Why the arms deal is rotten - Terry Crawford-Browne
23 June 2009
Activist's letter of advice to South African president Jacob Zuma, June 22 2009
President Jacob Zuma
22 June 2009
By email for the attention of Mr JS Mabelane, Director: Legal and Executive Services
Dear Mr President
The arms deal - reference 7/7/1-T CRAWFORD-BROWNE
Thank you for your letter dated 18 June, albeit that it was prompted by my release that morning to the media of my letters to you dated 14 and 27 May. I note that the matter has now been forwarded to the Legal and Executive Services Unit in the Presidency, and also to the office of the State Attorney. To assist them, I advise:
1. Chapter four of the Joint Investigation Team report into the arms deal confirms that the BAE contracts were very seriously flawed by tendering irregularities. With approval and support of the ministerial committee comprising then
Deputy President Thabo Mbeki
and Ministers Alec Erwin,
and the late Stella Sigcau,
the then Minister of Defence, the late Joe Modise
improperly introduced "non-costed options" to sway the warplane contracts to BAE.
The then Secretary for Defence, Pierre Steyn resigned his position rather than be a party to such malpractices. The British Serious Fraud Office, as well as authorities in Switzerland and Liechtenstein, has investigated the financial affairs of Modise's advisor, Fana Hlongwane, whose foreign bank accounts have reportedly been frozen. Hlongwane is but one of many South Africans identified by the Serious Fraud Office and named in the media as recipients of BAE bribes, but against whom no action has been taken in this country.
2. A former British government minister admitted that BAE used bribes to secure its South African contracts. These bribes are estimated at £112 million (R1.5 billion). The bribery clauses in the BAE supply agreement give the South African government the right to summarily cancel the agreement, and to claim damages. Why has that right to cancel the BAE contracts not been invoked? That our government has repeatedly refused to invoke that right makes a mockery of constitutional obligations to accountability, as well as your commitments that corruption will be dealt with seriously during your presidency.
3. The BAE contracts account for more than half of the financial costs of the arms deal. The affordability study in August 1999 argued that the BAE/Saab Gripen contracts should be cancelled, or at least deferred. Like the study itself which alerted cabinet ministers to the financial and economic risks of the arms deal, those warnings were recklessly ignored.Of the 28 BAE/Saab Gripen fighter aircraft, only seven have so far been delivered. That the South African Air Force now reportedly has only six pilots qualified to fly jets highlights the absurdity of these purchases. As referred to in paragraph 2, these contracts can still be cancelled. The monies recovered of about R30 billion would represent huge savings to South African taxpayers to enable delivery on socio-economic priorities such as housing.
4. In addition to bribes to South Africans laundered through its front company Red Diamond Trading Company, BAE employed "bagmen" such as
Saudi Prince Bandar who was a frequent visitor to this country during the period that the arms deal was under negotiation. British investigations reveal that, in collusion of the British Department of Defence, BAE paid over £1 billion to Prince Bandar and that these bribes were laundered through the now defunct Riggs Bank in Washington DC. The arms deal forms part of this agenda, hence at least US$70 million (R560 million) was transferred from Saudi Arabia to the African National Congress (ANC). The ANC however, refuses to open its accounts to public scrutiny.
5. May I bring to your attention Mr President that South Africa is one of 37 countries that has ratified the OECD Convention Against Bribery of Officials, and that under Article 7 money laundering is punishable in South Africa by a fine not exceeding R100 million or imprisonment not exceeding 30 years? In addition, section 2 of the Constitution establishes the supremacy of the Constitution. It stipulates that "law or conduct inconsistent with it is invalid, and the obligations imposed by it must be fulfilled." Should you refuse to appoint a judicial commission of inquiry, we intend to take the matter to the Constitutional Court in terms of section 167 (4)(e). We hope such action will not be necessary.
6. Your spokesperson Thabo Masebe is quoted on 19 June as having said: "anyone who has information must pass that information on to the authorities, like the police, so that they can investigate and charge." As have other citizens, I have previously provided information to the parliamentary Standing Committee on Public Accounts (Scopa) which continues to try to brush the arms deal scandal under a carpet. In addition, I have in August 2008 filed criminal charges of money laundering and perjury with the Specialised Crime Unit in Cape Town. The CAS number is 20/08/2008. Money laundering and perjury are extremely serious matters, but ten months later there is still no investigation.May I respectfully suggest that before I am again told by your spokesperson to take my information to the police that these complaints are thoroughly investigated by a judicial commission of inquiry?
7. Three issues defined President Mbeki's presidency: HIV/Aids, Zimbabwe and the arms deal. The arms deal ultimately became the cause of his dismissal from office in September last year. The Sunday Times newspaper in August 2008 had reported that the German company MAN Ferrostaal paid a bribe of R30 million to President Mbeki, of which he gave R2 million to you and paid the balance of R28 million to the ANC. The source of that information was an intelligence agency in England. The arms deal scandal is not going to go away as illustrated by the televised "big debate" this past weekend. Yet, even at this late stage, the country can still be extricated from some of its financial consequences.
Deputy President Kgalema Motlanthe is today reported by Business Day newspaper to have complained that corruption found at every level of government across all parts of the country is far worse than anyone imagines. Corruption is no less than theft from the poor. The arms deal unleashed that culture of corruption, but concerns expressed ten years ago by leaders of civil society were arrogantly dismissed. Simultaneously with this email, I am releasing this letter to the media in order to expedite the request that without further delay you appoint an independent judicial commission of inquiry into the arms deal.
Copies: Archbishop Thabo Makgoba and Archbishop-Emeritus Desmond Tutu