Mail&Guardian (6/2/2008 ) — 02/07/2008
ARMS DEAL – D.A. RATTLES SKELETONS IN ANC'S CLOSET

Parliament to reopen Public Accounts investigation into Government corruption

The Democratic Alliance (DA) has lauded the decision by Themba Godi, the chairperson of Parliament's Standing Committee on Public Accounts (Scopa), to place the DA's request for Scopa to reopen the arms-deal probe on the agenda. The DA also understood that Scopa members needed more time to consider the substance of the evidence presented and to take a considered and independent view on the issue in the best interests of the country. DA spokesperson Eddie Trent said, 'The DA firmly believes that Scopa's responsibilities and obligations relating to the investigation of alleged irregularities and corruption associated with the arms deal have yet to be fulfilled.' There were compelling reasons for Scopa to exercise its responsibilities in this matter, and in light of recent developments, Scopa had an obligation to take up the matter. These reasons included the establishment of an ad-hoc committee by the newly elected African National Congress National Executive Committee to investigate the deal. 'It is unthinkable that the Parliament, and therefore Scopa, should abdicate its responsibility by doing nothing while the governing party gathers information about itself and its officials that will not be subjected to any form of public scrutiny,' Trent said.

After Feinstein: cover-ups and corruption to be tracked down
Former ANC MP and Scopa member Andrew Feinstein had made a number of serious allegations of cover-ups and corruption related to the arms deal in his recently published book, After the Party. A Personal and Political Journey inside the ANC (Jonathan Ball, Johannesburg, 2007). [See ‘Book Review. Andrew Feinstein: The Case against Mbeki (8 January 2008)']. To date, none of the allegations has been denied or refuted. Trent said an inspection of the final version of the Joint Investigating Team's report and the comparison of this with the version given to the Cabinet committee for review showed very substantial changes. Yet former Auditor General Shauket Fakie and former Public Protector Selby Baqwa testified to Scopa that there were only format changes for the sake of 'user-friendliness'. Trent stated: 'This is allegedly untrue and the extent of these allegations and the truth thereof have never been properly investigated.' In addition, criminal investigations relating to allegations of corruption associated with the arms deal had now been launched in the United Kingdom, Germany, Sweden and Switzerland, he said. [See Mail&Guardian report below].
 
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'S.A. MINISTERS AND ANC GOT MILLIONS': GERMAN PROSECUTORS
Evelyn Groenink, Sam Sole and Stefaans Brummer
Mail&Guardian ( 14/2/2007 )
 
'SA officials and Cabinet members' as well as ANC alleged bribe recipients
German prosecutors believe Tony Georgiadis, the shipping tycoon regarded as close to President Thabo Mbeki, helped channel millions of dollars in arms deal bribes to 'South African officials and Cabinet members'. The explosive allegation is contained in a request for legal assistance, seen by the Mail & Guardian, that the German embassy in Pretoria forwarded to the Department of Foreign Affairs on 28 September 2007. The document, a formal request for South African help to follow leads, presents the firmest outline yet of a criminal probe, led by state prosecutors in Dusseldorf, into the sale of four naval corvettes to South Africa. The German request follows a similar one from Britain last year, swelling a body of evidence that flatly contradicts the South African Government's insistence that the main contracts in the controversial arms deal were not tainted by corruption.

'Accused' shipping tycoon Georgiadis and his alleged SA friends
The request lists 10 'accused persons', Georgiadis prominently among them, and states that contraventions of German anti-bribery legislation, fraud and attempted tax evasion are being investigated. The other nine suspects are mostly executives from German companies making up the consortium chosen as preferred supplier for the corvettes in November 1998 and awarded the multibillion-rand contract in December 1999. Georgiadis this week flatly denied wrongdoing. Of Greek extraction but London based, Georgiadis shipped oil to apartheid South Africa in contravention of sanctions and developed close relations with members of the previous government [of the apartheid period – ed]. He extended his sphere of influence to the ANC after 1990, developing relations, according to several accounts, with Mbeki, Deputy President Phumzile Mlambo-Ngcuka, her husband and former National Prosecutions head Bulelani Ngcuka and Penuell Maduna, a former minister.

