A betrayal of the struggle against apartheid, writes Terry Crawford-Browne

I sat stunned and bewildered in a Cape Town courtroom in March 2004 when judges Andre Blignaut and Ntlupheko Yekiso, in a two-sentence summary of their 52-page judgment, declared:

Applicants' review application is dismissed with costs, including the costs of two counsel. In the discovery application each party shall be responsible for his/its own costs.

We had won the first round a year earlier in March 2003 when Minister of Finance Trevor Manuel was ordered by the Cape High Court to supply me within 10 days with the financial working papers for the arms deal. The minister, through the Director General of the National Treasury Maria Ramos, argued against the judgment, declaring it was not in the national interest to disclose how the government conducted its financial business.

This was a foretaste of the government's subsequent refusals to comply with court orders it didn't like. It took two further applications to the court for contempt of court judgments against the minister to obtain 224 pages of the estimated 700 pages of documents to which I was entitled. By then I'd run out of money.

The government's own consultants had warned cabinet ministers that South Africa's multibillion rand arms deal was a highly risky proposition that could "lead the government into mounting fiscal, economic and financial difficulties". Those warnings had been ignored. The foreign loan agreements signed by the minister and verified in court as authentic, were a textbook example of Third World debt entrapment by European banks and governments.

As a former international banker, I could smell the stench of corruption. Corruption is, however, notoriously difficult and expensive to prove. Arms companies are expert in creating webs of front companies and offshore bank accounts to hide their tracks. Our documents had consequently argued that the arms deal was strategically, economically and financially irrational and failed the tests of South Africa's highly acclaimed Constitution.

After 1994, European politicians flocked to South Africa to pay tribute to then-president Nelson Mandela and our new democracy with one hand, while peddling weapons with the other. Spend R30 billion on warships and warplanes, went their patter, and the arms companies will invest offsets worth R110bn as a Marshall Plan to stimulate the economy and create over 65 000 jobs.

The royal yacht Britannia had reportedly doubled as a floating armaments industry exhibition when Queen Elizabeth visited Cape Town in March 1995. It is common knowledge that members of the royal family and successive British prime ministers are repeatedly employed to promote British arms exports in what Margaret Thatcher described as "batting for Britain".

Economically, the international arms trade is surprisingly small - $44.2bn in 2005 in a world economy of $45 trillion. But its distortions and economic impact are huge. Transparency International estimates that bribery around the world robs about $1 trillion from the poor. Another TI study links the arms industry to about 45% of that corruption.

The morning I heard the judges deliver their devastating finding, the weather was balmy and calm. As I walked down Keerom Street to the Cape High Court I thought this augured well. There was not a cloud in the sky and both the south-easter and the intense heat of February that are prone to strain Capetonian tempers were behind us. A few reporters waiting outside the building wished me good luck. I smiled sanguinely, but then my wife Lavinia has chided me throughout our marriage that I am an idealist and an eternal optimist.

Three weeks earlier, the hearing had not gone as well as the first and subsequent contests. Nonetheless, I felt confident as I sat next to my briefing attorney Charles Abrahams waiting for the judge to appear. It was a small but dignified courtroom, much smaller than the large chambers in which the previous sessions had been conducted. There were three benches behind me on which sat about a dozen journalists. Lavinia sat in the back corner.

The clerk of the court called "all rise" as Judge Blignaut swept in, dressed in his black gown. He sat down, and moments later we rose again as he swept out, having pronounced the verdict.

The clerk handed Abrahams a copy of the judgment. I received my own copy by e-mail that afternoon. Abrahams commented that it was an outrageous precedent that costs were being awarded against me in an issue brought in the public interest. Together we skimmed through the document, while Lavinia, anxious and gloomy, silently left the courtroom.

A few minutes later in the street, I encountered a battery of television cameras and reporters. Putting on the proverbial brave face, I tried to cover my feelings of confused panic, saying that I would appeal against the judgment to the Supreme Court of Appeal. Indeed, I expected the setback would be reversed and that I would be vindicated.

In 1998, a prominent advocate, Anton Katz, asked me to take up the arms deal as an important constitutional matter. He would act pro bono. Katz had made his name and fortune as a constitutional lawyer and in defending the German fraudster Jurgen Harksen. It was not an association with which I was comfortable, but Katz argued that even Harksen was entitled to the safeguards of the Constitution.

