The arms deal: Ten years on

Selim Gool reviews Paul Holden's The Arms Deal in Your Pocket


"The Arms Deal is a complicated beast", writes Paul Holden in his Preface to 'The Arms Deal In Your Pocket', Jonathan Ball Publishers, Johannesburg/Cape Town, 2008. It covers the best part of 18 years, so "if you were born in the year of Mandela's release [1991] and you look forward to casting your vote in the 2009 elections, the Arms Deal has been in the background all your life. No wonder people struggle to remember exactly what went on and why." (p xi)

That is why he wrote the book, "to make things easier to understand", to start "at the beginnig". The Mbeki years are often regarded as "15 "wasted years" [see inter alia, Paul Trewhela: '15 Wasted Years', politicsweb.co.za]. Will the next 15 years be the "Lost Zuma" years, as the Arms Deal controversy gets quietly buried and forgotten?

The Battle for Historical Memory remains as important today as it was in the days of the anti-apartheid struggle. As Holden comments: "Seven years after the ANC had taken power with a firm commitment to human rights, freedom and accountability, it was now being slated as a 'Big Brother' party desperately attempting to cover up its Arms Deal tracks, destroying democracy in the process" (p. 37)

Indeed, one of the chief reasons for me to recommend this book is its focus on chronology, its blow-by-blow account of the wheelin', dealin' and fixin' behind the scenes "so you can follow the story as it unfolded on the ground". [See also my earlier book reviews, bibliography, at politicsweb.co.za]

Appendix B: "The Only Arms Deal Timeline You'll Ever Need" on pps. 283 - 315, does exactly that, but in what follows I have added some of my own, and other author's, comments to give more juice (or spice) to the story, which "has poisoned the whole political system".

The most scandalous element of the deal was the decision to pay £1.6 bn. [R 15.3 Bn (billion)]to buy the Swedish JAS Gripen jet fighters and the British Hawk jet trainers from BAe/SAAB, the British-Swedish defence and aerospace company (see articles in politicsweb.co.za by James Myburgh, 'BAe and the Arms Deal: Parts I,II, III').

The Hawks cost twice as much as the Italian jets favoures by the  South African Air Force (SAAF) in another rival bid, and the military (and indeed the South African people) had no need of the Gripen jets. But when then Ministser of Defence, Joe Modise, removed cost as a criterion, the deal was signed, sealed and delivered.

Since then, accusations of corruption, bribery, money-laundering and an attempted political 'cover-up' by the ruling majority party, the ANC, in Parliament have haunted the Arms Deal for over a decade.

Indeed, as Alec Russel, Financial Times's man-on-the-spot notes: "Parliament itself became little more than a rubber stamp for the executive, as Andrew Feinstein found at the start of Mbeki's presidency, when he sought to expose wrongdoing by senior party members and arms companies in a controversial multi-billion arms deal... many senior ANC MPs [like Johnny de Lange et al] failed to support Feinstein's investigation into the arms deal and backed the leadership's drive to bar South Africa's most prominent anti-corruption judge [William Heath] from presiding over [the] inquiry. Feinstein was subjected to vicious denounciations by Mbeki's senior aides. In despair he resigned from Parliament" (Alec Russell, 2009, p. 74).

In fact, the present President Jacob Zuma was also implicated in the Arms Deal: "... after 1994, even as the ANC was consolidating itself in government and the era of struggle accounting (sic) was brought to an end, Zuma was embarking on a dependency on an extraordinary scale. Between 25 October 1995 and 1 July 2005 Shabir Shaik gave him R 4,072,499 in 783 payments, according to Zuma's 2007 indictment on multiple charges of corruption. The question of what exactly Zuma thought Schaik expected in return for this colossal investment was to dominate the most explosive trial of the post-apartheid era and ultimately precipitate the greatest split in the ANC for forty years. At the very least Zuma's behaviour in accepting the money betrays a lack of judgement that marked him out as a controversial role model for a young country struggling to find its way and to avoid slipping into corrupt ways of so many post-independent states." (ibid, p. 246)

We will also look at a quite different scenario: we will present the 'other side' of the Guns vs. Butter debate and focus (well, hypothetically) on what this money could have brought the country, in terms of housing, social infrastructure, medicines, jobs and incomes.

This is one of the greatest indictments of the Arms Deal, the Mbeki era and its attendant mis-expenditures: a 'sado-monetarist' Finance Ministry beholden to the 'Washington Consensus'[slashing social and educational expenditure to the bone while 'de-nationalizing' assets].

This is our history and this is what we bequeth to our children and grandchildren: unuseable, expensive weaponry bought through bribery and trickery; international allegations of widespread corruption and 'a culture of greed and self-interest' in the ruling party; rising unemployment and underemployment, leaving many black households without breadwinners or without jobs; a huge rising demand for adequate housing, self-sustaining projects for resettlement, urban renewal; horrific rising violent crime rates and a climate of fear.

Chronology of the period before 1994: Debacle for the SAAF in Angola

Holden starts off at a cracking pace to set the scene and provide some background: "Under apartheid, the military establishment was often seen as a behemoth with the means to wreak havoc throught Southern Africa at the push of a button ... The ability of the army [in the 1980s] to cross the South African border and attack ANC safe houses terrified anti-apartheid operatives and the states bordering the country ... But appearances were deceptive. The SADF [S.A. Defence Force] had a soft underbelly. With a focus on land-based encounters in the townships and abroad, funds had been channelled to support the army .... [in addition] the UN arms embargo against South Africa effectively prevented the SADF from modernising two branches of its forces: the Air Force and the Navy. As a result, by 1990, both were in terrible condition, stocked with hopelessly outdated equipment. During its war in Angola, the South African Air Force (SAAF), flying French Mirage fighters, was devastated by the Cuban army's much more effective Russian MIG-23s." (p.3)

By 1987/8 South Africa had acquired nuclear wepons and its army had re-invaded south Angola with the usual American approval, threatening to take the crucial air base and river junction of Cuito Cuanavale.

