TERRY CRAWFORD-BROWNE

PRESS STATEMENT

21 August 2019

1. I congratulate and thank Corruption Watch, Right2Know and Advocate Geoff Budlender SC for their initiative to have the Arms Procurement (Seriti) Commission report set aside after the Constitutional Court in 2016 had decided that my request was “not in the interest of justice.”  Twenty years have elapsed since the arms deal scandal erupted in September 1999 with the “Memorandum to Patricia de Lille from Concerned ANC MPs,” who were then led by the late Winnie Madikizela-Mandela.

2. Former President Thabo Mbeki, former Finance Minister Trevor Manuel, former Trade and Industry Minister Alec Erwin should now jointly apologise to the people of South Africa for ignoring repeated warnings – including the arms deal affordability study -- that the arms deal was a reckless proposition that would lead the government and country into mounting economic, fiscal and financial difficulties, including rising unemployment.  The 57 page affordability study was distilled from an estimated 17 000 pages of the International Offers Negotiating Team and Financial Working Group documents that are held by National Treasury which falsely informed the Seriti Commission that the documents are privileged, and blocked me from examining them.

3. It beggars belief that Mbeki, Manuel and Erwin (albeit in collusion with the British, German, Swedish, French and Italian governments) irrationally insisted that R30 billion spent on warships and warplanes would magically generate R110 billion in offsets and create 65 000 jobs.  As predicted, the offsets were simply vehicles to pay bribes, and the arms companies met less than three percent of their offset obligations.

4. As Mbeki admitted under cross-examination at the Seriti Commission, those bribes included “donations” by the “bagman” Tony Georgiadis to the ANC on behalf of the German warship consortia.  In addition, 160 pages of affidavits from the British Serious Fraud Office and the “Scorpions” detail how and why BAE/Saab paid bribes of £115 million (R2 billion) to secure their warplane contracts, to whom those bribes were paid, and which bank accounts overseas and in South Africa were credited.

5. South Africa owes an enormous debt of gratitude to the media and to a few Members of Parliament – most notably Patricia de Lille, Andrew Feinstein, Gavin Woods and Raenette Taljaard – in exposing the culture of corruption that the arms deal unleashed, and which has severely damaged our country’s hard-won transition to constitutional democracy.  When they (and even the Auditor General) demanded sight of the offset contracts, they were blocked by Trade and Industry officials with spurious excuses that the contracts were “commercially confidential.” 

6. Given the financial crises facing South Africa, it is now imperative to expedite remedial action. This includes cancellation of still-outstanding arms deal commitments, such as the 20 year Barclays Bank loan agreements for the BAE Hawk and BAE/Saab Gripen fighter aircraft that are guaranteed by the British government’s Export Credit Guarantee Department (now known as UK Finance).  Not only did Manuel as Minister of Finance exceed his borrowing authority in entering into these loan agreements, but their default clauses have rightly been described as “potentially catastrophic for South Africa.”  A related matter is his subsequent approval in 2005 of the Barclays Bank takeover of ABSA, a decision of similarly disastrous consequences.

7. There is, in addition, no prescription for fraud.  The internationally accepted remedy for fraud is cancellation of the contracts, return of the goods and recovery of the money. The principle applies that the fraudster should not financially benefit from his fraud.  Let the European governments now carry the financial consequences for the massive fraud they perpetrated upon the citizens of South Africa by pressuring our naïve and inexperienced government to purchase armaments of which the country had no need, and could not afford.  In recovering the money, South Africa would also recover the bribes which were obviously built into the prices.

8. Today’s decision of the North Gauteng High Court will hopefully also have global repercussions.  As illustrated by the humanitarian catastrophes inflicted by the arms industry in Yemen, Syria, Libya, Iraq, Afghanistan and other countries, there is now widespread recognition that the “war business” is irredeemably corrupt and out-of-control. As examples, a London court has ruled that the British government has failed to apply British arms export regulations, and that BAE exports to Saudi Arabia are illegal.  Similarly, the German government has suspended German arms exports to Saudi Arabia.  And even the US Congress is now considering similar measures despite President Trump’s complicity with Saudi war crimes in Yemen.

Terry Crawford-Browne

World Beyond War – South Africa

21 August 2019