Sunday, March 24, 2013

Arms Commission Blind To The Facts

Researchers argue that there is ample evidence to suggest that the ANC benefited from the arms deal and that the party must testify at the commission.

When President Jacob Zuma was reluctantly forced by legal action to appoint the commission of inquiry into South Africa's notorious arms deal, it was one of those moments that politicians believe they can control, but which often develop a life of their own beyond the machinations of the powerful.

Despite its difficult birth, the commission could play a pivotal role in the development of our country's young democracy if it lays bare the gargantuan amount of evidence about the deal and recommends appropriate legal action against those who are shown to have behaved inappropriately.

If it proposes steps to recoup monies forsaken on contracts shown to have been won corruptly, as is apparently allowed for in the contracts, then it will be remembered as the protector of our Constitution, the champion of transparency and accountability in government and the ultimate protector of ordinary citizens and taxpayers.

If, however, it fails to perform this crucial task without fear or favour, it will become the latest in a long line of whitewashes that will ultimately cost South Africa about R70-billion on weaponry that was never really needed and is woefully underutilised.


The commission did not get off to the best of starts. It took months to set up the most basic infrastructure, was haphazard in its approach to local and international meetings and its initial communication with potential witnesses was confused. None of this is surprising, given the enormity of its task and its relatively limited resources.

Then, in January, a senior official of the commission resigned, alleging there was a hidden agenda to discredit those who have been whistle-blowers on the deal, or those who have investigated its seedier underbelly, who are among the first to have been called to give evidence.

Most recently, in a letter to witness Terry Crawford-Browne, the activist whose Constitutional Court action forced Zuma to appoint the commission, chairperson Judge Willie Seriti suggested that there was no evidence of wrongdoing by the ANC. This week, the commission issued a statement suggesting Terry Crawford-Browne was conflating "allegations" and "evidence".

Seriti's comments fed into growing concern that the commission would not meaningfully investigate ANC malfeasance in the deal or the allegations against Zuma and other high-ranking ANC officials.

The existence of significant information alleging malfeasance is indisputable. We have written three books covering the arms deal, which we have made available to the
commission, in which, along with a voluminous submission, we outline much, but not all, of the evidence concerning ANC malfeasance in the deal.


In addition, Andrew Feinstein was the ranking ANC member on Parliament's Public Accounts Committee, which tried to investigate the deal before the Mbeki presidency intervened to neuter it.

In this capacity, he was told by senior party members of the ANC's alleged role in corruption regarding the deal and witnessed the party's efforts to prevent this information from becoming public.

Subsequently, Feinstein interacted with a wide range of investigators around the world, who confirmed and embellished upon what he had been told.

The evidence includes:
  • A R500 000 donation to the ANC by Tony Georgiadis in 1999, the year the arms deal was finalised. Georgiadis acted as an "agent" for both ThyssenKrupp and Ferrostaal, which won the corvette and submarine contracts respectively. Georgiadis' Mallar Incorporated (based in Liberia) was reported to have received $22-million from ThyssenKrupp. Georgiadis' donations were uncovered when the house of a ThyssenKrupp executive was raided in 2006.
  • A substantial document trail flowing from the Schabir Shaik trial that appears to indicate that his Nkobi Holdings company network was partially seen as an ANC front company. In one letter from Zweli Mkhize, then the ANC provincial treasurer for KwaZulu-Natal and now premier of the same province, an anticipated payment of R1-million to the ANC in 1999 was described as a "dividend". Between 1996 and 1999, Shaik paid R1.3-million to the ANC through his specially created Floryn vehicle, with a further R1-million "dividend" expected by the end of 1999.
  • Donations made by Richard Charter, identified by the United Kingdom's Serious Fraud Office as BAE's "overt" and "covert" agent in South Africa, to the ANC archives at Fort Hare. Although totalling only £30 000, correspondence between Charter and a Fort Hare employee indicates that his patronage of the archives was sufficient to grant him an audience with both Thabo Mbeki and Nelson Mandela.
  • Feinstein, while an MP, was called to the house of an influential member of the ANC's national executive committee to be told that "the party will close ranks on this thing, because w used some of the proceeds to fight the 1999 election".
  • The calculated and planned way in which the ANC ensured there would be no proper investigation of the deal, including: bringing into line the "too independent" component of the public accounts committee; the presidency allegedly instructing investigators on exactly who and what they could and could not investigate; ensuring that the "non-ANC-sympathetic Judge Heath" was not included in the investigating team; the removal of the main investigators in the auditor general's office from the probe; the exclusion from the final report of the request by investigators and prosecutors to recommend further investigation into corruption within the ANC linked to the deal; and crucial and substantive changes to the investigation report by the executive before it was submitted to Parliament.
  • Significant additional information about benefits to a number of senior ANC politicians and officials, allegedly including Zuma and then defence minister Joe Modise.
Just days before Judge Seriti's letter was written, the commission contacted us, saying that because of the volume of information we had presented, it was postponing the public hearings for months, suggesting that it had not yet been through all the evidence.

