THE ARMS PROCUREMENT COMMISSION

Mr Hennie van Vuuren has yesterday chosen to refuse to participate in the Commission's hearings, and has issued a well-motivated explanation for his decision. Although I publicly declared more than a year ago that the Commission had degenerated into a farce, I decided to subject myself during four days of 6 to 9 October to the charade and abuse so that the South African public could gain at least some insights into why the arms deal procurement process was criminal, unconstitutional and fraudulent.

Supported by a legal opinion by Advocate Geoff Budlender SC, I carefully structured my submission and testimony on the Commission's six terms of reference, i.e.

The rationale

Whether the equipment is used or underused

The job opportunities

The offset benefits

Improper influences

Ramifications of cancellation

Under pressure from European governments and their arms companies, our government was complicit in the absurdity that R30 billion spent on armaments would generate R110 billion in offsets to create 65 000 jobs and thus stimulate economic development.

Under President Thabo Mbeki, the Cabinet and ANC then embarked upon a massive cover-up of the scandal, and have systematically destroyed the checks and balances so carefully crafted into South Africa's post-apartheid Constitution. Advocate Marumo Moerane SC , who represents Mr Mbeki, Mr Manuel and Mrs Modise, predictably declared that my testimony should be dismissed as mere hearsay and rumour!

A one hour television documentary broadcast last week in Sweden now highlights the Swedish government's manipulation of Swedish support for the anti-apartheid struggle to promote exports of the BAE/Saab Gripen fighter aircraft. The Swedes were desperate to find export markets for the Gripen, and South Africa was little more than a guinea pig.

The Swedish government even stepped up the pressure after recommendations to the Cabinet sub-committee in May 1999 that the Gripen project should be scrapped, or at least deferred. At a time when hundreds of thousands of South Africans were dying prematurely of Aids-related causes, two medically discredited BAE/Saab offset projects were promoted as miracle cures for HIV/Aids. The programme Dokument Inifrän describes the Hivex study at the University of KwaZulu-Natal, which claimed to neutralise the HI virus with electromagnetic radiation. Fana Hlongwane was a director of this project, which was only discontinued as recently as 2012.

Elsewhere in the programme, the former director general of the Department of Trade and Industry, Lionel October declares:

 "I think South Africa was naïve and was not clear about its objectives in this programme. So the offset was badly structured, and it was really dominated by the global defence industry and major multinationals rather than being driven by South Africa's defence industry. The bulk of the projects were not in core industries, and were seriously flawed and not sustainable. That is the real weakness of the programme."

Jobs were counted that did not exist. In the scramble to accumulate offset credits, there was no concern whether a project was economically viable. October confirms that BAE/Saab could simply say that they would create jobs, and they would receive credits irrespective of whether any jobs actually materialised. Earlier this year October had told the Commission that the offset programme was "the best tool we had at the time."

His current description of the offset debacle as "naïve" remains however, a gross understatement. A criminal and fraudulent confidence trick played at enormous cost to the people of South Africa is a more appropriate description. As early as June 1999 the Swedish newspaper Finanstidningen, quoted Saab's vice president for communications as saying:

 "The South Africans don't understand their own model. There is a great intellectual problem. Those who decide cannot follow in the maze of figures."

The Cabinet sub-committee headed by Deputy President Thabo Mbeki, and comprising ministers Alec Erwin, Trevor Manuel, the late Joe Modise and the late Stella Siqcau bear responsibility for the arms deal debacle, and should be held accountable both collectively and individually for the criminal fiasco that ensued. Promoted by the armaments industry as a means towards weapons proliferation, offsets are a fraudulent and discredited practice that violate both the Constitution and the Public Finance Management Act. Offsets should be totally prohibited in any country that professes to be concerned about corruption.

Van Vuuren rightly refers to the Commission's refusal and/or inability to provide evidence. This was also my experience when I demanded the International Offers Negotiating Team and Financial Working group papers, discovery of which was awarded to me by the Cape High Court in 2003. Mr Manuel refused to comply with that order despite that court's rejection of his arguments that it was not in the national interest to disclose to South African citizens how the government conducts its international financial arrangements. I now estimate these documents comprise over 17 000 pages, and will confirm that the Cabinet was repeatedly warned that the arms deal was a reckless proposition.

The massive volume of evidence against BAE, the German Frigate and Submarine Consortia that actually led to creation of the Commission in 2011 has also reportedly been left lying in two shipping containers at the Hawks' premises in Pretoria. Equally absurd was Judge Seriti's dismissal of the Debevoise & Plimpton report, which highlights that Ferrostaal considered offsets (including non-repayable loans) as merely as a vehicle to pay bribes. They are referred to in the report as Nützliche Aufwedungen, or useful business expense, which is a German euphemism to mean bribes.

