By Paul Holden
Introduction
Reading back on the African National Congress’s (ANC’s) publications in exile is not just an exercise in historical curiosity, but akin to stepping into a different world. Infused with the rhetoric of an anti-colonial socialism – sometimes, it has frequently been claimed, bordering on Stalinist in tone – it is marked by the application of unwieldy appellations. The apartheid regime is almost always rendered as the “criminal apartheid order to further super-profits,” or some variation thereon. This was typical. The instinctively cynical and distrusting approach to capitalism in South Africa, and the role of business in facilitating the maintenance of a hated order, was de rigueur; it was almost unheard of to extol the virtues of capitalism and the positive role of business in society. In many respects, such a view was supported by a voluminous – and largely accurate – on-going revisionist critique by most progressive South African historians which provided the rigorous factual basis upon which the resistance movement’s wariness of business and capitalism was based.
The sector most vituperatively attacked was South Africa’s defence industry, which had, by the mid to late 1980s, grown into a behemoth employing nearly 100 000 individuals and supplying the bulk of the military materiel used by the state to undertake its grisly agenda of social engineering and control. Understandably, the often lucrative profiting by the apartheid state, military and private sector from the creation of a war economy was deeply disturbing. The militarization of the state – so accurately described by the likes of Philip Frankel, Jacklyn Cock and Laurie Nathan – was the target of a constant barrage of criticism from the likes of the ANC and the PAC.
Such a clearly articulated set of concerns had seemed to suggest that, upon the ANC’s election in 1994, the alliance between business, the state (read: the ANC), and security forces would be shattered and reconfigured in a way that would serve the interests of the average South African. However, in assessing the last fifteen years, and after engaging with the insights provided by the Arms Deal into the realpolitik of South Africa’s post-apartheid history, it is difficult to see any significant change in this alliance. Such an alliance should be deeply concerning: it is fundamentally undemocratic and, in its more extreme formulations, actively anti-democratic and it places the upcoming elections in a serious light. For what the forthcoming elections signal, above all else, is a decision on the suitability of maintaining this alliance as the guiding force of South Africa’s political economy.
Defining a Deep State
The concept of a deep state was most forcefully articulated in Turkey during the tempestuous period of the mid-1970s. The then Prime Minister, Bulent Ecevit, uncovered a military training unit previously funded by the Joint United States Military Mission Aid for Turkey (originally a Truman doctrine era project), which was the sharp edge of a broader grouping of military personnel, intelligence agents, businessmen and criminal mafia networks. His horror at its existence was marked and he attempted to reign in the organization, leading to an attempt on his life in 1977. More recently, the current Turkish Prime Minister, Recep Tayyip Edrogan, commented during a television interview that the Deep State still existed: “I don’t agree with those who say the Deep State does not exist. It does exist. It has always has…It must be minimized, and if possible even annihilated.”
Since then, the concept of a deep state has often fuelled wild conspiracy theories, but it has also acted as a useful tool to analyse modern political developments if applied with a degree of restraint. Recently, Aubrey Matshiqi, the respected political analyst based at the Centre for Policy Studies in the Western Cape, has outlined how the politics of the post-apartheid period can be tentatively understood using such a theory:
"According to this theory, there are times in the lives of nations when senior politicians, senior government officials, criminal syndicates, rogue intelligence officers, [and] elements of big business work together in pursuit of question of a common business or economic goal. The question we must ask is whether this is not what has been happening in post-apartheid South Africa. If this is correct, we then have to accept that there are possibilities that these senior politicians, senior government officials, criminal syndicates, rogue intelligence agents, and elements of big business, do not always belong to the same deep state project. And what that means is that there may have been or there may be in existence several deep state projects which at some point came into conflict and competition with one another and this conflict and competition has been manifesting itself as political tension. If this theory is correct, it explains why in part, the tensions have extended to the state."
Fundamentally, a deep state project is marked by a lack of concern for the rigours of parliamentary democracy. It is criminal and covert, defying accountability and transparency; at the level of economics, it diverts the resources of the state away from the needs of the average citizen and into the pursuance of a particular set of criminal activities. If a deep state exists – and this article will argue that there are disturbing signs that in South Africa it does – it should be cause for considerable angst.
The Arms Deal: Corruption and Cover-Ups
The existence of a South African deep state has been given credence by the conduct of the infamous Arms Deal. For the uninitiated, the ‘Arms Deal scandal’ was the decision taken in December 1999 to purchase a range of sophisticated equipment for the South African Air Force and Navy. At the time, the state claimed that it would cost just under R30 billion; more recently, estimates are in the region of at least R47 billlion and, more likely, slightly over R70 billion. The latter figure is alarming, as it veritably dwarfs the R45 billion spent by the state on low-cost housing over the same period, and vies in size with the Department of Health’s entire annual budget of R80 billion.
