Admin
19 Mar, 2014
Nkandla: President Zuma no longer has the moral authority to lead – it’s time to go
The scathing report of the Public Protector on the so-called Nkandla “upgrades” probably marks one of the darkest moments in the history our country since the advent of democracy in 1994. The findings that President Zuma has once again violated the Executive Members Ethics Code through his failure to act in protection of state resources, that he tacitly accepted the implementation of all measures at his residence and has unduly benefited from the enormous capital investment, must be offensive to any nation that takes pride in the values espoused in its constitution. No individual can be above our nation and our laws. We agree with the Public Protector when she says, “…if government becomes lawbreaker, it breeds contempt of law”. The report, in finding guilty various ministers and departments, is an indictment of our government and the ruling party. Advocate Madonsela’s report exposes the conspicuous lack of shame of the ruling party, its ministers and its leaders. The Comrades in Corruption have a propensity to deceive the citizenry in defence of its susceptible president and each other. The ministers’ calculated deception and ex facto justification of the spend is an indication of how institutionalised corruption has rooted itself in government. The fabric of our nation’s probity has been corroded and confidence has waned in the leadership, body politic and integrity of our nation – all because of one man and what was done in his defence. The ANC’s continued disregard of the many voices of conscience, inside and outside its ranks, and failure to put South Africa first, is a clear indication that only the voters can stop them now. We therefore urge voters to send the message loud and clear: “We Can Stop Corruption”. The United Democratic Movement (UDM) also pays tribute to the late Mandy Rossouw who exposed this scandal through her courageous and diligent journalistic work. Her extraordinary work reinforces our belief that a free media remains one of the pillars of our constitutional democracy. There is no doubt that somewhere up there she looks down upon South Africa with a broad smile. In addition, we continue to be impressed with the meticulous and diligent way in which the Public Protector and her team carries out their functions. We have full confidence in the constitution and all its institutions that are meant to strengthen our democracy. After having witnessed this situation unfold, it is clear that electoral legislation in South Africa must change to allow the people to hire and fire their own president. We cannot sit; do nothing and suffer the consequences. We, as the people, must take responsibility and take charge. Now is the time for our nation to stand up against corruption. We can change what has become systemic corruption if we rise to the challenge.
Admin
12 Jun, 2012
COMRADES IN CORRUPTION 3
The real State of the Nation “A looter continua” 1. Introduction This document, “Comrades in Corruption III” expands on the United Democratic Movement (UDM) previously published discussion documents: “Comrades in Corruption I” (issued in 1997) and “Comrades in Corruption II” (issued in 2001), in which we shed light on the extent of corruption in government in post-apartheid South Africa. Corruption in the African National Congress (ANC) government is rife and widespread despite its assurances to the contrary. This high level of corruption in South Africa handicaps service delivery, which results in many violent service delivery riots around the country. Even prospective investors shun South Africa as an investment destination due to high levels of corruption and our people are paying the price. With Comrades in Corruption III we aim to give a bit of a history lesson in the corruption scandals that have hit our Nation and who the role players were. We all know that history teaches us about the mistakes of the past so that we can avoid making them in future, but the ANC seems to be avoiding such lessons if one looks at their track record. However, the jury is still out whether the level in the ANC government either matches or surpasses that of the apartheid government. Even former President Nelson Mandela admitted to the widespread existence of corruption in the ANC when he said in August 1998 that: “We have learnt now that even those people with whom we fought the struggle against apartheid’s corruption can themselves be corrupted.” 2. Background In 2011 Transparency International ranked South Africa as the 64th most corrupt nation in the word, out of 183 countries, and the blame for this shocking statistic can be laid squarely at the door of the ANC. 2.1 Corruption in South Africa - the big picture A few months ago, the Special Investigating Unit (SIU) made a shocking revelation in Parliament about the state of corruption in South Africa. Responding to a Parliamentary question, the SIU said the extent of fraud and corruption in the State procurement process was R25 billion to R30 billion per year, confirming fears that institutionalised corruption has taken root. As Dr Sipho Pityana, chairperson of the Council for the Advancement of the South African Constitution, once put it: “It is now beyond doubt that corruption and patronage are so pervasive, rampant and crippling in our society that we are on the verge of being deemed a dysfunctional state.” The existence of corruption in government distresses because it slows GDP growth, causes distortions in the economy and results in inefficiencies that increase the cost of doing business. It also discourages the culture of paying tax. Established democracies make it their mission to root out corruption in all sectors of society but in South Africa government’s soft approach on corruption seem oblivious to the dangers corruption pose to long-term socio-economic and political stability. In fact, this culture of corruption is celebrated and those involved are viewed as heroes to be idolised and emulated and ANC deployees who are found guilty of corruption are rewarded with re-deployments, and rarely pay for the consequences of their actions. 2.2. The role of government in this corruption Corruption is so prevalent in our government, that we have name for it: institutionalised corruption. To make matters worse, our government shows a fondness of engaging in ‘elite projects’ (amongst many others, building soccer stadiums, the Gautrain, Gauteng’s e-Tolling system, etc.). Whilst some of these serve a good cause, we are doubtful of other. The UDM believes that government has its priorities all wrong. How can these elitist projects be a priority whilst millions of South Africans still need access to a basic thing as clean water? The priority must be to use the resources of state to deliver basic services. Instead government seems hell-bent on their elite projects that often seem designed as nothing more but a way for the ruling party and its cohorts to get their hands on lucrative state tenders - as we saw with the Arms Deal. In the past year, we have witnessed wave upon wave of service delivery protests, some very violent, with people complaining about the lack of jobs and services in their communities. Unfortunately the ANC government responds to legitimate grievances by sending in the police, instead of constructively engaging the community. This mentality reminds us of the Apartheid regime. This same “securocrat”-mentality also reared its ugly head with the introduction of the Protection of Information Bill and the ANC’s planned Media Tribunal. Never before has proposed legislation caused so much negative local and international publicity. Contrary to the propaganda of the ruling party, there has never been a single instance where a newspaper or media organisation threatened national security by publishing leaked information. However, there are countless examples of leaked information exposing the scandals and wrongdoing within Government. It is patently clear to any right-minded observer that these proposed laws are a heavy-handed attempt by government to prevent the public from knowing about the scandals in which it and/or its members are involved. It is the media that showed us lies and deception of those in power! There are Tripartite Alliance leaders in cabinet who have portrayed themselves as champions of the poor but who live in imperial opulence. If it had not been for the media we would not know that these so-called pro-poor hypocrites drive million Rand cars and stay in the most expensive hotels in the land. Nor is the problem restricted to individuals – we will cite a number of examples of this phenomenon later in this document which prove that the ANC is engaged in looting state resources for its coffers. 2.3. The role of the ANC in government corruption We have unfortunately not seen decisive leadership from the ruling party during any of the corruption scandals that involved government (therefore taxpayer) money. The ANC remains defiant – it seems hell-bent on silencing the media and vilifying opposition parties by calling them counter-revolutionaries. 3. A new policy for every season and every minister In addition to the confusion and dissatisfaction these ANC shenanigans are causing, they make matters worse with their constant policy changes. 3.1. Economic policies to confuse a nation Surely after nearly twenty years of economic experimentation, it must be clear that the ruling party has run out of ideas. They are merely tinkering with policy in the blind hope that they will somehow stumble upon a solution. With the latest so-called New Growth Path we once again have policy that was written behind closed doors and foisted on the nation. We are again witnessing the posturing and bickering among the Tripartite Alliance members as they did with GEAR. It seems that this latest policy is an attempt by President Zuma to get around his earlier statements that there would be no change in economic policy from the Mbeki government to his. 3.2. Other departments have been affected To see the dangers of personalising policy, we need only look at the disasters that followed in the wake of new education policy adopted by every new minister since 1994. 4. An enormous cabinet designed to repay political favours President Zuma’s big cabinet has one big consequence for South Africans, especially the taxpayer, we are just paying more. Not only are we paying more in salaries and expenses, we also pay for some of their inadequacies, their ineptitude, and in too many cases, their blatant corruption. Our parliament should empower itself to prevent the president from appointing such an excessively big cabinet. There should be a clear-cut policy on an agreed-upon number of cabinet posts. The president should not be able to just willy-nilly appoint more than this number without the approval of Parliament. What we are really witnessing is the creation of countless ministries simply to reward political allies. Given the fact that approximately twenty four ministers and a number of senior government officials come from the same region (i.e. most of the security cluster departments, economic development and finance clusters, judiciary and key social departments) it stands to reason that people perceive it as the most favoured region in the country when it comes to resource allocation. This laager mentality has even affected the relationship between the Tripartite Alliance partners, the ANC and its Youth League. Our cabinet must be representative of the demographics and regions of the country. If the president had chosen to draw the these twenty four ministers from right across the country, we could have maybe understood the concept of having a large cabinet representative of all regions, but as it stands, it looks as if President Zuma had to create posts in order to repay his political debts in KwaZulu-Natal. Under the President Mbeki’s leadership it was common to talk about the “Xhosa nostra”. The Public Service Commission has failed to prevent the appointment of civil servants along ethnic and racial lines. In fact, it has become a tradition for the executive and senior government officials to fill their departments with members of their ethnic groups once they take office. The evil of ethnicity was warmly embraced in the period leading up to the ANC Polokwane Conference in 2007 when those who campaigned for Zuma used slogans such as “100% Zulu Boy” with impunity. The victorious cabal openly declared that it was its turn to eat. The deployment of cadres along tribal lines even surpasses what the Mbeki administration had been accused of. Today, political pundits and fundis agree that the ANC has veered from the values embodied by its former Presidents, Chief Albert Luthuli, Oliver Tambo and Nelson Mandela. It has degenerated into a regional party with people expressing concerns about a disproportionate share of South Africa’s resources being allocated to one region. One forum user on Facebook summed it up nicely: Nelson Mandela : South African Agenda? Thabo Mbeki : African Agenda? Jacob Zuma : Zulu Agenda? Resource allocations and appointments based on ethnicity and tribalism are the root cause of civil wars in Africa and many parts of the world. Such tendencies are what caused mass killings of the Tutsis and Hutus in the Rwandan Genocide of 1994. Necessarily, the ruling party, the mother of non-racialism in South Africa, should not take these concerns lightly. 5. Political infighting spills over to government When trying to find examples of the ANC’s political infighting which spills into government, one does not have to look far. Just recently the former acting national police commissioner Nhlanhla Mkhwanazi alleged that there is an “ongoing plot to discredit the management of the police”. This is just one case, but there are stories abound of the ANC’s passion for fighting their political battles in the public service. Each move made by government, when it gets to the hiring and firing of senior officials, seems to be an “internal political intervention”. If an appointee is not the flavour of the day ór seems to be doing a good job, he/she is simply removed in favour of sycophant (competent or not) that will dance to the ANC’s tune. 6. Ministers interfere in the administration of departments The rot starts at the top and it will continue as long as we allow ministers, MECs and councillors to appoint senior and junior civil servants. What happens is that these political heads often appoint friends and acquaintances (to pay their political debts and/or hedging bets on their future political ploys). We have seen too many instances where ministers override the decisions of their accounting officers and the budgets of state departments are abused to pursue the elite projects mentioned earlier. This happens at the expense of valid service delivery projects, which is why communities complain that the projects they were promised never happen or were halted out of the blue. There are a number of examples of this phenomenon, but most recently it was reported that the Minister of Women, Children and People with Disabilities, Ms Lulu Xingwana, interfered with the work of her DG, Ms Nonhlanhla Mkhize. Once again, the media was the nation’s friend; otherwise we would have been blissfully unaware of this unhealthy situation. DGs and senior civil servants, who are committed to service delivery, do not enjoy protection against the hyenas who want to loot the resources of state departments. If these appointments were independently made and they were encouraged to report all “political directives” to Parliament a large portion of the corruption we witness will be stopped. As we can see, this culture of political interference in the daily administration of our government causes bureaucratic chaos. Ministers seem to not know where to draw the line between accountability and interference (or maybe they choose to ignore it). Several ANC Ministers have made this mistake at the expense of our people. 7. Corruption Some examples: • Arms Deal • Oilgate • Food for Oil • Tavelgate • Hitachi/Eskom/ Chancellor House • Karoo Gas/ANC Trust • Gautrain/SACP • e-Tolling/ANC/Cosatu 7.1. 1999 - The Arms Deal Scandal In 1999, the South African government signed contracts of approximately R30 billion to modernise the country’s defence equipment. This modernisation, popularly known as “The Arms Deal”, involved the purchase of corvettes, submarines, light utility helicopters, lead-in fighter trainers and advanced light fighter aircraft. The Arms Deal has been the single largest - and one of the most controversial - public procurement deals in post-apartheid South Africa. Controversy around the Arms Deal spread as allegations of irregularities in the tendering process and the lack of transparency in subsequent investigations became known in the media. Doubts were cast on the intentions of a number of senior ANC members. The national outcry had not resulted in the cancellation of any Arms Deal contracts and the saga continues. The institution of a judicial commission of inquiry, yet another promise made in 2011, has yet to start its work. The nation was promised that a 150 000 jobs would be created with this deal, but we are yet to see them! 7.2. 2003 - Oilgate/PetroSA In 2003, the Oilgate scandal broke after the state-owned oil company PetroSA gave an ANC aligned businessman, Sandi Majali, an advance of R15 million, to be used by his company (Imvume Management) of which R11 million was diverted to ANC coffers ahead of the 2004 elections. We would never have heard of this if not for our media’s effort in exposing corruption. 