Publication: Mail and Guardian Issued: Date: 2001-04-12 Reporter: Stefaans Brummer Reporter:

German Firm in R1,2m Lobby Agreement

 

Publication 

Mail and Guardian
Date

2001-04-12

Reporter
Stefaans Brummer

Web Link

www.mg.co.za

 

A German company which successfully tendered in South Africa's arms acquisition package appears to have paid a company linked to former defence minister Joe Modise to lobby government on its behalf.

The Mail & Guardian is in possession of a draft contract specifying that Futuristic Business Solutions (FBS) a company part owned by two of Modise's relatives would lobby "key decision makers within the government of South Africa" for a fee of R1,2-million.

At the time, Modise was still defence minister.

Bluntly put, relatives of a "key decision maker" were to have lobbied the "key decision maker".

The dynamics are similar to a recent conflict-of-interest case which caused a public outcry in the United States: Hugh Rodham, the lawyer brother-in-law of then-president Bill Clinton, lobbied Clinton's administration to grant pardons to two convicts: a cocaine dealer and a herbal-remedy conman. When Rodham's role became public, he had to repay his $400?000 (about R3,2-million) lobbying fee. The incident led to great embarrassment for Clinton and his wife, Hillary Rodham-Clinton, who has embarked on her own political career as senator for New York State.

The undated draft contract in possession of the M&G specified that FBS would lobby on behalf of Thyssen, a partner in the German Frigate Consortium, which was tendering to sell four patrol corvette ships to the South African navy. After the adjudication of tenders during which FBS was to lobby the Cabinet indeed named the German consortium the preferred bidder. The Cabinet decision was in November 1998, while Modise was still defence minister.

FBS is part owned by Lambert Moloi and Tshepo Molai, both of whom are directors. Moloi, a retired Umkontho weSizwe and South African National Defence Force commander, is Modise's brother-in-law. Molai is Moloi's son-in-law.

The draft reads in part: "FBS takes it upon itself to use its established network to lobby and market Thyssen, its products and services, to key decision makers within the government of South Africa or any of its departments or ancillary bodies ... during the adjudication of the tenders for the [arms acquisition] programme ... "In the event of Thyssen being awarded a contract subsequent to the date of signature hereof, it is agreed between the parties that, upon approval of Thyssen's contract proposal, a success fee of R1 200 000 ... shall immediately become due owing and payable by Thyssen to FBS."

The question, of course, is whether this draft contract between Thyssen and FBS was eventually signed, and if so whether it was in substantially the same form. Thyssen representative Sven Moeller failed to answer questions this week, saying a day's notice was not enough.

Last week, Minister of Defence Mosiuoa Lekota confirmed to e.tv news that indeed there was some form of contract between the two companies. He said: "At the time of the bidding, in their bidding papers, Thyssen included as a contract an agreement they had with FBS as their South African partner."

It is known that FBS signed a number of comparable deals with companies tendering for parts of the arms package.

Gavin Woods, chair of Parliament's standing committee on public accounts, this week said he found this disturbing as the process "was supposed to have been ring-fenced from outside political influence".

Said Woods: "My information is that FBS secured a number of such agreements and, working in terms of these agreements, was able to secure a number of contracts [for companies which tendered]. It would seem that, in the main, what [FBS] had to offer was their political connections."

Molai was out of the country this week and Moloi, when approached for comment, said he was in a meeting. He could not be reached again.

With acknowledgements to Stefaans Brummer and Mail and Guardian.