DTI reveals shocking truth about arms deal offsets - Maynier
David Maynier
16 March 2012
DA MP says, among others BAE/SAAB promised $7,2bn in bid, but only invested $203m
DTI briefing reveals shocking new information on arms deal offsets
Today, Minister of Trade and Industry Rob Davies and officials from his department revealed shocking new information about arms deal offsets to the Portfolio Committee on Trade and Industry.
There is a public perception that the arms deal offsets were a monstrous political fraud, and the facts that are now emerging seem to suggest that the public's perception was right.
The Minister was appearing before the Portfolio Committee on Trade and Industry to deal with questions raised as a result of a leaked internal audit document, produced by Debevoise & Plimpton LLP, which investigated "questionable and improper payment" made by Ferrostaal, which formed part of a consortium that supplied submarines to South Africa.
The leaked internal audit document stated that, whereas Ferrostaal had an obligation to invest Euros 3 billion under the arms deal offset programme, they had in fact only invested Euros 63 million.
The department conceded that the leaked internal audit document was correct and that Ferrostaal had in fact only invested a total of Euros 63 million.
During the briefing the department also revealed shocking new facts about the arms deal offset programme, including:
A total of 50 751 jobs, comprising 16 917 "direct jobs" and 33 834 "indirect jobs", had been created as a result of the arms deal offset programme, rather than the 65 000 jobs promised;
the total actual investment by each of the arms deal companies under the offset programme was as follows:
Name of Company
Obligation
Actual Investment
BAE/Saab
US$ 7,2 billion
US$ 203 million
German Submarine Consortium
Euros 2.85 billion
Euros 63 million
German Frigate Consortium
Euros 2.0 billion
Euros 44.4 million
Thales
US$ 652 408 990
US$ 139.7 million
Augusta (Light Utility Helicopters)
US$ 767 930 000
US$ 49.3 million
the German Submarine Consortium was awarded an offset credit of Euros 300 million for a movie about Nelson Mandela, entitled "The Long Walk to Freedom", that had not actually been produced. The offset credit included a Euro 120 million "investment credit", based on an actual investment of Euro 7.5 million, and a "sales credit", based on projected sales, of Euro 180 million.
How is it that BAE/Saab, which supplied the Gripen and Hawk aircraft, could get an offset credit of US$7.2billion, when they only actually invested US$203 million?
And how is it that Ferrostaal, which supplied the submarines, could get an offset credit on Euros 2.85 billon, when they only invested US$63 million?
There are clearly some serious questions to be answered about how the arms deal offset credits were awarded, and how the so-called "multipliers" were applied, given the wide variance between the total obligation and the actual investment by each arms deal company.
This can only be done if the Department of Trade and Industry lay their cards on the table and provide a full report on the arms deal offsets.
This the Minister has agreed to do.
The Democratic Alliance (DA) therefore welcomes Minister Davies' commitment to make a full report on the arms deal offset programme available to the Portfolio Committee on Trade and Industry.
This will bring an end to a struggle, spanning more than a decade, to squeeze detailed information of the arms deal offset programme from the Department of Trade and Industry.
We look forward to receiving the report.
Statement issued by David Maynier MP, DA Shadow Minister of Defence and Military Veterans, March 16 2012
--------------------------------------------------------------------------------
Arms deal prosecutor 'not yet suspended'
2012-02-02 18:30
Read more stories about
Arms deal
DA: DTI concedes over arms deal offsets - 16 Mar
Zuma mum on making arms report public - 15 Mar
Arms committee probing Iran claims - 15 Mar
Committee blocks arms deal report - 07 Mar
Arms deal prosecutor 'not yet suspended' - 02 Feb
Arms deal prosecutor suspended - 02 Feb
Canned deal: Armscor gets back R9.1bn - 19 Dec
2011 - Jacob Zuma's wrap - 18 Dec
Mbeki: I know things you should know - 18 Dec
Adriaan Basson, City Press
Cape Town - The national prosecuting authority (NPA) now says top prosecutor Glynnis Breytenbach will be given an opportunity to motivate why she should not be suspended.
After referring to Breytenbach's "suspension" in an official response to City Press earlier today, NPA spokesperson Mthunzi Mhaga said Breytenbach had not yet been suspended, but was served with a notice to suspend.
"She will get an opportunity to motivate why she should not be suspended," Mhaga said.
Earlier he said Breytenbach’s "suspension" was an internal matter and refused to divulge the reasons for her being under fire.
