[DEBATE] : Fw: Terry's Solution to Mugabe

Patrick Bond pbond at mail.ngo.za
Thu Jul 10 21:51:50 BST 2008

Dr D A Padayachee wrote:
> ----- Original Message -----          Terry Crawford-Browne
>          Milnerton, Cape Town

I happened to just meet him at CT airport today for a discussion and we 
agreed to disagree on a couple of these points: on whether the external 
pressures of int'l finance were possible to mobilise against apartheid, 
without massive internal grassroots protest; and on whether to call for 
sanctions in the absence of a call by the Zimbabweans affected.

The material below which he just sent is really good, and I hope it gets 
wide publicity.




* CASE NO. 5156/08*

In the matter between:-






I, the undersigned


do hereby make oath and say that I record that I will defend my plea and 
criticisms of the Plaintiff as “fair, accurate and in the public 
interest”. I do so either from personal knowledge or, as the context 
makes evident, from public documents such as the Joint Investigation 
(JIT report) and from parliamentary and other transcripts. I further 
respond to the First, Second, Third, Fourth, Fifth, Sixth, Seventh and 
Eighth grounds of exception (alternatively causes of complaint) that my 
defence and pleas are neither vague, scandalous, vexatious nor 
irrelevant, but are brought in the public interest to highlight the 
Plaintiff’s failure to meet his ministerial and constitutional 
obligations to the people of South Africa.

* 1.* *FAIR:*

 1.1. The arms deal “affordability study" presented to cabinet ministers 
in August 1999 warned them that the arms deal was a highly risky, indeed 
reckless, proposition that could lead the government into mounting 
fiscal, financial and economic difficulties. The Plaintiff, as Minister 
of Finance, was responsible for the affordability and financing of the 
arms deal. Paragraph of the Joint Investigation Report into the 
Strategic Defence Procurement Packages (JIT Report) notes:

 The Ministers’ Committee regarded the affordability assessment that was 
presented to them by the Affordability Team in August 1999, as a  
professional and very precise document that could be relied on. The 
contents of the assessment and the implications of the cost of the  
procurement were extensively debated and considered. These debates and 
considerations included issues such as the risk of the depreciation of 
the Rand against other currencies over the life of the contracts, the 
risk of interest rate increases in the economy and the risk of 
non-performance by contractors in relation to industrial participation 
commitments. These issues were fully addressed in the risk analysis that 
was submitted to Cabinet in October 1999.

* *1.2. The 224 pages of the affordability report that are in my 
possession -- albeit comprising less than 2.8 percent of the documents 
of which discovery was awarded to me by the Honourable Court in March 
2003 – also confirm beyond doubt that the Cabinet was warned about the 
risks of the arms deal. The findings include:


      the prospects both of a balance of trade crisis and of a financial
      crisis about 2007/08. These warnings are now substantiated, albeit
      dramatically worse than even the study anticipated.


      that foreign exchange risks were for the account of the
      government, and that foreign exchange markets are prone to shocks,
      including political events. Such risks are illustrated by the
      collapse of the rand against the dollar during 2001, and by the
      collapse of the rand against the euro in the past two years by
      almost 60%. The consequences are massive escalation in the cost of
      the arms deal in terms of rand because the contracts are in
      foreign currency, not rand. 


      that offsets could not be guaranteed, and to which I refer below
      in sub-paragraphs 1.3 to 1.14.


      that the negative economic impact was likely to lead to job losses
      estimated at 115 000 jobs instead of a gain of 65 000 jobs as
      publicly promoted. This, in a country with the highest rate of
      unemployment anywhere in the industrialised world, and variously
      estimated at between 23 percent and 40 percent.


      that defence spending for the arms deal would crowd out spending
      on social investment such as education, housing and welfare. The
      consequences are now experienced in rioting throughout South
      Africa because of the government’s “non-delivery” of social services.