On 16 November 1987 in Havana the Cuban Central Committee made the dramatic decision to reinforce its force of 25,000 troops in Angola to counter a massive new South African commitment of infrastructure and logistics in northern Namibia which had begun in March.

Cuba then organised the second massive air and sea lift [after the first in 1975] with the help of Barbados and Guyana, which risked US disapproval, by refueling Africa-bound planes carrying arms, equipment and military personnel to assemble a formidable fighting force.

Cuba concentrated 40,000 troops in an operation which stopped and rolled back the South African advance clear to the Namibian border.

By mid-February 1988 these thousands of young Cubans were ready to take on the South Africans at Cuito Cuanavale in a set-piece battle of tanks and heavy artillery, including South Africa's mammoth G5 and G6 howitzers, aircraft, and anti-aircraft batteries.

On the Angolan/Cuban side the Namibian movement SWAPO/PLAN also fought. Cuban (and Namibian-trained PLAN) pilots [in Russian MIG-23s] knocked South African aircraft [French Mirages] from the skies.

The battle of Cuito Cuanavale forced the apartheid South Africa's white rulers to abandon their dreams of military domination of the region. South Africa was compelled to begin negotiations on the independence of Namibia, which it had occupied since 1915, and to agree to the release of Nelson Mandela and other political prisoners and the eventual transition to majority rule in South Africa itself.

The South Africans knew that for the first time they had lost air superiority to Angola's MIG23s, a fact which changed the military picture as dramatically as their defeat on the ground at Cuito Cuanavale. It also opened up the way for the liberaion of South Africa after the trauma of the township uprisings of 1984-86.

The ANC was not present in the above events in southern Angola, in either a military or political sence - especially after the 1984-86 Mkatashinga crisis inside MK [see Paul Trewhela: "Inside Quatro", in ever-fasternews.com, et el; see also, Piero Gleijeses: 'Conflicting Missions - Havana, Washington and Africa, 1959-1976', University of Northern Carolina Press/Chapel Hill, London, 2002].

In fact, the ANC leadership was conducting "secret negotiations" with Afrikaner capitalists in Lusaka in 1985 [Mbeki, Jordan, Tambo, Loots, Hani etc]to prepare their return to South Africa, which in fact happened five years later as a result of a "negotiated settlement".

A Chronology of the Arms Deal

April 1994 - the ANC wins the first non-racial election in South Africa by a clear two-thirds majority and takes office. Joe Modise is appointed Minister of Defence. In the same year, Modise authorises the Navy to begin tendering for corvettes.

December 1994 - The ANC Treasurer-General notes at the ANC's Annual Conference in Bloemfontein that the ANC is "struggling financially", as donations to the organisation have dried up. "He notes that the party's foreign funding has dried up and no plans have been made to achieve financial self-sufficiency" (Holden, p. 284).

A new 'milking-cow' would have to be found for the upcoming elections in 1999 - i.e. new financial sources would have to be secured and new "external funders" for the ANC were to be canvassed.

This opened up the way for the corruption involved in the Arms Deal, with leading ANC Ministers involved in this process.

27 February 1995 - Schabir Shaik registers Nkobi Holdings as a holding company with himself initially as sole shareholder.

June 1995 - The "Corvette Deal" is scrapped after massive public criticism [the navy had narrowed down the tenders for corvettes to the Bazan shipyard in Spain and the Yarrow shipyard in Scotland - both had promised massive investments and job creation 'offsets']. 

October 1995 - The South African Air Force (SAAF) reviews what it needs and argues that it only needs to replace one 'tier' of jets: the Cheetah trainers. Their review is completed and formalised, requesting that only the Cheetah trainers be bought.

1 October 1995 - Zuma receives his first payments from Schabir Shaik, which Shaik later claimed formed part of a pattern of loans to Zuma.

May-August 1996 - French Thompson-CSF [International]* sets up its local branches in South Africa by incorporating Thompson-CFS Holding(Southern Africa) and Thompson (Pty) [p. 285; p. 317-318].

Thompson and Nkobi enter into a complicated agreement *, the result of which is to make Nkobi the joint venture partner in all of Thompson's business activities in South Africa.

[*(incorporated in France) [Thompson-CSF Holdings (Southern Africa)was later renamed Thint Holdings (Southern Africa), incorporated in South Africa in 1996, with two major sharholders, Nkobi Holdings and Thompson-CSF. Nkobi Holdings [named after Thomas Nkobi ex-ANC Treasurer General and police informer/double agent], is incorportated in South Africa whose major sharholder appears to be Schabir Shaik" (p. 318-9)].

March 1997 - The SANDF, after receiving bids from 23 suppliers for the provision of a fighter/trainer jet, chooses four bidders to enter the next stage of evaluation.

March 1997 - After receiving further information from arms companies, four prefered suppliers are selected [a joint Brazilan/Italian consortium offering the AMX-T aircraft; Daimler-Benz Aerospace offering AT2000; Aero Vodochody, offering the L159; and the Aeromacchi/Yakovlev YAK/AEM-130].

Neither of BAe's [British Aerospace] submissions (the Hawk and the JAS-Gripen) made the short-list as they are considered to be far too expensive and not suitable for the SAAF. They were then thus not being considered in the race at that stage.

18 June 1997 - The South African Cabinet approves the Defence Review [after the Department of Defence presented a White Paper before Parliament on "the need to prepare the country for any military eventuality" (p. 285).

The Navy and Air Force then submitted a wish-list of purchases, that included 4 corvettes, 4 submarines, 4 maritime helicopters, 28 fighter planes, 40 utility helicopters and 54 battle tanks.

August 1997 - Parliament approves the Defence Review, paving the way for the Arms Deal to start.

2 October 1997 - Thabo Mbeki announces that South Africa is to re-open tenders for the purchase of arms. The total cost is estimated at R12 bn. (billion).

October 1997 - Allegedly "on (the) strict instructions ... of Joe Modise, the SAAF decided to revert back to a three-tier system". [p.89; p.94; see Table 3: The Three-Tier System Explained, p.95]

This "shifting of the goal-posts" resulted in that "in both cases, the Hawk and Gripen could now be resubmitted as realistic options for the SAAF to purchase", having been elevated from "also-rans to contenders" [James Myburgh, op cit].

