Editorial

Dear Reader: We told you 16 years ago!


Readers knew all about Zuma’s French arms deal bribes in 2003.

The more recent mobilisation of the National Prosecuting Authority to resume the previously abandoned prosecution of Jacob Zuma is one of the few signs of what was promised would be a “new dawn” for South Africa.

It is particularly appropriate that the prosecution is for crimes allegedly committed in relation to the massive arms deals concluded with various European suppliers in 1999, because those deals compromised the entire ANC hierarchy – former president Thabo Mbeki included – setting the pattern for the massive diversion of state resources to corrupt purposes that has continued ever since, resulting in the perilous economic situation the country finds itself in 20 years later.

As is invariably the case, the cover-up is as heinous as the original crime. Read the charge sheet in the Zuma case, then read the story headlined “Who, what, when & how much? that appeared in Noseweek in August 2003 – yes, 16 years ago! – and you will immediately realise that all the evidence backing those charges was known and available to state law enforcement agencies 18 years ago. And, neatly summed up, to Noseweek readers 16 years ago.

The fact that Zuma and others were not prosecuted then simply encouraged those with even bigger and more brazen frauds in mind, as we now all know.

The 2003 story from Noseweek, issue 48:

• In the late ’80s and early ’90s: The three brothers Shaik (Schabir, Mo and Chippy), Mac Maharaj and Jacob Zuma, along with the now-deceased Joe Modise, were key players in the ANC’s military and intelligence wing. (Zuma recruited the Shaik brothers to his intelligence network; Maharaj headed its most famous assignment, Operation Vula, aimed at mobilising funds and forces for the ANC’s participation in its first democratic general election.)

When the ANC was unbanned in 1990, Schabir Shaik was advisor to ANC treasurer Thomas Nkobi. Following Nkobi’s death shortly thereafter, Schabir Shaik continued as financial advisor to Zuma. In 1994, when the ANC came to power, Maharaj became transport minister (see noses47&48 about him), Modise became defence minister (having been set up for corruption from day one - see nose52) and Zuma a KwaZulu-Natal MEC. Schabir Shaik’s brother Mo advised the government on security and brother Chippy was appointed chief of defence procurement.

With all those friends in high places [and lucrative arms deal spending], Schabir Shaik reckoned it was time to go into the BEE business. In February 1995 he registered two companies: Nkobi Holdings and Nkobi Investments. (The choice of name suggesting links to the ANCs fundraising machinery.)

They quickly became associates of French defence conglomerate, Thomson CSF [since re-named Thales].

• 18 November 1998: A senior delegation from defence suppliers Thomson International of France, consisting of Messrs Moynot, local Thomson CEO Alain Thetard and International company head Jean- Paul Perrier, meet with Schabir Shaik at Nkobi’s offices in Durban. They negotiate the sale of 10% of Thomson’s shares in its local defence subsidiary ADS to Nkobi. Mysteriously, the meeting is also attended by “Minister JZ”. This was the first evidence suggesting that Jacob Zuma, then shortly to become deputy president, had some interest in Nkobi and, through its stake in ADS, in the massive arms deals about to go down.

• 30 September 1999: Thomson-CSF chief executive in South Africa Alain Thetard and Nkobi CEO Schabir Shaik have a meeting in Durban, at which Shaik conveys a “request” concerning Jacob Zuma to Thomson. (Although Zuma was apparently not present at the meeting, he was in Durban that day.) The “request”, it later emerges, was for “one or more” payments of R500,000 to Zuma by Thomson in return for his support and protection.

Also on that day, Thomson-CSF (France) buys Nkobi Investments’ 10 shares in Thomson Holdings (SA) for R500,000 – 50 times the price at which similar shares had been issued to Thomson International the day before, later leading Scorpions investigators to suspect that the price may have been inflated to generate R500,000 for Zuma.

• 10 November 1999: Thetard meets with Perrier and Shaik in Paris (at Shaik’s request) to discuss “JZ”. Thetard asks Shaik to obtain a “clear” confirmation of the request from “JZ” or, failing that, for an “encoded declaration” from Zuma “validating” the request that had come to them via Shaik in September.

• 25 November 1999: The cabinet authorises the Department of Defence to sign the final arms procurement contracts. Defence Minister Joe Modise then nimbly resigns from the cabinet and parliament [There is a great deal of evidence to suggest that he was a major recipient of bribes related the deals], so the contracts are signed by his successor a week later.

• 11 February 2000: Schabir Shaik writes, in his capacity as executive chairman of Nkobi Holdings, to Alain Thetard of Thomson-CSF: “I refer to our understanding re Deputy President Jacob Zuma and issues raised. I will appreciate it if you can communicate to me your availability to meet.” Thetard, in reply, scribbled his willingness at the foot of the letter.

• 11 March 2000: Thetard, Shaik and Zuma meet in the morning in Thetard’s room at the Marine Parade Holiday Inn in Durban. Afterwards, Thetard sends an encrypted note to his boss Perrier in Paris, telling him that at the meeting Zuma had given him the “clear confirmation” he required “in an encoded form”.

Thetard then spells out the deal: “May I remind you that the two main objectives of the ‘effort’ requested of Thomson are: Protection of Thomson CSF during the current investigations (Sitron) [The SA Navy’s codename for its new corvettes project. – Ed.] Permanent support of JZ for the future projects. Amount: 500K ZAR per annum (until the first payment of dividends by ADS.)”

This last statement is the second bit of evidence to suggest that Zuma had a hidden stake in Nkobi/ADS. Advocate William Downer of the Scorpions concluded that Zuma had made a request for a R500,000-per-year bribe and was complicit with Shaik and Thetard in “some prior plan”.

