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The Peoples Tribunal CW Submission-Arms-Deal Evidence for the People’s Tribunal on Economic Crime (03-07 February 2018) 2. The 1999 Arms Deal Drafted by: Corruption Watch January 2018 1 Table of Contents Introduction ......................................................................................................................3 The Seriti Commission of Inquiry into the Arms Deal .........................................................4 The Establishment of the Commission ....................................................................................... 4 Resignations from the Commission ............................................................................................ 4 The Seriti Commission and the Implications for Methodology.................................................... 6 The Irrationality of the Arms Deal......................................................................................7 South Africa’s Apartheid-Era Military Dominance in the Sub-Saharan Region ............................ 7 The Political Context, Civil Society and the Majority of Parliament............................................. 8 South Africa’s Post-Apartheid Military Posture ........................................................................ 10 The Economic Context and the Potential Economic Cost of the Arms Deal ............................... 11 Mutual Enrichment: The Real Motivation for the Arms Deal, 1994 to 1999 .............................. 14 Inducements During the Early Stages of the Arms Procurement Process and their Implications for the Probity of the Initiation of the Arms Deal ..................................................................... 18 The Selection Process and Allegations of Corruption........................................................20 The LIFT/ALFA contracts........................................................................................................... 20 The LIFT/ALFA Contracts and Corruption.................................................................................. 25 The Corvette Contract.............................................................................................................. 31 Irregularities in the Selection of Subcontractors for the Corvette Combat Suite ....................... 34 The Sub-contract for the Supply of Gearboxes to be used in the Corvettes............................... 37 The Corvette Contract & Corruption ........................................................................................ 38 The Corvette Contract & Corruption ........................................................................................ 42 The Submarines, Corruption & the Debevoise & Plimpton Report............................................ 45 The Light Utility Helicopter Contract ........................................................................................ 48 The Sub-contract for the Supply of Engines to be used in the Light Utility Helicopters.............. 49 The Sub-contract for the Supply of Gearboxes to be used in the Corvettes............................... 50 The Arms Deal and ANC Party Funding..................................................................................... 51 ANC Efforts to Conceal Corruption ........................................................................................... 54 The Cost of the Arms Deal ...............................................................................................56 Conclusion ............................................................................................................................... 56 2 Introduction 1. This submission seeks to provide a salient narrative of all the currently known evidence relevant to the South Africa’s 1999 Strategic Defence Procurement Package (“SDPP”), more commonly known as the Arms Deal. 2. Occuring during South Africa’s transiton period from apartheid to democracy, the Arms Deal exemplifies the continuities between old and new elements within the shadowy criminal ‘deep state’ networks. It continues to haunt present South African politics, directly implicating the current President, Jacob Zuma. In addition, the Arms Deal also had a catastrophic effect on the post-apartheid economic project adding to rising inequality and entrenched poverty. The Arms Deal was not a single event, but rather a series of scandals that has contributed towards undermining accountability and transparency within the security establishment and the state. It thus remains vital to understand the Arms Deal as South Africans continue to grapple with its legacy of corruption and secrecy within public and private institutions. 3. The following text is based primarily on the joint submission made to the People’s Tribunal on Economic Crime in South Africa by Andrew Feinstein and Paul Holden. Their joint submission is annexed hereto and marked as “AD1”. This is based on their submission to the Seriti Commission of Inquiry into the Arms Deal, which was submitted to the Commission in January 2013. What follows below is a summarised version of events and should thus be read in conjunction with annexure AD1. 4. This submission seeks to address the following questions: i. What was the Arms Deal? ii. What wrongdoing was covered up? iii. Who were the actors involved and how did they benefit? iv. What was the Seriti Commission and where did it fail? v. What is the legacy of the Arms Deal? 5. In order to answer these questions, the submitssion takes the following structure. The first section details the Seriti Commission and its failures. Although, chronologically this comes later, it is important to discuss upfront as it has implications for the sources and methdology used in this submission. The next section lays out the what the Arms Deal was and why it was irrational. The final section covers the particulars of the contracts, the characters and the cover-ups that make-up the Arms Deal. The final section points to the cost of the Arms Deal. 3 The Seriti Commission of Inquiry into the Arms Deal 6. Before moving onto the substantive content of this submission, it is necessary to briefly discuss the Seriti Commission of Inquiry and how this submission will deal with both the evidence led therein and the findings of its final report. The Establishment of the Commission 7. On 24 October 2011 President Zuma formally established a commission of inquiry. He appointed Judge WL Seriti as Chairperson of the Commission. He appointed Judges WJ van der Merwe and M F Legodi as additional members of the Commission. 8. On 28 October 2011 the Presidency announced that Judge van der Merwe had asked to be released from his duties due to ‘personal reasons’, to which the President had assented. 9. On 6 December 2011 the Presidency announced that the President had appointed Judge HMT Musi as a member of the Commission to replace Judge van der Merwe. 10. On 1 August 2013, the Presidency confirmed media reports that Judge Legodi had tendered his resignation from the Commission. The Presidency stated that the President was satisfied that the Commission could proceed with its two remaining Commissioners. 11. The Commission was given far-reaching and wide-ranging powers of investigation, an extended period, and substantial resources in order to carry out the enquiry. The Commission was given more than four years to carry out its functions. Resignations from the Commission 12. During the life of the Commission it suffered numerous resignations, including two commissioners (Judge van der Merwe and Judge Legodi). 13. On 31 July 2013 Judge Legodi resigned from the Commission. This was just before the first public hearing, on 5 August 2013. The reasons for his resignation were not made public. Quoting sources within the Commission, the Mail & Guardian claimed on 31 July 2013 that his resignation was brought about by his unhappiness with the manner in which Judge Seriti was managing the Commission. The report stated ‘Legodi is known to have been unhappy with the secrecy surrounding the workings of the commission, the covert handling of the documentation, the fact that Seriti ruled with “an iron fist”, according to sources close to the process.’ The Mail & Guardian report is annexed hereto and marked as “AD2”. 14. The Commission suffered further resignations. Advocate Tayob Aboobaker SC was appointed as the chief evidence leader for the Commission. It was reported that he was deeply unhappy with the way that the Commission was run. In April 2014, it was confirmed that Adv Aboobaker SC had resigned from the Commission. No reason was given publicly for his resignation. 4 15. Attorney Mokgale Norman Moabi was appointed as a senior investigator at the Commission. He resigned from the Commission in protest at the manner in which the Commission was undertaking its work. His resignation letter, dated 7 January 2013, was subsequently made public. It claimed that the Commission was operating according to a ‘second agenda’, which ensured that the Commission did not fulfil its mandate as outlined in its terms of reference. His resignation letter is annexed hereto and marked as “AD3”. 16. Attorney Kate Painting was appointed as the Principal Legal Researcher assisting the Commissioners. She resigned from the Commission in March 2013. In August 2013, she released a short statement clarifying the reasons for her resignation. She, like Moabi, referred to a ‘second agenda’ at the Commission. Her statement is annexed hereto and marked as “AD4”. 17. Advocates Barry Skinner and Carol Sibiya were appointed as evidence leaders to assist the Commission.
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