Late October 1997 - Further requests are sent out for information from arms companies to supply Advanced Light Fighter Aircraft: BAe now makes the short-list with the Gripen but the SAAF still favours other jets due to cost and operational ability.

December 1997 - The ANC Treasurer-General presents his report to the National Conference and notes "the parlous financial state of the ANC, 'in and out of the red', and that they have become 'dependent on the President's [Mandela] initiatives and those of some officials for income' (p. 286).

Some Necessary Commentary

BAe eventually wins the Gripen contract after submitting an offset proposal [that was later argued to be 'radically inflated'] (p.96-8)

The issue of "offsets" was raised by the defence industry as they needed to justify the need for armaments purchases in peacetime. "Instead, it was argued that the corvette deal would actually make money. This would be achieved by offsets, also known as counter-trade.

Offset agreements on the part of arms suppliers to invest money in the South African economy in return for receiving tenders. Offsets in the corvette deal, it was estimated, would lead to between R 3bn. and R7.6 bn in new economic activity in the country" (Holden, p. 8).

Said Deputy Defence Minister Kasrils on the 18th June 1997: "There will be substantial off-set agreements so that, for instance, South African steel and other local components will be used in production. There will be major off-set or counter-trade agreements, so that every rand spent abroad, the same amount will be invested in South Africa." (quoted in Holden, p. 12)

See also Holden pp. 20-25, "What About Those Offsets, Then?". See also, Appendix A: The Companies and Institutions, pps. 277 - 282; Chapters 1 and 2, p.1 - p.32. There being no proper 'Index' to the book makes it difficult to find specific information though. 

Offsets, "are a particularly controversial way of engaging in trade, and are usually prohibited by the World Trade Organisation (WTO), except in relation to developing countries." (p. 22).

Thus, "if a country signed a deal purely on the basis of an offset agreement and not on the necessity of the goods purchased, it would be tantamount to legal bribery." (p. 23)

So basically, for the Arms Deal to go through Parliament and find acceptance in the voting population, the arms merchants just had to dangle a carrot of investments and jobs in their tender. Whether or not these investments or jobs were to materialize was another matter all together. Once the contract was achieved, they could always renege on the 'offset', as the penalty for doing so was minimal.

But with salesmen like Kasrils, Modise, Erwin, Manuel and Mbeki in Parliament, it became, like the neo-liberalist GEAR economic course, an administrative fiat that could not be contested, especially by ANC members in Parliament, who found thet they had to follow 'the line'.

In fact, the Gripen jet was "chosen on a technicality. We would get the Gripen regardless of the fact that it was neither the cheapest nor the technically prefered option". (p.98)

Flashback and Fast-forward

Early 1995 - Newly appointed Deputy President Thabo Mbeki announces in Germany that the tender for the supply of corvettes is to be reopened, allowing German shipbuilders to tender. He told the German Foreign Minister that "the race is still open".

March 1998 - BAe allegedly donates R4.5m (million) to the MK Military Veterans Association - Joe Modise was the Life President of the Association [see pps. pps. 105-111]. The latter "intervenes a month later to ensure that BAe's Hawk remains a contender in the evaluation process for the Lead-in Fighter Trainers" (p.287).

17 March 1998 - "According to the court's accepted version of events, Schabir Shaik writes to the head of Thompson-CSF, Jean-Paul Perrier, telling him that Zuma wants to discuss Thompson's seeming uncertainty about including Nkobi as a partner in Thompson/ADS's bid for corvettes. The letter is copied to Thabo Mbeki.

At a meeting of the Armaments Acquisition Council on the 30 April 1998, Joe Modise, ex-Spoilers thug and gangster, ex-MK commander who sent rivals and dissents on "suicide missions", double-agent and one-time police spy for the enemy, argued that the Council needed to take a 'visionary approach' (sic).

"The person around whom allegations of corruption have lingered the longest is Joe Modise, who continuously intervened in the BAe deals to ensure a favourable outcome for the UK/Swedish company BAe/SAAB, including arguing for the need to purchase the Hawk without considering cost. At the time of these, Modise is alleged to have had serious conflicts of interest." (pps. 105-108).

[This 'conflict of interest' arises from the fact that he was "a Director of Conlog "a company that was slated to receive massive contracts aringing from BAe's offset committments. He is also alleged to have bought shares in the company by BAe". (p. 90; pps. 105-111)]

Modise died at home on 26 November 2001. He was not investigated by any investigative agency in South Africa, and the matter was quietly left to die with him." (p.109) R.W. Johnston describes the scene thus:

"As Modise lay dying of cancer in November 2001 President Mbeki rushed to award him the Order of the Star of South Africa Grand Cross in gold - as Trewhela puts it, 'a suitable Ruritanian finale'... There were doubtless concerns in some quarters that Modise's death would bring to light some of the dirt surrounding the arms deal and the Hani assassination ... There were many possibilities, but not many had bet on Modise being singled out to receive the nation's highest honour. Modise was too ill to be shown in pictures of the award ceremony, depicting ministers 'in virgil pose' around the bed of 'Bra Joe' - gangster, killer, car thief, bank robber, arms trader, military commander, police informer, businessman, Defence Minister, decorated national hero and bon viveur." (pp.49-50)

14 April 1998 - Thompson-CSF purchases shares in Altech Defence Systems, renamed 'African Defence Systems' (ADS), which is the company that wins the tender to supply the information management system to be used in the corvette combat suites.

25 November 1998 - Deputy President Mbeki defends the Arms Deal while in Stockholm, Sweden, arguing: "the idea that money that you are using to acquire defence equipment is necessarily money that is being diverted from housing is emotionally appealing, but it is wrong" (sic)(p. 28; p. 289).

September 1999 - MP Patricia de Lille presents Parliament with a 'dossier'(compiled by "Concerned ANC MPs") which contains allegations of extensive corruption in the Arms Deal negotiations.