In the months that follow, according to Shaik’s notes, he continues to make payments on Zuma’s behalf, mostly for flat rental and his children’s school and university fees. (The Scorpions traced payments totalling about R90,000 over a three-year period, of which Zuma appears only ever to have repaid R15,000.) Significant, but nothing like the R500,000 promised by Thomson.

• July 2000: The Auditor General (AG) completes a “regularity” audit of the arms acquisition process. The audit finds that all was not regular.

• 31 August 2000: Shaik writes to Thetard reprimanding him for not answering his calls over the previous three weeks about “matters requiring urgent attention”. Such as the “very important matter” raised with Perrier in Paris several months earlier; the matter that “he [Perrier] had sanctioned, for implementation by yourself.” [Which can easily be interpreted as “Where’s the money you promised JZ?”]

• 15 September 2000: The Auditor General submits his report on the arms acquisition process to parliament’s Standing Committee on Public Accounts (Scopa). His conclusion: there have been “material deviations from generally accepted procurement practice” and the explanations provided by the Department of Defence are unsatisfactory. The audit dealt mainly with the awarding of contracts to the five primary defence contractors. Thomson’s (and Nkobi’s) ADS was one of them. The AG recommends a further, special, investigation into alleged irregularities relating to sub-contractors (ADS was one, too). Scopa votes unanimously including its ANC members headed by then ANC MP Andrew [Feinstein] to support such an investigation.

• 6 October 2000: Shaik writes again to Thetard: “Two weeks ago you undertook to call me back from your Mauritius office… Herewith a list of matters urgently requiring our attention.” Number five on the list: “The matter agreed by ourselves in Pretoria… over breakfast. My party is now saying that we are renegading [sic] on an agreed understanding… I share the sentiment with my party that he has been let down; this is particularly unpleasing given the positive response from Mr Perrier, [in consequence of which] my party proceeded to an advanced stage on a certain sensitive matter that was required to be resolved.”

• 15 October 2000: Zuma addresses the World Anti-corruption Conference in Durban. He speaks about “regaining the moral high ground.” “Even as we conclude this conference,” he declares, “an act of corruption is being committed somewhere in our country….” He has a message for those who thrive on corruption: “We have the will to deal with you decisively.”

• November 2000: A year has passed since Shaik first met with Thetard to discuss “JZ’s” request for a fee in return for protection. He again arranges to meet with directors of the French arms supplier, this time in Mauritius. He takes to the meeting a file containing newspaper articles on the growing controversy surrounding the arms deal (one is headlined, “I smell a very big, dirty rat here!”) and the Scopa hearings at which even the ANC members, led by Andrew Feinstein, (reportedly encouraged by Zuma) are calling for further investigation of the 1999 arms deals. [For background on this, see note below.] In Mauritius, Shaik, Thetard and others discuss “damage control”. According to investigators, “Shaik expressed his concern about the possibility of further involvement in the investigation by the Heath Investigation Unit.” [Clearly a not-so-subtle implied threat – just in case the French thought they did not need Zuma’s protection. – Ed.]

• 8 December 2000: Inkatha Freedom Party MP Gavin Woods, chairman of Scopa, in fact writes a confidential letter to President Mbeki, urging the involvement of Judge Heath’s Special Investigation Unit (SIU) in the arms investigation. During the Christmas parliamentary recess, many behind-closed-doors meetings are held between senior ANC and government members to discuss how best to deal with Scopa and the growing arms controversy. Deputy President Zuma plays a leading role.

• 19 January 2001: Woods gets a reply to his letter – not from Mbeki, but from Zuma. There has been a sudden about-face: In it, Zuma now accuses Woods of “misdirecting himself” and storms about Woods’s “assumption that our government, the transnational corporations and foreign governments are prone to corruption and dishonesty”!

“The government will …act vigorously to defend itself against any malicious misinformation campaign,” he tells Woods. Despite Woods’s letter having been confidential, Zuma copies his reply to all the contracting parties in the arms deal and their local representatives. (To ensure that they note his efforts to protect them?) The government’s website still hosts the letter.

Heath is fired, but other agencies continue to investigate the arms deals.

• March 2001: Advocate William Downer is designated by the Scorpions to conduct a preliminary investigation.

• 24 August 2001: Downer is designated to probe the “suspected commission of offences of fraud and/or corruption …involving the prime bidders/contractors and/or sub-contractors for the supply of armaments.” Thomson and Nkobi’s company ADS is among the contractors and sub-contractors named in Downer’s brief.

The Durban High Court issues warrants authorising Downer’s unit to search and seize documents from the offices of all the Nkobi companies and the homes and offices of Schabir Shaik and Colin Isaacs, financial director of the group.

• 9 October 2001: The Scorpions team seizes scores of files at the offices of Nkobi Holdings and at Schabir Shaik’s Yarningsdale penthouse on the Marine Parade.

So much for that Noseweek report in August 2003. Now read the current charge sheet in the Zuma case and you’ll find it all there as well.

To complete the picture, re-read After the Party, Andrew Feinstein’s account of how he was encouraged by Zuma, behind the scenes, to argue and vote at Scopa for further investigation of the arms deals, only for Zuma to suddenly, a month later, turn publicly hostile to the move.

Disillusioned, Feinstein resigns from Parliament and the ANC.

Later, when checking the chronology, he finds that Zuma’s about-face came about almost immediately after that notorious encrypted fax was received from Mauritius: Feinstein had been used to effectively blackmail the French defence suppliers into performing on their promised bribe.

Feinstein is listed as one of the witnesses to be called by the prosecution in the resumed criminal trial. – The Editor.
 

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