 1.3. Those risks included “non-performance by contractors in relation 
to industrial participation commitments” (the offsets). The arms deal 
was premised upon the economically-nonsensical proposition that 
expenditure by South Africa of R30 billion on warships and warplanes 
would generate R110 billion in offsets to create over 65 000 jobs, and 
thus stimulate economic development. Offsets are internationally 
discredited as a scam by the armaments industry to promote weapons 
proliferation. Offsets are prohibited for civil trade transactions under 
the rules of the World Trade Organisation because of their propensity 
for corruption.

 1.4. International literature on offsets is virtually unanimous in its 
condemnation of this economic malpractice perpetrated by the armaments 
industry. From the military perspective, offsets encourage the 
proliferation of armaments and the purchase of excessively expensive 
equipment against wildly exaggerated promises of economic benefits which 
almost invariably fail to materialise.

 1.5. From the perspective of economic and social development, almost 
any other expenditure would be more beneficial than expenditure on 
armaments against expectations of offsets for job creation and/or 
infrastructural investments. It has long been proven that expenditures 
on armaments are economically non-productive. Alternative expenditures 
on badly needed infrastructural development -- such as health care, 
housing and education – are prerequisites to poverty eradication. They 
can also provide job creation focussed on the part of the population 
that is economically disadvantaged.

 1.6. In a nutshell, the most economically-illiterate person knows 
better than to spend R30 in expectation of receiving back change of 
R110. That any Minister of Finance and/or Minister of Trade and Industry 
could pretend otherwise begs the question whether they were, at best, 
criminally negligent or criminally incompetent.

 1.7. South African law requires government policies to be conducted 
with rational objectivity. Ministers are expected “to apply their 
minds”. The only logical conclusion to be drawn from the arm deal offset 
policies is that the arms deal was driven by bribes, and that the 
Plaintiff “closed his eyes” to the corruption of his political colleagues.

* *1.8. The malpractice of offsets, yet made pivotal in 1997 to the 
government’s economic development strategy, is incompatible with section 
217 (1) of the Constitution which requires that government procurements 
are conducted “in accordance with a system which is fair, equitable, 
transparent, competitive and cost-effective”.

 1.9. The Auditor General in September 1999 expressed his concerns to 
the Cabinet that the offsets could not be guaranteed. His concerns were 
repeated to Parliament in September 2000.

 1.10. Organisations of civil society repeatedly alerted cabinet 
ministers to the negative consequences of the arms deal. I met Mr 
Jayendra Naidoo on 15 June 1999 to restate the opposition of the South 
African Council of Churches, specifically because of the notoriety of 
offsets for corruption.

 1.11. As a former member of the African National Congress, I even used 
the structures of Claremont branch to alert members (including cabinet 
ministers), and was rebuffed by the ministers that the arms deal “was 
the cleanest arms deal ever” and that built-in safeguards ensured that 
corruption was impossible.

 1.12. Given these anxieties, Archbishop Njongonkulu Ndungane’s press 
statement dated 23 August 1999 endorsed “suggestions of a full (and 
public) judicial investigation into the weapons acquisitions and offset 
processes” (annexure A).

 1.13. Predictably, the offset programmes have proved a dismal failure, 
yet even members of parliament were prevented from investigating the 
offset proposals under the spurious excuse that the contracts were 
“commercially confidential”.

 1.14. Not only was the Plaintiff responsible for the “affordability” of 
the arms deal, but it is his signature as Minister of Finance of the 
Republic of South Africa to foreign loan agreements which gives effect 
to the arms deal supply agreements. South Africa now faces a financial 
crisis, with dire socio-economic and political consequences for the 
people of this country, simply because the Plaintiff failed to meet the 
constitutional obligations of public office.

 1.15. European politicians flocked to South Africa after 1994 to pay 
tribute to our new democracy with one hand, and to lobby unashamedly for 
weapons exports with the other. These included British Prime Ministers 
John Major and Tony Blair, German Chancellor Helmut Kohl, French 
President Jacques Chirac and Swedish Prime Minister Goran Persson. The 
EU Code of Conduct on arms exports, including criterion eight which 
deals with socio-economic conditions in recipient countries, was 
disregarded. Our government ministers succumbed to these pressures from 
European governments to prioritise the purchase of armaments before 
social upliftment, and thus betrayed the struggle against apartheid.