7.3. 2005 - UN Oil-for-Food Programme (OFF) Once again, in 2005, Imvume Management cropped up with Oilgate’s Sandi Majali using the names of both former President Thabo Mbeki and then ANC Secretary General, Kgalema Motlanthe, when he sought crude oil from Saddam Hussein’s Iraq. 7.4. 2005 - Travel Gate In 2005, forty South African Members of Parliament (MPs) were to be charged with fraud in one of the biggest corruption scandal in the country's post-apartheid history. These MPs were charged with illegally using parliamentary travel vouchers worth millions of Rands to pay for lavish trips for themselves and relatives. The majority of the culprits had been from the ANC. In May 2008, the UDM expressed its disgust over the cynical manner in which the Travelgate MPs were let off the hook. The stealthy attempt to cancel their debt to Parliament made a mockery of the concept of accountability. 7.5. 2006 - Hitachi/Eskom/Chancellor House Holdings In 2006, the ANC stood to gain from state contracts by being both player and referee when its investment arm, Chancellor House, bought a 25% stake in Hitachi Power Africa. Hitachi Power Africa and its parent, Hitachi Power Europe, jointly won contracts worth R38,5 billion in 2007 to supply Eskom with power station boilers. In October 2010, the Minister of Finance announced that government would guarantee up to R300 billion in loans for Eskom up to 2017. The implication of this deal is that the taxpayer is helping Eskom to fund the ANC. In other words, the ANC benefits from Eskom’s electricity price hikes through Chancellor House. Reports indicated that Chancellor House will receive R50 million over eight years in profits from Eskom’s Medupi and Kusile Power Stations. 7.6. 2011 – Karoo Gas Exploration An ANC trust established twenty years ago by struggle veterans stands to earn a potential fortune from shale gas exploitation in the Karoo. The Batho Batho Trust has a 51% stake in Thebe Investments, the local empowerment partner of Shell SA. Thebe is well placed to benefit from an industry that could be worth an estimated $200 billion (R1.6 -trillion) should Shell succeed in a bid to tap the reservoir of natural gas beneath the Karoo. 7.7. 2012 - Gautrain/SACP The South African Communist Party (SACP) opposed the construction of the Gautrain. However, recent media reports (which the SACP has yet to publicly deny) show that its investment arm benefited from the train’s construction and operation. According to media reports, in July 2008, the J&J Group (co-owned by former trade unionists Jay Naidoo and Jayendra Naidoo) bought an 8% stake in the Bombela Concession Company, which had been awarded the contract by the Gauteng government to build and operate the Gautrain - and the SACP’s investment vehicle, Masincazelane, has shares in J&J. Are our communist brothers showing a thirst for the benefits of capitalism? 7.8. 2012 – e-Tolling Despite strongly contesting the controversial e-Tolling system, the Congress of South African Trade Unions (Cosatu) has apparently benefited from the project to the tune of R24 million. Cosatu's investment arm, Kopano Ke Matla, reportedly holds a 3% stake in road construction company Raubex, and Raubex received R800 million from a project which forms part of the Gauteng Freeway Improvement Project or the toll roads. 7.9. Correctional Services Scandal/Bosasa The SIU has been investigating the correctional services department for a number of years on claims of multimillion Rand tender rigging and is now ready to act against the politically connected Bosasa group of companies. SIU chief Willie Hofmeyr told Parliament that the Unit has uncovered evidence of corruption involving R1.7 billion and implicating the department’s former national commissioner Linda Mti and ex-finance head, Patrick Gillingham. 7.10. Independent Electoral Commission (IEC) On the 3rd of October 2011, the UDM reported suspected irregularities in the IEC lease agreements to the Public Protector. We wrote a letter to Advocate Thuli Madonsela asking her office to investigate the matter - please see Annexure A for the details (page 11). Thus far, her office has given us no progress report on the matter. On the 14th of March 2012, we sent her a follow-up letter asking for a progress report. To date, her office is yet to acknowledge receipt of the correspondence. This proves beyond reasonable doubt that the venerated Public Protector selectively tackles corruption and maladministration in government. It would appear that her office prioritises cases that strengthen the arm of the dominant faction in the ruling party, whilst dragging feet to investigate legitimate requests such as the one contained in our letter. For example, she was quick to confirm that her office would investigate allegations of bribe solicitation against Deputy-President Kgalema Motlanthe’s partner. Regarding the suspected corruption, on the 29th of April 2012, the City Press reported that it had confirmed that one of the Manaka directors was a business partner of IEC Chair Pansy Tlakula. Tlakula played a role in the IEC’s new lease-acquisition. Parliament’s finance portfolio committee chairperson Thaba Mufamadi’s company, Manaka Property Investments, owns a 20% stake in the trust that owns the Riverside Office Park. This once more demonstrates the shocking level of corruption in government when the chairperson of IEC ensures that her business partner is awarded with an IEC tender. In fact there is a clear conflict of interest. Sadly though, it would appear that the Public Protector has turned her office into an animal farm, where some are seem more equal than others. 8. The irony of corruption with the leadership of the police service Our police service is beleaguered with its own set of problems with the ANC’s political interference. How ironic that the very body that should be a shining example of honour and honesty goes laden under suspicion and distrust. We first had Mr Jackie Selebi who was put on extended leave as national police commissioner, and resigned as president of Interpol, after he was charged with corruption. Selebi, testified against the Scorpions before the Khampepe Commission, but he was exposed for having dubious relationships with drug lords and organised criminals. He ended up in jail. Bheki Cele, who did not last long after the President questioned his suitability, replaced Selebi. However, the jury is still out on whether Cele can be accused of not doing his job or that he was corrupt. So far there has not been any evidence that proves that he is guilty of corruption. However, Cele’s strategy to reduce crime seems to be working as is evidenced by the current crime statistics. We cannot rule out the possibility that his being fired can be linked to Richard Mdluli’s report that Cele and Housing Minister Tokyo Sexwale were involved in a plot to replace Zuma as president of the ANC. Yet Mduli is another example of the abuse of state resources. In fact, many South Africans expressed concerns that this officer thought himself justified in illegally tapping the phones of many people who were deemed to be “the enemies of Zuma”. At the moment, the National Prosecuting Authority (NPA) is investigating the serious charges of corruption and murder against Richard Mduli. Another aspect of this mess is that the Minister of Police has not yet adequately responded to allegations that the secret fund administered by Mduli was misused to improve the security in the Minister’s private home. 9. The implications of corruption This shocking level of corruption in the ANC government affects us in the following ways: • Subsidies, which were used to support labour intensive industries, such as textile and agriculture/farming, were removed, leading to the destruction of many industries. This means that our unskilled labour force could not be absorbed into these labour intensive industries. • Corruption diverts resources that government should use for job creation and the fight against poverty, into the coffers of the ruling party or politically connected individuals. • No attention is paid to improving the poor quality of our education system. • Hospitals and clinics regularly run out of medicines and lack proper equipment. • Doctors, nurses, teachers and civil servants (such as soldiers and police officers) are paid paltry salaries, which is the reason why they leave for greener pastures. • South Africa looses billions of Rands because of the capital and skills flight. • Infrastructure, government buildings and roads fall apart due to neglect and inadequate maintenance. • Most importantly, the gap between the rich and poor widens exponentially. 10. Conclusion For seventeen years the ANC has stubbornly continued the use of a system that seems nothing more than an incentive scheme for those in power (including their friends and family) to accrue even more. Not only are the blunders these inappropriate appointees make costly (both in financial and credibility terms), but prosecuting those that make themselves criminally culpable also use resources that surely could have been spent on bettering the lives of all South Africans (not only the cadre elite). This culture of Comrades in Corruption shows that the ANC is either wilfully ignoring the problems cadre deployment creates, or they are just plain naïve. No matter their motivation, if the ANC cannot stop themselves from abusing power, the electorate must make that decision for them. During election time COSATU and the SACP perpetuate the myth a pro-poor ANC notwithstanding all evidence to the contrary. After elections they complain and talk of a ‘predatory state’ and ‘hyenas’ - it is not the state that is predatory, it is the ruling elite. It is COSATU and the SACP who continue to deceive the public to vote for an ANC which has since the Arms Deal of 1999 been characterised by self-enrichment. 11. What to do? This is a wake-up call for our members! We must go out to our communities, our families and friends and tell them what is really going on. The information we have given in this document is not something the UDM is making up – they are facts. In order for us to make a change, we must go out and create awareness and educate our people about the reality: corruption is alive and well and our people are paying the price. We must engage our fellow citizens and civil society organisations to get the nation talking. The question they should answer is: How much longer will we allow this situation to continue? How much longer do we want to suffer? This is not what South Africans fought for! Drastic change is needed!
Admin
03 Dec, 2001
COMRADES IN CORRUPTION II
Arms Deal Joint Investigation Report – UDM’S reaction Who is fooling whom? “The troughs have changed however the pigs have remained the same” Background Many public statements on the Arms Deal saga assert that Parliament approved the Defence Review and thereby approved the decision to purchase military equipment. ANC ministers and –politicians have made this assertion frequently during the Arms Deal investigation. However, it is fundamentally and demonstrably inaccurate. The inaccuracy has no bearing whatsoever on the allegations of impropriety against the “comrades in corruption”. The experts argue that the implications relate to policy, parliamentary mandates and the debate around state expenditure priorities. The Defence Review was conducted in terms of the overarching policy framework of the White Paper on Defence, approved by Cabinet and Parliament in 1996. The White Paper proclaims that national security is no longer a predominantly military and police problem. It encompasses the consolidation of democracy, economic development and the achievement of social justice. At the heart of this new approach is a “paramount concern with the security of people”. The White Paper goes on to declare that the greatest threats to the security of our people are socio-economic problems like poverty, unemployment, poor education and the lack of housing and adequate social services. In the absence of any foreseeable external military threat, there is “a compelling need to reallocate state resources to the Reconstruction and Development Programme”. The challenge facing the Department of Defence is “to rationalise the SANDF and contain military spending without undermining the country’s core defence capability”. We do not dispute the fact that the Defence Review contains a force design that lists the type and quantity of military hardware deemed necessary for the SANDF to fulfil its functions. The list includes submarines, corvettes and the other weapons systems that form part of the procurement package. However, the Review describes the force design as a “vision” that will change over time. The final detail concerning the type and quantity of weaponry to be acquired will “inevitably deviate from the vision” and “such deviations will be subject to parliamentary oversight”. Notwithstanding the binding agreement, President Mbeki’s Cabinet reneged on it and induced government to underwrite the R29.9 billion Arms Procurement Deal behind Parliament’s back. This has now escalated to R66 billion, and still mounting. The Minister of Finance, Trevor Manuel signed foreign loan agreements and credit guarantees early this year without the approval of Parliament by way of a special or other resolution. The Hansard of Parliament reflects that no such approval was sought or obtained. For the Cabinet to approve such agreements without the approval of Parliament is unlawful. Even the Public Finance Management Act of 1999 states that it prohibits the State from borrowing money or issuing guarantees without specific authority from Parliament. Given these qualifications, parliamentary approval of the Defence Review in 1998 cannot be construed as a mandate to buy weapons. Parliament was not asked to sanction the Arms Deal at the time of the Review or subsequently. It has exercised its oversight function only in relation to the charges of corruption and conflict of interest surrounding the deal, after the Auditor-General’s Special Review Report was tabled in September 2000. Moreover, the Review acknowledges that “national priorities and budgetary restrictions place constraints on defence expenditure”. It accepts that the force design vision is thus unaffordable in the short to medium term. At the time of the Review, Parliament consequently had no expectation of increased military spending. Indeed, the Review anticipates that annual defence expenditure between 1998/9 and 2005/6 will remain constant at R9.7 billion in 1998 rand-value. This target now appears likely to be exceeded substantially. In the many ways as described above, the R66 billion arms package is inconsistent with national policy on security and defence endorsed by Cabinet and Parliament. The package is in fact more likely to reduce than enhance security. This is undoubtedly true for millions of people in terms of human security: money spent on weaponry is money that could otherwise have been spent on education, housing, health, social services and policing. With few exceptions, the ministers responsible for these portfolios insisted in their budget speeches to Parliament that they were chronically underfunded. It cannot be argued convincingly that the package is needed for peace operations in Africa. It is hard to imagine how submarines and corvettes could play a significant role in containing civil wars, nor could we imagine these weapons being deployed in the shallow Great Lakes. Given Government’s policy emphasis on peacekeeping and reluctance in peace enforcement, fighter aircraft and other combat equipment are unlikely to be used often if at all. Department of Finance warnings The record escalation of the Arms Procurement costs from R29.9 billion to R66 billion to date was foreseen by the Department of Finance who warned the Cabinet as early as August 1999. It is disturbing that the Cabinet Committee responsible for the Arms Deal was warned by the Department of Finance in August 1999 about the risks involved in the deal. Four types of risks were identified namely: Exchange and Interest Rate Fluctuations, Counter-Trade as well as Macro-economic (growth) risks. These revelations raise a number of serious questions: a) Why did the Cabinet Committee take the decision to proceed with the deal knowing the risks involved? b) Why were the risks not explained to Parliament when the deal was announced? c) Why was the public not informed that the cost to the state would not be fixed at R29.9 billion? The Cabinet Committee, specifically Mr Mbeki, then Chairperson of the Committee, as well as Ministers Manuel and Erwin, need to answer these questions. Ignoring the warnings of the downside potential of any project places the full responsibility on the decision-makers; they must face the full consequences of their decision. Opposition parties, religious groupings and civil society at large questioned the logic of such staggering expenditure on weapons of war in peacetime when there was such a backlog of social delivery reflecting the historical imbalances of the old order. In their defence the Cabinet argued that the Procurement deal would generate 65 000 jobs and R104 billion in offsets (investment and counter-trade). If arms procurement is such a lucrative undertaking one wonders why developing countries do not embark on arms purchases in order to make more money and create more jobs. The people in the driving seat of this deal are the Cabinet subcommittee chaired by the