first draft of the JIT report was edited by government officials before it was presented to parliament. Young is suing the department of defence for R149m, claiming he lost a lucrative contract to one of Shaik's companies due to an irregular tender procedure.

This week Gavin Woods, who chaired parliament's standing committee on public accounts (Scopa) from 1999 to 2002, told the FM that the Shaik trial confirmed his long-held view that the JIT report was flawed and weak.

Woods was highly regarded in parliament when he headed Scopa but quit in February 2002, citing intolerable pressure and interference from the ANC.

According to Woods, the JIT report ignored 10 of the 14 concerns raised by Scopa, especially questions about the eventual cost of the deal.

Woods argues that had the rules and criteria been adhered to, at least three of the five choices of arms suppliers were "likely to have been different".

Though the report found that established procedures and practices were repeatedly disregarded across the five main transactions, it still concluded that the breaches would not have affected the specific results.

Woods's critique of the JIT report is supported by Andrew Feinstein, who resigned from Scopa in 2001 and later resigned from parliament. Feinstein found himself at loggerheads with his fellow ANC members on Scopa over the handling of the investigation.

Both Woods and Feinstein were particularly scathing about the report's handling of the role played by Shaik's younger brother, Chippy, then the influential head of procurement in the defence department.

When questions about a conflict of interest arose - after a company in which Schabir Shaik had a shareholding was awarded a R400m tender on one of the sub contractor deals - Chippy told a parliamentary committee that he had recused himself from all meetings concerning his brother's contract.

But documents acquired through Young's court action show that Chippy was not only present at the meetings, but also chaired some of them.

Feinstein says he was so outraged by this that even though he had resigned from parliament, he wrote to the then speaker of parliament, Frene Ginwala, demanding that Chippy be sanctioned for lying to parliament.

He never received a response.

Woods adds that even where the JIT was able to produce evidence which showed Chippy Shaik lied about the extent of his potential conflict of interest and claims of disclosure and non participation, "the JIT avoids recommending any sanction".

Later suspended by the department pending an internal investigation, Chippy eventually resigned.

For Woods, the Shaik trial is a small vindication, raising more questions than providing answers. "We now know that Chippy was in a position of extraordinary influence," says Woods. "But did this extend to areas of the [arms] deal that did not involve his brother?"

A government statement released soon after Judge Hilary Squires' judgment said the integrity of the primary contracts "which was the core responsibility of government" was not in question and that the Shaik trial related to secondary contracting only.

But Woods says the issue isn't that simple. He argues there was evidence that even prime contractors were given instructions, in some cases by the state's procurement agency, Armscor, about the selection of subcontractors. "This was done in a way which went beyond the scope allowed by Armscor policy." The defence department has always denied this happened.

Woods says that though the JIT does point to instances where attempts were made by government to influence tenders of subcontractors, these were never investigated and it again failed to make a single recommendation.

Woods believes that state institutions have failed the country and that Scopa needs to exert its influence again if public faith in parliament is to be restored. Scopa , now chaired by former NNP MP Francois Beukman, has the power to initiate an investigation, which Woods says should be conducted by independent forensic experts.

Woods is against a judicial inquiry because its terms of reference will be set by the president.