— 01/25/2008 The central role of the President in a corrupt deal Arms deal funding of the ANC? If one were to ask why Mbeki - supposing he was not personally a beneficiary of the deal - should have taken such a colossal risk with the welfare of the nation (and his own reputation), Feinstein provides a line of inquiry. He notes that civil servant investigators into the arms deal were placed under 'intense' duress by their superiors, amounting to 'enormous political interference and even intimidation.' (Feinstein, p.229) A report submitted by investigators had 'recommended that corruption involving the ANC as an organisation be investigated.' Among the 'myriad' factors directing them to this conclusion was a 'trip that the party's Treasurer-General, Mendi Msimang, made to Switzerland to meet with successful bidders.' This recommendation 'never saw the light of day.' Feinstein asks the question: 'what benefit the ANC received from any of the successful bidders,...who knew of this support and in what ways it affected the judgement of the decision makers in the deal', a judgement we know from their neglect at the same period of elementary provision for future power supply to have been catastrophically flawed. (p.231) It is probable that the arms deal funded, at least in part, the ANC's election campaign in 1999. As Feinstein notes, a Black Economic Empowerment company, Imvume Management, 'channelled R11 million of public money from the state oil company, Petro SA, to the ANC to help fight the 2004 election campaign. This was patently illegal. The ANC prevented any meaningful investigation of the matter...'. The head of Imvume, Sandi Majali, as Feinstein reports, was 'known to be close to ANC Secretary-General Kgalema Motlanthe,' now ANC deputy president, and touted as the future Deputy President - and even President - of South Africa. (p.241) Also close to Majali, he reports, was the ANC Treasurer-General, Mendi Msimang, husband of Mbeki's loathed Health Minister, Dr Mantombazana Tshabala-Msimang, who strangely preserved her seat on the ANC's National Executive Committee while almost all the other members of Mbeki's cabal were losing theirs: an acknowledgement, maybe, of her husband's possible role in arms deal funding of the party.
MARK GEVISSER ON MBEKI AND THE ARMS DEAL
Paul Trewhela
In his very intensive, exhaustively prepared biography of Thabo Mbeki – now already yesterday's man and yet a key figure to the present and the future – Mark Gevisser gives a balanced summary of the existing state of knowledge of Mbeki's role in the arms deal corruption scandal of the late 1990s. Along with Mbeki’s bizarre stance on HIV/AIDS and the calamitous refusal of his government to accept the elementary advice of the 1998 White Paper on the need for expansion and renovation of electricity power supply, the arms deal will forever be the albatross hanging round this ancient mariner's neck. Try as they might to evade the consequences, whether from the side of Mbeki in the former leadership of the African National Congress or from his enemies and rivals now with their own hands on the tiller, this albatross is coming home to roost.
The arms deal drives the conflict between Mbeki and his successor, Jacob Zuma, with Zuma the junior rating who refused to walk the plank to protect ship's captain. The result has been ship's mutiny. As Gevisser states, in the arms deal Mbeki was 'unlike Zuma, central to the process.' (Thabo Mbeki: The Dream Deferred, Jonathan Ball, Johannesburg, 2007. p.676). Zuma's resentment derives from the fact that despite his own much more marginal role, it was he and not Mbeki who was made – through Mbeki’s directing of the investigative body, the Scorpions – to face the criminal justice system. As he said when he was prosecuted for corruption in 2005, anyone who wants to know about corruption in the arms deal should ask Mbeki.
