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A question of priorities

Following investigations by a special unit and whistle-blowing by concerned ANC MPs, a dramatic arms for oil scandal is emerging in South Africa . Terry Crawford-Browne asks what South Africas priorities really are clean water or armaments?

The Defence White Paper released in May 1996 had noted that there is no foreseeable conventional military threat to South Africa, and that the government has prioritised the daunting task of addressing poverty and the socio- economic inequalities resulting from the system of apartheid.

The South African Constitution similarly declares in Chapter 11, Section 198 (a) that: National security must reflect the resolve of South Africans, as individuals and as a nation, to live as equals, to live in peace and harmony, to be free from fear and want and to seek a better life. [writers italics]

The Congo and Angola are tragic examples of prioritised corruption and military expenditure over human security. The kleptomaniac Mobutu looted his country, and reputedly became one of the worlds richest men. Up to two million people are estimated to have died during Kabila's reign of terror in a conflict now designated as the Third World War.

Angola's oil production is forecast to exceed that of the Middle East within twenty years. Yet the governing MPLA elite around Dos Santos, having mortgaged the countrys future against purchases of weapons, has vested interests in continuing that war irrespective of the suffering of the rest of the population. Unita and Savimbi, funded by diamonds, are equally prepared to destroy their country for the sake of personal gain.

Transparency International reports that corruption in the third world usually originates in the first world. In addition, it declares that the armaments industry to be the industry most prone to corruption. The son of former French President Francois Mitterand is presently on trial for illegal arms trafficking in Africa, including Angola.

President Jacques Chirac himself was so closely identified with French arms sales to Saddam Hussein during the 1980s that he was nicknamed Monsieur Iraq. The Chirac administration is now mired in numerous corruption scandals in France, whilst former Chancellor Helmut Kohl's reputation has been shredded by revelations about his connections to the German armaments industry.

Frankenstein returns

The Cameron Commission of Inquiry into Armscor, and the Truth and Reconciliation Commission, have both found that incompetence and corruption are rife within South Africa's armaments industry. The apartheid government squandered tens of billions of Rands on the industry, which had devastating socio-economic consequences in South Africa and beyond. Other than corruption, it is inexplicable why the present government continues to promote an organisation which the late Oliver Tambo described as a Frankenstein monster which cannot be reformed and should be destroyed.

The uproar around South Africas proposed R43 billion (£3.75 billion) armaments acquisition programme concerns an attempt by a clique of former Umkhonto-we-Sizwe leaders to enrich themselves at massive expense to the country. In late 1999 the government announced that it intended to purchase four frigates and three submarines from Germany, 28 BAe/Saab JAS39 Gripen fighter aircraft from Sweden, 24 BAe Hawk fighter trainer aircraft from Britain and 30 utility helicopters from Italy.

The cost was given as R30 billion, but the rationale was that the purchase would produce offsets from the armaments companies worth R110 billion which would create 64,165 jobs. Already the cost has risen to R43 billion, and the offsets are increasingly unlikely to materialise.

Although the focus to date has been upon the armaments, the allegations submitted to the Heath Special Investigating Unit [A national unit set up in 1997 to investigate government corruption and recover misappropriated funds, headed by Judge Willem Heath] go much, much further. The allegations include the conditionality between the Saudi Arabian financed Cell C cellphone (mobile) bid and:

  • Saudi sources of ANC campaign funding;
  • the prospective sale of G6 artillery to Saudi Arabia;
  • the very substantial increases in recent years in oil imports from Saudi Arabia;
  • the Strategic Fuel Fund/Central Energy Fund scam;
  • and the rail/ferry proposals in the Great Lakes region by Makhosi Holdings of which Moeletsi Mbeki (the presidents brother) is a director.

 

Blowing the whistle

The writer was approached by ANC intelligence operatives in mid 1999 on behalf of Concerned ANC MPs. Their allegations conformed to malpractices by the armaments industry internationally, yet were so extraordinary that his response was that they must be tested by a competent authority. Anglican Archbishop Njongonkulu Ndungane and others called for a judicial inquiry, which the government refused. It is, of course, one thing to smell the stench of corruption, it is yet another to prove it.

ANC reaction to the Memorandum to Patricia de Lille, MP (of the opposition Pan Africanist Congress) in September 1999 was massive pressure upon De Lille and Archbishop Ndungane to reveal the identities of the whistleblowers. Even foreign governments were accused of being responsible for the document. The Minister of Defence and the ANC Chief Whip quite evidently were not interested in investigating the allegations, but only in identifying the whistleblowers. It has therefore been imperative, but extraordinary, to conceal their identities even from the Minister of Justice and the President until their safety was guaranteed and assured. The whistleblowers were introduced to the Heath Special Investigating Unit, who found that their information confirmed other investigations. The allegations by the whistleblowers indicate why the Minister of Justice, Penuell Maduna, has endeavoured to block Judge Heaths investigations. The bizarre intricacies of these alleged arrangements are worthy both of a best-selling thriller and of a television soap.

The players

Tony Georgiades, the Greek shipowner, allegedly bankrolled the National Party and former President FW de Klerk until Mrs Georgiades became Mrs de Klerk. In response, Georgiades transferred his support to the ANC and, through Mrs Maduna, became a facilitator for the German warship consortium including the proposed Coega deep water harbour and stainless steel plant offsets. Georgiades is said to be one of President Mbekis frequent visitors.

