Publication: Business Day Issued: Date: 2006-07-04 Reporter: Terry Crawford-Browne Reporter: Reporter:

Zuma is Small Fry in Arms Scandal

 

Publication 

Business Day
Date 2006-07-04

Reporter

Terry Crawford-Browne

Web Link

www.businessday.co.za

 

Letters

Media reports in 1995 confirmed that then deputy president Thabo Mbeki had intervened inappropriately to swing the corvette contracts to Germany. Instead of spending R1,7bn on four Spanish corvettes *1, SA was committed to four German frigates costing more than R6,5bn but equipped with obsolete 1970s French technology, plus three German submarines.

A former German ambassador to SA was my house guest in March 1996, and confirmed that the German government was “determined at all costs” to win the warship contracts. The Helmut Kohl scandal in Germany finally erupted in 1999, sparked by a Thyssen export of tanks to Saudi Arabia in 1991. The bribes in that instance were almost 50% of the contract price.

The arms deal tender processes were a sham *2. Germany and France would share the warship contracts. England and Sweden would share the warplane contracts. And Italy would supply helicopters.

SA’s actual defence and socio-economic needs were deemed irrelevant to the European governments and arms companies sharing the spoils. Kickbacks from arms exports are how European political parties are funded. How could the South African government have been so gullible?*3

The offset “benefits” for the warships were to be contracts with steel companies including Thyssens. A stainless steel plant at Coega morphed into a condom factory in East London that, in turn, morphed into a bankrupt tea estate in Transkei. The bribes now being investigated in Germany appear to be merely the “first success fee” payments paid in 1999 by Thyssen to Futuristic Business Solutions.*4

The real bribes were apparently paid only after Finance Minister Trevor Manuel signed the Commerzbank loan agreements in January 2000. Former deputy president Jacob Zuma comes to trial this month on corruption charges related to these contracts. He is, however, merely a “small fish” in this saga. The net needs to be cast higher, both in SA and Europe.

Meanwhile, 7-million South Africans live in shacks. Six million South Africans will die of AIDS-related diseases by 2010. Unemployment is more than 40%, and crime is out of control. What an appalling legacy from the man once dubbed “Mr Delivery”.

Terry Crawford-Browne
Milnerton

With acknowledgement to Terry Crawford-Browne and Business Day.


*1       The Bazan 590B is a full blown frigate in the 3 000 tonne range.


*2      How's this for a real beauty from the November 2001 JIT Report :

Chapter 7, Page 214

"(a)  There  is  no  evidence  regarding  the  manner  of  awarding  the  NIP quality multipliers  of  1  to  25,  as  these  were  not  linked  to  any  documented benchmarks."

This just about says it all - Thabo Mbeki and his MINCOM could adjust the carefully determined scores based on pre-determined value and scoring systems simply by multiplying a score by a factor of 1 to 25 and on purely qualitative terms.

So of course they could defeat the quantitative analysis done by teams of technical and financial experts.
And thereby "legitimately" ensure the successes of their favourite bidder.
How is this comply with the transparency stipulation?
And Shauket Fakie says but diddly on this "best practice" in his forensic report.

*3      Come on Terry, the South African Government was not gullible.

The South African taxpaying voter was gullible.

*4       Puzzle of the Week

International Taxation III

Q1      20%
In German and French tax law and before February 1999, can “first success fee” payments be legitimately claimed as "necessary expenses" (NEs)?
Q2      20%
In German and French tax law and after February 1999, can “first success fee” payments be legitimately claimed as "necessary expenses" (NEs)?
Q3      20%
In German naval business practice and after February 1999, can success fee payments be justified in terms of corporate ethics statements?
Q4      20%
In French naval business practice and after February 1999, can success fee payments be justified in terms of corporate ethics statements?
Q5      10%
In German naval business practice, have there ever been corporate ethics?
Q6      10%
In French naval business practice, have there ever been corporate ethics?