President. The awarding of contracts for the supply of defence equipment in this deal was not done through the normal tender process. It was all done behind closed doors by the said cabinet subcommittee. This lack of transparency has been characterised by questionable selection of contractors where one contract for the supply of naval equipment was awarded to a more expensive German contractor to the exclusion of a Spanish bidder who could supply it for much less. Another glaring example of irregularity in the tendering process was when the committee changed the tendering procedures mid-stream in order to give bidding advantage to a more expensive British Aerospace contractor over a more affordable but effective Italian aircraft one for the supply of military aircraft. The media and public furore arising out of these scandals caused the Auditor-General to review the Arms Deal and the manner in which, it had been handled by the various stakeholders. In September 2000, he tabled a Special Review Report in Parliament, which revealed suspicions of conflict of interest in the awarding of tenders. Consequently the Standing Committee on Public Accounts (SCOPA), the parliamentary watchdog, after deliberations, endorsed the need for an in-depth investigation of the Arms Deal, especially the tendering process. Through Parliament’s 14th Report, SCOPA recommended that the investigation be undertaken by the Heath Special Investigative Unit (Heath SIU), the Auditor-General, the Public Protector and the Directorate of Public Prosecutions. However, as a result of panic, the ANC big-wigs, led by the Speaker of Parliament argued that SCOPA had no mandate to sub-contract its work to outside agencies and effectively overruled SCOPA and hijacked the responsibility and accountability for the investigation. The Heath SIU, was summarily dissolved and the investigation delegated to the remaining three Agencies with no Terms of Reference known to the public, despite our calls for such. Hereunder is an extract from the SCOPA 14th Report dated 30/10/2000 submitted to Parliament, which speaks for itself. It is important to note that SCOPA is composed of representatives from all political parties including the ANC, which has the majority representation. “After the National Assembly had referred the Auditor-General’s report to this Committee, the Committee received a large amount of unsolicited evidence, of varying plausibility, from a number of different sources. Amongst the numerous allegation and assertions were those which reflected common ground to a significant degree. It is on the basis of this, and the Committee’s perception of the other issues raised in this Report, as well as the need to prove or disprove once and for all the allegations which cause damage to perceptions of the government, that the Committee recommends an independent and expert forensic investigation. In this regard, the Committee will prepare a brief for such investigation which stipulates particular assertions that ought to be investigated, while placing no limitation on the scope of the investigation. In noting the complex and cross-cutting nature of the areas to be investigated, the Committee feels that the investigation would be best served by combining a number of areas of investigative expertise and a number of differing areas of legal competence and authority. It therefore recommends that an exploratory meeting convened by the Committee, be held within two weeks of the tabling of this Report in National Assembly. The Auditor-General, the Heath SIU, the Public Protector, the Investigating Directorate of Serious Economic Offences, and any other appropriate investigative body should be invited, so that the best combination of skills, legal mandates and resources can be found for such an investigation. Once this is established, the Committee will issue an investigation brief to the team for its input. Also, the chosen investigating body will be requested to report on its progress at regular intervals to the Committee, as well as at the conclusion of its work, in order that this might be included in the Committee’s final report to the National Assembly on the matter.” As a result of the Speaker’s meddling in SCOPA’s business, ostensibly at the instance of the ANC party bosses, the ANC component in SCOPA reneged and withdrew their support for the 14th Report which they had previously co-authored, and which was unanimously endorsed by the National Assembly. The situation became ugly when the Deputy President and his Cabinet colleagues publicly berated SCOPA and thereby undermined Parliament’s decision. The Executive interference led to a trail of incidents, which undermined the credibility of any investigation, conducted at its instance i.e.: a) SCOPA’s independence and effectiveness as a watchdog on tax-payer’s money were severely compromised; b) The Heath SIU, which had more powers than the other three Agencies, was withdrawn from the investigation and subsequently dissolved. c) Parliament and SCOPA were not informed of the Terms of Reference of the pending investigation. d) Consequently the investigation had no public legitimacy and the outcome could be predicted. Despite the President and his Cabinet’s protestations that the deal was above aboard, even using the public broadcaster to mount this propaganda, the patriotic media and opposition parties continued their independent probe and exposed many wrong-doings which are now public knowledge, e.g., it emerged that one senior defence public official was implicated in influencing the awarding of a contract to a company in which his brother was a director. Some contractors had links with key political figures in South Africa and selected prime contractors were twinned to local ANC-aligned subcontractors. It also emerged that European Aeronautic Defence and Space Company (EADS), a subsidiary of Mercedes Benz doled out expensive motor vehicles at massive discounts to prominent Parliamentarians, the Chiefs of the Defence Force, and Airforce, Government Officials and other public figures. It’s not yet clear what the motive for this bonanza was. Neither does the report of the three Agencies mention these incidents in detail. On realising that the executive had hijacked the investigative process against the wishes of Parliament, the UDM questioned the conduct of the Speaker on the Arms Deal and recommended to her on the 14th May 2001 some Terms of Reference for the investigation and also to the three Agencies on the 18th July 2001. These are quoted hereunder: Terms of Reference a) The probe must be officially gazetted with clear Terms of Reference and time frames. b) In the light of further revelations of the possible proliferation of irregularities in the entire deal, the investigation must go beyond examining sub-contracting procedures and cover the entire arms procurement transaction including the main contractors. What was the motive for the Cabinet Committee to opt for a British Aerospace expensive purchase against the advice of Defence Force and arms procurement negotiating team. c) Attention must be drawn to the sub-committee, which was chaired by the President, which apparently positioned itself as the “Tender Board” in the allocation of contracts with the view to bringing clarity regarding its role in the whole saga. d) The need to empower the investigating agencies with the same authority previously enjoyed by the Heath Special Investigative Unit i.e. powers to cancel irregular contracts, etc. e) Were any monies paid to individuals or political groups by tendering companies in order to facilitate the granting of contracts to themselves, such as in the case of British Aerospace which paid the ANC an amount of R5 million just prior to the awarding tenders? f) Special focus be made on the possibility of individuals or groups holding public office being beneficiaries of monies or shares from international companies which have been awarded contracts. g) The role played by individuals in the sub-committee chaired by the President in the awarding of contracts and whether any of them received any payments or shares. h) Are there any family members of the Mbeki sub-committee or close associates benefiting from the awarding of these contracts? i) Whether the Black empowerment companies who were awarded sub-contracts have the capacity to perform or were mere fronts for the main contractors? j) What were the motives for EADS in subsidising 30 motor vehicles sold to politicians, Armscor/Denel personnel, civil servants and Defence personnel as they have publicly confessed? k) Whether the executive deliberately misled Parliament and the public about the true cost of the arms procurement exercise when they quoted it at R30 billion when in reality it is +R50 billion to date. l) According to the Defence Review, R9.7 billion was focused for 1999 – 2006 financial years, as approved by Parliament. Who authorised the R30 billion expenditure? Did Parliament endorse this expenditure? Whether the Defence Review, which identified the Defence needs which culminated in the current arms procurement was a genuine analysis of our national Defence needs or a smokescreen to cover self-enrichment by individuals in the ruling party circles. i. With special reference to the estimated R4 billion which ANC members who own sub-contracted companies in the arms procurement deal will earn and in particular the role played by the former Defence Minister, Mr J Modise and General L.A. Moloi in establishing the following companies, as suggested by financial media: - Are these companies African Defence Systems (ADS) - Futuristic Business Solutions - Applied Logistics Engineering - Nkobi Investments - Temoso Technology - M.K. Technologies - X Cell - Dynamic Cables ii. conduits for channelling arms procurement funds back to ANC coffers? This must be investigated. iii. Were these companies lobbied by the main international contractors who were awarded procurement contracts? Were they paid any monies by them and if so how much? iv. Did these sub-contractors lobby any members of Parliament and ministers? If so did they pay them any monies and how much? The Auditor-General on behalf of the Agencies responded and refused to consider our Terms of Reference and boasted that his office had the capacity to carryout the investigation. The Speaker did not even respond to our call. Instead she threatened to sue the President of the UDM and tabled his letter in Parliament charging that it undermined her integrity as Speaker of Parliament. Government censorship of the audit report??????? Our worst fears that the investigation lacked credibility were confirmed. The Auditor-General secretly, without the knowledge of SCOPA submitted the report of the investigation to the Cabinet, which was an integral component of the investigation. The media exposed this unusual step by the Auditor-General. He confirmed this when he justified his action on the grounds of apartheid era legislation, the Special Defence Account Act, which mandated him to submit the report to the Cabinet for “security reasons.” Clearly that report was edited or sanitised in the interests of “security”. Parliament, SCOPA and the public are in the dark as to what was excised from the report for “security reasons.” The tabled report does not show that any forensic audit of the banking accounts of the individuals and contractors being investigated was done, despite the earlier undertaking by the Auditor-General that this would be done. This apparent omission leads one to the conclusion that this forensic audit could be part of the excised report. In evaluating the Arms Procurement saga, it is important to note that the Apartheid-era Special Defence Account Act, which empowers the government to censor the report of any investigation was used by Chippy Shaik at the Cabinet Sub-Committee’s instance to censor certain aspects of the Auditor-General’s report to Parliament which sparked off the investigation of the Arms Deal. This report enabled Chippy Shaik, a Defence procurement official to influence the awarding of the contract to his brother’s company, according to reports. Notwithstanding the apparent cover up by the Investigating Agencies, the media continues to probe and reveal irregularities which leave us with no doubt that there was large-scale wrongdoing in the Arms Deal process, and the Cabinet has used its powers and archaic apartheid-era laws to mount a monumental cover-up of these irregularities. The invoking of the Special Defence Account Act for censoring the Auditor-General’s Special Review report in 2000 set a pattern which has been repeated with regard to the current report of the investigating Agencies. For example, prior to the tabling of the Auditor-General’s Special Review Report in September 2000, which had already been censored by the executive, the Minister of Defence Mosiuoa Lekota had given the Auditor-General carte blanche authority to investigate any irregularities in the Arms procurement deal. He was to access all relevant documents without hindrance. However, the then Deputy President Thabo Mbeki, as chairman of the Cabinet sub-committee charged with overseeing the Arms acquisition, intervened to reverse Lekota’s decision. In the letter of the 28th September 2000 the defence ministry’s Brigadier-General Keith Snowball wrote to the Auditor-General advising him that it had been brought to the attention of Minister Lekota that a decision had been taken prior to his appointment as Minister of Defence that only the Cabinet sub-committee had authority to approve the audit of documents regarding the Arms packages. This reversal of Lekota’s earlier carte blanche approval in effect required the Auditor-General to clear his Terms of Reference with the executive. From the onset President Mbeki’s sub-committee positioned itself to influence the course of the investigation by establishing an “audit steering committee” on 29 November 1999, on which sat people suspected of wrongdoing in the Arms Deal, including Chippy Shaik. Notwithstanding the independence conferred on the office of the Auditor-General by the Constitution, the Auditor-General has allowed himself to be swayed by the executive and compromise the integrity of his office by allowing members of the Auditor-General’s office to serve in the Cabinet appointed Audit Steering Committee. Chippy Shaik has now become the focus of blame for conflict of interest, with justification. However his culpability must be seen in the context of a Cabinet that had a vested interest to see an outcome that suited it in the investigation. In other words Chippy Shaik enjoyed Cabinet backing to do what he did. The latter share the responsibility for sanitising both reports and deceiving the public. This scenario has echoes of the Apartheid-era info-scandal of the Roodies and Mulders. Chippy Shaik may well go the way of a sacrificial lamb and carry the sins of his masters to the execution block as Herschell Roodie did. However, the Nationalist government of the day had stirrings of conscience, which prompted Mulder and John Vorster subsequently to resign from their posts. One wonders if our leaders will have the moral courage to emulate this historical example. Time will tell. Auditor-General’s role The conduct of the Auditor-General in this episode is cause for concern. He refused to heed the appeals of Parliament and opposition parties and SCOPA that the four Agencies including the Heath SIU draw up the Terms of Reference or the Brief of the investigation. He openly supported the Cabinet in excluding the Unit from the investigation. We now know that he allowed himself to be persuaded by Chippy Shaik to remove certain aspects of the original Auditor-General Special Review report of September 2000 to Parliament, as a result of which sanitation, arose Chippy Shaik’s conflict of interest. He has again defended the submission of the Report of the three Agencies to Cabinet for perusal prior to tabling, in terms of the apartheid-era Special Defence Account Act, for “security reasons”. He further denies that Cabinet has made any “substantial” changes to the original report. That remains to be seen. SCOPA has been kept in the dark about the progress of the investigation despite appeals that they be kept informed. Members of SCOPA and Members of Parliament were not implicated in the Arms Deal, and therefore there could have been no justification for withholding information about the investigation from them. Yet the Cabinet to whom he submitted the reports are themselves material factors for investigation. The Auditor-General conceded to Parliament and SCOPA that there were merits for the investigation of the Arms Deal. He was mandated by them to carry out this investigation and remained in principle and morally accountable to them. Instead he abused their trust, turned his back on them and kept the probe a private and confidential affair which he shared with the Cabinet. There is only one conclusion; the Auditor-General has betrayed the trust of Parliament and SCOPA. The Speaker of the National Assembly castigated the Chairman of SCOPA for identifying the four Agencies to investigate the Arms Deal on the grounds that SCOPA had no powers to sub-contract to these Agencies. It was the same Honourable Speaker who recently held a celebratory press conference inside Parliament with the very Agencies, which she barred SCOPA to deal with. The whole episode is a farce; hence the UDM termed the outcome of the probe “a celebrated palace verdict”. Findings of the probe The investigating Agencies have been hasty to exonerate the