Publication: Financial Times Issued: Date: 2007-05-31 Reporter: Michael Peel Reporter: Alec Russell

S African General Reveals Graft

 

Publication 

Financial Times

Date

2007-05-31

Reporter

Michael Peel, Alec Russell 

Web Link

www.ft.com

 

London, South Africa's former top defence official has revealed that he resigned because he suspected corruption in a UK-backed arms deal involving BAE Systems and other big European companies.

As Tony Blair prepared to visit South Africa today,Lt Gen Pierre Steyn told the Financial Times that his concerns led him to leave office in 1998 - months before the prime minister backed the 30bn rand (Pounds 2.1bn) deal by signing an agreement on a package of spin-off industrial projects.

The controversial arms deal is now being investigated in Britain and Germany and is widely seen as a test of Mr Blair's long-stated commitment to helping curb corruption in Africa.

Gen Steyn said he was concerned about the possibility of graft during negotiations on the deal to buy military aircraft and vessels, although he added that he did not want to make allegations against specific individuals or companies.

"I suspected corruption - for sure," he said. "So that made me more determined to enforce good practice."

He said he resigned because he was not satisfied that sufficient safeguards were in place to enable him to prevent or expose any corruption in the bidding process, whose winners included BAE, Germany's Thyssen-Krupp, France's Thales and Saab of Sweden, which is 20 per cent owned by BAE.

"When my attempts were frustrated, I said, 'That's it, I must relinquish my responsibility,' " he said.

Each of the companies has since come under a cloud, with BAE and Thyssen being investigated in their home countries and Thales being suspected of offering to bribe Jacob Zuma, South Africa's former deputy president. BAE, Saab, Thales and Mr Zuma have denied corruption, while Thyssen has declined to comment.

South African critics of the arms deal - in the military, parliament and elsewhere - say the authorities have never properly investigated after the government bought too much equipment and overpaid for it.

London has backed the deal strongly, principally through a January 1999 agreement between Mr Blair and Thabo Mbeki, now the president, to promote industrial projects related to the British arms contracts. This programme has also been controversial, with some critics arguing that it is run secretively and has brought South Africa few of the promised benefits.

Investigators from Britain's Serious Fraud Office are expected to visit South Africa soon, although their trip has been complicated by London's much-criticised decision in December to scrap a corruption investigation into BAE's relationship with Saudi Arabia. Mr Mbeki later suggested that Britain had applied a double standard by ending the Saudi inquiry while continuing to investigate in South Africa.

In an FT interview, Alec Erwin, South Africa's minister of public enterprises, who is close to Mr Mbeki, said his country would not tolerate "some kind of fishing expedition" by the British authorities.

He said: "Use the international agreements and we'll co-operate as far as we can. But thus far we've just had shooting into the dark - and hoping you'll hit a pigeon *1."

With acknowledgement to Michael Peel, Alec Russell and Financial Times.


*1       But we've caught some very nice fish so far, thank you.

And we've got some other very shy Big Fish and some pigeons very fearful of coming home to roost.

Because they're going to get hit, dark or not.