|
Defence analyst did take arms money |
| Publication |
The Citizen |
| Date | 2011-12-12 |
| Reporter | Paul Kirk |
| Web Link | www.citizen.co.za |
Defence analyst and author Helmoed Romer Heitman yesterday confirmed
he had taken money from German arms consortium Thyssen Rheinstall Technik (TRT)
but denied that the payments were improper.
Johannesburg - Defence analyst and author Helmoed Romer Heitman
yesterday confirmed he had taken money from German arms consortium Thyssen
Rheinstall Technik (TRT) but denied that the payments were improper.
Heitman, who is the SA correspondent for the influential Janes Defence
Weekly, said all payments were for legitimate contracting and were paid
after he submitted invoices for this work in the normal way.
Heitman is working as a consultant for the Department of Defence, where he
has a three-year contract to help write the next Defence Review, helping to
chart out what new weapons the SA National Defence Force (SANDF) will need
in the coming decades.
Heitman said he also did consulting work for the late Joe Modise, the
architects of the controversial 1999 arms deal.
TRT are one of several suppliers who the SANDF may turn to to purchase
armoured vehicles and other weapons which the Defence Review may recommend
purchasing.
During the 1999 R60 billion arms deal, TRT were part of the German Frigate
Consortium.
Heitman said he had no reason to conceal the fact he was on the payroll of
a major arms contractor. Said Heitman: “The payments had nothing to do with
acting as any sort of PR consultant for them.
If I write for a local publication that publication pays me.
I do not take payments to write favourable
stories about companies.
I have been offered freebie trips by arms companies and have turned
these down for this very reason, they can look very bad.”
Heitman has written several articles in SA newspapers, all strongly in
support of the German Frigate Consortium.
Ironically Heitman, when asked about other consulting work he did, admitted
he had approached British Aerospace, a British based company, seeking
consulting work, but had not been successful.
Advocate Paul Hoffman SC, director of the SA Institute for Accountability,
said: “I sincerely hope that Mr Heitman has disclosed his clear conflict of
interest to the Department of Defence.
If he has been taking money from an arms company then there is a perception
that he may have difficulty in putting together an objective review of
defence procurement requirements.”
Heitman told me on 2006-07-11 that :
"At last we are in at least partial agreement! We would have done far better to buy the (Bazann] 590Bs then than to wait, regardless of what we finally bought."
I wonder
whether he ever told anyone else that?
He also told me on 2006-07-10 that :
"Unless I misread your opening comments, you would seem to be accusing me of something? Please bear in mind that, unlike yourself, I have not financial interest in this matter"
Seems like he
does indeed have financial interests in this matter.
He also told me on 2006-07-10 that :
"I trust that you will circulate these responses to those on your normal list."
However small this pleasure may seem to others,
it is indeed substantial to me.
But unlike him, I have always made it excruciatingly clear on both the
public and legal records that my primary interests were the legitimate
financial ones of my company which lost several tens of millions of Rands of
investments and profits due to the GFC's and Thomson-CSF's crooked dealings.
And these two trough filling crooks were in bed with a bunch of trough
feeding crooks such as Thabo Mbeki, Jacob Zuma, Tony Yengeni, Chippy Shaik,
Dries Putter and Robby-Simple Anderson.
Since 2007 my interest has become mainly a public one.
The articles of this military expert were published 9 July 2006 in the South
African Sunday Independent Nothing suspicious about the patrol
corvette deal and Sunday Tribune newspapers Claims about
corvette chicanery don't hold water , soon after the first series of
searches and seizures were carried out on 19 and 20 June 2006 by the German
investigating authorities on the GFC, Blohm+Voss, TRT and MAN Ferrostaal and
after Der Spiegel, a German weekly political magazine, earlier the same week
printed an article entitled Excellent Connections (Ausgezeichnete
Verbindungen) about corruption allegations in connection with
ThyssenKrupp and the South African Arms Deal.
From seized documents it was learned that Heitman on several occasions was
contacted by TRT and asked to publish articles supporting of different TRT
products or projects.
See below for one's self and enjoy.
Nothing Suspicious about the Patrol Corvette Deal
Sunday Independent
Helmoed Römer Heitman
9 July 2006
http://www.sundayindependent.co.za/index.php?fArticleId=3330265
The news of an investigation in Germany that may - or may not - reveal
evidence of bribery in connection with the patrol corvette acquisition has
triggered a new wave of comment. Sadly, much of
that comment is ill-informed.*1 The question of corruption or not
must be left to the investigation, but some old
fables *2 need to be set right.