government from any wrongdoing in the awarding of the contracts. Yet they concede that there were irregularities in the awarding process. In view of the fact that it was the Cabinet Committee, which awarded the contracts, there is a glaring contradiction in their findings. The tendering cannot be found faulty and the instrument responsible for that process be found faultless. We now scrutinise some of their findings hereunder: a) Fighter Aircraft. The SANDF experts and technical committees who evaluated the tenders for the fighter aircraft were unanimous in recommending the Italian Contractor Aeromacchi as a preferred bidder. This was despite the then Defence Minister Modise’s mid-stream injunction that cost should not be used as a criteria in selecting a bidder. The minutes of the meeting on 30 April 1998 at the technical committee, record that Defence Minister Joe Modise told the gathering that “the most expensive option was not necessarily the best option”. He instructed the defence acquisition staff to bear this in mind during the selection process. The acquisition staff followed the normal prescribed rules in doing their evaluation and selection. They used the costed criteria and chose Aeromacchi over the British Aerospace bidder. However, according to the UDM’s research, Mbeki’s Cabinet Sub-Committee intervened when British Aerospace lost the bid, and instructed the acquisition staff to determine both a costed and a non-costed option in their selection. The uncosted option would be deemed to have other weightier non-cost considerations, which would make a company a preferred bidder. After determining both the costed and uncosted options the Italian Aeromacchi still won the tender ahead of British Aerospace. SANDF experts used objective criteria to arrive at this decision. The joint Airforce and Armscor technical team still preferred the Italian trainer even after considering both options. Cabinet, through Chippy Shaik imposed the selection of British Aerospace and justified this intervention on the much questionable superiority of the British fighter trainer – which claim is hotly contested by the technical experts who obviously have the technical expertise lacking in the Cabinet, which imposed their choice. A Cabinet Committee chaired by Mr Mbeki opted for the more expensive British Hawk on the basis of superior offset. However, it is reliably known that the list of counter-trade offsets attached to the British Aerospace final tender proposal in April 1998 was not the same as the list which was put before the Cabinet, on which they are supposed to have based their decision. The Agencies themselves in their findings raise serious questions about British Aerospace’s industrial offset offerings and the way in which they were evaluated. It is common knowledge that British Aerospace gave out substantial cash inducements (R5 million) to the ANC just before the Arms Deal tenders were issued. The UDM made reference to this transaction when it submitted its suggested Terms of Reference to the Agencies. They now argue that the Cabinet used their prerogative in making their selection, despite the compelling evidence against their decision as stated above and the Agencies’ own serious reservations about the Cabinet evaluation criteria. The Agencies’ position in this report is untenable and raises our concerns about the integrity of their report. b) Corvettes. The Agencies further exonerate the government from any wrongdoing on the Corvette deal despite their own findings. None of the bidders on corvettes complied with the key criteria affecting their financing, among others, with the exception of Bazan of Spain which lost the bid to Frigate Consortium, which should have been disqualified for not providing the required guarantee. The report shows that Bazan would have beaten German Frigate Consortium, had it not been for the high scores awarded to the German Company by the Department of Trade and Industry, specifically on the non-defence industrial participation component of the German bid. The German bid of R8.5 billion won the day over the Spanish one of only R1 billion. The non-defence industrial participation which tilted the scale in favour of the German Company is the non-starter at Coega Industrial Development Zone (IDZ). During the tender period the non defence industrial participation entailed an offer by the German Ferrostal steel group to build a R6.5 billion integrated steel plant at Coega. Immediately after the tender was awarded this figure was scaled down to R1.2 billion. Recently, Business Day reported that Ferrostal’s often revised and down scaled plans now stand at R860 million. To compound the problem, former Minister Joe Modise who just before he retired awarded the contract for the supply of Corvettes to the German Company in return for the Ferrostal’s involvement at Coega is now the beneficiary in that transaction through his chairmanship and shareholding in Khutele Project which has been awarded a contract to conduct an integrated transport study at Coega. There is no doubt he had a vested interest in awarding the contract to the German Company. All this damming evidence of impropriety has been ignored by the Agencies who cursorily dismiss this important transaction and exonerate the government from wrong-doing. c) Submarines. The Agencies’ Report finds that the German Submarine Consortium, which won the bid did not make the grade where its defence offsets were concerned and should not have been awarded the contract, at the first round. It says Armscor’s legal division submitted a legal opinion that the Germans had “failed materially to meet the essential requirements of the defence offsets”. This opinion was not passed on to the selection panel. The investigators concede that Chippy Shaik and a colleague allowed the bidders who did not comply to get their house in order before the next round. However to the Agencies all is forgiven. d) Cost of the Arms Deal. The Agencies and their consultants are critical of the Cabinet’s affordability assessment of the Arms purchase because they ignored the currency fluctuations. The contracts, they say, are long term and the final cost would be subjected to the vagaries of the rand. They say the forecasts on which the government study was based were too optimistic. This assessment is in stark contrast to the exoneration of no wrongdoing by the Cabinet. There is no question that the Arms purchase debt continues to escalate especially with the fast depreciation of the rand against the major currencies of our trading partners. The final figure after 20 years of the duration of the debt is anybody’s guess. Armscor estimate is R66 billion. Yet it could be much more than that. The disturbing feature of this transaction, apart from channelling scarce resources to the purchase of arms in peacetime at the expense of social priorities, it does not quantify with any certainty the trade and investment offsets which have been so liberally used as arguments to justify the awarding of tenders. Ultimately, according to some authorities, the finance and interest costs will be born by the taxpayer as part of the budget deficit. Do we really need this extravagance? We submit hereunder Armscor’s breakdown of the original Arms Deal purchase cost as at 18 November 1999 exchange rate, which excluded financing costs amounting to 49% of the procurement costs e) Sub-contracting – your right to know Government has been voluble in denying any responsibility for main sub-contractors who have been linked to the tenderers who have been awarded contracts. This is strange indeed because it was one of government’s pre-conditions to would-be offshore suppliers that they would have to subcontract to local empowerment contractors. This is government policy. The Government denies that it got involved in choosing sub-contractors, so it could not have been influenced by the fact that several sub-contractors benefited relatives, ANC, friends of the ANC leadership and government officials. Government claims that prime (main) contractors were responsible for selection of sub-contractors. However, records will prove in the case of naval combat suite, that Armscor, a government institution, issued tenders for the corvettes and stated that with a few specified exceptions, South African companies (empowerment companies included) were going to supply the components. Foreign bidders for the ship contract were supplied with a list of the nominated sub-contractors and what equipment they would be providing. Even the price had been fixed ±R1,47 billion. The navy did not thumb-suck this figure. Nominated local contractors had provided detailed cost estimates for the sub-systems. These were further audited and approved by the Navy/Armscor team. For example, after the German Frigate Consortium (GFC) was chosen, it then joined forces with Thomson/African Defence Systems (ADS). The price of the combat suite suddenly went up dramatically from R1,47 billion to R3.9 billion. This prompted Captain (now rear admiral) Johnny Kamerman, to write an angry letter in March 1999 to the German Frigate Consortium complaining that the ADS quote for the combat suite was nearly double that tendered by the South African supplier. But the prime contractors simply blamed the price increase on the risk premium they had added for using South African contractors. In effect, ADS was able to massively inflate prices, trading on the strong political commitment both to ADS and its well-connected comrade empowerment partners and to deal with Germany. Do you want to tell us that Thabo Mbeki and Trevor Manuel, Minister of Finance, were not aware of this anomaly? Never! An example: the price quoted by ADS for one subsystem was R64.73 million. But, when forced by the Navy to quote against another bidder, ADS quickly dropped their price to R29.65 million – less than half their original bid, but still higher than the other company’s tender, which was for R26.43 million. ADS got the tender. Another example: The price quoted by ADS for another subsystem was R46.9 million. Again, when forced by the Navy to quote against a competitor, ADS dropped their price to R18.9 million. This time the competitor won the contract, with a quote of R14.1 million. One of the subsystems on the corvette was the contract to supply the massive gears which form the link between engine and propellers. There were two bids: the one from Maag, the other from Renk, both foreign. The GFC chose Maag, as did the Navy’s technical team. (The Navy team formally informed the GFC of their choice in June 1999). Then Armscor wanted Renk. In August Armscor wrote to the GFC stating that it wished to “notify GFC of the importance of Reumech Gear Ratio to Armscor and the Department of Defence.” Reumech Gear Ratio, a local company which was in the process of being sold to British defence firm Vickers, relied on its profitable relationship with Renk. So here a selection made by the preferred prime contractor and formally endorsed by the Project Control Board (consisting of the Navy, the Department of Defence (DoD) and Armscor), was later overturned by the latter – so much for the government’s contention of no involvement in the selection of subcontractors! Despite the fact that Maag upped their industrial participation offer and offered to source some of the work from Gear Ratio, the nod went to Renk. Could it be possible that the decision had something to do with the fact that a company called DGD Technologies (co-directors: Diliza Mji and Moeletsi Mbeki) was negotiating for a stake in Reumech/Vickers? Dr Diliza Mji is a Director of Armscor and Chairperson of British Aerospace South Africa. Unfortunately , these questions would never be answered unless we appoint an Independent Judicial Commission of Inquiry. These sub-contractors are manned by ANC activists. They were clearly hand-picked by the ANC leadership in government. What is of serious concern is that it was known by government that these contractors do not have the technological expertise to handle the high tech that comes with modern defence equipment. Yet at the time of winning the tenders they were scheduled to earn ±R4 billion from the deal. How was it expected they would perform without the necessary skills? Were they mere conduits through whom the government wants to channel funds to the ANC? There is no other possible explanation for this clumsy arrangement. Government cannot bury their heads in the sand like ostriches. Government has erred and acted irresponsibly in allowing sub-contracts on such sensitive transactions to go to people over whom they have no control or responsibility, as they claim. Their denial of responsibility is an admission that they have placed the security of the country in the hands of unqualified people over whom they have no control. Disappearance of Cabinet documents Much has been said about the disappearance of Cabinet documents related to the Arms Deal in the wake of Chippy Shaik’s suspension and his brother Schabir Shaik’s arrest. The latter is a director of among others, Nkobi Investments. The Deputy President, Jacob Zuma has publicly admitted that they are long-standing comrades and close associates. Mr Zuma acknowledged that Schabir Shaik paid for his children’s’ education and that he was at one time his economic advisor in KwaZulu-Natal government. Schabir Shaik revealed in the media that his company channelled funds to ANC coffers. Quite clearly there is a cosy relationship between Schabir Shaik and the ANC. The disappearance of Cabinet documents, therefore cannot be an inexplicable mystery in the circumstances. It would have been in the interest of the ANC for Shaik to obtain inside information on competing tenders in order to have advantage over his competitors. His companies apparently are cash cows of the ANC. Indeed Schabir Shaik’s companies namely: · African Defence Systems, · Thompson-CSF Holdings, · Detexis Data, · Nkosi Investments (named after ANC’s late Treasurer General, Mr T Nkobi). These are some of the subcontracted companies who stand to benefit from the awarded tenders. While the Agencies have found a lot of flaws in the tendering process, and a litany of irregularities in the awarding of sub-contractors, there is a big omission in their probe however. There is no forensic audit of bank accounts of these sub-contractors to determine their financial viability, and the way funds are channelled. Is this a deliberate omission? Had the Agencies conducted forensic auditing of bank accounts of these sub-contractors, it would have exposed the channelling of taxpayers’ monies to the ANC coffers as admitted by Schabir Shaik. Outstanding questions to the investigation agencies 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? Role of European Aeronautic Defence and Space Company (EADS) The Joint Investigations Agencies have been significantly reticent in their probe and resulting report on the aspects of the role of EADS , a beneficiary of the Arms Deal, which raised a number of questions about the integrity of some public officials. EADS, a subsidiary of Mercedes Benz, doled out gifts of motor vehicles at ridiculously low prices to key public officials and other national figures. The revelations of these gifts clearly showed that no purchase contracts existed in respect of some of the vehicles given to these public figures. However, when the shady deals were exposed, hasty hire purchase arrangements were made to cover-up the shady deals. For instance, it was revealed that President Mbeki had been given a luxury S600 bullet proof Mercedes Benz for test-driving for a period of six months. Tony Yengeni test-drove his for seven months. Mbeki’s car was only returned to Daimler Chrysler when the media exposed in March 2001 Tony Yengeni’s deal. All enquiries by the media about detail of the transaction hit a solid wall of reticence. Daimler Chrysler’s spokesperson Ms Chakela said that she could not talk. “I cannot comment due to Daimler Chrysler’s policy of providing no comment to the press until the investigation into the Arms Deal has been concluded.”