By Lee-Ann Alfreds
They have formed a procession of grey men, with Afrikaans surnames and titles such as programme manager, acquisitions manager and chief financial officer.
But while Robert Vermeulen, Johan Odendal, Jacobus Grobler, David Griesel and Henderich de Waal Esterhuyse have not necessarily provided headline-grabbing testimony, they have been important witnesses for the Arms Procurement Commission. For these former and current employees of Armscor – the company responsible for procuring arms for South Africa – have shone a light on the 1999 arms deal, long shrouded in mystery and confusion.
With 10 Armscor employees having testified before the commission – the most of any of the government agencies appearing – the inner workings of the deal, and how processes were flouted and normal procedure were deviated from have become clearer.
The commission is probing corruption, fraud, irregularity and impropriety in the R71-billion purchase of three submarines, four frigates, 24 Hawk fighter jets, 26 Gripen fighter jets and 30 light utility helicopters.
Change in normal acquisition procedure
In testimony in October last year, David “Dawie” Griesel, Armscor’s acting GM for acquisitions, told of how the Strategic Defence Procurement Package (SDPP), as the arms deal was known, marked a change from normal acquisition procedures.
Griesel said under standard procedures, the agency is responsible for all phases of tendering and contracting. “The Armscor board of directors, being the tender board, is the sole authority that can authorise preferred bidders and also authorise contracts to be placed on identified preferred bidders,” he said.
“The practice dictates that the process would be led by Armscor and only provides for participation by the DoD (Department of Defence) on evaluation panels. (But) in the SDPP process, some of the value systems and evaluation reports were finally approved and signed off by the DoD and not by Armscor.”
Griesel testified that the list of preferred arms deal bidders was ultimately authorised by Cabinet, as well as the contracts.
Arms deal activists have long contended that some Cabinet ministers and high-ranking DoD officials, such as chief of acquisitions Shamin “Chippy” Shaik, received millions in bribes and kickbacks from bidders.
Griesel also testified that while Armscor was normally responsible for negotiations with arms suppliers, negotiations in the arms deal were led by an international offers negotiating team (IONT) who reported to cabinet.
Jayendra Naidoo, the IONT‘s chief negotiator, later became a shareholder in a company that took a substantial contract out of the deal, while other members of the team such as Chippy Shaik and LLew Swan, Armscor’s CEO, have been accused of colluding to allow the German Frigate Consortium to proceed to the next round of evaluations, despite the fact that they did not submit all the necessary information and did not conform to minimum criteria. The consortium eventually won the bid to build the frigates.
Bid scores doctored to favour certain bidders
Meanwhile, Vermeulen, Armscor’s programme manager for the integrated project team, conceded under cross-examination by arms critic Paul Holden in October last year that the scores earned by the various bids for the submarine contract had most likely been altered before being forwarded to the strategic offers committee. “I was under the impression that our basic results had always been directed directly to Sofcom but obviously this intermediate step took place,” he stated in response to a question.
In The Devil in the Detail: How the Arms Deal Changed Everything, Holden and co-author Hennie van Vuuren implicated Chippy Shaik in altering scores to favour certain bidders who had bribed senior ministers, ANC members and high-ranking officials.
While none of Armscor’s employees testifying has been implicated in any irregularity, the same cannot be said for its leaders. Swan, Armscor’s CEO at the time of the deal, was one of about 30 officials and VIPs to receive a discount on a luxury vehicle from an arms deal related company.
Daimler-Chrysler Aerospace owned shares in European Aeronautical and Defence Systems, which received a R220-million contract to supply radar for the corvettes. It provided the Sunday Times with a list of officials and VIPs who received a discount. Tony Yengeni, then chairman of the joint standing committee on defence, and a senior ANC member, was later convicted of defrauding Parliament by accepting a 48% discount on a luxury car during the tendering process, while he was a member of a parliamentary committee reporting on the same deal. He spent four months in jail.
Swan’s name was on Daimler-Chrysler’s list as was that of Armscor chairman, Ron Haywood. The Mail & Guardian also reported in 2007 how Haywood and Swan left Armscor after the arms deal was concluded in 1999, to join defence minister Joe Modise in new ventures. Swan and Modise became partners of Russian arms dealer Mark Voloshin, while Modise and Haywood joined up in a controversial deal with local logistics and electronics company Conlog.