Most important among them is the story that the Germans had failed to make
it onto the navy's shortlist, and were then "suddenly" restored to it and
went on to win. This goes back to 1995, when Thabo Mbeki, then the deputy
president, apparently assured the Germans that they were still in the
running, despite Armscor having announced a revised shortlist that excluded
the German offer.
Thus the Independent Democrats website says that, according to the De Lille
Dossier, "initially this German bid was not shortlisted in 1995. The
re-entrance onto the shortlist followed a visit by Mbeki to Germany.
Suddenly the British and Spanish were ousted from the shortlist and the
Germans were included. What caused this change of events?"
The short answer is that nothing did, because there was no such "change of
events". The reality is that there were two quite distinct ship acquisition
projects. The first was launched in 1993, and was for a class of four
corvettes.
The decision to acquire corvettes, rather than the frigates the navy
actually needed, was based on an assessment that the government was unlikely
to fund the larger and more expensive frigates. That project, as I recall,
resulted in an initial shortlist of five ship designs:
The Danish Svendborg Thetis ocean patrol vessel, which did not really meet
the requirement (single shaft, and so forth) and in part because the
shipyard could not serve as prime contractor (the Danish navy was its own
prime contractor).
The French DCN Souverainete light frigate, a scaled-down version of DCN's La
Fayette frigate design, which was dropped partly because it was perceived to
be more a concept than an actual design, and because it was too expensive.
The German Blohm & Voss Meko-100L corvette, which was dropped because it was
simply too small to be effective in the waters off the Cape and to have the
endurance to allow even limited regional operations independent of a support
ship.
The British Yarrow F-2000 light frigate, which had unacceptable stability
margins and reserves but was otherwise interesting.
The Spanish Bazan Type 590B light frigate.
The latter two were taken into a revised "short shortlist", by which time
Yarrow had taken the opportunity of a request for "best and final offers" to
upgrade its proposal to the larger F-3000.
The final evaluation resulted in the selection
of the 2 800-ton Bazan Type 590B light frigate, apparently partly on its own
merits and partly on the basis of a more attractive offset package.*3
Those four ships were being offered for R1 billion, without the
combat system, which was to be developed and installed in South Africa.
The total cost at that time was estimated at R1,7 billion, held that low
because almost all of the sensors and weapons were to be taken over from
strike craft being phased out of service. It did not, for instance, include
the surface-to-air missile system.
The project team's recommendation in May 1995
was that the government enter detail and contract negotiations with the
Spanish yard, Bazan (now Navantia).*4
At this point, however, the entire project ran into trouble *5 that
finally led to it being deferred. That centred on arguments in parliament's
joint standing committee on defence that the project was still based on the
strategic and operational concepts and requirements of the "old order", so
that it could not be supported. Others in civil society and elsewhere
questioned whether the country actually needed such ships at all.
Still newly in office, and still formulating its policies and strategies,
the government chose to defer the project, deferring any major equipment
acquisitions until after a new Defence White Paper had been completed and a
full defence review had been conducted.
The white paper on defence was completed in 1996, and the Defence Review was
conducted in 1997/98. The force design phase of the review concluded that
the navy did have a valid requirement for at least four large surface
combatants, and the project was re-opened in September 1997 as part of the
"Strategic Defence Packages".
This time, however, the navy was able to look to acquiring something rather
closer to its actual requirements, a ship with the size to offer:
The endurance and range to conduct effective patrols along the outer edges
of South Africa's exclusive economic zone and the waters of the Prince
Edward Island group, and to be able to deploy in support of other African
countries.
The sea-keeping to be able to operate effectively in the often very rough
seas off South Africa, and to be able to operate a helicopter in bad
weather.
That requirement demanded a ship of roughly "frigate" size, that is with a
hull length of at least 110m. The "corvette" was now clearly something of
the past, of the era when General Magnus Malan, the former defence minister,
saw little need for a navy.
A full-blown "frigate", however, was still beyond the navy's likely budget.
That led to the notion of a "patrol corvette": a ship of frigate size that
would provide the required endurance, range and sea-keeping, but with a
weapon system equivalent to that of a top-of-the-range corvette, not a
typical frigate.
This project again resulted in a shortlist of five ships:
The German Frigate Consortium (GFC) Meko A200 frigate.
The GFC Meko 200 frigate (an older design).
The Spanish Bazan Type 590B, slightly modified from the previous offer.