The Debevoise & Plimpton report also records that Tony Georgiadis, Anthony Ellingsford, and Llew Swan were recipients of large payments for which there was no rational explanation other than their political connections. Georgiadis was one of the principals back in 1979 in the infamous Salem incident, which Lloyds of London described as the worst case of maritime piracy in the history of Lloyds. After that he became one of the apartheid government's preferred oil and arms sanctions-busters. In the post-1994 era, he has been a "facilitator" for both the German Submarine and Frigate consortia, and Mr Mbeki in July 2014 confirmed that Georgiadis has made donations to the ANC.

I thought long and hard about whether to include a section 7 in my testimony as an addendum outside the Commission's six terms of reference. As the current "spy tapes" saga illustrates, the ANC and government are seriously riddled with conspiracies and plots. I eventually decided that South Africans should also have some small insight into events that accompanied the arms deal. The late Joe Modise died on 26 November 2001, ten days after the Joint Investigation Team report was tabled in Parliament. We now also know that the JIT report was heavily doctored during October 2001, and was cut from 741 pages to 380 pages, and that portions particularly critical of Modise's behaviour were excised.

In an article entitled "Modise's Greasy Brotherhood," the Mail and Guardian reported on 27 May 2002 that eight days before his death, Modise was so weak that he could not sign his final will. Accordingly, he contributed only a thumb-print, and thus the will is of very questionable validity. The whole issue of coercing a dying man to make a new will eight days before his death is of course highly irregular.

Unbelievably, the original of that final will then reportedly disappeared, apparently after Modise's trust funds had been cleaned out by Ellingsford, Swan and Ian Deetlefs. A report in December 2003 by Noseweek magazine entitled "Modise Was Bought" details how Deetlefs, Ron Haywood and others in 1997 manipulated the purchase of Conlog and Log-Tek shares to enrich themselves and Modise.

The Mail and Guardian also reported on 8 August 2008 in an article headlined "The spy who fingered Mbeki" that Paul Madaka had died in a suspicious car crash on 21 August 2007 after claims that Mr Mbeki accepted a R30 million payment from Ferrostaal, of which he allegedly paid R2 million to [now] President Zuma and the balance to the ANC.

South Africans will recall that revelation of this bribe from Ferrostaal was the immediate cause of Mr Mbeki's dismissal by the ANC from the Presidency in September 2008. Sadly, there are many other instances of suspicious deaths connected with the arms deal. These are not my conspiracy theories, but they illustrate some of the consequences unleashed by the arms deal.

I was branded by the ANC's spokesman as a pathological liar after I revealed that Mrs Winnie Mandela had led the ANC MPs who were opposed to the arms deal. Having erroneously jumped to conclusions that Mrs De Lille was the source of my information, Mrs Mandela telephoned Mrs De Lille on 8 October to complain.

She thereby confirmed the veracity of my revelation. However, my information had not come from Mrs De Lille but, instead, from Mrs Mandela's own staff and others. Given the witch hunts that periodically erupt within the ANC, as highlighted by the uproar that followed the "De Lille Dossier", we kept that secret for over 15 years.

In summary, my testimony noted:

1. South Africa did not receive the benchmark R110 billion in promised offsets.

2. The equipment is underutilised or not used at all, illustrated by the reality that the Gripens are in storage because South Africa lacks even the pilots to fly them.

3. The promised jobs did not materialise.

4. The offset benefits did not materialise

5. Were there improper influences? Yes, the bribes and improper behaviour by governments including a massive cover-up operation by our government.

6. The internationally accepted remedy for fraud is to cancel the contracts, return the goods and recover the money. The arms deal contracts are guaranteed by European government export credit agencies who should therefore suffer the financial consequences, not South Africans.

Plainly, the arms deal acquisitions were bought for the bribes rather than any rational defence requirement. South Africans have been the victims of an estimated R70 billion fraud perpetrated by European arms companies with collusion of both their governments and ours. There is little prospect that the Commission will redeem itself by recommending to President Zuma that the arms deal contracts should be cancelled as unconstitutional and fraudulent.

Accordingly and having more than a year ago declared that the Commission is a farce and, per Mr Norman Moabi's description, part of a "second agenda to silence the Terry Crawford-Brownes of this world," I now reiterate that the Commission should be terminated when its current mandate expires in November 2014.

Statement issued by Terry Crawford-Browne, October 21 2014

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