. President Mbeki’s acquisition was valued at R2 million. It is not clear what the details of the test-drive were and the secrecy with which it was handled is cause for concern. It also raises questions why the test-driving took so long and why it was terminated and the car returned after enquiries made by the media. The media, in the following transactions, exposed both Daimler Chrysler and EADS: a) Tony Yengeni only made financing arrangements after media enquiries of his 4x4 Mercedes Benz acquisition and several months down the line. b) Nafcoc officials were also given expensive vehicles by Daimler Chrysler and had to return them when the media exposed these transactions. c) SANDF Commander General Siphiwe Nyanda was also given two Mercedes Benz at a sizeable discount. d) General Roelof Beukes, former Chief of the Airforce, was also given an expensive Mercedes Benz on similar generous terms. e) Vanan Pillay of the Department of Trade and Industry was also a beneficiary in this bonanza. He was part of the negotiating team in the Arms acquisition exercise. If not for the intervention by the senior German management who suspended their EADS Managing Director, Michael Woerffel, after exposures of this corruption our government would not have conceded the need for the investigation, which they are now so eager to sweep under the carpet. It has now become a pattern for would-be suppliers of goods to short-circuit transactions by directly approaching political heads, who in turn manage and steer the transactions to a pre-determined conclusion, disregarding legal tender processes. Corruption has seeped deep into the public sector, tarnishes governance and erodes the moral fibre of our entire society. Civil society must take up the cudgels against this scourge and rescue our nation from the moral decay into which it has sunk. Role of President Thabo Mbeki In view of the adverse economic climate such as the drastically escalated cost of the Arms Deal, the risks involved related to the non-defence industrial participation which may not materialise, the uncontrollable depreciation of our rand against major currencies of our trading partners, UDM urgently and strongly recommends that government cancel the second and third legs of the deal. People need jobs, adequate health care and education, not arms. President Thabo Mbeki stands out like a sore thumb as the major architect of the whole Arms Deal fiasco. He has taken pains to present himself nationally and internationally as the champion of the cause of fighting poverty at home and in Africa. He has spear-headed the Africa recovery initiative, now encapsulated in New Partnership for African Development (NEPAD). Yet his actions are an antithesis of his much-publicised initiative. The wild idea of an arms procurement of these dimensions, his high-jacking of the tendering process, the emasculation and marginalisation of SCOPA, and Parliament and compromising the exalted office of the Auditor-General all conspire to project him as the unmistakable driving force behind this Arms Deal debacle. In hindsight, it is not surprising that he came out guns blazing in defence of the deal at an earlier press conference after the media revelations of corruption in the Arms Deal. His damage-control endeavour however has not succeeded in putting the matter to rest. The joint investigation by the Agencies has omitted to probe the Cabinet sub-committee over which the President presides. Instead they hastened to absolve them from wrongdoing without interrogating the facts which are continually surfacing. His record in addressing the socio-economic problems leaves much to be desired. His dabbling in the scientific discourse about HIV/AIDS, is tantamount to venturing where eagles dare, and has cast a dark shadow on government commitment and capacity to drive the anti AIDS campaign. The UDM acknowledges the call by former President Nelson Mandela for political leaders to be at the forefront of the fight against HIV/AIDS. The leadership of the UDM accepts this responsibility without hesitation. The overwhelming majority of the civic, religious and political leaders and organisations in this country are similarly committed. It is only President Mbeki, and his increasingly dazed and confused National Executive Committee (NEC) sycophants, who play with words and rather waste money to defend the indefensible in court. They are two-faced, considering the fact that they claim a lack of funds prevent them from distributing affordable lifesaving treatment, but they have money for court cases. They are hypocrites because they claimed victory earlier this year against the pharmaceutical companies, but now that they are free to use their victory they have new excuses. They are deceitful because they argue lack of resources whilst they simultaneously go on a R66 billion shopping spree for unnecessary weapons. But perhaps the greatest deceit is that committed by the leader of a country, who would not admit his undeniable errors publicly, but rather gets his party lapdogs (NEC) to issue a watered-down statement in response to justifiable criticism that comes from within where it cannot be denounced or ignored out of hand. His administration has created a crisis of confidence in education, job creation, and poverty alleviation. The time has come for the ANC to call on him to recuse himself from public office. He is driving this country to the edge of a precipice. He is not fit to govern. Conclusion The report has been held up by the government as a complete and definitive exoneration of the Arms Deal, one that absolves them of wrongdoing. We disagree. One simply has to look at the context in which this report finally came to Parliament. The truth is that the public lost confidence in the process when Mbeki rejected calls for a Judicial Commission of Inquiry and stopped the Heath SIU from participating in the investigation. The subsequent interference by the executive, the unwarranted attacks on Parliament, the ANC’s pig-headed behaviour in the public accounts committee, and finally the Speaker’s involvement, all conspired to turn this investigation into a farce of monumental proportions. One year after the Government launched the investigation, the investigators still refuse to state what their Terms of Reference were. The UDM is astounded that despite this interference and manipulation the government has the temerity to celebrate its innocence and label anyone who disagrees a racist. The truth is the report finds senior government officials guilty of despicable behaviour, but somehow we are asked to believe the politicians did not know and are not culpable. This is nonsense! When qualified officials’ advices are ignored and the Cabinet instead approves a vastly more expensive deal, the report finds that the politicians did not do anything wrong. It is attributed to Cabinet “prerogative”, which explain nothing. But when corruption occurs it is attributed to the officials. And as the politicians make the officials their fall guys for gross mismanagement, we are still expected to believe that the integrity of the deal is intact, despite ample proof that at the very least the politicians didn’t exercise proper control over the process. The ANC has taken this country to the edge of the abyss. All that stands between South Africa and the cesspool of corruption is a handful of dedicated opposition parties and the media. It is time for Mbeki and his cronies to realise that “struggle credentials” and skin colour do not automatically make them immune to mismanagement and corruption. Nothing has served to illustrate this sad fact more acutely than this botched investigation – and Mbeki’s stubborn and misguided views on HIV/Aids. The original budget for the Arms Deal took into account the socio-economic demands of our society, hence the Defence Review’s conservative figure. These social considerations have been echoed by Mbeki in his discourse on the HIV/Aids pandemic. How do we explain this surreptitious escalation of the Arms Deal budget to R66 billion when these socio-economic conditions have not changed? UDM recommends that Parliament and SCOPA should regard the findings of the investigation by the Agencies as an Interim Report, which indicates areas of further in-depth investigation by an Independent Judicial Commission of Inquiry. That commission should unearth the rot at the centre of this Arms Procurement Deal, and propose recommendations that will lead this country out of the depths of corruption, which underpin the flourishing culture of depravity and moral decay that confronts our society. The Comrades in Corruption can rest assured that this matter will not be allowed to be swept under the carpet. They can no longer shield themselves behind the hackneyed baseless charges of racism to people who expose their misdemeanours. The concerns of the Arms Deal controversy are not sectarian or racial. They are embraced by all South Africans irrespective of race or creed. The time has come for the Cabinet to take the public in its confidence by accessing it to their threat analysis, which motivated their decision on expenditure on Arms. If they fail to do so, they leave us with the conviction that this procurement was designed to line their pockets and fund their party. In light of Mbeki government’s behaviour, one wonders what prompted Mr Nelson Mandela to lament that little did he know that the corruption, which had characterised the apartheid regime, was now endemic among his ruling comrades. The old adage that “The troughs have changed however the pigs have remained the same” is appropriate to describe this situation. Sources a) Joint Investigation Report b) SCOPA’s 14th Report c) Defence Review and White Paper on Defence d) The Mail and Guardian e) The Sunday Times f) Noseweek g) Financial Mail h) Zapiro i) Centre for Conflict Resolution
Admin
01 Jul, 1997
COMRADES IN CORRUPTION I
Holomisa reacts to ANC leadership booklet titled “The rise and fall of Bantu Holomisa” ANC:”When journalists ask Holomisa whether his “new party” will be to the left or right of the ANC they are met with a blank stare.” Holomisa: “This is not surprising, if one is engaged in a process of consultation. However, how can one know the left or right of a party with virtually no economic policy, no foreign policy, with a leadership who one day masquerades as hard-line socialists, and tomorrow pronounce capitalism as “a fundamental policy of our organisation”. Even Mr Raymond Mhlaba in his farewell speech in Port Elizabeth on 14 June 1997 had asked, “What is the character of this government” Introduction This exposition is a just response to the booklet entitled "The Rise and Fall of Bantu Holomisa" being distributed nationally and internationally by the ANC's Department of Publicity and Information in a desperate bid to cast aspersions on my integrity and eventually discredit me in the eyes of the public. The National Working Committee (NWC) of the African National Congress (ANC) met a few months ago and conceded the fact that my expulsion from the ANC has led to sharp divisions within the organisation. They resolved to take measures for averting further schisms. As a result of this resolution an evaluation document was circulated which says, among other things, Winnie Mandela, Toni Yengeni and Peter Mokaba must be used to counteract my initiations of seeking to establish a political party. However, I have noted a statement of denial by the ANC spokesperson purported to be emanating from Mrs Mandela. One is not surprised since it is the culture of the ANC spokesperson to deny everything. In one of the NWC meetings recently Mrs Winnie Mandela bluntly told the entire NWC leadership that she would not wittingly or unwittingly allow herself to be used against me. She went further and categorically stated that she had forewarned the ANC leadership of problems lying ahead, should they resolve to proceed with their harsh treatment of me. This was at the incipient stages of the Holomisa saga before my final expulsion from the organisation. I have no doubt in my mind that Mrs Mandela was referring to a letter she addressed to Deputy President Mbeki, just before the ANC expelled me, which reads as follows: "It is critical for this organisation not to handle an issue of this nature in this manner, especially as it involved Sol Kerzner. Ultimately the organisation will not survive further bruising in this matter, and I think some people who took part in this decision will know what I am talking about." It is a pity that the rank and file members of the ANC were never told the truth that the officers (the top five officials), NWC and NEC, in line with the ANC Constitution, never took a decision that I should face the disciplinary committee or hearing, but it was the work of an individual who issued instructions to that effect. Be that as it may, I attended their hearings. I still maintain that the issue of my being disciplined was clumsily handled from the very beginning, for I was even informed thereof through the media. My immediate reaction was that I would not attend a "kangaroo court". However, I later on attended the said hearings after Kader Asmal had informed me in writing. The NWC in one of their recent meetings took a decision that the issue of my expulsion from the organisation is explained to the public. Instead of heeding the NWC decision, they have produced a booklet assassinating my character. This booklet has been furnished to email internationally, and is being distributed door to door in all languages here at home. This is a clear tactic of cowards who could not face their constituency but resort to pamphleteering. The public would be well advised to read the booklet between the lines; the ANC leadership has suddenly awakened to the reality of problems they have created for themselves by expelling me. They are really panicking and feel threatened by spectre of an emergent political party with me as one of its founding members. A party which is reportedly in the red to the tune of R41 million, and which is closing its regional offices because of dwindling membership and empty coffers, could ill-afford to waste its financial resources on printing this glossy booklet. Was it necessary to embark on this huge waste instead of paying salaries to their office staff, which they are retrenching? Is it also not ironical to incur such huge expense on someone whom they despise and refer to as a "construct of the South African Defence Force"? Could it be possible that the ANC leaders are still in cahoots with their financially resourceful friend, Mr Sol Kerzner, who once donated R2 million to their election, coffers, in printing this booklet? The ANC leaders' attempts at demonising me will be counteracted by me in my small way. I have already informed President Mandela in writing that I will respond to my denunciation by the ANC leadership. The difference between us is that the limited funds of the National Consultative Forum (NCF) will not be used for that exercise. I humbly appeal to all people who are fortunate to lay their hands on this "response" to share it with their neighbours and with as many people as possible. I thank the printers and friends who have volunteered to produce my response in substantial volumes. Attempts will also be made to put this on the email. The booklet has confirmed my suspicions that the ANC leadership is on the road of establishing a one-party state dictatorship in the country. One of their tactics and strategies is to throw opposition parties into disarray through the employment of smear political campaigns, scurrilous denigration of individual leaders and vituperative propaganda. This booklet is an encapsulation of all these despicable political tactics and strategies. Everyone who disagrees with them is portrayed as a dissident, a populist, a "demagogy", a villain, a demon, a fiend, a monster, a turncoat, a chameleon, and even treacherous serpent whose head must be smashed. They are the experts in promoting hatred in politics. Comrades in Corruption The ANC leadership has, of late, rudely awakened to the real possibility of a humiliating electoral defeat at the hands of a strong, combined opposition. They are cognisant of the fact that the pre-election euphoria of a liberation movement ascending to power has virtually subsidised and supplanted by appalling voter apathy and disillusionment. Voters throughout the country seriously question the integrity of ANC leaders who only yesterday made election promises that reverberated throughout the length and breadth of South Africa. The luxurious trappings and cosy seats of power have diverted the attention of ANC leaders from pre-occupation with apartheid imbalances and backlogs to the amassing of personal power and wealth. They are endowing themselves in every conceivable way with the abundant riches so easily available to themselves to the utter disgust of the weak and poor who have suffered the loss of limb and life for the emancipation of the country. They flaunt their newly acquired power in the form of flashy, elegant and executive cars and mansions in the best leafy suburbs of our First World cities, while millions of our people bathe in seas of poverty and wallow in famine. Are they better or worse off than homeland leaders and FW de Klerk? Crass incompetence, sleaze and corruption are the order of the day. Crime is rampant and dissuades investors from considering the country as a potential destination for scarce investment funds. Millions are retrenched to swell the ranks of the unemployed. All this, to the arrogant and complacent ANC leadership, is business as usual. They are not perturbed at all by the plight of the indigent masses. This is to be expected of a leadership whose wallets are ever burgeoning because of the constant annual salary rises they grant themselves. In 1994 alone they granted themselves more than 100% salary increments. Is this done in the name of the liberation struggle and politics for the suffering masses of our people? Certainly not. The question to be asked is what is the effect of these huge salary increases for cabinet ministers on the national fiscus? Our cabinet ministers are among the best paid in the world! Their lifestyle is vastly superior and grand compared to their peers in the industrialised nations of the West. If the South African electorate is deluded into voting the ANC to power again in 1999, the country would be put firmly and irrecoverably on the path to financial ruin and economic destruction. The warning signals are already there for everybody to see. The aborted voluntary severance package is a glaring example of the ANC leadership's lack of vision and their wavering commitment to an efficient and effective civil service. The best civil servants have been bribed to quit the government service in a crazy bid to pave the way for the ANC unemployed loyalists and pals of the ministers. This is the trend at provincial and national levels of government. The consequence of this ill-conceived move is the visible lack of delivery and