3 December 1999 - Minister of Finance Trevor Manuel signs the loan agreements that provided the MEANS by which South Africa could undertake the Arms Deal.

15 August 2000 - Auditor General Shauket Faukie releases the first official report into the Arms Deal, finding evidence that acquisition procedures had not been followed.

11 October 2000 - The Standing Committee on Public Accounts or Scopa [a Parliamentary oversight body], then led by IFPs Gavin Woods and ANCs Andrew Feinstein and Laloo Chiba (supplemented later by Serake Leeuw and Bruce Kannemeyer), holds its first public hearings into the Arms Deal.

Shamin 'Chippy' Shaik and Jayendra Naidoo [boyfriend of Norwegian researcher at FAFO, Liv Torres and former Nedlac coordinator] are extensively questioned.

They "admitted that offsets might not materialize, it also emerged that the cost of the deal had grown to R 43.8 Bn" (p.26)

30 October 2000 - Scopa releases its '14th Report' into the Arms Deal, requesting a "Super-investigating" team be formed and specifically requests that the [Judge William] Heath Unit [on corruption] be included.

19 January 2001 - President Thabo Mbeki writes to Heath to tell him that that he [Heath] will NOT receive a Presidential Proclamation [from Mbeki] to investigate the Arms Deal - i.e. Heath is explicitly excluded from the investigating team by Mbeki. The 'cover-up' is in full swing, with "orders from the top" [described fully in Chap. 3]. 

8 June to August 2001 - In the light of the furore around Scopa, the Parliamentary ANC moves a motion of confidence in the Speaker of Parliament, Frene Ginwala. The motion is passed using the ANC's majority, but Andrew Feinstein abstains from voting and in August 2001 he resigns from Parliament.

12 June 2001 - Scopa announces that it is 'too busy' to investigate the Arms Deal. Scopa's investigation into the Arms Deal has been effectively sidelined by the ANC government.

November 2001 - The Joint Investigation Report [of the "Joint Investigating Team" (also known as the 'Three Agencies'] is presented to Parliament, but opposition MPs walk out in protest at the alleged 'cover-up'.

16 November 2001 - Schabir Shaik is arrested the day after the Joint Investigation Report is presented to Parliament.

The Report, nevertheless, strongly questions the role of Joe Modise [ex-Minister of Defence] in the selection of the British- Swedish BAe Hawk trainer jet [SAAB and the JAS Gripen fighter] and finds that Chippy Shaik failed to recuse himself from meetings where tenders involving African Defence Systems, a company in which his brother Schabir had a stake, are discussed.

February 2002 - Gavin Woods resigns from Scopa in protest at the way the ANC is using its majority in the committee to prevent it working properly.

31 July 2003 - Newspaper reports emerge that alledge that 'Mac' Maharaj was guilty of corruption involving payments from Schibir Shaik. Maharaj resigned from Discovery Holdings pending an investigation, but has never been changed with any 'wrongdoing'.

23 August 2003 - Bulelani Ngcuka announces that the National Prosecuting Authority (NPA) is to prosecute Schabir Shaik but not Jacob Zuma. He notes that while there is a 'prima facie' case of corruption against Zuma, the NPA felt that it was not 'winnable'.

6 November 2003 - Jacob Zuma lays a formal complaint with the Public Proscecutor [Lawrence Mushwana] alleging that Ngcuka abused his position as the National Director of Public Prosecutions by making the 'prima facie' statement.

2003 - Richard Young wins a court case against the Auditor-General forcing the ANC to provide all the documents used in the drafting of the Joint Investigation Report to Young. The documents show that the Report was heavily edited to clear the government of any wrongdoing. These documents can be found on his website: www.armsdeal-vpo.co.za

May 2004 - The Public Prosecutor finds that Ngcuka has abused his office and infringed on the constitutional rights of Zuma. His findings are attacked by Ngcuka and former Justice Minister Penuel Maduna - both regarded as being firm 'Mbeki-ites'.

July 2004 - Ngcuka resigns from his position as Publc Prosecutor.

19 June 2006 - German investigators raid the offices of ThyssenKrupp [yes, that same unbundled firm that in the 1930s supported the Nazi war machine and remains a major player in the arms industry globally], one of the companies of the German Frigate Consortium which won the tender to supply corvettes.

The German authorities investigate allegations that ThyssenKrupp paid R130m. in bribes to South African politicians and 'intermediaries'.

... "the tax records of ThyssenKrupp had shown that they had paid an amount totalling roughly R130m to politicians and intermediaries in South Africa, and they were hoping to find out who the money went to" (p.233).

"Lurking in the background of all these matters is Thabo Mbeki. As Deputy President of the country from 1994 to 1999, and President thereafter, Mbeki was intimately involved in the Arms Deal and its later investigation (or 'cover-up'). During the period of the acquisitions, Mbeki was part of the Cabinet sub-committee that directed the whole procurement process" (p. 234)

Since 2006 - "Mbeki, according to newspaper reports, travelled to Germany in early 1995 and informed his hosts that the deal was still open for tendering ...

Mbeki's trip to Germany was followed by the deployment, in 1997, of a 'trusted comrade', [one] Mo Shaik (brother of Chippy and Schabir), to the position of South Africa's Consul General in Hamburg. Hamburg is the hometown of the head office of ThyssenKrupp, and Blohm and Voss, one part of the German Frigate Consortium.

" ... claims have been made, since 2006, that Mbeki might have met with the French representatives of Thompson-CSF International* prior to the signing of the combat suite deal. Thompson, remember, was the company awarded the combat suite as part of a joint venture with Shabir Shaik's African Defence Systems.

According to Mark Gevisser, the biographer of Thabo Mbeki, there exists 'documentary evidence' that proves that Mbeki attended these meetings (as above).

Mbeki, however, has repeatedly denied doing so (or more accurately, has claimed that he 'honestly can't recall ever attending a meeting')[sic]

However, Barbara Masekela, South Africa's former Ambassador to the US and a close Mbeki confidant, confirmed on the 13 February 2008, that Mbeki did indeed meet with the French." (p.235)

March 2008 - The Mail & Guardian (Johannesburg) rus a story that alleges that German and UK authorities are jointly investigating allegations that ThyssenKrupp illegally paid Tony Geogiades a commission of $22 m. (p. 312) The latter is the "ex-husband of F.W. de Klerk's current wife" (p.258) but was a go-between or lobbyist 'intermediary' between ThyssenKrupp and the S.A. government (p.259).