The Arms Deal has suggested the existence of a series of forces and processes that have determined state policy on this particular topic in a number of ways. First, it is clear that the average South African was deeply opposed to it. Indeed, in 1995, when the purchase of corvettes for the South African Navy was first debated, it led to successful mass action to prevent its materialization. Parliamentary members, including ANC luminaries such as Joe Slovo, frequently lambasted the idea of the expensive purchase of new military materiel. So powerful was the criticism of any mooted increase in military expenditure that it was decided, in late 1995, to make the decision only after the completion of the Defence Review: a process to establish, after extensive consultation, the needs of the South African Defence Force.
Second, the Arms Deal was pursued despite the express findings of the Defence Review itself. Commenting on South Africa’s security situation, it was acknowledged that “the greatest threats to the security of the South African people are socio-economic problems like poverty and unemployment, and high levels of crime and violence” and that South Africa faced no short to medium term military threats. Similarly, the Defence Review argued that:
"The approval of a force design by the parliamentary defence committee, cabinet or parliament does not constitute blanket approval for all implied capital projects or an immutable contract in terms of the exact numbers and types of equipment. At best, it constitutes approval in principal for the maintenance of the specified capabilities at an approximate level…"
However, despite this warning, the decision was taken to pursue the Arms Deal by cabinet without seeking the permission of parliament: the Arms Deal was, in simple terms, unmandated and unapproved by the relevant political bodies.
Third, it has become clear that the majority of the contracts entered into by the state with various multinational arms companies were done in a manner that consistently violated fair and unbiased procurement practice. The corvettes that were eventually selected were nearly twice as expensive as their nearest competitor who, in addition, offered a more lucrative industrial participation package and a more suitable ship; the selection of Hawk and Gripen jet fighters from British Aerospace (BAe) was done despite the fact that they virtually doubled the cost of the Arms Deal itself, and were undertaken against the wishes of the Air Force; and the submarines, bought from the German Submarine Consortium, were chosen due to a technicality that distorted the money-for-value analysis upon which the decision was partially based.
In each instance of these violations of procurement practice there lingered the suspicion of corruption on a grand scale. The selection of BAe’s equipment was largely shepherded by the then Defence Minister, Joe Modise, who was alleged to have received substantive payments from the company, and, upon his resignation, took up a position at a company said to to receive considerable business flowing from one of BAe’s industrial participation program. An advisor to Joe Modise, one Fana Hlongwane, is alleged to have received millions in ‘commissions’, and is currently under investigation by South African authorities. Similarly, the selection of contractors for the corvettes was marred by the fact that the then Chief of Acquisitions, Chippy Shaik, sat in on deliberative meetings to select the corvette contractor that was then in business with his brother, Schabir. Schabir Shaiks’ subsequent corruption trial in 2005 provided ample proof that, in many ways, the Arms Deal was racked by persistent corruption.
Fourth, and perhaps most disturbing, the multi-pronged investigation into the Arms Deal was clearly hampered by the interference of key political figures. Initially, in 2001, Parliament’s Standing Committee on Public Accounts had urged for a multi-agency investigation into the Arms Deal on the basis of prima facie evidence of corruption and mismanagement. One such agency was the Special Investigative Unit, colloquially referred to as the Heath Unit in reference to its head, Willem Heath. However, the suggestion that the unit be included was quickly panned by the executive: the Heath Unit was denied the Presidential Proclamation needed for it to get involved in the investigation despite the fact that the then president Thabo Mbeki’s own legal advisors had recommended its inclusion. That the unit was excluded from the investigation was instructive as it was the sole legal unit in the country that was empowered to cancel contracts entered into by the state if corruption was uncovered. Although other agencies could pursue corruption charges against individuals implicated in impropriety, none of these could prevent the completion of the Arms Deal. The Arms Deal, via this intervention, was portrayed as untouchable. Similarly, the ousting of Andrew Feinstein, the ANC MP that led, in conjunction with Inkatha Freedom Party’s (IFP’s) Gavin Woods, Scopa’s investigation into the Arms Deal from the self-same committee, suggested that any means necessary would be adopted in preventing a full-scale investigation into the Arms Deal.
In addition, the final report into the Arms Deal, written by a joint investigation team that included the Auditor General, Public Protector and the newly formed organised crime busting unit, the Scorpions, was shrouded in controversy. Despite overwhelming evidence to the contrary – some of it included, somewhat bizarrely, in the main body of the report itself – it was claimed:
"No evidence was found of any improper or unlawful conduct by the government. The irregularities and improprieties referred to in the findings as contained in this report point to the conduct of certain officials of the government departments involved and cannot, in our view, be ascribed to the president or ministers involved in their capacity as members of the Ministers’ Committee or Cabinet. There are therefore no grounds to suggest that the Government’s contracting position is flawed."