baffling levels of incompetence. As a result the national and provincial governments spend billions on acquiring the services of consultants to perform duties which are supposed to be the domain of the civil service. This is the most extreme form of corruption - that is, the deliberate appointment of pals to key well-paying jobs in the government without any track record in administration and the necessary skills and experience. The ANC, in an effort to divert attention from its failures and shortcomings, accuses me and many other former leaders of corruption. I shall deal with these charges when I delve in detail into their misrepresentations of myself in their booklet. There are many contradictions within the ANC leadership. The vicious power struggles among some individuals seems to negate the much-vaunted unwavering commitment to the total socio-economic emancipation of the broad masses and the concomitant betterment of their living conditions. Personal grandeur and self-aggrandisement are the order of the day. They have been in power only since May 1994, but behold, some of them are already multi-millionaires and have bonds worth millions of Rands. The vexing question to serious observer of the country's political scene is, where do these leaders derive these vast sources of income. Is it not possible that some of the funds from overseas donors earmarked for anti-apartheid activities and the ANC's electioneering efforts have been siphoned off for private use by individual leaders of the organisation? Something is rotten in the state of ANC's affairs. It was for this reason that I alerted Prof Kader Asmal in writing in 1995, as "Mr Clean" of the ANC regarding an allegation of a serious international financial irregularity that was attributed to a prominent ANC member. One wonders what happened to his investigations. Instead ANC's "Mr Clean" was busy advising their “kangaroo court” to drive me out of their organisation for narrating the historical events of Transkei Bantustan in the Truth and Reconciliation Commission last year. It is an open secret that since the 1994 the ANC Conference until my expulsion from the organisation no financial statement has ever been ready for tabling either at the 1994 Conference or at National Executive Committee (NEC) meetings. The truth of the matter is that millions of Rands could not be accounted for, and books could therefore not be balanced. My advice to the delegates to the forthcoming ANC Conference in December 1997 is that they should demand fully audited financial statements of the ANC's London account. If they fail to elicit a proper and satisfactory response in this regard, they should solicit the assistance of the Reserve Bank of South Africa who would be in a position to make informed findings and trace recipients of funds from the London account. It is no small wonder that we read in daily newspapers and weekly papers of the boundless graft in the provincial- and national governments under ANC leadership. Billions of Rands have gone down the drain and they cannot be accounted for. The good example is the ±R2 billion spent on consultants, yet the administration situation continues to deteriorate every year. The question is, do the ANC leaders in government really engage consultants, or are there some bogus consultants to whom funds are paid and in turn channelled back to the coffers of the organisation or to themselves? Are bodies like Thebe, an ANC investment arm, getting government contracts and non-governmental organisations (NGOs) associated with the ANC also taking part in this looting spree? The commissions of inquiry, like the Heath Commission, should not only concentrate on the corruption that took place under Matanzima, Holomisa and other leaders, but should immediately attend to the cesspool of corruption that has been taking place under the ANC government since 1994. The massive retrenchment of experienced civil servants has given rise to a fertile ground for the spreading of corrupt practices as MECs and National ministers appoint their Directors General (DGs) and staff, a duty which should be performed by an independent Public Service Commission. Currently Zola Skweyiya's department does not know whether it moves backwards or forward. At times the apologists of this fiasco and national disgrace euphemistically allude to this as affirmative action when they try to disguise the appointment of their friends and relatives. As far as I know there are no set standards and policies guiding the implementation of the so-called affirmative action. Instead, we notice that the appointments of key personnel in senior positions are not on merit but are along ethnic lines i.e., an Indian minister would fill top posts with Indians and Xhosa or Zulu ministers would recruit Xhosas or Zulus respectively to fill the said posts. Let me demonstrate how their incompetent appointees have led to the draining of state coffers. According to the audit report of the North West Province released on 29 May 1997 the following emerges: · Premier Molefe's office alone was unable to produce backup documentation for R3,5 million which had been spent; · No indication that tender board approval was obtained for an R18 million RDP project; · In one department, Transport and Civil Aviation, vouchers could not be produced for expenditure of R135 million, which made up 60% of its total spending; · Unauthorised spending in the whole administration totalled R367,3 million, which included R11,7 million two-way radio equipment bought by the Department of Public Works and Roads; · The audit had also shown that Members of the Provincial Legislature were in arrears with their housing rentals; · At the Department of Health, vouchers for about R19 million could not be submitted for audit purposes; · Payment of about R14 million had been made on photocopies of invoices. These included individual payments of R4,9 million, R2,9 million and R928 800. The graft delineated above takes place even in national departments and other provinces, for example, the R14 million Sarafina Scandal. Your attention is also drawn to the Kleuver Auditor-General's Report, which demonstrated the poor performance of the national departments. In the Eastern Cape, for instance, the tender was corruptly awarded to Balraz-Pensecure whose quotation was R164 million more than that of other tenders. This had to be overturned by a court of law. At what cost? How about the Feeding Scheme Scandal? In the Mpumalanga Province, which is notorious for unbridled levels of graft, R185 million was awarded to Motheo Construction, an unregistered company headed by a pal of a national housing minister. The Northern Province under Ramatlhodi is not even worth writing about because of the daily exposure of corruption. The above breakdown is just the tip of the iceberg. In the light of these nauseating exposés and financial scams the ANC leadership should bow their heads in shame and are the last to muster courage and point dirty fingers at others accusing them of corruption. It is high time that the nation becomes more vigilant regarding the role played by the spouses, immediate families and friends of the ANC elite and dubious consultants. One need not to be a genius to realise that the parties referred to above have a propensity of becoming either conduit pipes "economic Trojan Horses" for the benefit of the elite. If this looting spree cannot be stopped in its incipient stages, I fear that by 1999 more billions or trillions of Rands would have gone down the drain. This is indeed a contradiction of what is contained in the 1994 ANC election manifesto. The question many are asking is: What is the difference between ANC leadership and National Party (NP) and its homeland leaders who were dubbed by the ANC as bunch of corrupt leaders? Remember the old German saying: "the troughs have changed, however the pigs have remained the same". Despite the problems of limited capacity of the then Transkei Military Government, and frustrations by the then NP Government that defended the perpetrators of corruption in the territory, we did manage to bring corrupt elements before the courts of law. Court records will confirm this. With the ANC government, reports of corruption only end in newspaper banner lines. Ministers and MECs in whose departments’ corruption has reared its ugly head are neither sacked nor reprimanded. Instead, they are showered with praise for being good. I would now like to respond to the allegations contained in their booklet point by point. The Military Man ANC: Bantu Holomisa was nurtured by old Transkei Defence force, itself a proxy of the apartheid SADF Holomisa: This is cheap stuff indeed. The question arises: Who is currently nurturing the ANC led government's SANDF? Who provides round the clock security for the ANC President, even on board the Outeniqua? You are a Department of Information, yet you sadly lack information. In fact, in this area you are miserably bankrupt. A good number of members of the then TDF and myself are capable graduates of SA Army College. In acknowledgement of this fact, your Defence Minister and President Mandela have appointed TDF officers to high positions in the Army. Where are your military graduates of Eastern Europe? Have you forgotten that the Defence Force is still being commanded by the old white SADF Command element, without change to the doctrine? The ANC leadership is worried about my rapid rise. In the same vein, can they tell the world what criterion did they use to promote people like "Lt. Gen." Nyanda who in 1994 was unable to salute properly let alone wearing a barrette and uniform properly? Were they promoted or rewarded for failure to implement but to leak operation "Vula" just to earn fame or were they rewarded for claiming "successful" operations like Wimpy Stores and Wits Command bombings which turned out to be South African Defence Force (SADF) operations as reported in the media recently. In the meantime your "generals" have been decorated as "heroes". I find it strange that the ANC leadership takes me to task for having been taught counter-insurgency, as this is an international norm in the curriculum of all soldiers. It is the same course that helped the Transkei Military Council and the Transkei Defence Force (TDF) in general to counter Pretoria's total onslaught on the people of Transkei and, in particular, Umkhonto we Sizwe (MK) and Azanian People's Liberation Army (APLA) cadres who took refuge in Transkei long before 1990. Indeed, I have never applied the knowledge gained from the said subject against ANC or Pan Africanist Congress (PAC) cadres. I am equally amazed now by the audacity of the ANC leadership to question the training I received from Pretoria as their own commanders of MK like "Lt. Gen." Siphiwe Nyanda and others undergo the same training by the same instructors in the same institution following the same syllabus and doctrine as well as adhering to the language policy (Afrikaans) of instruction as determined by General George Meiring and his team. Would I be wrong to call them "construct of the SADF?" If you doubt the ability of the SADF personnel, why your Defence Force is still headed by General Meiring who is not a "construct of MK or ANC?" This is basically the reason why the integration of the armed forces has turned out to be a fiasco because the revolutionary forces are being trained by their former foes. As you are aware, this aborted exercise of absorption has led to MK soldiers resort to mass action like the recent march to Parliament. One wonders whether the several millions collected abroad for the military training of MK were never used for that purpose or were they simply deposited in individual bank accounts in countries like Switzerland? It was for this reason that I, upon requested by ANC leadership I dispatched fifty Transkei Defence Force (TDF) instructors to train MK cadres in their camps in Uganda a few years ago. If the TDF was a "proxy" of the SADF, why allow it to train your liberation forces? (It was a strategy Bantu). The TDF was established as a separate entity from the SADF from the very outset. It is mind-boggling to read insinuations by the ANC leaders that I am a "construct of the SADF". Some TDF members have received their training from many military institutions all over the world. Even the promotions of the TDF members had had nothing to do with the SADF. It was for these reasons that the ANC tasked me, together with MK commanders, to approach certain countries overseas for extending military training to MK in the early 1990s. It must now be a contradiction of the century that the very ANC leaders who reposed such unshakeable confidence in me find it easy to label me a product of the SADF. The most appropriate thing they could have done was to keep away from anybody with associations with apartheid institutions if they are so proud. However, people know that this sudden loss of confidence in me by ANC leadership is because of politics of greed (Sol Kerzner's resources refers). It is a contradiction in terms that they now speak of "my dubious military past" when the ANC leaders approached the TDF to release me for candidature in their nomination list as submitted by their regions. One can deduce the truth that they managed to sway me away from my chosen career of being a soldier to a politician, only to be dumped two years later under suspicious circumstances. One of the leadership’s henchmen said recently "From the start the ANC's relationship with former Transkei leader Bantu Holomisa had been a tactical one, to use him attain liberation" said Mr Mhlahlo, MEC for Public Works, Eastern Cape Government on 16 May 1997 – the Daily Dispatch of 17 June 1997 refers. Obviously, this is an insult to the then Military Council and the people of Transkei. No wonder the Transkei region is so neglected. At the time of going to the printers to print this booklet, there was not a single house built in Transkei by the ANC government since 1994. Perhaps the voters of the Transkei region were a tactical strategy used to "attain liberation". Hence in inter-alia roads have been neglected including the N2 route. Instead we hear promises as usual about building of a "corridor" along the coast which in any event will nearly take the entire budget of this country, let alone causing destruction to our environment. Today, this greedy ANC leadership is celebrating for seeing me out of my job (army). There is no doubt that it is the culture of the ANC leadership to dump people as and when they deem it fit to do so. They have done so to the anti-apartheid activists abroad immediately they started to rub shoulders with the likes of Sol Kerzner. We know how they have used people like Father Trevor Huddleston whom they later dumped. This current leadership does not have time for persons who are not economically resourceful. They have also dumped MK members who put them where they are today. So if they could do so to their own front-line soldiers, who am I to complain? However, what I am challenging is the fact that this ANC leadership has a nerve to lie to the public by saying that I am drawing a monthly salary pension from their government. The fact of the matter is that President Mandela has flatly refused to approve my early retirement pension. On the contrary his government had decreed to give the so-called veterans a pension, people who have never contributed to the pension fund in the first instance. De Klerk, former homeland leaders including Stella Sigcau and old MPs are getting their monthly pensions, but not Holomisa. A military intelligence project that went wrong I have nothing to say on this item because the ANC leaders themselves do not place any premium on the statement made by Eugene De Kock. I agree with them because the same De Kock alleged that the late Chris Hani and I witnessed the killing of Colonel Craig Duli. It was the same De Kock who cast aspersions on the integrity of "Lt. Gen." Siphiwe Nyanda, the SANDF Chief of Staff, by insinuating that he was also their man. The only connection that has been proved beyond reasonable doubt is that of Craig Duli and the SADF's Directorate of Military Intelligence (DMI) Vlakplaas operatives who supplied him with weapons to overthrow us for giving sanctuary to liberation movements in the Transkei. The left hand in the ANC apparently does not know what the right hand does if the same organisation can question the origin of files that I have leaked from time to time. On a number of occasions I conferred with members of the ANC leadership, in particular President Mandela, on ways and means of dealing with the information contained in some of those files. These had no doubt assisted the ANC during negotiations with the National Party. President Mandela knows exactly the origin of those secret files and the person who brought them and for what good reason. Joe Ntlanhla was also briefed by the President about the files. That particular person deserves a medal for alerting us to the existence and activities of the Third Force. It was for these reasons that President Mandela asked me to keep the files and leak them periodically with the Editor of the New Nation, an ANC sympathetic newspaper. President Mandela would then use the leaked information in the New Nation to pressurise Mr De Klerk for more concessions and progress in negotiations. Mr Mac Maharaj laid his hands on NIS' top secret files on him and published the information contained therein in the New Nation of July 1994. I have not heard that his integrity and connections have been