Arms deal ‘fraud, manipulation’ exposedComment on this story
Johannesburg - Lieutenant-General Pierre Steyn resigned as secretary for defence before the 1999 arms deal was signed because he thought it was a dodgy deal.
Steyn pointed a finger at the then minister of defence, the late Joe Modise, and the then department of defence’s chief of acquisition, Chippy Shaik, as key people involved in manipulating the Strategic Defence Procurement Package (SDPP).
“In view of persistent attempts by the minister to dismiss sound financial arguments, ignoring prescribed acquisition processes and unduly speeding up the SDPP process, I contend that the process adopted by the minister, devotedly supported by the chief of acquisition, lacked transparency and was influenced and manipulated to such an extent that the possibility of fraud and corruption cannot summarily be dismissed,” Steyn said in his statement to the Arms Procurement Commission on Wednesday.
He did not offer the commission hard evidence of corruption and bribery but called for the commission to investigate it.
The commission is investigating the controversial arms deal signed in December 1999, through which the SANDF bought frigates, submarines, fighter jets and helicopters.
Steyn raised queries over the finances and said “the reckless disregard of fiscal discipline by inter alia my executive (the minister of defence) made it absolutely impossible for me to effectively discharge my fiduciary duties associated with a lawful process of acquiring arms and defence equipment”.
His attempts to persuade the minister of the risks failed, so he resigned in August 1998 and left at the end of November, almost a year before his contract was up and before the deal was signed.
Steyn, a lieutenant-general who spent 34 years in the SA Air Force, was secretary for defence from August 1994 to November 30, 1998, and was thus the accounting officer during that time.
Steyn said the deal deviated from the standard acquisition processes; the offsets were over-emphasised, unsubstantiated and not delivered on; the deal couldn’t be accommodated in the budgets; the aircraft purchases were manipulated; and the whole thing was a dangerous financial risk.
“In my view, the deviations from the standard acquisition processes, which the minister of defence fashioned, laid the foundation for the executive and senior officials of the department and Armscor to frustrate the proper regulation of the collection, receipt, control, custody and issue of state money and the receipt, custody and control of state property,” said Steyn.
He said a “concurrent and unauthorised” acquisition process was set up by Shaik.
Steyn said Shaik signed as secretary for defence - Steyn’s position - as the authority to set up that concurrent process, a fact Steyn said he discovered only recently while compiling his statement for the commission.
He called the process which Shaik set up - the strategic offers committee, or Sofcom - a way of circumventing the correct structures and manipulating the acquisition process.
Steyn said the manipulated processes affected the fighter aircraft purchases: the lead-in fighter trainer; the Hawks bought from BAe in Britain; and the advanced light fighter trainer (Alfa), the Gripens bought from Saab in Sweden.
“The choice of the Hawk was predicated on fraudulent manipulation of information, and the choice of the Alfa aircraft was superfluous as the air force had no need thereof,” said Steyn.
He said Modise made a “subjective decision” to phase out the SAAF’s existing Cheetah aircraft (which had at least 14 years of service left) and buy new Alfa aircraft which weren’t needed, and that the decision to buy the British aircraft was unjustifiable and done “at considerable extra cost which was unnecessary”.
Steyn accused Shaik of trying to pretend, via faked minutes, that a briefing by Modise to then deputy president Thabo Mbeki and other ministers in August 1998 was a cabinet meeting which decided to recommend the Hawks. This meeting has previously been dismissed by the secretary of cabinet as not being a cabinet meeting.
Steyn criticised the deal’s finances, saying the procedure Modise adopted to gain cabinet approval “contained a dangerous cocktail of financial and economic risks” for both South Africa and the Department of Defence. There was no formal budget, as legally required, he said.
“The total cost of the military equipment was approved by the cabinet only during the negotiation phase.”
Former fighter pilot Steyn’s career included being chief of defence force staff from 1990 to 1993 and chief of defence force personnel from 1989 to 1990.