However, shortly thereafter, the bulldog-like Arms Deal critic, Dr Richard Young, successfully litigated to access earlier versions of the Joint Investigation Report. The final disclosure of these documents – only provided after Young had to resort to enforcing a contempt of court order on the office of the Auditor General – was deeply disturbing. Earlier draft versions of the report were voluminous: over 600 pages, in some instances, compared to the slimmed down 200-page report that was finally presented. Scrawled over the original reports were handwritten notes that suggested that the Executive, including President Thabo Mbeki and Chief of Acquisitions Chippy Shaik, had exercised considerable powers of editing and oversight over the report. Distressingly, and perhaps illustratively so considering the argument made at the beginning of this article, such editing was undertaken by the invocation of the Special Defence Account Act: an Act that had, originally, been passed to allow for extreme secrecy to be used by the apartheid regime to avoid international and national detection of how the state was breaking the UN arms embargo then in place.
Unfortunately, these two examples of interference in the Arms Deal-related investigations are not isolated incidents. Frequently, international investigators, including those in Britain and Germany, have been frustrated by the unwillingness of South African authorities to expedite their investigations and assist in the transnational pursuance of law and order. Indeed, as recently as February 2009, the National Prosecuting Authority (NPA) admitted in a submission to the Standing Committee on Public Accounts that German investigations into bribes paid to a prominent South African – alleged to be Chippy Shaik – had been hamstrung by the fact that the Department of Justice had blocked all requests for investigative cooperation. Fed-up with the formal process, the NPA acknowledged that they were tempted to pursue their own avenues of cooperation:
"If the request information from the [Department of Justice] is not forthcoming, then a request for mutual legal assistance will have to be directed to the German authorities. There can be no meaningful progress with the investigation until the information in the possession of the German authorities is obtained, as the evidence we require is located mainly overseas."
Combined together, these four points paint a concerning portrait of the Arms Deal: it was deeply unpopular and unnecessary; undertaken without the requisite approval by parliament; marked by severe irregularities and well-established claims of corruption; and investigations into such corruption were restricted by interventions on the part of ministries, the cabinet and the presidency.
Thus, it is unclear why the Arms Deal, indeed, took place in the first instance, and why such an aggressive approach to curtailing investigations was pursued. Although counter-intuitive, it should be acknowledged that, if corruption influenced individuals and did not impugn the conduct of the state as a whole, such investigations would be limited in its political impact. That such investigations were prevented has suggested, instead, that corruption in the Arms Deal may have involved large chunks of the state apparatus, and, perhaps more importantly, the ANC itself.
The Grey Area: State and Party
The claim that the ANC might, itself, have taken money in the Arms Deal has been alleged most vociferously by Andrew Feinstein. Feinstein, in his devastating account of his political life in the ANC – After the Party – recalled an interaction he had with a senior ANC politician:
"[A] senior member of the ANC’s NEC invited me to his house one Sunday. Sitting outside in the sunshine, he explained to me that I was never going to ‘win this thing’.
“Why not?” I demanded. “Because we received money from some of the winning companies. How do you think we funded the 1999 election?”
I didn’t know what to say. I tried to think of a reason why this comrade might want to mislead me, but couldn’t."
Similarly, the Schabir Shaik trial provided some evidence of the fact that the ANC might have been in a position to take money from the Arms Deal. During his trial, Schaik acknowledged that he had incorporated a private company – Floryn Investments – that would form part of his network of companies. Vitally, Floryn Investments was, through a serious of machinations, the beneficiary of corruption in the Arms Deal. When the company was first formed, Schaik noted that he had toyed with the idea of making the ANC a shareholder, which was rejected out-of-hand by Thabo Mbeki. However, during cross-examination, Shaik acknowledged that although the ANC was not a shareholder in Floryn itself, he had used Floryn to make extensive donations to the ANC, totalling roughly R1 million between 1998 and 1999 – the very same time during which the selection process in the Arms Deal was under way. As he noted during his trial: “I first thought of giving the ANC shares in the company, but I had to respect Mbeki’s view. At the same time I knew of the ANC’s need for funds.”