questioned. However, we note the selective treatment of individuals by the ANC leaders. I am however proud that the strategy used by President Mandela, the Editor of the New Nation, the undisclosed individual and myself paid dividends for the nation. History, not the ANC leadership, will pass a harsh judgement on whether I have ever worked with any apartheid institution in order to derail the freedom of our people. The files were handed to us in 1992 and were selectively used since then. The ANC is out of order to question why the files have not been handed over to the Truth and Reconciliation Commission (TRC) or the new National Intelligence Agency (NIA). Those structures were not in existence in 1992. However, when I handed over these files to the TRC, the ANC leadership instead expelled me. What a contradiction? Whilst the ANC leaders concede that they have no tangible evidence linking me to apartheid intelligence network, President Mandela when addressing us in the NEC meetings often repeated that "some of you here were agents of the former government. I know this, now that I have access to the security files." Some of these ANC leaders may boast of their colourful credentials in exile, but the turmoil and contradictions within the leadership suggest that the ANC programme has been hijacked by forces within who have always been inimical to the objectives and goals of the movement. Was President Mandela perhaps correct in his assertion? The ANC leaders must come clean! This scenario is compounded by reports of the TRC, media and the likes of Joe Mamasela who adamantly claim that some NEC members and ANC cabinet ministers were spies for the former government. No wonder that we read in the newspapers that Zuma and his ilk had been allocated intelligence source numbers by the PW Botha intelligence agents. I challenge the ANC leadership to appoint an independent auditor for evaluating how much was spent on these source numbers allocated to Zuma and others. Zuma’s feeble excuse that he was involved with PW Botha’s intelligence agents to negotiate on behalf of the ANC is somewhat puzzling. The question many are asking is: What precautionary measures did Zuma put in place during the so-called negotiations to make sure that exiles and many in this country would not be victimised as it happened in July 1990? You will agree with me that many people were killed/massacred by FW de Klerk’s forces between 1990 and 1993, as compared to the entire period of the struggle. It should be noted that these are the same forces that Zuma is boastfully telling us that he was negotiating with. One becomes suspicious whether Zuma’s recommendations to his leadership after he had met the apartheid regime were not leading South Africans into a Trojan Horse or a Dingaan’s Kraal style. Obviously TRC would have failed in their mandate if they do not investigate the circumstances which led to ANC’s leadership putting too much trust in FW de Klerk’s war machinery to guarantee our safety in the period referred to above. Surely people like Zuma who have been given source numbers by PW Botha’s government owes people of this country an explanation. Joe Mamasela’s evidence has been accepted in the highest courts of this country and has helped the TRC in unravelling the past. Many would like to know the present ANC cabinet ministers and NEC members who used to be flown by South African government helicopters from Lusaka to be briefed and to fetch money from Vlakplaas as alleged by Mamasela. It is worth noting that De Klerk’s government tried in vain to break our backs, that is, Winnie Mandela, Holomisa, Harry Gwala and others, but the process even after our freedom seems to be gathering momentum under the Mandela leadership. What is going on? Holomisa's 1987 coup - Why did Pretoria tread softly? There were judicial commissions of inquiry that were probing corruption and misappropriation of funds in the Transkei as far back as 1986. They published the involvement of political office-bearers in the rampant corruption that they unearthed. Pretoria was consequently embarrassed, the Transkei Public was jittery, and it was easy for the TDF to step in and re-establish sound and normal administration. In Bophuthatswana the staging of the coup was not preceded nor accompanied by startling revelations of corruption involving the then President Mangope and his ministers. Moreover, the TDF was unanimous in staging the coup, after forcing Chief George Matanzima out of power and acting against Miss Sigcau's Government. In each case we had incontestable evidence attesting to their complicity in corrupt malpractice. However, the ANC leadership should be thankful that the TDF had successfully removed from power a dynasty, the Transkei National Independence Party (TNIP) of Matanzima and Sigcau, because it denied the ANC and others a space to present their case to the people of Transkei. As far back as 1963, Stella Sigcau was part and parcel of the Government’s which harassed many people in Transkei including: detention without trial, banishment of churches, harassment of King Sabata Dalindyebo and the cold blooded murder of people like Bathandwa Ndondo allowed South African Police (SAP) to arrest or abduct ANC activists from Transkei to South Africa - the list is long. We have never known her to be critical of these issues nor her newly acquired status of being pro-liberation movement. However, if she was, I am thankful for this piece of information. Colonel Craig Duli As far as I am concerned I do not know that Craig Duli was executed. What I know is that Duli and his group were receiving military training in some Queenstown farms, and we reported this to Pretoria. They were arrested for illegal possessions of firearms and were placed in the custody of the SAP after being granted bail in Court. While under the bail conditions and "custody" of the SAP, they emerged in Transkei staging the aborted coup. The Duli group consisted of ex-Transkei Police who were refuges of the SAP after they had killed MK activists in the Transkei early in 1988. The ANC should recall that the Sangoni brothers and others were killed by the Transkei and Republic of South Africa (RSA) Police. When we laid charges against them, they fled to South Africa. The other group involved was the Lesotho Liberation Army. The ANC report shows no interest in the death of the nine TDF recruits. I confirm that Duli was a friend of mine and a highly respected officer, but his betrayal of the Transkei Nationals could not be tolerated by the Transkei Armed Forces. I have noted the instruction purportedly given by the ANC echelon in government to South African Police Services to try and gather evidence incriminating me in the death of Craig Duli. What a waste of time! It would be appreciated if the same instruction were to be given for the prosecution of the ANC's exile leadership for their brutal murder of ±100 ANC cadres who rose in rebellion against the organisation as claimed by Thabo Mbeki in the submission to the TRC. Today, the ANC government is sending the same policemen who ferried Duli and his team to Transkei, while they were still placed in the custody of the same policemen, to investigate us. It is like sending a jackal to a conference of jackals to represent sheep while the subject matter is the slaughtering of sheep! Whose interest are those policemen going to represent? It was for this reason that I told the newly "trusted" policeman who helped Duli and others, to go and jump in the lake, when he wanted a statement from me. However, I have offered myself to be the defence witness. I have been calling for the TRC to investigate this matter but seemingly they are not interested. The public is also watching the discrimination which is being practiced by the present government against the black soldiers of the TDF as compared to General Malan and others as well as Colonel De Kock. In the latter case the state paid for their legal costs including the use of luxury jets and hotels, while TDF members who have been arrested for the so-called murder of Colonel Duli are not supported by the State. What a fuss and double standards! The public will recall that the former President De Klerk's forces raided and killed five innocent school-going children in Umtata in 1993. Instead of being charged for murder, as it is the case with the TDF members, President Mandela apologised on his behalf. Can the same apology be extended on behalf of the then Transkei Government forces who were on the defensive against the South African Government backed abortive coup of 1990 which claimed the lives of nine TDF soldiers? Is this "gesture" a classical example of reconciliation? What must we read from here? I have noted the ANC leaders' zeal to poke their noses in the affairs of Transkei in particular the failed coup by Duli and the coup against Miss Sigcau in an attempt to incriminate me and masquerade as champions of human rights, although they had executed hundreds in exile. However, the ANC leadership must have felt bad when their trusted policemen, Capt. Neethling, told the media on 14 June 1997 that, "Holomisa is not a suspect. We can prove nothing against him. But the marathon investigation into the Duli murders suggested that Mr Holomisa did not order the shootings, nor did he have knowledge of the order prior to being told that Col. Duli was dead". Capt. Neethling continues, "Despite their animosity, we have evidence that Holomisa sent his bodyguards to East London (where Duli was in self-imposed exile) to try to broker a reconciliation. And when he was told that Duli was dead, Holomisa was seen to shed tears". This would contradict a report received by Military Intelligence operatives, as revealed by Vlakplaas Commander, Eugene de Kock, that Duli was shot dead by my bodyguards in the presence of Chris Hani and myself. The public should also know that although the abortive coup took place in Transkei, Eastern Cape, the case is being handled by Gauteng Attorney General and that the case will be heard in Bloemfontein. However, the Duli family had never laid charges against the TDF members. So where are their instructions coming from? Is this perhaps another palace exercise? Is the justice system of this country vulnerable to political manipulation? Now that the ANC leadership realises that they have failed to break my back, they are resorting to dirty trick campaigns costing them millions of Rands, money that could have been better used to pay their officers who are being retrenched in their regional offices. A personality full of contradictions ANC: You mention files on "Operation Katzen", DMI operations, etc. and you suggest that I revealed these with opportunistic intentions. Holomisa: While your leaders were fumbling in CODESA, your MK unable to put up a fight against untrained Inkatha hostel dwellers, I on the instructions of your President, gave you a weapon through those files to enjoy high moral ground in negotiations. I have never complained against my being appointed deputy-minister. I therefore challenge any ANC leader with such information to come forward and proclaim it publicly. I however sense that my topping of the ANC NEC elections in the 1994 December ANC Conference rendered me a target of a leadership clique within the movement. They became jealous as well as feel threatened by my popularity although I have never evinced any ambitions for the future leadership of the organisation. I was, of course, once, a de facto head of government. The ANC leaders are the last to talk of this position in disparaging terms as they fully exploited it for their political convenience. The TRC episode On 16 March 1996 I addressed a letter to the Secretary of the TRC in which I stated that "As a former Head of Government of Transkei I wish to bring to your attention that the knowledge and information I have on how the Apartheid Government was operating in our region might help your Commission in arriving at sound conclusions". The TRC itself published the contents of the letter in the media, it also published its intention to call upon me to testify before the Commission. There was much publicity in the media associated with my impending appearance before the TRC. The leadership of the ANC was fully aware of my pending appearance. Indeed, I handed a thirty-page copy of my written submission to President Mandela who gave me the go-ahead. I approached President Mandela, in particular, because part of the evidence I was to present included the secret files, which detailed Third Force activities which he said I should keep. Both of us agreed that the handing over of the files to the TRC would help Bishop Tutu and his team. Indeed, those files have helped the TRC in their work when one judges by the disclosures. On 22 May 1996, and with the concurrence of the ANC's leadership, I appeared before the TRC where I made written and oral submissions and handed over all the files, which were in my possession. At no stage prior to my giving evidence on the 22 May 1996 did the President or any member of the NEC contact me to suggest any alteration in the text. I dealt with, amongst other things, the reasons for the overthrow of the governments of Chief Matanzima and Stella Sigcau by the TDF, who appealed to Pretoria for military assistance in order to ensure a speedy and forceful removal of the military government from power. Following on there the attempted coup instigated by the NP Government was aimed at replacing the Transkei Military Council with a government which was politically more closely aligned with NP policy. There is no doubt that the Transkei Security Forces, would have been used once more, against the ANC and others since the corrupt leadership of the TNIP would have been returned to power by Pretoria. What triggered off the hot debate about my submission to the TRC was the following paragraph: "When Chief George Matanzima, then Prime Minister of Transkei, refused to step down as a result of his implication in financial scandals, the Transkei Defence Force intervened and forced him out of politics. A new Prime Minister, Miss Stella Sigcau, was elected. We discovered that Chief Matanzima was paid R2 million as a bribe for exclusive gambling rights. Bank statements were obtained from the Bank of Transkei which showed that some of the senior ministers and Paramount Chief KD Matanzima had each received a sum of R50 000-00. This created curiosity among the TDF ranks, that is, lower ranks, including troops, up to Senior Officers as to why the amount was divided among politicians if it was destined for Chief George Matanzima only. On the morning of 31 December 1987, all ranks of the TDF took a decision to remove the government of Miss Stella Sigcau since she was a recipient of R50 000." Thabo Mbeki and his cohorts, however, seized on this reference to Sigcau and exaggerated and distorted the entire issue of the bribe and her benefiting there under out of all proportion to the context in which the remarks were made. Indeed, all those who were in South Africa in 1987 were surprised and baffled by the behaviour of Thabo Mbeki and Steve Tshwete who pretended that this was a revelation. Mr Mbeki had never censured me nor did he call Sigcau and myself as he promised instead he went to parliament and attacked me. The statement referring to Miss Sigcau unruffled many feathers in the ANC leadership, causing some of them to panic beyond comprehension. This came as no surprise to me for Mr Kerzner has been rubbing shoulders with all sorts of government figures in the country. Everybody knows now that he had bribed Chief George Matanzima, the NP and even the ANC. No wonder the ANC government has dropped charges against Kerzner. I cited the conflict of interest between me and the ANC when the issue of Stella Sigcau was raised as both she and the ANC were recipients of Kerzner's favours. It is for this reason that I kept on agitating for an independent Tribunal to try my case. The rules of natural justice should have prevailed in this case. Unfortunately the Kerzner boys in the ANC leadership would not be swayed by any substantive argument. They clutched at my statement against Miss Sigcau and used it to expel me from the ANC. Even before I faced the Disciplinary Committee (DC), the people like Tshwete, Gigaba, Matshatile and Mbeki had already called for my expulsion. For example, Thabo Mbeki told a Sowetan reporter on 12 August 1996 that, "It has emerged that even a public apology from Holomisa will not appease the ANC’s NEC and DC. The message is clear: Holomisa must go". It is in this regard that I made this submission to the DC: "So you can see that a decision has been taken already to expel me from the organisation. I have a feeling that my appearance here today is just a formality”. In these circumstances I became anxious that members of the DC would also feel the antagonism in leadership circles and thus undermine my chances of obtaining a fair hearing in the DC and the NEC. It was in these circumstances that I felt it necessary, in order to protect myself and secure an objective unbiased hearing to raise the issue of recusal arising out of the ANC’s contemporary involvement with Kerzner. Be informed that sometime in 1992 I was approached by Thabo Mbeki and told me that he had been approached by Kerzner who wanted to know whether the ANC could do anything about charges pending against him in the Transkei. This enquiry took place on or about the same time as Mbeki’s 50th birthday party, which was graced by the likes of Sol Kerzner. In motivating for the recusal of the ANC