A French DCN design based on the French navy's La Fayette class frigate.
The British GEC (formerly Yarrow) F3000 frigate.
All were frigate designs of around 3 000 tons.
The evaluation of these four ships showed the Meko A200 to offer the
best "military/technical value" *6, with
a score of 810,5 points out of a possible 1080. The older Meko 200 scored
790 points, Bazan's 590B 766,6 points, GEC's F3000 649,9 points and the DCN
design 618,3 points.
Much is made of the fact that only Bazan's design met all of the "minimum
technical performance criteria", which was true as far as it goes. The
evaluation would seem to have been, however, that the advantages offered by
the German designs more than offset those aspects where they fell short of
the original specification. The A200, in particular, adopted an entirely new
approach to enhancing survivability.
There have also been comments that only Bazan met all of the tender
requirements, and that all the others should have been dropped from the
outset. The fact is that Bazan also did not meet
all of the requirements *7, and it would have been silly to restart
the entire process from scratch, losing yet more time and allowing
escalations to drive the cost even higher.
The cost of the platforms had in any event already escalated quite
dramatically over the intervening period, as a result of normal escalations,
inflation and a major decline in the value of the rand (from 3,56 to the
dollar in 1995 to 5,9 in 1998). Thus, by the time these bids were submitted,
the cost of the Bazan ships (platform only) had risen from the original R1
billion for four to R1,69 billion. The Meko A200, the type that was
eventually selected, was the second cheapest at R2,13 billion for four.
The Bazan Defence Industrial Participation offer was, at least on paper,
substantially better than GFC's, but GFC's National Industrial Participation
offer (that is, for civilian industrial investment) was
vastly higher than that of any other bidder. *8
The ministerial committee *8 was
then briefed on the outcome of the evaluation at the end of August 1998, and
the cabinet selected the GFC as the "preferred bidder" in November 1998,
opting for the Meko A200 design.
Thus the "suddenly" of the De Lille dossier actually involved a period
running from May 1995 to August 1998; hardly the usual understanding of
"suddenly". Also, the ship offered by the German yards in 1997 was an
entirely different ship to that offered in 1995.
It is also worth remembering that Joe Modise, the minister of defence, had
spelled out the government's priorities in selecting from the shortlist
drawn up by the military. Those priorities were: strategic alliances with
the major European trading partners; alliances for the defence industry;
industrial participation; and the actual cost of the equipment.
Germany was clearly going to win unless the
Spanish had come up with a truly remarkable offer. *9
That set of priorities was clear to all of the bidders that I spoke
to during that period. If they did not take that into account, the fault is
theirs.
The bottom line is that the German ship seems to have been selected because
it was the best ship and because the German NIP offer matched South Africa's
interests in developing "strategic alliances with our major European trading
partners". If the Germans actually did pay any
bribes, they were wasting their money. *10
With acknowledgements to Paul Kirk and The Citizen.
*1
Straight from the JIT Report of 14 November 2001 :
"(i) Further observations with regard to the selection process are that:
•
•
•
•
GFC, however, was nominated the preferred bidder on the basis of their NIP offer. This is despite the fact that NIP is not ascertainable in terms of achievability."
"(a)
"There is no evidence from the minutes of SOFCOM that the memorandum directed to SOFCOM chairpersons had, at any stage, been submitted to the entire committee. In the absence of such evidence, it would appear that the chairpersons took a decision to condone the mentioned non-compliance without the approval of the committee. This decision had a far-reaching impact on the eventual selection of the preferred bidder for the Corvettes, which was GFC. Upon enquiry about this decision, Mr Shaik indicated that this decision was taken by them in their capacities as Chief of Acquisition of DoD and CEO of Armscor. His authority, according to him, vested in his management delegation from DoD."
"GFC was given a score of 5 instead of 1 on the total DIP offered in terms of paragraph 7.1.2 of the conformance and compliance summary schedule. The reason given for this is that GFC was given this standard credit because of an increased NIP commitment. It was the understanding of the investigation team that NIP and DIP were to be evaluated separately."
"(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.
*2
Straight from Thabo Mbeki's digital missive of 2003-05-30 :
"An aggrieved potential and unsuccessful sub-contractor has taken his grievance to our courts. For this reason, we will not comment on the matters he raises, which the fishers nevertheless use triumphantly and willfully to justify their campaign. But this gentleman decided to raise, in the media, the matter of an earlier process to acquire corvettes for our Navy.
