TERRY CRAWFORD-BROWNE FILES CONCOURT APPLICATION
(CCT 161/16) TO SET ASIDE SERITI COMMISSION REPORT
The Arms Procurement (Seriti) Commission’s report released by President Jacob Zuma in April 2016 was immediately discredited by the South African public and media as a whitewash that cost taxpayers R137 million and wasted four years. Despite public commitments to an open and transparent investigation, the Commission proved a repeat of the 2001 stunt by President Thabo Mbeki to cover-up the arms deal scandal.
Having in 2010 made the application in the Constitutional Court (case CCT 103/10) that forced President Zuma’s reluctant appointment of the Seriti Commission, I have last week filed another application (case CCT 161/16) in the public interest requesting the Court to set aside the Commission’s report, and to instruct the Minister of Finance to recover monies -- now estimated at over R70 billion -- that were irrationally and fraudulently spent on the arms deal.
The huge volume of evidence against British Aerospace (BAE), the German Submarine Consortium (GSC) and German Frigate Consortium (GFC) that was the very cause of Commission’s creation was left lying, un-investigated, in two shipping containers at the Hawks’ premises in Pretoria. Examination of other evidence was deliberately blocked by Judge Willie Seriti.
The report does however reveal (obviously inadvertently) on pages 25 and 26 that the Commission colluded with the National Treasury to block examination of an estimated 17 000 pages of the International Offers Negotiating Team and Financial Working Group papers on a false claim that these documents are “privileged.”
These 17 000 pages were distilled into the 57 page affordability study, which in August 1999 warned the Cabinet that the arms deal was a reckless proposition that could lead the Government and South Africa into mounting economic, fiscal and financial difficulties.
The Cape High Court in 2003 (case 5129/2002) awarded me discovery of these documents. In so doing, that court rejected spurious arguments by former Minister of Finance Trevor Manuel and then Director General of Treasury, Maria Ramos that it was not in the national interest to disclose how the government conducts its financial arrangements. Accordingly, these documents are not “privileged” albeit Manuel and Ramos in 2003 refused to comply with that court’s discovery order.
In addition to colluding with the National Treasury to “silence the Terry Crawford-Brownes of this world,” the Commission embarked on a “red herring” in an attempt to divert attention from the corruption inherent in the absurd but deceitful “rationale” of the arms deal – namely, that R30 billion spent on armaments would generate R110 billion in offsets, and would create over 65 000 jobs. With the complicity of our government, massive fraud has been perpetuated against the people of South Africa, especially our most impoverished communities, by the arms deal suppliers and foreign governments.
Compounding the cover-ups since the 1990s, BAE, Barclays Bank and the British government usurped the oversight roles of Parliament. Members of Parliament and even the Auditor General were prevented from investigating the offsets because of conditionality clauses imposed by the British government that offset contracts were “commercially confidential.”
The Minister of Defence and Veterans Affairs has acknowledged in Parliament that many of the BAE fighter aircraft are “in storage” and that South Africa lacks the pilots to fly them. Likewise, the Minister of Trade and Industry admitted in 2012 that the offset “benefits” did not materialise.
As the Debevoise & Plimpton report on Ferrostaal and the German-supplied submarines confirms, offsets were simply vehicles to pay bribes – euphemistically referred to in Germany as “useful business expenses.” About 160 pages of affidavits from the “Scorpions” and the British Serious Fraud Office detail why and how BAE paid bribes of £115 million (R2 billion) to secure its contracts, to whom the bribes were paid, and which bank accounts in South Africa and overseas were credited.
The Minister of Trade and Industry informed Parliament that BAE had delivered only 2.8% of its National Industrial Participation (NIP) offset obligations, whilst the GSC and GFC each delivered only 2.2%. Although BAE had described its arms deal bribes as “commissions,” the Debevoise & Plimpton report revealed that the submarine bribes were mainly in the form of what were described as “non-refundable loans.” Yet in contradiction of those cabinet ministers, the Seriti Commission report glowingly recorded:
- that all the arms and equipment acquired are well-utilised,
- the projected number of jobs was achieved, and would be higher than 11 916,
- that the anticipated offsets have substantially materialised, and
- the Commission found no evidence of “undue or improper influence.”
Section 217 (1) of the Constitution, the Public Finance Management Act and Treasury regulations all stipulate that government procurements must comply “with a system which is fair, equitable, transparent, competitive and cost-effective.” The arms deal clearly failed this obligation, and was therefore both unconstitutional and fraudulent.
As predicted back in the 1990s, the arms deal has unleashed a culture of corruption. South Africa faces investment downgrading to junk status, hence the urgent necessity to take remedial action. Given the multiple crises of confidence presently facing South Africa, it is therefore hoped that the Constitutional Court will act speedily to assert the supremacy of the Constitution as the foundation of our country’s hard-won constitutional democracy.
In addition to the attached notice of motion and my founding affidavit, appendices TCB1, TCB2, TCB3 and TCB4 are available on request by email. These are:
TCB1: A legal opinion by Advocate Geoff Budlender SC on section 217 (1) and the internationally-accepted remedy for fraud,
TCB2: The 20 year Barclays Bank loan agreement for the BAE Hawk and BAE/Saab Gripen contracts signed by Manuel, and guaranteed by the British government. The default clauses of this agreement, verified in the Cape High Court in 2003 as authentic, have been described as potentially catastrophic for South Africa, and are a textbook example of so-called third world debt entrapment by European banks and governments,
TCB3: The BAE and BAE/Saab offset Defence Industrial Participations (DIP) and National Industrial Participations (NIP) obligations contract with Armscor, the Department of Defence and the Department of Trade and Industry, and TCB4: The “affordability study” that warned the Cabinet in 1999 that the arms deal was reckless.
Statement issued by Terry Crawford-Browne, 19 July 2016
