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JUDITH FEBRUARY: The arms deal and the creep of state capture

OPINION

It is in the nature of things that most political victories are won in courts these days. On Wednesday the Pretoria High Court set aside the findings of the Seriti commission of inquiry into the strategic defence procurement package (commonly known as the ‘arms deal.’) The application was brought by the Right2Know campaign and Corruption Watch and represents a victory for civil society groups which have been part of a decades long campaign to ensure some form of accountability occurred after the corruption-riddled deal.

The commission, appointed by former President Zuma in 2011, seemed doomed from the start with its ballooning budget which eventually stretched to R137 million, as well as Seriti’s seeming unwillingness to ensure that it examined every bit of evidence available to it.

Its witnesses were rarely cross-examined and it seemed reluctant to get to the truth surrounding the multi-billion rand deal. Its mandate was to investigate “allegations of fraud, corruption, impropriety or irregularity in the strategic defence procurement package” and was meant to question the rationale for the arms deal, whether the equipment purchased was adequately used or not, and whether job opportunities linked to the deal have materialised or not. (These were the so-called national industrial participation and defence industrial participation - NIPS and DIPS in the arms deal parlance.)

Quite unbelievably, after almost four years, Judge Seriti could find no corruption in the deal at all.

This week, however, Judge Dunstan Mlambo did not mince his words when he said, “It is clear that the commission failed to inquire fully and comprehensively into the issues which it was required to investigate on the basis of its terms of reference”.

So, the work of commissions of inquiry are indeed reviewable and that will be an important line in the sand given the plethora of commissions set up in South Africa to deal with corruption and ultimately, the failure of our political system to ensure swift justice and accountability. Commissions are now duty-bound to get things right.

Several high-profile individuals were implicated in the arms deal, including, of course, President Jacob Zuma. Fana Hlongwane, former advisor to then Defence Minister Joe Modise, the infamous arms deal ‘middleman’ was barely questioned at the Seriti commission and questions remain regarding possible payments to him by BAE Systems. Now that the commission findings have been set aside, logic would dictate that fresh investigations and subsequent prosecutions would follow.

Yet, one has to wonder given the limited capacity of the National Prosecuting Authority and the overwhelming instinct to prosecute the larger, more recent and most egregious instances of state capture. Prosecuting historical crimes is always difficult and will be especially difficult given the many challenges facing the NPA.

It is easy to forget the details of the arms deal given the far more sensational stories of state capture during the Zuma years which we are hearing of first-hand from the Zondo commission. In a sense, state capture makes the arms deal look like proverbial ‘child’s play’. Yet, the arms deal, after the Sarafina corruption scandal of 1996, was the largest scandal of its kind a mere five years into democracy. The background is useful because it points to the failure of our democratic institutions, particularly Parliament, to exercise oversight over the executive account while other institutions failed to hold the corrupt to account either civilly or criminally.

In 1992 arms dealers came a-courting the future government and South Africa seemed only too keen to please. In March 1996, the Ministry of Defence conducted a strategic defence review of the capacity and requirements of the South African National Defence Force (SANDF). After the completion of the review, Cabinet provided details of the new arms and equipment it would purchase at a cost of R29.9 billion over 12 years. In 1999, National Treasury’s Roland White compiled an affordability report which famously said that whether government wished to enter the deal depended on “its appetite for risk”.

Despite this warning, in December 1999, the executive entered into five major arms transactions involving submarines, corvettes, light-utility helicopters, lead-in fighter trainers (LIFT), advanced light fighter aircraft and four maritime helicopters, the purchase of which was eventually deferred. The government ‘sold’ the deal to the South African people on the basis that the offsets (in the form of jobs and investments) would outstrip expenditure. Whether this was the case was highly debatable as there have been several reports over the years of offset obligations not being fully met.

One of the main concerns related to the LIFT contract, in respect of Hawk jets awarded to BAE, the salient question being why the contract was awarded to BAE when clearly it was not the most cost-effective option. Then Defence Minister Joe Modise was consistently linked to allegations that he intervened to eliminate cost as a criterion in the evaluation process relating to the Hawk jets. Modise also allegedly stood to gain from the offsets as he was a shareholder in Conlog, one of the companies set to benefit from the deal with BAE.

Several questions in relation to the LIFT contract for Hawk jets were raised by Idasa and others including: For what reason was the evaluation basis changed from costed to non-costed at such a late stage in the tender process? Who made that decision and why? Were other tenderers told of the change and if not, why not? What are/were the cost implications for South Africa as a result of those changes?

