UK company BAE, Stella Sigcau implicated in faxes

In the coming months, and after our success, she wants BAE, for two to three years, to provide a marketing job for her daughter in London

New evidence suggests that British arms company BAE bribed senior South African politicians with lavish gifts to win a R20-billion tender *1 in the government's controversial arms deal.

A Sunday Times investigation can confirm that among those who were allegedly bribed were former public enterprises minister Stella Sigcau, whose daughter Portia was bankrolled to ensure the minister approved the deal to supply South Africa with Hawk and Gripen jet fighters. The alleged bribes are revealed in a series of encrypted faxes and interviews with former BAE staffers.

They could provide the strongest evidence of benefits received by a cabinet-level arms deal decision-maker since former defence minister Joe Modise was implicated. Sigcau died in 2006 and Modise in 2001.

The faxes outline how the arms company bankrolled Portia Sigcau in return for supporting its bid by:

• Offering to give her a marketing job in London for two to three years;

• Ensuring that BAE set aside a budget to support her for three vears· "

• Providing her with hospitality and introductions for work opportunities with BAE's banker, Lloyds Bank, during her visit to London in 1998; and

• Supporting her during her studies in London with "accommodation, furnishings" and "a large number of other items".

This is supported by a sworn statement submitted to arms deal investigators by a former BAE staffer. The staffer, who insisted on anonymity because she feared for her life after threats, told the Sunday Times this week that BAE also funded several trips for Portia, Fana Hlongwana (sic Hlongwane) and other politicians to attend a golf tournament in St Andrews, Scotland.

Hlongwana, Modise's former adviser, received R150-million in mostly secret payments from BAE. The new encrypted faxes are believed to be in possession of the Seriti commission investigating the arms deal.

Earlier this year, the commission said it had seen no evidence implicating the ANC in any wrongdoing. In a memo sent recently to his staff and seen by the Sunday Times, Seriti confirms that the Stigcau allegation is among those to be investigated.

Hearings scheduled for March have been postponed to August.

In the first fax dated September 4 1998, Allan MacDonald, former BAE managing director for Africa and Asia admits to group head or human resources Terry Morgan that the company made the short list thanks to the relationship he cultivated with Sigcau.

"You will note from the information I attach that the fact we have got Hawk on to the final list is very much due to our friends in the country rather than the quality of our ITP [invitation to prequalify] response," he writes.

"One friend who has, and remains, absolutely critical to our ultimate success for both Hawk and Gripen is Minister Stella Sigcau."

MacDonald profited from the deal. He admitted to UK Serious Fraud Office investigator Gary Murphy in 2007 that he had personally received £5-million from Arstow, a part of BAE's covert company network designed to keep secret the commission payments to secure the Hawk deal. At the time, Sigcau was a member of the arms deal cabinet subcommittee chaired by then deputy president Thabo Mbeki.

Affidavits submitted by prosecutors in 2010 to freeze Hlongwana's overseas bank accounts make it clear that Sigcau and Modise were an integral part of rigging a bidding process to favour BAE, then falling behind its rivals.

On August 31 1998. at a meeting chaired by Mbeki and attended by Sigcau, a decision was taken to recommend the Hawk.

MacDonald told the Sunday Times he saw nothing untoward *2 in helping Sigcau's daughter. He claimed Sigcau had "openly asked me at a well-attended social event" to help Portia find a job in the UK, and that this had happened after a crucial briefing Sigcau attended. "To me this reflected a request that any concerned mother may make for a daughter who was going overseas," he said.

However, MacDonald's fax to Morgan, sent just four days after the briefing, outlines how he had interrupted his leave "recently" to host Sigcau's visit to the UK. During the visit, Sigcau "very privately asked for my support*4 on a personal family matter" involving Portia.

"In the coming months, and after our success, she wants BAE, for two to three years, to provide a marketing job for her daughter in London," MacDonald writes.

"As you would expect, in view of the criticality of where we are in the decision-making process and our fundamental reliance on the minister's support, I gave all the right assurance to the minister." Two months later, on November 18 1998, a cabinet meeting approved BAE as the preferred bidder. MacDonald left BAE soon afterwards under a cloud.

It could not be established whether BAE did employ Portia for three years, but a letter from Portia in October 1998 thanks the company for hosting her in London and providing introductions to Lloyds Bank. Another internal memo says that "Portia is being supported by BAE while doing a course in London. This includes accommodation and all furnishings, plus a large number of other items *3."

BAE's support for Portia was not universally considered to be above board: another encrypted fax, sent to MacDonald by BAE's South African executive director, Stuart Mcintyre, says Hlongwana had demanded that BAE "must deny all knowledge or involvement whatsoever" of Portia's "recent job application in the UK". He insisted that BAE's system should be cleaned of "all record or reference (especially in SA)*5" of any help given to Portia.

BAE denies any wrongdoing. "In February 2010 we announced the agreement of a global settlement with the Serious Fraud Office and Department of Justice following long investigations by those authorities relating to a number of countries, including South Africa," spokeswoman Leoni Foster said this week. "Neither settlement involved charges of bribery or corruption relating to South Africa*6 or any other country."

She said the company had already made a "voluntary" submission to the Seriti commission. but declined to provide a copy to the Sunday Times.

Hongwana would not respond to "unfounded and vague allegations, suggestions and statements made by undisclosed sources*7 his lawyer, Christo Stockenstrom, said.

Portia Sigcau could not be reached for comment.

With acknowledgement to Stephan Hofstatter, Mzilikazi wa Afrika and Sunday Times.

*1      Let's get real now.

The Hawks and Gripens cost R15,916 billion in 1999 Rands.

That's more like R40 billion in 2013 Rands.

And we ordered 28 Gripens and only received 26.


*2      He wouldn't.

This lowlife pommie and his company have the business ethics that would make a ruptured hemorrhoid on the anus of a heretic Tasmanian Devil qualify for beatification.


*3      Including schooling and/or bursaries for her two children.


*4      At her call, BAe did not falter.

Well, it was worth about R5 billion profit to BAe in 1999 Rands.

R12 billion profit to BAe in 2013 Rands.


*5      This amply demonstrates the seriousness of the matter.

For it will lead to :

• 15 years jail time for the natural persons

• 20 years blacklisting time for the juristic persons

• 5% clawback on the contract price

• return of 24 Hawk 120s to Britain

• return of 26 Gripen JAS39s and two simulators to Sweden