not to preside over my case I drew the attention of Zola Skweyiya’s DC to the NWC meeting which was attended by both President Mandela and Thabo Mbeki, " The NWC issued a statement describing Holomisa’s allegations a "scurrilous", "repugnant" and "blatant lies". The organisation said it had not received any money from Kerzner and Kerzner had not funded the Deputy-President Mbeki’s birthday party. It further said that Tshwete' s accommodation at Eubank fight in the Sun City had been paid by boxing promoter Rodney Berman, a claim Berman denied within an hour of the statement being released. The effect of NWC’s statement was that my statements were false, malicious and defamatory - by implication that the taking of money from Kerzner whether for funding a birthday party, Tshwete' s accommodation or an election campaign would be an iniquitous act to which the ANC would not be a party. I clearly expressed my fear those members of the DC and the NEC, because of their appreciation of, if not dependence, on Kerzner’s generosity might not exercise an unbiased judgement in the disciplinary proceedings against me. It was, however, also my desire as a loyal member of the ANC that the organisation should distance itself from that constellation of circumstances which could give rise to the suspicion of a desire to protect Kerzner as a quid pro quo for his generosity. Insofar as the offer of complimentary accommodation was concerned I submitted a letter addressed to the SABC by the Marketing Director of Sun International from which it is confirmed in black and white that the Company invites relevant dignitaries including senior ministers for major international events providing them with complimentary accommodation and hospitality. It was, therefore, my suggestion that the DC should in collaboration with the leadership consider the formation of an independent investigative body composed of a person or persons acceptable to myself and the ANC who could investigate the question whether members of the DC who were ministers received complimentary treatment from Kerzner’s company. However, this request was rejected by the DC instead, Minister Alec Erwin, who once recommended that late Comrade Gwala be expelled from the South African Communist Party (SACP), again recommended to Zola Skweyiya’s DC without reasons as follows: - "It is my contention that Comrade Holomisa if he were to continue to enjoy membership, would remain a member of the legislature and would be entitled in that capacity to possibly continues his conduct. It is for that reason, I believe, the more severe discipline that you are entitled to take is expulsion of membership." So says the Baas! In conformity with the reasoning of Alec Erwin who wanted to be in good books of his masters who put him in the gravy train, the DC resolved to expel me in order to deprive me of membership, the purpose being to halt my parliamentary activities. Imagine, my fate being decided by a person like Alec Erwin, whose supporters can hardly fill the passenger seats of his car. It is clear that the DC acted improperly and with ulterior motive. Zola Skweyiya, who is alleged to be having a doctorate in law, ran like a spoilt child to the Office of President Mandela, to seek an advice as to whether he conducted the case properly. A civil servant, Mr Fink Haysom in the Office of the President was apparently assigned to handle him. On the advice of this civil servant a second judgement was issued outside the "court". A memorandum addressed to Skweyiya and his DC from President Mandrel’s office on 9th September 1996, after my expulsion, contained the following among other issues: - It suggested that "a judgement should be provided with reasons in respect of the conviction in respect of each charge and the sentence in respect of all the charges. It further suggested that a fuller judgement should be drafted by the DC, which addresses the charges and indicates which aspect of the Code of Conduct has been breached. This is not clear from Comrade Zola’s judgement." From the above you can see that the DC’s conduct is under question and, their formulation of the second judgement, took place after they received the letter which contained advice from the Office of the President. A classical example of a “kangaroo court” presided by Eastern Europe graduates. Is it conceded that this was one of the celebrated palace exercises? You be the judge! You will recall that when I justified the reasons for objecting to be tried by ANC Disciplinary Committee, I referred to Sol Kerzner’s generosity to ANC coffers. As usual the ANC leadership dubbed me a liar and denied that they ever received monies from Sol Kerzner. However, President Mandela later admitted that Kerzner had indeed given money to the ANC, but "Nobody will apologise to Holomisa. Even if anybody wanted to apologise I would overrule them." The original sin in this sorry affair is not so much the acceptance of the donation but the subsequent cover-up. It is difficult to give it another name. When the ANC NWC meeting attended by both President Mandela and Thabo Mbeki issued a statement that publicly denied my claim and later confirmed by President Mandela proves that there was a big cover-up. It is not true that I walked out of the NEC meeting during my appeal. We are still confounded by the ANC leaders' approach to Kerzner for a R2 million donation when they were aware that he was still facing charges of bribery in the Transkei. Their attempts to have Kerzner's case set aside after receiving the R2 million donation before they even came to power was tantamount to defeating the ends of justice. Through hindsight wisdom they showed us what type of leaders they would be. One is not surprised by the looting spree taking place in their government. As far as I am concerned, everything I said in the TRC was raised in evidence. However, the ANC leadership disregarded the latter. The response and passive reaction by the TRC leadership raises curiosity in the eyes of the public. The question arises as to why it never protected a person who facilitated the realisation of TRC's objectives. Is it conceded by the TRC leadership that I erred in raising issues contained in my testimony? Is it further conceded by the TRC leadership that they did not protect me, as their witness, from the ANC leadership's political machinations? (No, Mr Holomisa, it was a celebrated palace exercise!) How clean is Mr. Clean ? I have already alluded to corruption in the Transkei in the preceding pages. The ANC leaders have a propensity of regarding every decision taken by homeland governments for the benefit of their people as corruption while they shy away from decisions taken by the National Party Government. This attitude is a classical example of a deep-seated slave mentality among ANC leaders. They so readily embrace the decisions of the people they allude to as the trainers of the likes of Holomisa. It was for this reason that they targeted workers from the former homelands, in their obsession with right-sizing and downsizing of the civil service which led to the suffering of those workers and their extended families. The promotions which took place in the then central government against TEC ruling are not questioned because they were sanctioned by De Klerk (makhulubaas). In 1995 I submitted an open memorandum to the Cabinet expressing my displeasure in the manner of handling black civil servants in the country. ANC: Holomisa's Military Council did not reverse the trend of corruption inherited from the Matanzima era Holomisa: At least you acknowledge that this trend was inherited. The hard reality is that neither has President Mandela reversed the trend in South Africa. In fact, the symptoms are worse than during the Matanzima, Sigcau, Holomisa to De Klerk's eras put together. All this in three years! The prognosis is very bad indeed. The intentional spreading of blatant lies by the ANC leaders seems to be in their blood veins. They allege, for instance, that "just one day before the April 1994 elections, Holomisa and his entire Military Council illegally promoted themselves to qualify for better pensions". All the years I was Chairman of the Military Council, I retained the basic salary of an administrative head of a government department, that is the Director-General. From the above, it can be detected that I have never enjoyed the lucrative basic salary scale of a Prime Minister. Records in possession of the ANC government in the expenditure department can reveal that I have been paid the DG's salary scale plus taxable non-pensionable allowances for serving in the then Military Council. As a Commander of the then TDF, my basic salary was equal to other Directors-General of both Transkei and RSA. Whenever the RSA Commission for Administration adjusted salaries for RSA civil servants, Transkei would be advised accordingly and in terms of the existing agreements then RSA would transfer money to Transkei to effect such adjustments. For example, the last increase of both Transkei and RSA management echelon salaries was in December 1993. Transkei Government, in line with the RSA Commission for Administration circular, increased the salaries of its management echelon and executive with effect from 1 December 1993, in terms of PSC Circular No. 1 of 1994 as follows: TDF Commander (myself) DG Transkei/RSA From R221 802 per annum to R266 784 per annum plus R37005 per annum Military Council non-pensionable allowance From R221 802 per annum to R266 784 per annum My last promotion according to my personal files in your government's possession was in 1987 by Chief George Matanzima, from a rank of a Brigadier to Major General. At the time of leaving the Transkei government in April 1994 there was no change in my basic salary, it was fixed at R266 784 per annum plus R37 005 per annum Military Council taxable non-pensionable allowance. That is Holomisa's version. I doubt very much if there would have been any minister or a head of government/province in today’s government who would have accepted the same basic salary as that of a director general. The ANC leadership claims that I promoted myself "a day before the 1994 elections". I am therefore looking forward to receiving from you documented evidence that substantiates the malicious allegations levelled against me. In the meantime, my legal team will approach your good offices with the intention to sue your organisation for the defamation of character. You will agree with me that I fared better than the ANC leadership who, on assuming power, doubled the salaries of their predecessors. My witness that I receive no monthly pension is none other than your President himself. I wonder where the figure of R342 000 per month on pensions originates from, because the civilian members of the then Military Council never qualified for and received any pension. The four soldiers who served in the Military Council then returned to the military barracks without getting any golden handshakes. If some of them have retired they did so as members of the new SANDF. They, like me, retained their basic salaries plus taxable non-pensionable allowance when they were members of the Military Council. ANC: “Holomisa robbed the public fiscus, to feed not the poor, but a relatively marginal third world professional stratum of fellow junior officers and bureaucrats.” Holomisa: “Here you write like a typical absentee and one of the cowards who were incensed in the safe havens of Europe and elsewhere. The opposite of what you say is true. Holomisa fed the poorest of the poor in Transkei. Go and ask the people of that unfortunate part of South Africa.” ANC: "Such wild spending sprees (as done by Holomisa's Military Council, result in crisis conditions, that open the doors wide for IMF - imposed structural adjustment programmes." Holomisa: “It is very sad if you are aware of this reality, and yet you allow these tendencies to become a major characteristic of your ruling party. Your much-touted programmes, macro economic policy, wholesale privatisation, GEAR, outcome-based education, national qualifications framework and a whole host of such concepts works towards the structural adjustment programme. Ask President Chiluba of Zambia. Your party not Holomisa is preparing South Africa for this calamity.” It is disconcerting to note that while the ANC led government, on one hand, professes to prioritise job creation, on the other hand, some ministries rather than creatively and innovatively seek mechanisms of lowering prices they choose to import the required commodities. Invariably the social cost to South Africa of "exporting" jobs outweighs the benefit of purportedly cheaper imported commodities would create jobs for the foreign countries. In a nutshell this practice decreases job opportunities in South Africa and increases job opportunities for the exporting countries. Who are the economic advisors of the present government? Are they loyal to this country? 60% to 70% of the population of this country have no access to banking facilities. How do we then talk about wholesale privatisation? Who is going to benefit? Foreigners who "rent" few prominent blacks as fronts will no doubt benefit. The countries who are pumping millions of Rands to the ANC coffers and their youth league are given tenders and the land is sold to them for peanuts, even before the question of land dispute has been resolved. If we continue in this manner, I am sure that by 1999 we will be renting this country from foreigners. ANC: "If Holomisa is Mr Clean, why is he speaking to Lucas Mangope?" Holomisa: Your amnesia is mindboggling. Why did the ANC or rather President Mandela speak to PW. Botha in 1984? Why did he speak to De Klerk? Why is your organisation talking to Inkatha? You have prepared a package of concessions, literally begging, with cap in hand, for a merger with IFP. All this is a shameful about - turn made in the name of peace in KwaZulu-Natal. Is this again a strategy? If that is the case, I am justified. In the light of all your insinuations and allegations, you promise your members you are going to revive your structures, and to engage in a programme of cadre development, all this to guard against demagogy and opportunism. This is a noble and necessary venture. I suggest you start by reviving the Department of Information and Publicity. You even suggested "Holomisa's ineptitude is due to the fact that he has never become a member of a street committee". I do not have any regrets about this. Street committee leadership background is the cause of all the mess South Africa finds herself in today; rampant crime; uncontrolled spending sprees; unprecedented corruption; stinking town and city centres; uncontrolled immigration; taxi violence; car hijackings; etc., the list is endless. Against this background, your booklet was a futile exercise. This is a feeble and failed attempt to detract people's focus on the glaring failures of your party, and a despicable act of panic and cowardice. So to the ANC rank and file and the public in general, I say, you be the judge. I learn from the booklet that commissions have been appointed to probe corruption during my reign in the Transkei. What puzzles many people and me is that not a single member of the Military Council nor directors general were ever summoned to testify before the Commissions. To make things worse Directors, Chief Directors, Deputy DGs and DGs have been expelled in favour of pals. The findings thereof would always remain questionable in my eyes and to many others who know administration. However, the last word on issues like these should be said in a court of law. Making noises about corruption without charging the wrongdoers will not help, take a leaf from the then Military Council of Transkei. Where to now, Holomisa? ANC: "When journalists ask Holomisa whether his "new party" will be to the left or right of the ANC they are met with a blank stare." Holomisa: "This is not surprising, if one is engaged in a process of consultation. However, how can one know the left or right of a party with virtually no economic policy, no foreign policy, with a leadership who one day masquerades as hard-line socialists, and tomorrow pronounce capitalism as "a fundamental policy of our organisation". Even Mr Raymond Mhlaba in his farewell speech in Port Elizabeth, on 14 June 1997 asked, "What is the character of this government?" The President of Cosatu has even confirmed the above confusion, your big ally when he referred to the failure of Gear "After a year of Gear - the reverse gear for our society - the promised jobs have not materialised. There is a vast difference between programming a computer to project on jobs and the real thing. Gear is a business strategy dressed up in struggle language." The miraculously bloodless 1994 democratic elections unfolded a vast new dispensation that dictated some new demands and re-definition of political roles on some major political parties. Undoubtedly there has been tremendous pressure of late, on most role players to undergo some introspection and re-appraisal in respect of the birth of fresh thought and new dimensions pertaining to common goals and common destiny which the entire South African society will surely have to grapple with - beyond the Truth and Reconciliation Commission era. Perhaps we could begin by seeking a more stable and permanent identity than the "rainbow" one, precisely because the rainbow is ever a fleeting phase whose attributes are dubious indeed and above all it contains some colour connotations - the very scourge of our evil past.