The documentary evidence of Mbeki's role
Gevisser argues that Mbeki's central role in the arms deal is 'supported by documentary evidence'. While Nelson Mandela was nominally President of South Africa – though in many ways only a figurehead, like the Queen in Britain rather than like President Bush in the United States – Mbeki as Deputy President was chairman of the Cabinet sub-committee on arms procurement between 1996 and 1999 which arranged the deal. Documents show that 'Mbeki has held at least one secret meeting with Thomson, the French partner in the German Frigate Consortium (GFC) which won the tender to supply the South African Navy with four new ships worth nearly R2 billion each: Mbeki claimed improbably that he did not recall the meeting.' A second 'and far more serious allegation' came in July 2006 'after German authorities raided the Hamburg offices of ThyssenKrupp, parent company of both the frigate and the submarine contract, and found evidence of a bribe of R130 million paid in 1999 to a senior South African politician. The Germans fingered Chippy Shaik', then the Director of Acquisitions in the Department of Defence. (p.676)
A family business: the Brothers Shaik
This brings attention to the Brothers Shaik. They are the gophers at the centre of the deal. Three of the four brothers of this Natal-based 'Indian' Muslim family (and the wife of one of them) hold the threads binding together both the Mbeki and the Zuma camps in the broedertwis (or war of brothers) in the ANC, a falling-out derived from what the editor of the Mail&Guardian, Ferial Haffajee, described in 2001 as a state system of bribery funding, 'MK Inc' – businesses owned by former leaders of the ANC military wing in exile, Umkhonto weSizwe (MK). The Shaik brothers, like Zuma, were members of MK. The most important figure in this web of brothers, Shamin 'Chippy' Shaik, is for the time being resident in the dubious security of Australia, to which he removed himself and his family last year after the Johannesburg Sunday Times alleged that he had plagiarised a doctoral degree in mechanical engineering from the University of Kwa-Zulu Natal in an effort to construct a post-arms deal professional career for himself.
Family connections in ADS
In the late 1990s, while Chippy Shaik was Director of Acquisitions in the Department of Defence, his wife Zarina Mohammed was employed by a South African-based arms company, African Defence Systems, that was (a) successful in tendering for billions of rand in contract from the South African government; (b) was a subsidiary of the French arms firm, Thomson CSF, a part of the German Frigate Consortium with which Mbeki met secretly, and which now under the name of Thint faces corruption charges alongside Zuma; and which (c) was run by Chippy's older brother Schabir, currently serving a 15-year prison sentence for corruption and fraud. (This company, ADS, also employed Lt-General (retired) Lambert Moloi, the brother-in-law of Joe Modise, the Defence Minister at the heart of the arms deal, and former MK commander; Moloi's son-in-law, Tsepo Molai, and son Chris, as well as Modise's granddaughter, Lerato). [For Haffajee’s report, see here.]
An odour of impropriety from Joe Modise
Gevisser notes that an 'odour of impropriety' emanated 'directly from Modise, one of Mbeki’s closest political allies and most important patrons.' (p.677) The importance of Modise to Mbeki lay in Mbeki’s lack in exile of a political support base in the military wing, in MK. Gevisser's view is that 'you could not lead the ANC-in-exile if you did not have the support of the military. And in this respect, the patronage of one particular man played an indispensable part in Mbeki’s ascendancy: Joe Modise.' He notes that 'Modise became an ardent defender of Mbeki' and was 'instrumental in promoting Mbeki to replace [ANC president in exile, Oliver] Tambo as national chairman in 1993', following Tambo's death. (p.684) This explanation is convincing, all the more since Modise received in return the benefit of Mbeki’s political support, having been excluded – though MK commander - from any knowledge of MK's Operation Vula owing to extreme suspicion in the army that Modise might have been an agent of the apartheid state.
British fraud investigation into arms deal
Gevisser reports that the British Serious Fraud Office was investigating the 'other major purchase of the arms deal', that of 24 Hawk fighter-trainers and 28 Gripen fighters bought from the British arms firm BAE and Saab (Sweden), and was 'looking at evidence that bribes worth more than R1 billion might have been paid to South African intermediaries to secure the bid. These included the special advisor to Joe Modise, the defence minister [this advisor was Fana Hlongwane – ed] – and Chippy Shaik. The South African Air Force had, in fact, made clear its preference for the planes offered by the Italian Aeromacchi company; not only did they score highest on technical specifications, but they were by far the most cost-effective option available. But – at the strong advocacy of Modise – the Mbeki committee changed the terms of the contract to exclude price from the criteria, and awarded the contract to BAE.'
Gevisser notes also that BAE 'made a donation of R5 million to an MK veterans' association that Modise chaired [the MK Military Veterans' Association supported Zuma in the recent ANC presidency campaign – ed]. More seriously, when Modise retired from politics in 1999 he became the chair of an electronics company [Conlog – ed] which stood to benefit significantly from industrial participation programmes entered into by BAE as part of its counter-trade agreements'. (p.677) Modise died in 2001, at a time when he was increasingly the focus of investigation, and was presented on his deathbed by Mbeki with the highest civilian award available to the government. There have been unsubstantiated allegations he was poisoned, in order to remove a danger to others.
