Arms deal investigations are exposing the links between business and politics within the ANC. Politics has become a means to wealth and business deals a source of political influence and power. ANC politics and business can still be divided roughly into two opposing camps.
THABO’S BOYS VS VULA’S BOYS
What are we to make of the arrest of Tony Yengeni, Parliament’s former defence committee chairman?And the police raids on the home and offices of Schabir Shaik, MD of armaments company ADS and brother of South Africa’s arms procurement chief, Chippy Shaik? What are the prospects that the official investigations of alleged irregularities in the government’s (now R60 billion-plus) arms procurement programme will “go all the way”?
The last question is eerily echoed in a 1998 report by Washington Post correspondent David Ignatius about an arms deal scandal that continues to haunt French politics [page 21].
“A large bomb is ticking away in the midst of French political life – a scandal that could explode with tremendous force or, as is often the case in France, be quietly defused and buried …”
In 1998 a corruption investigation by Judge Eva Joly turned really nasty when she found evidence that French defence giant Thomson-CSF had acquired former foreign minister Dumas’ mistress’s services as a lobbyist – just when the company needed government approval for a $2.5b deal to supply frigates to Taiwan. Dumas had been a key opponent of the deal, but within a year it was approved – without any explanation.
“Chirac must decide soon,” wrote Ignatius, “whether to encourage an escalation of the judicial probe [to include the frigate deal] – and, figuratively speaking, bring down the pillars of the temple – or instead try to contain the investigation.”
Likewise, will President Thabo Mbeki allow the investigation to go the whole way, risking bringing down the pillars of the temple, or will he seek to limit the enquiry to small-time corruption involving secondary contracts only? Foolish question.
But let’s have a closer look at the situation anyway, both current and historical, and see if our suspicions are correct.
Arms-deals investigators will quickly have discovered that those within the ANC most interested in the deals can be divided roughly into two competing groups: the Vula Boys and Thabo’s Boys.
While both are equally anxious to maintain their grip on power and their cut of the arms deal profits, the difference between them could just influence who will be sacrificed and who will be saved in the arms-deal investigations.
The Vula Boys are the collection of communists and (mostly Natal) ANC intelligence operatives who set up Operation Vula, the secret pre-1990 programme to develop the leadership and financial networks inside SA needed to launch a violent revolution.
Vula was controversial because it was secret even inside the ANC: the wider ANC leadership – including Thabo Mbeki – knew nothing about it. (Treason? The Vula Boys would later claim their scheme had been sanctioned by party president Oliver Thambo, which sounds convenient, because, by then, he was too ill to confirm or deny this.) That gap between the groups appears to have persisted.
Vula was led by Mac Maharaj (later made Minister of Transport by Mandela – but fired by Mbeki). It included Siphiwe Nyanda (now Defence Force Chief), Ronnie Kasrils (moved by Mbeki from Defence to Water Affairs), Mo Shaik (demoted from national intelligence co-ordinator to ambassador in Morocco), and Shaik’s brother Schabir (who, recent events suggest, has lost the protection he once might have expected). Deputy President Jacob Zuma (then still ANC intelligence chief) was apparently also within the Vula network and is widely perceived to be the closest the group has to a protector in government. (Schabir Shaik is said still to handle his personal financial affairs.)
Operation Vula militated against another initiative within the ANC, the Mbeki-led efforts at dialogue with the apartheid state. Vula continued its secret operations following the ANC’s unbanning in 1990, leading to increasing conflict between Vula operatives and the ANC leadership about strategy and the direction of negotiations. “The views of the Vula comrades were largely ignored,” the group’s former communications man Tim Jenkins wrote in 1995.
The level of conflict between the two groups was such that in February 1990 Maharaj quit the ANC.
Mandela – just released from prison – persuaded him to retract his resignation, but in June 1990 Vula’s cover was blown following the arrest in Natal of two of its operatives, Charles Ndaba and Mbuso Shabalala. (Both later murdered by security police, purportedly to prevent the exposure of Ndaba as a police agent.)
In the midst of negotiations, Mbeki was confronted by the Afrikaner Nationalist negotiators with evidence of a secret ANC unit of which he had been unaware. FW de Klerk sanctimoniously charged the ANC with secretly plotting insurrection while negotiating a settlement.
Some sources believe Mbeki was so angry that, in effect, he allowed the Vula network to be hung out to dry. Maharaj and others were arrested and released on bail only after the Pretoria agreement with De Klerk had already been signed. Mbeki allowed these key hawks within the ANC to be side-lined. In mid-December 1990 Maharaj again “retired” from the ANC. Again Mandela brought him back - and into the Cabinet.