2 March 2008 - Britain's Sunday Telegraph reports that the UK's Serious Fraud Office is intensifying its investigation of corruption involving BAe in South Africa.

20 March 2008 - M&G reports that the Scorpions have 'recently registered an investigation into South Africa's multi-billion rand purchase of jet trainers and jet fighters from British arms giant BAe systems and Sweden's SAAB'. (p. 31)

June 2008 - German prosecutors announce that they have stopped investigations into alleged corruption committed by the German Frigate Consortium in its dealings in South Africa, led by ThyssenKrupp. The latter releases a media statement claiming that the investigation had been stopped as the investigators had "found no evidence of corruption". So the Thieves' Kitchen remains a diry mess.

3 August 2008 - Sunday Times story that alleges that MAN Ferrostaal had paid a R30m. bribe to Mbeki, R2m of which went to Zuma and the remainder (R28 m.) to the ANC. The Presidency strongly rejected the allegations, as well as MAN Ferrostaal.

8 August 2008 - Judge Chris Nicolson, after hearing arguments in the Zuma trial, delivers jugdement in September and throw out the case against Zuma, thus clearing the way for him to become State President.

The Cover-Up Operation: Who did what and who benefited?

March 2001 - Sunday Times (S.A.) breaks the story that Tony Yengeni had received a Mercedes-Benz ML 320 4X4 [through DaimlerChrysler Aerospace (DASA) executive Michael Woerfel at an allegded discount price of 47 per cent] through "corrupt channels". October 1998 he registers this car in his name.

Appearing in Parliament after the above article is published, Yengeni tells the Assembly that the 4X4 was not a gift and did not need to be declared in his statement of Members' Interests.

29 May 2001 - The ANC uses its majority on Parliament's Joint Committee on Ethics and Members' Interests to force through the finding that Yengeni did not need to appear before Parliament to explain his 4X4. Opposition parties vehemently oppose the motion.

July 2001 - Yengeni takes out a full page ad in the national media proclaiming his innocence and calling the allegations against him part of a 'witch-hunt' ("playing the innocent with the notorious 'race card'") to ruin his reputation - the ad is reported to have costed R 250,000)

['Car Allegations are hogwash, says Yengeni', The Star, 25 March 2001; 'Statement by Tony Yengeni regarding media reports', July 2001, available at: www.armsdeal-vpo.co.za]

The ANC majority did not want Yengeni to appear before the Ethics Committee to discuss the 4X4 at all - the motion was carried, with 7 voting for the 'minority view' and the remaining 25 voting for the 'majority view': "This was the first time that any decision before the JCEMI [Ethics Committee] had been forced to a general vote, suggesting that the Arms Deal had turned a previously harmonious committee into a partisan playground.

And, just as happened on Scopa, the ANC refused to allow any allegedly corrupt ANC member to appear before the appropriate parliamentary hearing or be investigated by Parliament.

October 2001 - Yengeni was charged with fraud, perjury, forgery and corruption over the 4X4 matter. He immediately resigned his position as Chief Whip of the ANC, inferring that "he was the victim of a conspiracy" (p 79), much as Jacob Zuma would later claim.

He finally "admitted his guilt in a plea bargain agreement with the State, with the charge changed from 'corruption' to 'fraud'." (p.79) He is sentenced to prison for four (4) years but appeals the sentence. The charge against Woerfel is dropped as a result of Yengeni's plea bargain.

August 2006 - The Bloemfontein Supreme Court of Appeal rejects Yengeni's appeal "and is ordered to report to Pollsmor Prison within 72 hours" (p.85). "It was to be a remakably short stay. In January 2007, after spending four (4) months in prison, he was released." (ibid), as a result of a Presidential Pardon by Mbeki that halves the sentences for 'this category' of criminal.

He is received at the gates of Pollsmoor as a "conquering hero of the struggle" by a veritable cavalcade of Western Cape ANC leaders, supporters and academics from the University of the Western Cape.

"... Thus six years after the Sunday Times broke the first story of Yengeni's perfidity; four years after he had admitted quilt; and four months after he begun serving his four-year prison sentence, Tony Yengeni was a free man." (p.85)

The Story of Escalating Costs and Some Wicked Lies

A Defence White Paper was presented to Parliament in 1996, followed by a final Defence Review, which was presented in phases to Cabinet and Parliament in 1997 and 1998.

In May 1997 'Red' Ronnie Kasrils, Deputy Defence Minister and his boss, also from MK times, now Defence Minister Joe Modise, had approached Thabo Mbeki to try and convince him of the need to purchase the weapons. Minister of Finance Trevor Manuel was still "unwilling to budge on the request" (p. 11).

This lobbying seems to have worked. The Cabinet approved the first phase of the Defence Review on 18 June 1997, and it was presented before Parliament in August of the same year, where it received the "stamp of approval" (p. 12).

Towards the end of 1997, the SANDF could start "shopping around for materiel", as now Thabo Mbeki, as part of the Cabinet sub-committee tasked with undertaking the acquisitions, announced that invitations to tender would be released by the end of the year: "The aim: to purchase R12 Bn worth of equipment (p. 13).

In November 1998, Thabo Mbeki, heading the Cabinet sub-committee tasked with overseeing the whole process, announced that the government had "selected its list of preferred suppliers, and that the arms acquisitions were to go ahead.

This was the first time that a firm figure was presented as to the cost of the purchases: it had previously been estimated at between R12 and R15 Bn, but was now estimated at R30 Bn" (p. 17).

3 December 1999, the government signed the final purchasing agreements, and Finance Minster Manuel signed the loan agreements that would pay for the equipment (p.17).

