Another bomb drops on the dodgy arms deal

The DA has released documents purporting to show that Fana Hlongwane, adviser to late defence minister Joe Modise, was paid more than R150-million for work related to the arms deal after he had left the government's employ.

Last week Swedish arms manufacturer Saab revealed that it had, through British Aerospace Systems (BAE), paid a South African "consultant" R24-million to buy preferential treatment in South Africa's R48-billion arms procurement programme.

But documents released by DA MP David Maynier yesterday list payments apparently made to Hlongwane that indicate that he might have benefited from the arms deal to the tune of R150-million.

One set of documents bears the initials "FH" on each page. The last page of the set carries the signature "F Hlongwane".

Most of the payments were made through a third company, SA National Industrial Participation (Sanip), and the consultant who benefited is widely believed to have been Hlongwane, Modise's adviser between 1995 and 1998.

At a press conference yesterday, Maynier handed out photocopies of documents in which payments were listed that were purportedly made to two companies in which Hlongwane was the sole shareholder.

The first document was a five-year "consultancy agreement" between Sanip and Hlongwane's company, Hlongwane Consulting, signed in September 2003.

The document seems to show that Hlongwane stood to make about R62-million from Sanip. This amount includes an initial payment of R8.1-million, which would have been made around August 2003, a fee of R1.8-million payable quarterly from September 2003, a bonus of R22.5-million on completion of "milestone one" of the project, and another bonus of R30-million on completion of "milestone two".

All the payments were premised "on the basis that the government does not terminate the tranche 3 of the Hawk-Gripen agreement".

The Hawk-Gripen agreement was for the purchase by South Africa of 26 Gripen fighter jets and 24 Hawk trainers, at an estimated cost of R15-billion, from Saab and BAE. The deal was divided into three parts. The government had the option of cancelling the second and third at any time.

The milestones refer to the investments that the weapons dealers were obliged to make in South Africa in "offsets" to the arms deal. Sanip was set up to manage the arms-deal offsets, which were trumpeted as requiring Saab and BAE to invest millions in South Africa.

The second document was a list of payments totalling R51.3-million purportedly made to Hlongwane Consulting by Sanip between 2003 and 2005.

The third document was an amendment to a 2005 agreement between Hlongwane Consulting and BAE, revealing that Hlongwane stood to make £1-million (about R11-million) for identifying "specific decision-makers" in the South African government and to set up meetings between "the company" [BAE] and "the customer" [the government].

The fourth document is an amendment related to a 2003 agreement between Hlongwane Consulting and British Aerospace Systems, promising an extra $8-million (about R54-million) to Hlongwane Consulting for "additional work done" on "tranche 3" of the Gripen contract.

Maynier said he could not reveal who had given him the documents.

"The documents amount to prima facie evidence of bribery and corruption," said Maynier, pointing out that BAE had to pay a $79-million (R550-million) settlement to the US State Department last month for an alleged 2591 violations of US laws.

The veteran anti-arms deal campaigner Terry Crawford-Browne said he had received the same documents over the past 13 months from sources in Sweden.

Crawford-Browne has amassed boxes of arms deal-related evidence for his Constitutional Court case against President Jacob Zuma.

He is asking the court to compel Zuma to open a judicial commission of inquiry into the arms deal.

Maynier called for the Hawks and the National Prosecuting Authority to re-open their investigations of the arms deal. But Crawford-Browne disagreed.

"The Hawks and the NPA have demonstrated utterly no political will to investigate or prosecute," said Crawford-Browne. "There must be a judicial commission of inquiry with five retired judges empowered to cancel the contracts and recover the monies."

•  The Hawks raided Hlongwane's palatial Johannesburg home in 2008, but the Sunday Times reported last year that national prosecutions chief Menzi Simelane told the Asset Forfeiture Unit to drop the case.