This is the second in a three-part Open Secrets series detailing the lucrative relationship between BAE Systems and its covert international network of middlemen. As we saw in Unaccountable 00012, BAE, like many European arms corporations looking to profit from South Africa’s 1999 Arms Deal, paid well-connected middlemen and agents vast sums of money to guarantee access to politicians and key decision-makers. This focuses on another of these middlemen – Fana Hlongwane.
BAE Systems was awarded the contract to supply the South African Air Force with 24 of its Hawk trainer aircraft, as well as a second contract – along with its joint venture partner, Swedish Defence company, SAAB – to supply 26 of their Gripen fighter jets. These highly lucrative contracts were together worth R15.77-billion (valued at about R45-billion today) – more than half the total cost of the arms deal at the time.
But, as we saw in the previous installment in Daily Maverick, the selection of BAE as South Africa’s largest arms deal contractor made very little financial or logistical sense. BAE was neither the cheapest nor the best option in terms of their machinery, with the head of the Air Force himself opposed to the deal early on. Last week, we discussed the evidence that another of BAE’s middlemen, John Bredenkamp – who died last week – was paid handsomely to activate his political connections.
Denying any malfeasance, the South African government ultimately justified their decision to select BAE based on the company’s “offset” proposals. The “offset” obligations were economic benefits, like new jobs and industries, that government and the arms companies promised the public would flow from the deal. Few, if any, ever materialised.
Once BAE had secured the contracts, they needed to ensure these offset promises were delivered. This is where Fana Hlongwane’s role became important.
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