These questions seem as pertinent today as they were in 2001 unfortunately. One doubts we will ever know the truth.

As part of his ordinary functions, then Auditor-General Shauket Fakie investigated certain aspects of the arms transactions and produced a report into the matter in late 2000 which recommended an investigation.
That report formed the subject of a further investigation by Parliament, through Scopa. Then Public Protector Selby Baqwa also started a probe of sorts. In October 2000, Scopa produced its own report on the arms transactions after it had conducted hearings into the matter. During those hearings, Chippy Shaik, the Department of Defence’s head of arms acquisition, and Jayendra Naidoo, government’s chief arms deal negotiator, admitted that the costs of the deal had by then ballooned to R43.8 billion.

The two reports identified areas of concern and recommended that further investigations be conducted. Scopa had called for a full multi-agency probe into the deal as well as the increase in the cost of the deal. Scopa’s October 2000 report also raised concerns about the procedural regularity of the arms transactions. Scopa has a very specific and significant role in the parliamentary oversight process. Its core function is to satisfy the legislature that money has been spent in accordance with decisions in the budget; in other words: the public is getting ‘value for money’.

Unlike other parliamentary committees, Scopa does not pass laws as part of the ruling party’s electoral mandate. On the contrary, its mandate is to perform a non-partisan oversight role to ensure the effective management of fiscal resources. The tradition had until then been that a member of the opposition should chair Scopa because of its exceptional role. Its chairperson at the time of the arms deal investigation was Inkatha Freedom Party (IFP) MP Gavin Woods, a man of unassailable integrity, who chaired the committee with patience, skill and aplomb. Prior to the arms deal, Scopa enjoyed a reputation as one of the best-run, most efficient committees in Parliament which worked effectively across party lines.

It recommended that the Special Investigating Unit (SIU) headed by Judge Willem Heath form part of a joint investigation team to probe the arms deal. This was later refused by President Thabo Mbeki. At the time, Speaker of Parliament Frene Ginwala also actively intervened to stymie the independent-minded work of Scopa.

Instead, a joint investigation team into the arms deal comprising Baqwa, Fakie and National Director of Public Prosecutions Bulelani Ngcuka was charged to look into the arms deal in 2000. They produced the so-called Joint Investigative Team (JIT) Report of November 2001 which Woods subsequently described as ‘sub-standard’. That report essentially exonerated government. And so, the fault-lines in the post-apartheid body politic were drawn. It would soon enough also tear the ruling ANC apart after Mbeki fired Zuma as a result of arms deal-related allegations of corruption. The consequences haunt us to this day and the matter remains dangerously unresolved.

Woods resigned in February 2002 in protest at what he deemed to be a ‘cover up’ of possible corruption in the deal. The ANC’s Andrew Feinstein had been demoted as ANC leader in the committee and he resigned as an ANC MP in August 2001. As chair, Woods had raised several concerns about the procedural regularity of the various arms deal transactions. Feinstein had joined him in raising concerns about the probity of the procurement procedures.

Scopa has never quite recovered from the manipulation of Parliament as an institution by the powerful executive. And so, what the Seriti commission judgment this week shows us is that commissions of inquiry cannot be an ex post facto substitute for effective and strong democratic institutions. Had Parliament and other Chapter 9 institutions fulfilled their constitutional mandates nearly two decades ago, those guilty of corruption in the arms deal would now be behind bars.

It is when political meddling happens, that democratic institutions fail us. State capture on such a grand scale did not happen overnight. It has been creeping up on us since virtually the start of democratic rule. Any democracy is only as good as the people who demand accountability and those within the system who seek to uphold it.

This might well be one of the most fundamental lessons of post-apartheid South Africa to date. Our democratic institutions are meant to be living, breathing instruments that shape our society. Yet in so many ways political battles have seen weakened institutions struggle to maintain their independence in the face of an onslaught of political pressure. Institutions recover with difficulty once they have been hollowed out either by political interference and weak leadership.

There are important lessons for the future as Parliament investigates the fitness of the Public Protector to hold office and as the Zondo commission continues its painstakingly necessary work.

Judith February based at the Institute for Security Studies and is also a Visiting Fellow at the Wits School of Governance. She is the author of 'Turning and turning: exploring the complexities of South Africa’s democracy' which is available. Follow her on Twitter: @judith_february

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