Where are the Vula Boys now? They are positioned strategically throughout state structures. The Shaik brothers’ mentor, that stalwart communist academic Pravin Gordhan, like Maharaj, was unlikely to be welcomed into Mbeki’s political structures; instead he heads the SA Revenue Service, where he has been joined by old comrades Vuso Shabalala (Customs), Ivan Pillay (Special Investigations) and Sirish Soni. [It is said ex-poachers make great game-keepers! – Ed.]
Solly Shoke is now mission director for the SANDF, Raymond Lalla is a senior official in police intelligence and Mpho Scott is an MP who appears to be somewhere at the centre of just about every major empowerment deal – including the arms deal.
The repeated surfacing of Vula members in alleged plots is no co-incidence. Remember the report which the ill-fated Georg Meiring (then SANDF head) presented to President Mandela in which it was alleged that Meiring’s 21C (Siphiwe Nyanda) was plotting with ANC radicals against the government? Whatever Meiring and friends’ interest in its telling, there could’ve been something to the story – only the plot is more likely to have been against Mbeki than Mandela.
Maharaj’s name was floated by ANC sources in connection with last year’s bizarre Mbeki plot allegations.
There are clearly ideological issues involved in the conflict. Maharaj, Gordhan and company are associated with the ANC’s left wing, which includes much of the white left, and is seen as sympathetic to ex-trade unionist Cyril Ramaphosa. At least two of the Shaik brothers have privately expressed concern at the “crude Africanism” espoused by some of Mbeki’s acolytes.
It is said that, in the course of their arms-deal inquiry, the Scorpions have taken an interest in the relationship between Maharaj, Gordhan, Zuma and the Shaiks. (Ronnie Kasrils is suing several newspapers for suggesting that the Scorpions were at one stage investigating him.)
It would be no surprise if they were. While Maharaj was in charge, the Department of Transport got Schabir Shaik’s company Nkobi Investments on its feet via a R4-billion tollroad contract on the N3 highway. (Nkobi has a small share of the consortium.) This was followed by a R400m contract for the production of credit card-type driver’s licenses – Nkobi’s first joint venture with French arms company Thomson-CSF and with Denel.
The N3 toll consortium is worth a closer look. [see end.]
Among the major shareholders is Rand Merchant Bank, part of the FirstRand Merchant Bank, part of the FirstRand Group, where Comrade Maharaj has since become a director. (Two other group subsidiaries, Wesbank and FirstAuto, also each won R750m contracts while Maharaj was transport minister). Also on the RMB board is Ahmed Sadek Vahed (of the AM Moola group), whose daughter is married to Schabir Shaik.
And, thanks to Rapport, we now know that Pravin Gordhan, Commissioner of the SA Revenue Service, at the request of Shaik solved a tax problem for the AM Moola group. This personal service, explained a spokesman for SARS, was part of Revenue’s "open door" policy.
Rapport also told us that Gordhan’s brother-in-law works for Schabir. And that Schabir handles Jacob Zuma’s finances. All one big happy family.
All this might lead one to suspect that the recent raids by the Scorpions on the offices of Nkobi Holdings and the home of Schabir Shaik might have been politically motivated. Not so, we are assured: the raids took place on the basis of specific information. Furthermore, judges in Paris and Mauritius – where raids took place on Thomson-CSF (now called Thales) offices – have to have been convinced that good grounds existed for those raids.
But that’s not to say investigators are not under political pressure. They are.
Government is desperate to avoid any suggestion of corruption in the prime contracts, which would place them in jeopardy. Investigators have been told not to bother former Defence Minister Joe Modise, who is apparently dying of cancer. There are whispers that Jayendra Naidoo (who negotiated the final deals) has also been declared out of bounds to investigators. Ian Pierce, an accountant who is reputed to have several present and former cabinet ministers as clients, and who set up many of the empowerment companies involved, continues simply to defy a subpoena to hand over documents. And the focus on the Shaiks has diverted attention from Thabo’s Boys’ also having their snouts deep in the arms-deal trough.
To be continued . . .
Footnote: More about the N3 toll consortium
Also once a director was Mohamed Enver Asmal (said to be related to Kader), whose company, Profour, won the tender to revamp Durban Airport. (Profour then promptly went bust, but that’s another story.)
Yet another director was George Negota, possibly representing that firm with an impeccable Hervormde Kerk/ Broederbond heritage, BKS engineering. (He is chair of Khuthele Projects, a BKS subsidiary that specialises in transport consultancy.)
BKS, which amassed a fortune on state projects under apartheid, is poised to build on that solid foundation with the new elite. (Joe Modise was recently appointed chair of BKS.)
Its subsidiary, Tollink, has won contracts to run tolls on the N3 and N4. It is doing work for Coega. It’s in on the Gauteng high-speed train project. It owns the rights to the technical information for the proposed La Mercy airport. So it goes.
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