All we ask is that our information, compiled over years of investigation and research, be heard fairly and impartially by the commission, to which we are more than happy to submit to cross-examination, and that it be judged on its merits, not just by the commission but by all South Africans.

If the commission fails to investigate alleged ANC malfeasance in the deal thoroughly, including myriad allegations against Zuma and other senior politicians and officials, it will have wasted millions of rand on yet another meaningless whitewash engineered by the ruling party. 

It will also have failed all the South Africans who paid for the deal. At issue is not only our tax rands, but also the massive socioeconomic opportunity cost and the corrosive impact on our hard-won democracy.

Investors Wary of South Africa

In the decade bookmarking Nelson Mandela's release from prison South Africa transmogrified from racist pariah to beacon of hope, but a series of tragedies threaten to reverse that gain and spook investors.

The bad news just doesn't stop coming for Africa's largest economy.
In the last year police shot 34 striking miners at Marikana, Oscar Pistorius was arrested for murder, a 17-year-old girl was gang raped and disemboweled and the police were filmed dragging a Mozambican taxi driver to his death.
Stories of rape, gun crime, police brutality and obscene levels of violence flashed across the globe, overshadowing the country's breathtaking landscapes, stunning wildlife and the joy of the 2010 football world cup.
"South Africa's seemingly untouchable reputation started to wane," said Dion Chang, founder of Flux Trends analysts.
"The death of a Mozambican taxi driver at the hands of the police invoked apartheid style brutality, and Oscar Pistorius brought South Africa the harshest form of unwanted publicity."
Even the authorities concede the lustre of the rainbow nation has dimmed.
"In the immediate term, undoubtedly yes," said Nomsa Mazibuko, communication director for state marketing agency Brand South Africa.
"The sheer volume of coverage paints a disturbing picture. Yet this can also seem overblown and at times a little out of context," she warns.
Still, Brand South Africa points to gains since the end of white minority rule 19 years ago, when over 27 000 people were killed.
Gun-related crimes have also dropped 21.2% since 2005. BILL SH!T
Progress is happening, Mazibuko insists, though "results will not be delivered overnight." Nearly 20 years down the line is NOT over night!
Unfortunately for South Africa the string of tragic events has coincided with deep investor unease.
Concern about corruption, government mismanagement, labour unrest, a shocking education system and unsustainable levels of inequality is widespread.
All three major ratings agencies have downgraded the country in the last year.
"Most investors are happy to stay at the party, but dancing close to the door," said Mohammed Nalla, head of strategic research at Nedbank Capital.
So far the malaise has not been reflected in South African bond or equity prices, but the rand has been pummelled, sending shock waves through the import-dependent economy.
The currency has lost around 20% of its value against the dollar, inflating the price of everything from food to cars.
With price increases expected to exceed the bank's six percent limit, policy makers have little room to stimulate the economy even as inflation taxes the poor.
There are more ominous signs investors may be mingling near the exit.
The price of insurance against South African bonds -- so-called credit default swaps (CDS) -- have surged.
In the US, European and other financial crises rising CDS prices were often harbingers of doom.
Many hopes are being pinned on one still contested document which has yet to be implemented, but which would remake South Africa's economy. The National Development Plan.
The vast plan aims to improve housing, water, electricity and sanitation, reform the education and public transport system and boost job creation.
"At this stage we need much more visible counteractions -- trust in the police, swift and effective justice for violent crimes... and an aggressive campaign to highlight the positive aspects of South Africa."
Ja right!!