Mbeki's appointment of Mo Shaik
Gevisser states that there is 'no evidence that Mbeki was a personal beneficiary of the deal'. Nevertheless, 'the role he played in awarding the frigate contract to the GFC meant that questions were bound to be asked about him'. He states it was Mbeki 'more than anyone' who steered the 'Mbeki committee' towards purchase of German Meka A200 warships rather than cheaper Spanish corvettes which had been shortlisted earlier. Mbeki had 'vigorously led the process of reopening the tender process, to allow for the GFC to participate.' (p.677) Gevisser then mentions Mbeki's own direct political relation to the family web of the Shaiks, set in place with Chippy Shaik’s role as head of procurement in the Department of Defence and Schabir's role in the ADS/Thomson/GFC bid. As Gevisser reports, 'In 1997 Mbeki had sent a trusted comrade, Mo Shaik (a third brother), to Hamburg as South African consul-general, to midwife the deal, and quickly became the champion, himself, for the Germans'. (p.677)
Confirmation from Andrew Feinstein
Gevisser's account corresponds with After the Party (Jonathan Ball, Johannesburg, 2007), written by Andrew Feinstein, the former ANC MP and member of the parliamentary Standing Committee on Public Accounts (Scopa) in 1999-2001, which examined the arms deal. Feinstein notes in his book that Mo Shaik had 'no diplomatic expertise whatsoever' at the time of his appointment as consul to Hamburg, the headquarters of the GFC. As soon as the contract was awarded to the GFC, the South African consulate in Hamburg was closed down and Mo Shaik appointed South Africa's ambassador to Algeria. (Feinstein, p.226) Feinstein reports overhearing a telephone call from Mo Shaik in Algeria to an ANC member of the arms negotiating team during the Scopa hearings, and concludes: 'Clearly there was a family interest in the hearing and its consequences.' (p.164) He concludes that Chippy Shaik was at the 'fulcrum of the deal' and an 'influential and aggressive proponent of his brother’s interests,' citing documented evidence which appeared in the Sunday Times on 19 March 2007 that 'linked Chippy to the soliciting of a bribe from one of the bidders who was awarded a contract in highly dubious circumstances'. (Feinstein, p.227)
The argument of 'racism'
Mbeki's response to the German and British investigations was 'breezily dismissive.' As he told Gevisser last year, 'Frankly, I don’t take them very seriously because they are not founded on…anything'. (Gevisser, p.678). Gevisser notes that Mbeki had 'repeatedly insisted that while there might have been impropriety in secondary contracts arising out of the arms deal [ie, contracts not determined at Cabinet level – ed], his government should shoulder no blame for that, as it was not responsible for these contracts.'
To the contrary, Gevisser finds that 'the state was deeply involved in the deliberations around secondary contracts.' He cites bidders who told Feinstein that Chippy Shaik had attempted to blackmail them, telling them 'they would not win the primary contract…unless they gave a secondary contract to his brother, Schabir; indeed, the very basis of the Schabir Shaik conviction was that he and his brother Chippy had managed to blackmail the GFC in this way'. (Gevisser, p.678) Mbeki's response was to "allege a conspiracy, powered by the media and driven by 'fishers of corrupt men…determined to prove everything in the anti-African stereotype.' "
In Mbeki's words, critics of the arms deal were really arguing that 'Africans, who now govern our country, are naturally prone to corruption, venality and mismanagement'. For Mbeki, critics of the arms deal are, as Gevisser puts it, 'driven by racism.' (p.679) Along with the response of any reasonable reader, his conclusion is that Mbeki’s defence of 'racism' in this connection is 'hard to swallow'. The President has a case to answer. Corruption, venality, mismanagement: these are indeed the charges that he faces, if not in the courts of law, then in the court of history. The arms deal, too, in Gevisser's words, is 'one of the stigmata of the dream deferred' (p.765), the dream of happiness, freedom, prosperity and equality.