Breytenbach heads up the NPA's specialised commercial crimes unit in Pretoria and was heading the investigations into the arms deal, alleged Ponzi scheme mastermind Barry Tannenbaum and suspended crime intelligence boss Richard Mdluli.
- City Press
Read more on: npa | glynnis breytenbach | richard mdluli | arms deal |
corruption
Mbeki: I know things you should know
December 18 2011 at 10:02am
--------------------------------------------------------------------------------
Independent Newspapers
Former president Thabo Mbeki. Photo: Masi Losi
Former president Thabo Mbeki said on Saturday that South Africans deserved to know facts about the country's history which were not yet public knowledge.
“I have various facts at my disposal which have not as yet seen the light of day, but which are essential pieces of the jigsaw puzzle which explains the evolution of South Africa over a number of decades, to this day.”
Mbeki made these comments on Saturday in an article he wrote in response to allegations made against him by former Special Investigations Unit head Willem Heath.
This week, newly-appointed Special Investigating Unit (SIU) head Willem Heath resigned following a furore over comments he made about Mbeki to the City Press newspaper.
Earlier this month, Heath alleged to the newspaper that Mbeki had initiated rape and corruption charges against Jacob Zuma.
He also told City Press that Mbeki abused his position by blocking some investigations into corrupt practices.
Zuma subsequently called for a probe into Heath's accusations, following which Heath tendered his resignation.
The corruption charges against Zuma that Heath mentioned were eventually dropped, and Zuma was acquitted on the rape charge.
On Saturday, Mbeki said the high positions he had held in the ANC and in the government have given him access to a “unique body of facts” and “broad reality”.
He said he was familiar with the matters referred to by Heath's allegations about him.
“I do hope that in time the opportunity will arise such that the facts about all these issues are disclosed to our people as a whole.
“Court proceedings may provide such an opportunity, as hopefully will the hearings of the projected Judicial Commission of Inquiry into the Defence Procurement Package, the so-called arms deal.”
In October this year, Zuma announced a commission of inquiry into the arms deal which will probe allegations of fraud, corruption, impropriety or irregularity in the Strategic Defence Procurement Package, otherwise known as the arms deal.
Mbeki welcomed the establishment of the commission in his article.
“It is absolutely correct that all necessary action is taken to address all allegations, as happened and will happen with regard to the so-called ‘arms deal’.”
South Africans may have been given a “welcome opportunity” to “out the truth” by Heath's allegations, said Mbeki.
Just as much as Heath must substantiate his statements, so too must “the rest of us, the accused” respond to the accusations with honesty and openness, he said.
“In the end it may very well be that the comments made by Heath...will have helped to lance a virulently poisonous boil on our body politic.”
Mbeki described the “boil” as the “shameless propagation of lies by people outside of government to achieve selfish political objectives, or nefarious and disguised actions undertaken by those in positions of power, like me during the period to which Heath refers, fundamentally to betray the interests of the people and negate the objectives spelt out in our Constitution, in their personal interest.”
“All this dictates that everything should be done to respond to the ‘Pandora’s box’ which Heath opened, with no restrictions.”
Once 'Pandora's box' was opened, the issue was not whether Mbeki or Heath emerged as “the victor.”
“The victor should be the truth,” said Mbeki.
Earlier in the article, Mbeki, reiterated his position that “all the allegations made by Heath are false, malicious and defamatory.
“I am ready to defend this assertion in any forum.”
Mbeki's spokesman Mukoni Ratshitanga emailed a copy of Mbeki's article -which runs to over 2000 words and is titled “Rumble in the South African Jungle!” and subtitled “Thabo Mbeki, Willem Heath, Democratic South Africa and the Truth.” - to Sapa late on Saturday night.
Earlier this month, Ratshitanga said that it was with “great reluctance” that Mbeki commented on Heath's allegations; as this had meant he had to break his self-avowed silence - since his retirement - on domestic politics.
Mbeki was ousted as president in 2008 at the culmination of a long-running split in support in the ANC for himself, and Zuma. Mbeki had fired Zuma as deputy president after Zuma's financial adviser Schabir Shaik was convicted of corruption.
Sectors of the ANC and the ANC Youth League publicly turned on Mbeki after this. - Sapa
-----------------------------------------------------------------------------------
NPA graft buster facing suspension
CHANDRÉ PRINCE | 03 February, 2012 00:51
NPA spokesperson Mthunzi Mhaga A top corruption prosecutor has been informed of her imminent suspension in what many believe is a sinister ploy to remove her from a sensitive fraud investigation.