The Presidents brother, Moeletsis business interests are apparently linked to Marc Rich. Rich is a fugitive American commodities trader resident in Switzerland since the early 1980s, and one of 140 persons pardoned by President Bill Clinton just before he left office. Rich became the main oil sanctions-buster during the 1980s for the apartheid regime. Swiss governments had repeatedly refused American demands for his extradition because of his contributions to the Swiss financial services industry. Then there is Rafik al-Hariri, chairman of Saudi Oger which controls the contentious Cell C cellphone bid. Hararia Lebanese billionaire and boy-made-good in the Saudi Arabian construction business as a front for Saudi royals has recently been re-elected as Lebanons Prime Minister despite his previous dismissal by Lebanons

President on grounds of corruption.

Hariri and Prince Bandar are frequent visitors to South Africa. Prince Bandar is the Saudi Arabian Ambassador to the United States, and an agent for Lockheed Martin the worlds largest armaments company. He is also a contender for the Saudi throne upon the death of King Fahd, as well as being a close friend of both Presidents Mandela and Mbeki. Indeed, President Mbeki stayed at Prince Bandars residence in Oxford, England, last year before flying on in the Princes jetliner for a state visit to the United States. The explanation given to the South African public was that the Presidents plane had engine problems: the intelligence operatives tell a very different story.

Even the recently and deliberately-timed publication of the extraordinary letter from Winnie Madikizela-Mandela to Deputy President Jacob Zuma plays a part in the drama and convulsions of ANC politics. It is also being alleged that Mrs Kate Zumas death at the age of 44 from heart failure was in fact the consequence of poison intended for the Deputy President.

Exerting influence

The parliamentary Public Accounts Committee hearings in October 2000 confirmed that the offset benefits on which the whole acquisition programme hinged had been grossly overstated, and were unenforceable. In addition, BAe Systems had been unduly favoured. BAe Systems involvement in the £20 billion Al Yamamah deal between Britain and Saudi Arabia was so politically sensitive that the report of a British parliamentary investigation was suppressed.

The South African parliamentary committee, by contrast, recommended a multi- agency investigation including the Heath Special Investigating Unit. Its public hearings had learned that the arms acquisition package was a government-to- government programme in which foreign embassies were responsible for the tenders, prices and offsets.

Indeed, when Queen Elizabeth visited South Africa in March 1996, the royal yacht Britannia was reported to have been fitted out as a floating British armaments industry exhibition. If true, it illustrates the influence that the European armaments industry holds over European governments.

The British and Swedish Prime Ministers, Tony Blair and Goran Persson, were instrumental in the adoption of the European Unions Code of Conduct on Arms Exports, Criterion Eight of which requires that consideration must be given to the socio-economic conditions in recipient countries. Under no circumstances can European governments plead that they are unaware of the crises of poverty which afflict South Africa. Instead, European governments actively market armaments to Third World countries, whose people then become mere cannon-fodder.

Offsets as a scam

ECAAR-South Africa had repeatedly alerted government ministers during the Defence Review and subsequently of the international experience of offsets as a scam promoted by the armaments industry, with the connivance of politicians, to fleece taxpayers of both supplier and recipient countries. Those warnings were ignored. Offsets are discredited because they distort the normal functioning of markets. It is extraordinary that the Department of Trade and Industry has made this discredited malpractice pivotal to South Africa's industrialisation policies. The reason that offsets are so prone to corruption is precisely because they cannot be effectively monitored. Indeed, in terms of the offset contracts, South African taxpayers are not permitted details of the offsets under the spurious claims of commercial confidentiality.

The ANC intelligence operatives and whistleblowers declare that as serious as the allegations regarding the arms acquisition programme are, even more ominous is the use of South Africa's banking structures to launder funds derived from drugs and arms trafficking. South Africa's banks pride themselves on their First World infrastructure, yet their policing of illicit and fraudulent banking transactions is notoriously lax. South Africa has become the ideal transit point for international criminals.

When these and other allegations were referred to the writer, his immediate response and also that of De Lille was that they were so serious that they needed to be investigated urgently by a competent authority, hence the referral to the Heath Special Investigating Unit. Well over a year has since elapsed and, sadly, the governments embarrassment and constitutional crisis is consequently of its own making.

Reality check

President Thabo Mbeki's behaviour on 19 January 2001 is likely to inflict as much damage to South Africa as President PW Botha's Rubicon Speech in August 1985. In a televised address to the nation, Mbeki lambasted Judge Heath and De Lille and used an organisational diagram and a legal opinion to imply a racist conspiracy to discredit his government and the country.

Days later the organogram was found to have been the doodlings of an investigative journalist, and that Mbeki had cynically manipulated the legal opinion to support his dismissal of the Judge. In fact, the opinion was found to have supported Heath and thus the President was shown as having lied.

Even were the armaments acquisitions programme squeaky clean which obviously it is not the overriding priority for South Africa should be its cancellation. The naval motivations for purchasing submarines were that South Africa needed the capacity to give the United States a bloody nose, and that submarines are the ultimate stealth weapon to protect fish.

Millions of South Africans are now threatened by cholera. About 10 percent of our population is estimated to be infected with HIV/Aids. Tuberculosis is rife. Eight million people live in shacks. Unemployment is 35 percent. The government came to office pledging its commitment to the eradication of poverty. Instead, like the apartheid government and the regimes in the Congo and Angola, the ANC government proposes to squander tens of billions of Rands on armaments.

The attempted cover-up is likely to prove even more damaging than the crime. A massive scandal is unfolding, which is likely to spill over into an enquiry into the complicity of European governments.

ECAAR South Africa, 3B Alpine Mews, PO Box 60542, Devils Peak, Cape Town 8001, South Africa (+27 21 465 7423; e-mail ecaar@icon.co.za).
Coalition Against Military Spending (email via stopwar@sn.apc.org).

Terry Crawford-Browne is the Chair of the South African affiliate of Economists Allied for Arms Reduction (ECAAR)