Even before the final contracts were signed, the government announced with considerable fanfare that the Arms Deal would lead to investment in the country worth between R104 Bn and 110 Bn, and the creation of roughly 65,000 jobs. [See earlier discussion on the "offsets"].

In September 2006, the new Minister of Defence 'Terror' Mosiuoa Lekota admitted that only 13, 000 of the 65,000 jobs had been created. Already at the Scopa meeting on 11 October 2001 Jayendra Naidoo and Chippy Shaik admitted that the offsets might not materialize, and it also emerged that the cost of the deal had grown to R 43.8 Bn.

By 2003 (due to the depreciation of the Rand - from the R 6.25 to the US dollar that was used as the basis for the estimate of the deal, to the roughly R 8 since 2000) the deal had grown in cost to R 52.3 Bn, excluding financing costs.

The "most recent estimate of the cost of the Arms Deal" is provided by the 2008 National Budget: "According to the Budget, the Arms Deal, without financing charges and interest payments, will have cost R 47.4 Bn by the time the final payment is made in 2011 (p. 26)."

In other words, "since the deal was announced in December 1999, the total costs to the South African taxpayer has increased by over 50%" (pp.26-7).

"In addition, the recent international credit crunch (sic) and the resulting rapid depreciation of the rand are still anticipated to increase the remaining costs of the deal" (ibid).

An Alternative Scenario: What Could We Have Spent the Bucks On?

Holden's Table 1: What we bought, where it came from and how much did it cost, is a useful summary of the expenditures: (p. 18)

4 Corvettes [Meko A200] Supplied by GFC/Thompson-CFAS (France) @ a price of R6,917 Bn (billion) [1999]

3 Submarines [Class 209 1400 MOD]Supplied by GSC @ a cost of R5,354 Bn.

28 Advanced Light Aircraft [JAS Gripen] Supplied by SAAB/BAe @ a cost of [Part of R15,354 total Bn.]

24 Lead-in Fighter Trainer Aircraft [The Hawk] Supplied by BAe @ a cost of [Part of R15,772 Bn., as above]

30n Light Utility Helicopter Aircraft [Agusta A109M] Supplied by Agusta (Italy) @ a cost of R1,949 Bn.


Total cost                                      R29,992bn.

[see footnote 8, p. 323, on how the author arrived at these figures]

Table 2: What we actually paid for the Arms Deal compared to other social expenditure (Between 2000 and 2008) (p. 29)

'Strategic Defence Procurement' [The Arms Deal] Total in R Bn. 43.097

'Strategic Health Programme' [HIV/Aids,STI] Total in R Bn. 8.715

National student financial aid scheme Total in R.Bn. 6.032

Grants to housing funds Total in R.Bn. 41.573

(for the construction of low-cost housing)

Looking at the above figures, "the Arms Deal from 1999/2000 to 2007/2008, took up a greater chunk of the National Budget than low-cost housing, Aids policy or bursaries for tertiary students, with an estimated R4.3 Bn. still to be spent by 2011". (N.B. these figures exclude the financing costs of the deal (interest payments) and does not allow for the rand's depreciation in the future) [pp.29-30]

Holden comments: "... prior to the signing of the Arms Deal, the Cabinet was presented with a thorough Affordability Report [of 1998] on the deal drawn up by the Department of Finance. The Report warned the government that, because of the huge sums involved and the rand's volatility, it was an increadibly risky idea to agree to the deal" ...

"The Report found that the Minister of Defence, Joe Modise, had initialled the contracts to purchase the three submarines before the Affordability Report had been presented.

Another key concern of the Affordability Report was that, by spending this amount on the Arms Deal, other areas of South African society would be ignored, or, at the very least, suffer from less spending: payments on the Arms Deal would 'crowd out' (a technical term meaning simply 'replace' or 'push aside') other pressing social demands.

But Thabo Mbeki, Chair of the Cabinet sub-committee overseeing the purchases, obviously did not agree. Speaking in Sweden in November 1998, he made the argument that 'the idea that the money you are using to acquire defence equipment is necessarily money that is being diverted from housing is emotionally, appealing but it is wrong'. [source: Holden p. 28, citing article, `Mbeki quizzed about plans to buy war planes´, Daily News (Dagen Nyheter, Stockholm) 26 November 1998]

It was a difficult point to sell, especially as only a month previously, South Africa's Health Minister, [a Moscow-trained doctor, an ex-wife of Jacob Zuma and a Mbeki-ite] Nkosazana Dlamini-Zuma, had rejected the idea of providing AVRs [anti-retrovirals] to pregnant mothers as the programme was "too expensive to even contemplate" (sic).

Five years later, the Report of the Joint Health and Treasury Task Team found that providing ARVs to everyone who would need them by 2008 would cost R 5.7 Bn. a year (ten (10) per cent of the estimated cost of the Arms Deal at the time), and would 'defer' the deaths of 1,721,329 people as well as the orphaning of 860,000 children." (pps. 27-28)

To return to the "Guns vs. Butter" theme, what else could we have bought for the same amount in 1999?

"In real 1999 terms, the same amount of money would have bought or paid for one of the following:

* 1,993,333 RDP houses at R15,000 each (this was the subsidy amount offered for an RDP house in 1999).

* The salaries of 474,603 educators for a year at an annual salary of R63,000 [over double the number of educators employed by government in 1999]

* The salaries of 590,909 nurses for a year at an average annual salary of R63,000 [nine (9) times the 75,000 nurses employed by the government in 1999]

* The salaries of 381,864 medical doctors for a year at an average annual salary of R78,300 [a staggering 29 times the 13,000 doctors employed in 1999]

* A power-station the size of Lethabo, which produces 3,558 MW, more than the total electricity demand of a city the size of Johannesburg.

