October 15, 2010

Arms deal corruption investigation terminated

The arms deal investigation is dead. After a decade of investigators' work and revelations about hundreds of millions of rands splurged by arms merchants to lubricate the sale of jets, ships and submarines, Hawks boss Anwa Dramat has effectively buried the probe. The Hawks confirmed that Dramat closed the last two active legs of the investigation on September 21 after feedback from the National Prosecuting Authority (NPA). The decision, which flies in the face of substantial evidence, came two weeks after Dramat failed to persuade MPs to "take an executive decision" to halt the probe.

While elements of the criminal justice system are still pursuing leads previously ordered, it appears that, with the main investigative capacity at the Hawks shut down, these efforts stand little chance of success. The Hawks, a police branch formally called the directorate for priority crime investigation, succeeded the NPA's disbanded Scorpions unit in specialist investigations including into the arms deal.

The death of the probe means that well-connected South Africans suspected of receiving or channelling bribes, chief among them Chippy Shaik and Fana Hlongwane, are off the hook, as are the foreign arms merchants now known to have spent more than R1-billion in "commissions" as they sold R30-billion worth of military hardware to the South African government. It also means that democratic South Africa has failed its most important test in dealing with corruption allegations. The question is whether a "Polokwane consensus", an accommodation between warring ruling-party factions that accused one another of using arms deal investigations to target one another, supplied the motive.

Chippy Shaik, head of defence procurement when the arms deal was finalised in the late 1990s, stood accused of negotiating a $3-million (now R20-million) bribe with one of the companies in the German Frigate Consortium which sold South Africa four patrol corvettes. He is a brother of Schabir Shaik, one of only two individuals convicted for arms deal corruption, and Mo Shaik, head of the South African Secret Service. Both were key backers of President Jacob Zuma in his political ascendancy.

Hlongwane, adviser to then-defence minister Joe Modise while the arms deal was set up, allegedly received roughly R250-million in payments, much of it via an opaque offshore network, from BAE Systems. The arms giant sold South Africa jet trainers and fighters. Hlongwane was on the guest list for the wedding of police chief Bheki Cele -- Dramat's boss -- a fortnight ago, with members of the political elite, including Zuma.
In the meantime, the Sowetan was also told that the Hawks had a "multitude" of pieces of evidence of bribery in their possession, including financial records showing that German arms dealers claimed tax deductions on the bribes they allegedly paid. Sowetan reported last month that the Hawks also have a copy of the signed "German bribe agreement". This document says Spanish companies had offered to sell the SA Navy four ships for 20percent less than the German Frigate Consortium, which eventually got the tender. (Mail & Guardian/Sowetan)

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