Deputy director of public prosecutions Glynnis Breytenbach was slapped with a warning letter by her bosses requesting that she provide reasons why they should not suspend her.
Breytenbach - who has been responsible for several high-profile fraud convictions - heads the Pretoria office of the NPA's Specialised Commercial Crimes Unit and is privy to sensitive matters currently being heard before the Specialised Commercial Crimes Court.
She was in Cape Town for the past few days consulting on a complex fraud case when the letter was delivered to her attorneys in Pretoria. She declined to comment.
The Times became aware of the impending action against Breytenbach on Tuesday and was reliably informed of similar action being planned against another senior official at the NPA's witness protection unit whose name is known to The Times.
The NPA has refused to comment on Breytenbach's imminent suspension, but The Times has learnt that it relates to an alleged "abuse of power in the Kumba Iron Ore case".
She has until Monday to make written submissions on why the NPA should not suspend her.
Breytenbach is highly regarded in NPA circles and has taken on some of the country's bigwigs.
She was responsible for the controversial arms deal probe and also headed the prosecution of alleged Ponzi scheme mastermind Barry Tannenbaum.
She worked on a corruption case involving Mineral Resources officials and business people involved in the Sishen mining rights transaction.
The Hawks last year raided the offices of a politically connected company, Imperial Crown Trading, and those of the Department of Minerals and Energy, in Kimberley.
This was after Kumba Iron Ore, an Anglo American subsidiary, opened a case of corruption against Imperial in connection with a mining-rights dispute affecting the lucrative Sishen iron ore mine.
In a separate but related civil case, the Pretoria High Court found in Kumba's favour in December, ruling that Imperial had no prospecting rights to the mine.
Breytenbach recently decided against prosecuting suspended crime intelligence boss Richard Mdluli. Many believe that decision was forced on her.
An NPA official said there have been allegations of abuse of power against prosecutors involved with high-profile cases, but the prosecutors would just be removed from the case.
"If you are loyal to the principles of prosecutions, you are bound to lose favour with those who have ulterior motives," said the official.
Citing the allegations of abuse of power levelled against Gerrie Nel when he prosecuted convicted druglord Glenn Agliotti, the official said such tactics were employed when "they want the court case to fail".
NPA spokesman Mthunzi Mhaga dismissed NPA officials' claims that Breytenbach was being persecuted for "not shutting up".
"We won't be drawn into commenting on insinuations.
"The suspension of advocate Glynnis Breytenbach is an internal matter, hence we are not at liberty to discuss it in the media,'' Mhaga said.
"All cases she was handling will be reassigned to other equally capable prosecutors within the NPA," he said.
Three NPA officials yesterday questioned the timing of Breytenbach's imminent suspension. They said it could be as a result of her reluctance to take political orders.
"This is very bizarre and we all know that, if you make too much noise in the NPA, or you are too close to the truth, you become a target," said a senior official.
One of the prosecutions Breytenbach is currently heading is a fraud case involving over R1-million in which her boss, Specialised Commercial Crimes head Lawrence Mrwebi, is due to testify.
Breytenbach and two other senior advocates are prosecutors in the case dating back to when Mrwebi - whom President Jacob Zuma appointed in November - was still head of the Scorpions in KwaZulu-Natal.
The matter was postponed on Monday to February 7 for a trial date.
Mrwebi has been subpoenaed to be a state witness against his former colleague, Malala Geophrey Ledwaba.
The case dates back to 2005 but had to be abandoned halfway though when the presiding magistrate was forced to recuse himself.
Ledwaba faces several charges of fraud committed between December 2003 and January 2005.
Some of the charges relate to Ledwaba allegedly siphoning off over R500000 from the Scorpions' "confidential fund" - a slush fund from which clandestine operations are run and informants paid.
In one transaction, Mrwebi authorised a R150000 payment from the fund in March 2004, allegedly acting on a request by Ledwaba. Mrwebi is to testify that he signed a memo authorising the payment but that he was under the impression that it was legitimate.
The Times has reliably learned that Mrwebi, before his appointment to the NPA, was on several occasions offered Section 204 status, which would safeguard him from prosecution.
Mrwebi is said to have declined the Section 204 offers, maintaining that he did not do anything wrong.
Mhaga has, however, denied that Mrwebi was offered a Section 204, instead saying that "there is no possibility of him being charged at any stage".