"These figures also raise questions about the effectiveness of the Arms Deal as a job-creating exercise. Working from the estimate of R29.9 Bn. for the total cost of the package, which would produce 65,000 jobs, it would have cost the South African taxpayer R460,000 per job created - almost six (6) times the average annual salary of a medical doctor in 1999." (Holden, pp. 30-31)

A Reality Check: Some Pros and Many Cons

"In the decade beginning in March 1996, the tax base more than doubled, from 1.9 million individuals to about 5 million. In a striking sign of the economic turnaround and the surge in tax revenues, but also of the inefficiencies of local government - which proved unable to spend its budget on worthwhile projects - in 2007 and 2008 Manuel ran a budget surplus. And yet there was another side to the sparkling statistics. In the shadow of the new malls and the grand infrastructure projects in the main cities [not to mention 'prestige projects', soccer stadiums for the coming soccer World Cup and infrastructure related to this], there were many who were not experiencing the benefits of the boom. A decade after the introduction of GEAR the divide between rich and poor had increased. Unemployment hovered somewhere between 30 and 40 per cent. After taking five years to fire after the launch of GEAR, the economy did grow at a healthy average of 5 per cent between 2004 and 2007 ... The government trumpeted that 1.6 million jobs were created in the five years up to 2007, but unemployment remained precipitously high" (A. Russell, 2009, p. 91)

"Between 1994 and 2007 the ANC built 2.6 million houses. The number of homes with electricity doubled to 8.8 million. By 2007, over 87 per cent of people had access to clean running water. As of March 2008, 14.1 per cent of people in South Africa were benefiting from the largest social welfare programme in sub-Sahara Africa." (p.93)

Johnson adds: "Mbeki's presidency, begun with such promise, ended in failure on every front. This was not just a personal tragedy, however, for what failed with Mbeki was an exile dream ... which had simply stayed frozen in exile ... For the first decade of ANC rule the country was in effect running on the accumulated momentum of previous public sector investments in many areas, most notably in infrastructural provision of all kind. It was only towards the end of this period that the deletrious effects of this new type of governance began to be felt, particularly of a public sector administration which lacks education and skills at every level. At the same time, both the new elites and the black underclass, subjected for many years to policies of exclusion and discrimination, naturally had keen acquisitive instincts and were determined to use the opportunities presented by the new dispensation to make up for lost time. This led on the one hand to very low levels of competence in many areas of government and, simultaneously, the pillaging of the public sector. The combination threatens a sort of institutional implosion." (Johnston, 2009, p. 620)

On The Erosion of Electorial Democracy under the ANC since 1994

An "electorial law", a last minute addition to the South African Constitution agreed upon by the ANC and the (old) Nationalist Party (NP) politicians, is "anything but 'democratic'" (quoting R.W. Johnston below):

"... The unbanning of the ANC in 1990 and the return of the exiles created enormous hopes. And, as always when the rules change, it also set off a frantic competition for power and wealth - the public gaze was focussed at the Convention for a Democratic South Africa, where the new constitution was hammered out. The oddity was that while white South Africa took it for granted that the ANC would inevitably win a democratic election [due to the "demographic factor"], many within the ANC found it hard to believe that De Klerk really would hand over power. The ironic result was that the ANC negotiated the sort of liberal constitution they thought would help them in a continuing struggle against white power. Thus the ANC government ended up with a constitution which, with experience of power, it would never have chosen. But the most important deal was on the electorial system: a pure proportional representation list system which gave the party leaders power to choose, expell and switch list members in and out of Parliament at will. Thus South Africa allows neither the representation of constituencies nor independent-minded MPs. Only parties are represented and only party bosses matter." (Johnston, 2009, p. 13)

"The proportional representation list system used in parliamentary elections means that that there are no constituencies and the party bosses rule supreme. Moreover, MPs can be swapped into and out of Parlaiment at will by the parties so that very few voters could even name many MPs, let alone the MP 'allocated' to their area. All real power has moved upwards to the executive and ministers are fixed and immutable. Underperformance or corruption is seen as no reason to sack a minister ... Ministers, well aware that they are immune from parliamentary questions or popular accountability, frequently ignore parliamentary questions give insulting cursory replies. Hence the irony of South Africa's transition. Under apartheid it was ruled not just by a racial oligarchy but, by a narrow Afrikaner elite. Now that democracy has arrived it is ruled by an even narrower elite which is even more unaccountable than the group it displaced, and which also controls significant power in the private sector. The real ruling elite was narrower still, for the preponderance of exiles within it meant the dominance of a tiny fraction even within these confines ... The continuing dominance of this group is hardly popular - far less then 1 per cent of South Africans are former exiles, after all - but there is little to stop it. The ANC's electorial majority seems secure not only because of its partonage power but because the black majority will, judging by the example of nationalist movements elsewhere in Africa, continue for a generation to vote for the party associated with liberation." (Johnston, pp.594-5)

Elected MPs (to Parliament) are thus NOT servants of their electorial constituency but are beholden to the Party whip!

When Feinstein went against the 'Party line' in Scopa, by not voting for the motion to support Ginwala, and together with Gavin Woods recommitted itself to its 14th Report, which wanted Judge Heath included in the investigation, it was "an act of courage, it was unsurpassed" (p.57), but it "signalled the end of Feinstein's career on Scopa" (ibid), and he was replaced by Geoff Doidge, "seen as an ANC loyalist." (ibid)

It was an obvious attempt to regain Executive control over the formally independent Scopa" (ibid). Feinstein resigned from Parliament on the 23 August 2001, citing in his resignation letter, "I have realised that over the past few months that I can no longer play a meaningful role in Parliament under the present political structures" (p.58)

This was made strikingly clear by (then Chief Whip Tony Yengeni) who explained to the media that "some people have the notion that the public accounts committee members should act in a non-partisan manner. But in our system, no ANC member has a free vote."

[Holden, 2008, p. 57; quoting article 'ANC cracks whip in watchdog committee', Sunday Independent, 3 February 2001]

Some Further Considerations

Holden's chapter 9 "Unfinished Business and Unanswered Questions" presents both a summary of his preceeding arguments as well as asks some pertinent questions:

"What was the role of Thabo Mbeki?",

"The submarines: another questionable deal?",

"What about the other 4X4s?"

And the million dollar question,

"Will Jacob Zuma ever go to trial?"

[seeing that there is a real possibility of a Presidential Pardon or the squashing of any corruption charges against him].