These, it is feared, are not isolated incidents. Instead, it seems that the Arms Deal may have provided the model by which other moneys may have accrued to the ANC, both through benefiting from Defence spending and more mundane avenues. With regards to the latter, the exposure of Chancellor House by the investigative newspaper, Mail & Guardian, has given one serious pause for thought. According to the Mail & Guardian’s Stefaans Brummer and Idasa’s Judith February, in a paper completed for the Institute for Security Studies, Chancellor House was set up and run by the ANC Treasury, and, in particular, ANC Treasurer-General, Mendi Msimang. The organisation, which operated covertly for many years, was assumed to be a front used to provide operational funds to the ANC. Its modus operandi was disturbing: it entered into contracts with joint venture partners to tender for state contracts that were almost invariably to be awarded by ANC members in the state. In effect, the ANC, by virtue of its overwhelming hold on state power, was able to provide state business to its own company. This, it seems, is one of the only ways to explain how the ANC, virtually bankrupt and heavily indebted as late as December 1997, was, by 2008, in possession of assets exceeding R1 billion.
What the above suggests, broadly, is that there has existed a particularly disturbing grey area between the ANC and the state, and one which continues to operate. This grey area, it seems, has been used in order to facilitate both the enrichment of individuals, but also of the ANC itself. Although, in most instances, these do not constitute prosecutable corruption, there is no doubt that it has dangerous and deleterious impacts on delivery, democracy, accountability and the efficient distribution of limited state resources.
Evidence of a Deep State
Certainly, what has been described above may be considered to be evidence of particular tensions between the processes of governance and party politics: tensions that are replicated in most states where considerable moneys are made by accessing state resources. What makes the South African political economy noticeably different from many functional Western democracies, however, is the fact that the Deep State, rather than, for example, the Military-Industrial Complex, can be said to operate to a degree not replicated in many countries.
Two key determinants distinguish a deep state compared to other questionable interfaces between the state and business: the level of involvement of criminal activity in the pursuit of the Deep State’s aims, as well as the impact of covert intelligence networks in the conduct of backroom politics. In South Africa, the example of former Police Chief and ANC cadre Jackie Selebi has been one that has illustrated the manner in which criminality – he is alleged to have received considerable benefits from a corrupt relationship with numerous drug kingpins – has influenced national political developments. Similarly, the drafting of the highly controversial Browse Mole report – that described allegations that presidential pretender Jacob Zuma had received campaign funding from states such as Libya and Angola – and the fact that it was used, with little real evidence, as justification for the firing of former head of the NPA, Vusi Pikoli, has indicated the manner in which intelligence has increasingly become both a site of political contestation and the weapon of choice in the dirty politics of backroom struggles.
However, perhaps the most outrageous example, has been provided fairly recently: the decision taken by the NPA to drop corruption, fraud and racketeering charges – many related to the Arms Deal itself – against President-in-Waiting, Jacob Zuma. According to the NPA’s own statement, the decision was informed by recordings of discussions between Bulelani Ngcuka, the former head of the NPA, and Leonard McCarthy, the former head of the Scorpions investigative unit. These recordings – provided to the NPA by Zuma’s defence team – allegedly indicate that both Ngcuka and McCarthy were party to a conspiracy to fabricate charges against Zuma in order to thwart his presidential ambitions. That the tapes barely prove this fact and have not as yet been verified, and that the representations made by Zuma’s legal team have not provided any evidence to challenge the substantive merit of the facts listed in Zuma’s charge sheet, indicates that it was a deeply flawed decision. Even more disturbing is the fact that Zuma’s defence team were able to provide the tapes in the first place: there is no logical way in which they could have been procured without breaking the law. If the tapes were intercepted privately they are illegal recordings; if they were provided to Zuma’s defence team by the National Intelligence Agency, which seems the most likely, this is in direct contravention of the innumerable laws guiding intelligence work in South Africa.
Such a situation is scarcely believable: the almost certain future president, with the strong support of the ruling party, attempting to avoid facing charges of corruption and racketeering, and doing so by recourse to intelligence gathered in dubious circumstances. The state intelligence service, if they are indeed responsible for such tapes, is thus being used and manipulated for ends related to the internal political struggles of the ANC itself, rather than for fulfilling its mandate: the protection of the country’s national security.
Put more simply: the South African public has been treated to the spectacle of a criminal accused making use of criminally gathered intelligence. This has been done to avoid the examinations and rigours of a court case related to the interface between party, business and state in the arms deal, and was palpably completed to clear a route to the most powerful office of the state.
That such a situation has barely raised any degree of dissent from any member of the ruling party is indicative of the manner in which concern over its manifestation – and the long term implications for governance and democracy – has evaporated amongst those key opinion formers in the ruling alliance.
Paul Holden is a 25 year old freelance researcher, writer and trained historian. He has recently published the best-selling political guidebook, ‘The Arms Deal In Your Pocket’ (Jonathan Ball: 2008), as well as co-authored, with Lauren Segal, a collection of essays on South African figures and events that have shaped our present, ‘Great Lives: Pivotal Moments’ (Jacana: 2008). Paul continues to research the ins-and-outs of the Arms Deal. He writes in his personal capacity.