UDM has studied the Joint Investigation Report and consequently will participate in Parliamentary deliberations in this regard. In light of these glaring deviations from the legal procedures in the Arms acquisition process and the joint investigation’s own acknowledgement irregularities in this exercise, UDM, as part of its contribution to the corrective effort by parliament and public we represent, submits for clarification the list of questions that appear hereunder, and these questions will be posed to the three Agencies: a) What was the Joint Investigation Team’s Terms of Reference, and who provided these? b) Has the “Special Review by the Auditor-General on the Strategic Defence Packages” (September 2000) been shown before its publication and tabling in Parliament to: i) Members of the Executive ii) The Chief of Acquisitions (Mr Chippy Shaik) and have they changed anything in the draft shown to them? c) The media reports that an “Audit Steering Committee” was established by the Executive: i) What was the role of this committee in the entire arms procurement exercise? ii) At what stage did its operations begin and when will/did they stop? iii) Did the committee influence the Auditor-General’s Review of September 2000 prior to its tabling in Parliament? iv) What are the powers of this committee? d) Did the Investigating Agencies interrogate the Cabinet subcommittee on the whole Arms acquisition deal? e) Having conducted the investigation and discovered certain abnormalities, on what did the Joint Investigation Agencies base their absolution of the government from any wrongdoing? f) In view of the fact that the Joint Investigation Agencies were delegated by Parliament in terms of the 14th Report what authority do the Agencies have to absolve the government from wrongdoing even before they have reported to their principal (Parliament)? g) Why did the Agencies show their report to the Executive without first consulting Parliament and SCOPA to whom they were accountable? Why did they go public with their report without first briefing SCOPA? h) Has the “Joint Investigation Report into the Strategic Defence Packages” (November 2001) been shown in a draft form to the President, any member of the Cabinet or any government official, before its release on 14 November 2001? Was any fact, finding or recommendation changed, adjusted, added or removed from such draft report, and if so, what are the details? i) Is it true that the Joint Investigation Report has found that there was no wrongdoing by government and its members in the Arms deal, why were there such frantic steps taken to exclude the Heath SIU from the investigation, involvement by executive (Deputy President Zuma) in the work of the parliamentary committee SCOPA, and unprecedented interference by the Speaker in this investigation? j) From the total of eight serious allegations listed in the Joint Investigation Report, no less than six allegations are still under investigation. How can government claim it has been vindicated? Against this background, who has decided and for what reason, that the Joint Investigation Report is a final report and not an interim report or is Parliament expected to rubberstamp this decision? k) Did the investigation team investigate the allegations that British Aerospace paid a substantial inducement to the governing party? If not, why not? l) The report found that the Chief of Acquisitions, Mr Chippy Shaik, breached a series of procedures and rules and allowed a serious conflict of interest to contaminate his role in the decision-making process. Did any member of the executive know about this conflict of interest, and in what sense is anyone of them responsible for the actions of such a senior official? Where does the accountability of a minister stop for a public servant? Why are the actions of a government official in a government department different from the responsibilities of government? Why didn’t the report address this question of ministerial accountability? m) Will the contracts given to companies, as a result of Chippy Shaik’s behaviour, be cancelled? Who should take this decision? n) Why does the Report not recommend that government use the option open to it, based on adverse economic circumstances such as the drastically escalated cost of the arms deal, the risks involved related to industrial participation, etc, to postpone or cancel the second leg of the deal, namely to buy 19 Gripen light fighters and 12 Hawk jet trainer aircraft? o) Why was the Cabinet subcommittee the “clearing house” of the Strategic Defence Packages? Why did the Minister’s Committee intervene in certain circumstances, i.e. overriding the tender procedures in Lead in Fighter Trainer (LIFT), deciding on light utility helicopters before key documents have been finalised and allowing the initialling of the submarine contracts before the affordability study had been completed? p) Did the Joint Investigation Team study the contracts and investigate them? Have they established beyond any doubt that all transactions were in order? q) The Report has uncovered numerous deviations from procedures. Have they investigated the impact of these errors and failures on the legality of purchases? r) A number of allegations have been made about the role and influence of Mr Joe Modise in the Strategic Defence Packages. Had it been established whether he acted with the knowledge of his Cabinet colleagues. s) The Auditor-General pointed out in his “Special Review” report that the technical evaluation of the LIFT represented a material deviation from the originally adopted value system? A special Ministerial briefing decided that a non-costed option should be recommended as the preferred option. Has it been determined whether anyone received a kickback from this change in the deal for the fighter trainer aircraft? Allegations in this regard go to the heart of the question of possible corruption hanging over the Strategic Defence Packages! t) Who kept the minutes of the Minister’s Committee meetings? Was it the Chief of Acquisitions? u) Regarding the light utility helicopter programme, it was found that the implementation costs of R176 million were not included in the total programme cost submitted to Cabinet in September 1999. This amount had to be incorporated in the normal SAAF operating budget. Has it been established who was responsible for this expensive oversight? Has action been taken against any individual? v) The Report highlight serious errors and mistakes regarding the Industrial Participation process with reference to the purchase of submarines. Of special importance were the roles of senior government officials. What action has been taken against those officials? How did their actions and decisions influence the selection of the preferred bidder? On what grounds, given the contents of the report in this regard, were government exonerated of any wrongdoing? w) Did the investigators come across instances where government had insisted to primary contractors that certain sub-contractors had to made use of? If so, was any evidence of conflicts of interest uncovered? What criteria