I would like to add some questions of my own (as I am sure that readers of this article would also have their own ideas - just write in to the Comments section below):

1) "Seeing that there is insurmountable evidence and that it can be  legally proven that the Arms Deal was constructed and executed on the basis of corrupt practises, with bribery and corruption of high State officials, cannot we (the Nation, the People) DEMAND that these weapons/armaments bought be RETURNED to the original sellers so that we can get our monies back?"

2) "If so, can we then not invest these funds into the 'social expenditure' scenario outlined earlier: low-cost houses, anti-Aids AVS and treatment for HIV-infected, salaries for doctors, nurses and teachers, upgrading of squatter camps and so on?"

There is not only a strong moral case for the above but also a financial one: the South African nation was conned and duped by smooth-talking crooks into buying these armaments which we just cannot afford. The social dislocation and homelessness that affects our poorer communities needs a social injection of these funds now!

Taken to an International Court for Arbitration and by laying our case, warts and all, before the international community, as we did during the anti-apartheid struggle, I am sure we will find the popular support we need.

3) A third question relates to the two above:

"How was it possible that with this Pig's Circus called the Arms Deal, for the South African public to be duped, conned and fooled by these second-rate arms merchants of death and destruction - a society which had fought bravely for liberation in an long anti-apartheid struggle for decades - when reliable independent media reports, the various courts and politically untained researchers were providing them with all the necessary evidence to see through this hoax, this enormous con, and the obvious double-dealing involved?"

Numerous theories have been put forward, none of which I find hold any water or validity. Here are some of the more popular I have encountered:

"We were not aware of what type of predatory beast the ANC was", is one of the more often encountered. "We WANTED to believe that the accusations of bribery, corruption, the tissue of lies and deceit for over the decade was incorrect, was not true, so that we could get on with our own lives, be with our families and construct our own vision of a 'Brave New South Africa'"; "Ag, we are all so tied of politics!"

"Yes, all politicians are crooks, eh?"; "We knew that they were crooks and thieves, but then, they are are 'our' crooks and thieves, not so?"; "Our whole society and the whole anti-apartheid struggle was permeated by these con-men (like Boesak) and gangsters (and now drug dealers). But what could we do? These crooks are in power now".

This list is obviously incomplete. Try and find your own reasons!

Alec Russell (2009) also poses the following rider:

"A viable opposition party competing for power would not be 'feasible' for some time. ANC voters were not ready to abandon the party [in the last election in 2009 after the COPE split-off was trounced] that was so intrinsic to South Africa's liberation. Rather, the best hope for democracy would have to come from within the ANC. The party had shown it had a democratic spirit (sic) when Mbeki was rejected. South Africa had to ask, he [Mbeki] said provocatively, if Westminister-style democracy, with parties opposing each other in Parliament, was exactly what South Africa required ... If the ANC is to avoid becoming entrenched in power and defiant of the electorate's wishes, at some stage its hegemony will have to end, and it will have to leave office. A spell in opposition would be healthy for the party and for South Africa's democracy." (p. 272-73)

But do gangsters and thugs give up their lucrative rackets or drugs turf voluntarily, or will the newly rich waBenzi (maybe now also  waLamborghini)kleptocrats give up their newly achieved social power, status-symbols and lucrative BEE CEO positions without a fight?

To me, the present day ANC looks like a unproductive moth-eaten male lion, scarred and lazy as it lies in the sun of the African Savannah , scratching its belly and pawing at the irritating flies buzzing around; but only too ready to steal from the young lionesses in the pride the meat from their hunt that gives life's nourishment for survival.

Now, how long will it take for the young lionesses to organise themselves, gang-up on the old patriarch and demand changes in the system of distribution (really redistibution, eh?) and even ponder the eviction of this parasitic old male from their civil society.

Any bets?

[A personal note: as a 'returned exile', I lived an worked in Cape Town from 1993 to 2006, so was present to suffer the everyday daily news broadcasts (and humiliation) of "What's Going On?" in the Arms Deal and all the other financial scandals associated with the ANC rule since 1994 (Travelgate, Oilgate, the tender-fixing, etc).

Also I lived near Cape Point and thus Simonstown harbour recently, 2005-6, and would take the early-morning school bus just in time to see these newly-purchased and costly submarines and coastal corvettes do a "morning-run" [euphemistically called "keeping the engines running"] and then return to port. I timed this as about two hours.

They have not, to my knowledge, been on "active service" and on a visit on-board on "Open Naval Day" I spoke to the various crews. They were clearly embarassed by any "critical questioning" but were well aware of the controversy surrounding the purchase of the corvettes and submarines.]  

Selim Gool

[for more about me go to: www.zcommunications.org/zspace/selcool]

Select Bibliography

Selim Gool: 'South Africa in a new transition again: From crony capitalism to African despotism?', first published in august 2009, at www.politicsweb.co.za/politicsweb/view/politicsweb/en/page 72308?oid=13771

Piero Gleijeses: 'Conflicting Missions - Havana, Washington and Africa, 1959-1976', University of Northern Carolina Press/Chapel Hill, London, 2002

Paul Holden: The Arms Deal In Your Pocket, Johannesburg and Cape Town, 2008.

R. W. Johnston: South Africa's Brave New World - The Beloved Country Since The End of Apartheid, Allen Lane/Penguin Books, London, 2009.

James Myburgh, 'BAe and the Arms Deal: Parts I,II, III', in www.politicsweb.co.za

Alec Russel: After Mandela - The Battle for the Soul of South Africa, Hutchinson, London, 2009.

Paul Trewhela: various articles in www.ever-fasternews.com; politicsweb.co.za

'Official' Websites






'Independent Media' websites





www.caat.org [Campaign Against Arms Trade]

www.pambazuka.org [South African Social Justice Movement]


[view also the draft of the first part my autobiography here at:


which describes my life as a student in Lund, Sweden from 1969 and political work with the African National Congress, Youth and Students', from c. 1971 to 1977 - also in the GDR, London, Lusaka - during the 'Golden Years of Swedish Social Democracy' under Olof Palme's SAP government; until I leave for Stockholm/Uppsala in 1977]

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