Alleged payments of bribe money to 'SA officials and Cabinet members'
The presidency has deflected questions about Mbeki's relationship with Georgiadis. While acting as a lobbyist for German arms interests during the acquisition process, Georgiadis reportedly had the ear of Mbeki, then Deputy President, who chaired the Cabinet subcommittee that oversaw the acquisition. The M&G first highlighted Georgiadis's role in February 2007 after the German magazine Der Spiegel revealed that Dusseldorf investigators were probing "commission" payments of $ 22-million (about R150-million) to a company in Liberia. The M&G identified this company as Mallar Incorporated, a secretive letterbox company, and said that Georgiadis was believed to be behind Mallar. The German request lists three amounts of 'bribe money' allegedly paid by the corvette consortium, led by Thyssen Rheinstahl Technik - $ 22-million, $ 3-million and DM1-million. It also confirms Georgiadis's allegedly central role in the largest of the three. The request states: "For the payment of these bribe monies, so-called 'commission agreements' were arranged by Thyssen Rheinstahl Technik with Liberia-based Mallar, which is represented by Tony Georgiadis, who distributed the money, for an amount of $ 22-million. At least the major part of these amounts had been paid to South African officials and Cabinet members directly or indirectly after the [German] international anti-corruption law had become effective." Before February 1999, when this law came into effect, foreign bribery was not an offence in Germany .
 
Cheques to the ANC, Mandela Children's Fund and Mozambican charity
However, the German document reveals that in a raid on the home of Christoph Hoenings, the top Thyssen executive involved in the South African bid, investigators discovered photocopies of three cheques for R500,000 each to the ANC, the Nelson Mandela Children's Fund and the Foundation for Community Development. The latter is a Mozambican charity founded by Graca Machel, Nelson Mandela's wife. Independent Democrats leader Patricia de Lille revealed the existence of these payments, saying Thyssen had made them in January 1999. This was during contract negotiations after the German consortium was named preferred bidder. None of these entities has admitted receiving the money. It now appears these amounts might have been paid by Georgiadis, although with Thyssen's knowledge. The German document states: 'The accused Hoenings received these photocopies from the accused Georgiadis and was asked to keep them confidential.' Hoenings was the Thyssen official who, in 1995, revealed that Mbeki had intervened to restore the German bid after Armscor had excluded the company from a shortlist drawn up during an earlier round of bidding for the corvette-supply contract. That process was aborted in favour of the later Strategic Defence Procurement Programme, which issued new tenders for jets, helicopters and submarines, as well as corvettes.

Thyssen official's  report of request for payment by Chippy Shaik
It was also Hoenings who allegedly met Shamin 'Chippy' Shaik, then head of Procurement at the Department of Defence, in July 1998. According to Der Spiegel, Hoenings - although he was not named by the publication - recorded in a memo that Shaik had asked for a payment of $ 3-million. The German request now confirms that a lobby agreement for $ 3-million - the second amount of which it calls 'bribe money' - was signed with a London company, Merian Limited, represented by accountant Ian Pierce, the go-between allegedly nominated by Shaik in his meeting with Hoenings. The request states that the money was paid to 'a South African official acting on behalf of Armscor' (erroneously identified in the document as Schabir and not Shamin Shaik) 'in order to motivate him in violation of his duties to support the delivery contract for the corvettes'. Chippy Shaik has previously denied any wrongdoing. [Armscor is the South African state arms manufacturing company. Schabir Shaik, the brother of Chippy Shaik, and former financial adviser of ANC president Jacob Zuma, is serving a 15 year sentence in prison for corruption and fraud relating to the arms deal. – ed].

Raids sought to investigate a 'flow of bribe payments' to SA officials
The German request seeks South African assistance in carrying out 'search and confiscation warrants' issued by a Dusseldorf judge in June last year, with raids also being sought in Switzerland, the United Kingdom, Jersey and Monaco. Raids are sought on several entities in South Africa (which are known to the M&G) to obtain information about the 'flow of bribe payments' and 'agreements between the participants'. The German document reveals how Thyssen's alleged desire to deduct commission payments from tax as 'business expenses' first alerted the authorities. The German Income Tax Act outlawed such deductions after the end of 1998, if the payments constitute an illegal act. Thyssen, the request alleges, 'falsely declared that these payments had been made for the bid as early as 1998 and that in the end they did not know who was the recipient of these monies'.

Denials of wrongdoing by ThyssenKrupp and Georgiadis
Thyssen has strenuously denied wrongdoing. The company said: 'ThyssenKrupp is confident that the suspicion of illegal commission payments will not be confirmed in the further course of the public prosecution office's investigations.' The German document states that Georgiadis expressly denies he passed on any money to South African politicians or officials. It concedes that the names of the recipients 'are known only to a certain extent'. Georgiadis told the M&G: 'I flatly deny that I have been involved in any wrongdoing and I have not been in any way involved in bribing anybody. Beyond saying the above I have no comment.'