The gentleman concerned makes the false allegation that during the life of the Government of National Unity, formed in 1994, a contract for four corvettes to be built by Bazan of Spain "was cancelled after being awarded". This is not true. The preceding apartheid Cabinet had not approved this contract. The GNU Cabinet decided not to enter into this contract.
Bazan entered the later competition to supply the four corvettes, and lost to the GFC. This issue is of relevance and interest only because of the controversy that some have brought into the current defence procurement. It is an interesting coincidence that this controversy has focused so intensely on the corvettes.
In time the details of the truth will come out about how the controversy concerning the 2000 defence procurement emerged and persisted. The gentleman litigant, who has raised the matter of Bazan of Spain, may be proved to have been justified in raising this issue, even if he made false claims about a Bazan contract that never was.
This detailed truthful account would tell our country interesting things about such matters as defence procurement during the apartheid years, and the promotion of political careers and fortunes in contemporary South Africa. It would tell a story about the political uses of the racist stereotypes that are part of our daily menu of information and perception, and the formation of popular consciousness.
It would inform us about the impact or otherwise of the domestic and international apartheid networks on our democratic order, and the moral integrity of those who correctly claim that they fought for the victory of this order, and therefore seek to position themselves as its true representatives.
The sooner this fascinating story is told the better, so that we can improve our performance with regard to the achievement of the critical objective of building a truly people-centred society."
However, just
compare this to my statement as published in Business Day "This was not long
after a R2,4bn (1995 rands) tender
for four patrol corvettes (read light frigates)
was cancelled after, and to all intents and
purposes, being awarded to Bazan of Spain,
after a three-year acquisition process, which had been approved all the way
up to and including the Armaments Acquisition Council."
Mbeki should be aware of the statement under oath of Rear Admiral S.J. (Kek)
Verster, DoD's Director of Weapon Systems :
"I just want to point out in 1994 and 1995 there were very particular approvals given for the corvette, the navy corvette, and there is certain documentation which I do not want to now name, but we were on our way to ask for political authority in 1995 particularly. At that time the corvette had money approved on the budget."
*3
*4
There were even dozens of DoD, SA Navy and Armscor officials working on this
project at Bazan's shipyard on the west coast of Spain when Mbeki and
friends pulled the plug.
*5
"This detailed truthful account would tell our country interesting things about such matters as defence procurement during the apartheid years, and the promotion of political careers and fortunes in contemporary South Africa. It would tell a story about the political uses of the racist stereotypes that are part of our daily menu of information and perception, and the formation of popular consciousness."
Mbeki hints
darkly about corruption, conspiracy and racism - which have little to do
with strategic and operational concepts, corvettes vs frigates, etc.
*6
"Bazan obtained
the highest military value and DIP scores."
*7
"According to one evaluator, Bazan did not provide a business plan for a particular activity although they committed themselves in this respect."
This hardly
seems to be a valid reason for final disqualification and as the JIT Report
coyly puts it : "According to one evaluator.....".
*8
But MINCOM, chaired by Mbeki down-rated Bazan NIP and up-rated GFC's, this
using an entirely qualitative methodology.
So they swung the NIP ball in GFC's favour which eventually tipped the
scales towards GFC and voila, mission was accomplished.
Meanwhile, the big question is : "has the GFC accomplished R52,433 billion
in NIP?".
*9
Which is what happened.
*10
The Germans had very good reason to pay bribes :
to get Mbeki to cancel the 1993 to 1995 tender which the Spanish had clearly won;
to get SOFCOM, read Chippy Shaik acting on behalf of Mbeki, Modise, etc., to revalidate GFC's offer after Armscor declared it invalid
to get the inside track on how to defeat Bazan on the NIP Index; and
to get the SA Government to increase the contract price from R6,001 billion to R6,873 billion.
The Germans
certainly did not waste their money.
If the bribes were only DM30 million (R136 million), this amount was easily
absorbed by the R872 million price increase between 17 November 1998 and 3
December 1999.
Even if the bribes were DM80 million, this amount was easily justified in
going from zero to hero.
But the Germans were probably not the only one's to pay bribes in respect of
the corvette contract.
The evidence would appear to indicate that the French paid an equivalent
amount in absolute terms, i.e. also about R130 million, but slightly higher
in relative terms at 5% on contract value rather than 3%.
But then this was also quite justifiable in that they were allowed to take
the corvette combat suite price from just R1,8 billion to R2,599 billion - a
deliver just half the goods.
Great deals if one can get them.