The Institute For Democracy in South Africa has described the arms deal scandal as "the litmus test of South Africa's commitment to democracy and good governance". My own assessment is that the arms deal ranks as nothing less than the betrayal of the struggle against apartheid. People around the world dedicated their lives to that struggle. Has it all been in vain, destroyed by corrupt politicians in collusion with that most venal business, the armaments industry?

Regrettably it is the arms deal - along with Zimbabwe and HIV/Aids - that dogs the presidency under Thabo Mbeki. In the mid-1990s one might have believed the new government was inexperienced, but a succession of corruption scandals has tainted its term of office.

It remains unconscionable that the first major procurement priority of the post-apartheid government was to buy warships and warplanes. This in a country with 40% unemployment, where eight million people live in shacks, and where an estimated six million will die of Aids-related diseases by the year 2010.

In 1996, the Archbishop of Cape Town, Njongonkulu Ndungane, had asked me to represent the Anglican Church during the parliamentary Defence Review in which post-apartheid South Africa debated the premises of defence policy in the new era. Churches and other civil organisations were invited to Parliament to participate.

This approach was very different from the apartheid era when Parliament was discredited as a rubber stamp for a racist ideology. Faith-based institutions now argued at the review that there was, thankfully, no conceivable foreign military threat to South Africa. With the Quaker Peace Centre, the Catholic parliamentary office and other representatives, we established what we called the Coalition for Defence Alternatives.

I served as co-convenor, representing both the Anglican Church and Economists Allied For Arms Reduction. Ecaar had been established in 1989 in New York, and I had been mandated in 1995 to establish a South African affiliate.

While each affiliate is autonomous, the common purpose is objective economic analysis and appropriate action so that conflicts between nations can be resolved without recourse to war. Ecaar is accredited to the Economic and Social Council of the United Nations, and its distinguished board of trustees then included eight (currently 10) Nobel laureates.

The coalition organised regular meetings in the parliamentary precincts to stimulate public debate on defence issues. Among those who attended these meetings were Katz and the feisty Pan Africanist Congress member of Parliament, Patricia de Lille. De Lille had been the keynote speaker during a defence debate in November 1998 and was an ardent opponent of the arms deal.

By mid-1998 there were already whisperings in the parliamentary corridors of a £1 million first-success fee allegedly paid by BAE Systems to various ANC MPs. In December that year, trade unionists at the National Union of Metalworkers alerted me to an additional R30m allegedly being routed by BAE via two Swedish trade unions. This money was to entice politicians to support the arms deal.

My contacts with Swedish television confirmed the payments but then the shutters came down. Through Campaign Against Arms Trade in London, I asked the British government to investigate. The then secretary for trade and industry, Stephen Byers, appointed the London Metropolitan Police to the task.

The eventual response was that it was not illegal under British law to bribe foreigners and consequently, that there was no crime to investigate. Six months later, in June 1999, the Quaker Peace Centre received a phone call from ANC intelligence operatives asking for copies of papers compiled by the coalition. We had an American intern at the time, newly arrived from Columbia University in New York where she was a graduate student in international relations. Bridget Moix phoned me in agitated concern. "Go ahead, give them to them," I replied. "Our documents are all in the public domain". Even so, it was with some trepidation that I agreed to meet the operatives a few days later.

They identified themselves and also named some of the ANC MPs with whom they were working. They had been highly trained in the Soviet Union and had seen the consequences when communist bureaucrats became super capitalists overnight.

Russia collapsed into a mobster society where contract killings replaced the rule of law.

"Very interesting papers," they commented, "but we'll tell you where the real corruption is around the arms deal.

"The leadership of uMkonto weSizwe sees the arms deal and other government contracts as an opportunity to replace the Oppenheimers as the new financial elite."

They also believed the arms deal was just the tip of the corruption iceberg that concerned oil deals, the taxi recapitalisation process, toll roads, drivers' licences, Cell C, the Coega development, diamond and drug smuggling, weapons trafficking and money laundering.

The common denominator, they added, was kickbacks to the ANC in return for political protection. As the subsequent arms deal, Oilgate, Brett Kebble and other scandals have confirmed, their information has proved accurate.

It was known back then that Brett Kebble was a crook. Yet no action was taken.

By the time of his mafia-style assassination or assisted suicide in September 2005, Kebble had embezzled an estimated R2 billion out of JCI and other companies.

This is extracted from Eye on the Money, written by Terry Crawford-Browne and published by Umuzi, a division of Random House.

With acknowledgement to Terry Crawford-Browne and Cape Argus.