were used for black empowerment companies chosen as sub-contractors, and specifically, were tenders issued for all black empowerment companies to apply? Was any investigation conducted to determine whether money accruing to sub-contractors have flowed back to politicians and officials in government or the ruling party, considering the public utterances of Schabir Shaik indicating donations from his company went into ANC coffers. x) How could it be allowed that a former member of Cabinet (Mr Joe Modise) initialled a contract for submarines at a cost of R4.5 billion, before an affordability study had been undertaken? y) Did the Joint Investigation Team investigate the most likely success/failure of the promised Coega stainless steel plant, as part of the industrial participation offer for the submarine deal? z) Regarding the corvettes, the Report states that due to non-conformance to critical criteria, as well as deviation from the value system, it had a far-reaching impact on the eventual selection of the preferred bidder for the corvettes. What was the consequence on the final outcome and does it provide sufficient ground for cancelling this main contract? aa) There is a difference of R916 million between the costs presented to Cabinet on 18 November 1998 (R6001 million) and the costs contracted for (R6917 million) for the corvettes. Who is to blame for this deviation/error? bb) Regarding the state of the Strategic Defence Packages, who is to be blamed and held accountable for the cabinet approval of R30 billion on 1 December 1999, and an estimated total cost in excess of R66bn, two years later? Where does the buck stop? Who decided not to include financing costs in the total price over the future period? Why were there warnings in the “affordability report” ignored? This report clearly emphasized certain risks, i.e. foreign exchange movements, non-materialisation of industrial participation benefits, and the impact of interest obligations. Despite these warnings, the cabinet decided in December 1999 to go ahead with the Arms Deal. A media briefing at that time gave no suggestion that the real cost of the transactions was well in excess of R30.3 billion or that the deal was subject to any risks. cc) Did the Joint Investigation Team do any forensic audits on bank accounts of any individuals or organisations, and if not, why not? dd) When (date) did Parliament approve the Strategic Defence Packages, and at what cost? Was this R30.3 billion procurement in line with the spirit and letter of the White Paper on Defence and the Defence Review? ee) What happened to the promise by Government to create 65 000 jobs and that Industrial Participation projects would amount to R104 billion in investment, due to the Strategic Defence Packages? Many allegations pertain to contracts awarded to subcontractors. These allegations did not fall within the scope of the “Special Review by the Auditor-General” and the Joint Investigation Report has only few pages devoted to it. Will there be further investigations into these allegations? Will the complaints of competitors against the process that was followed for the selection of subcontractors be investigated? ff) Persons involved in the overall acquisition process received various gifts (including luxury vehicles) Excluding Mr Tony Yengeni and Mr Woerffel who were arrested and prosecuted, have any other public representatives, official, public servant etc. been investigated, and if not, will they be investigated? And if so, by whom? gg) The Joint Investigation Report indicated that Mr Chippy Shaik did not recuse himself from the important Project Control Board (PCB) meetings, but continued to take part in the process that led to the ultimate awarding of contract to companies. He also signed the minutes. Has it been established what effect these actions could have had on the awarding of contracts? hh) Why didn’t the Joint Investigation Team investigate the authority of the Joint Project Team any further? The Joint Project Team allegedly played a significant part in the award of contract to subcontractors regarding the combat suite for the corvettes. Of particular concern are: i) No minutes were kept of meetings and decisions. ii) No tender procedures were applied. iii) No records were kept of the process. iv) Unfairness was at the order of the day regarding the handling of certain proposals. v) No proper risk evaluation was done. vi) Conflicting statements by senior government officials. vii) Withholding of important information (i.e. Detexis is a Thomson company) viii) The manner in which a risk premium was calculated. ix) Was a proper risk assessment made? ii) Taken into account all the outstanding allegations, how will eventual finding of criminal conduct influence the main contracts entered into? Have these contracts been scrutinised by the Joint Investigation Team? jj) Why were the main contract not fully investigated and what are the chances that the validity of these contract my by impacted by the findings of criminal misconducts? kk) Mr Shaik (Chippy) did not recuse himself from no less than 8 out of 11 Project Control Board meetings (PCB) regarding the conflict of interest he had with the supply of the combat suite to the corvettes. Where he did recuse himself, he remained present in the meetings. Did the Joint Investigation Team not find enough evidence in this case to declare the awarding of this subcontract null and void? ll) ADS became part of GFC (preferred bidder and main contractor for the corvettes), ADS was also the Combat Suite contractor for the corvettes, ADS was also a contender for sub-contracts: this is contradictory to any good procurement practice. Hasn’t this event cast sufficient shadow over the awarding of the contracts (main- and subcontractors) for the corvettes? How has these events influenced the validity of the awarded contracts? mm) How could the alleged meeting of 19 August 1999 (with no records) decided to award a major subcontract, especially where evidence of this meeting is contradicted by other witnesses? nn) What powers did the Joint Investigation Team have at their disposal to obtain access to all personnel and records, before and after the date of 03 December 1999, in order to make a proper evaluation of DIP and NIP contracts? How can the Report express a view on DIP and NIP contracts if they have not studied their contents, performance guarantees, and likely changes to succeed? oo) The Joint Investigation Team has successfully identified numerous gaps, failures and procedural wrong-doings in the Report yet, regarding the scrutiny of the main contracts, they have devoted less than five paragraphs (1 page) to the main contracts. Is there a possibility that any of their findings in the Report may have impacted on the validity of any of the main contracts, and any o f the subcontracts? pp) Did the Joint Investigation found any evidence of gaps that existed between actions taken/orders received by government official and public representatives. Were gaps identified between what official presented to politicians and what politicians told official to do, find and say?