 1.16. The absurdity was rigorously promoted that the promised offset 
benefits constituted a “Marshall Plan” for the “new South Africa” that 
would fast track economic development. This is the real “scandal” of the 
arms deal; that European governments knowingly unleashed a culture of 
corruption, which now threatens the very survival of South Africa’s 
hard-won democracy – and that the leadership of umkhonto-we-sizwe, 
especially including the late Joe Modise, were suborned to that purpose.


 2.1 The 380 page Joint Investigation Report into the Strategic Defence 
Procurement Packages (JIT report) confirms that all the arms deal 
primary contracts were severely flawed by tendering irregularities. This 
was true of the German warship contracts, the Italian helicopter 
contracts and the British/Swedish BAE Hawk and BAE/Saab Gripen fighter 
aircraft contracts. The report was also critical of the role and 
involvements of the late Joe Modise, the former Minister of Defence.

 2.2* *The BAE contracts (chapter four of that report) were most 
especially flawed, the Auditor General having reported his concerns to 
Cabinet in 1999 as well as to Parliament in 2000 that BAE had been 
unduly favoured.

 2.3* *Paragraph 4.1.13 reports that the British government in January 
1997 tabled a package proposal for the BAE Hawk and BAE/Saab Gripen 
fighter aircraft. Paragraph 4.1.14 reports that these aircraft failed 
the requirements of the South African Air Force. Paragraph 4.1.15 
reports that the President was advised in July 1997 why the British 
proposal was not acceptable.

 2.4* *Various performance and cost criteria were established, which the 
BAE aircraft again failed. On pages 86 and 87, paragraphs to report that the Minister of Defence removed consideration of 
cost from the tendering criteria. “Non-costed” options were introduced 
to sway the decision to BAE. Paragraph 4.6.8 on page 99 reports that the 
Minister of Trade and Industry confirmed this irregular decision to 
exclude cost consideration was initiated by the ministerial committee. 
Under no circumstances can a decision to exclude cost as a tendering 
criterion for government procurements be reconciled with section 217 (1) 
of the Constitution.

 2.5* *Paragraphs to on pages 91 and 92 report that BAE 
had radically inflated its offset programme for the Hawks on two 
obsolete investment projects, and without which BAE had virtually no 
national industrial participation package.

 2.6* *British Prime Minister Tony Blair visited Cape Town in January 
1999 specifically to lobby on behalf of BAE when arms deal offsets were 
described as a “Marshall Plan”. The British government seconded a 
British civil servant to the Department of Trade and Industry (DTI) to 
ensure that South Africa could maximise the offsets gains. Church 
leaders, including Archbishop Ndungane, wrote to Mr Blair to express 
their opposition to the arms deal.

 2.7* *Confirming support for the arms deal by the Plaintiff as well as 
from DTI as pivotal to its economic development strategy, the Minister 
of Defence, Joe Modise told Parliament on 9 March 1999:

 I am heartened by the commitment shown to the acquisition programme by 
both the president and finance minister in their keynote addresses of 
this parliamentary session. Re-equipping the defence force is being done 
in such a way as to add value to our economy. In return for our  
expenditure, our economy will benefit by an estimated R110 billion of 
new investment and industrial participation programmes; and the creation 
of approximately sixty-five thousand jobs. The sceptics have suggested 
this is wishful thinking. The following breakdown has been very 
carefully calculated with the department of trade and industry. Of the 
R110 billion, over R26 billion is made up of direct investment into the 
project; R25 billion is estimated revenue from local sales stemming from 
business projects that will be established, and R59 billion will be 
derived from export sales. As to the concern that such transactions are 
open to improper influences, I want to assure you that the bids have 
gone through a fine- tooth comb to ensure an ethical outcome. It is 
clear that this acquisition project will enormously benefit South 
African industry as a whole. It will benefit the defence industry in 
particular, which receives a new lease of life.

 2.8* *Both the affordability study and the JIT report were also 
critical of Mr Modise’s role in committing South Africa to the submarine 
programme before the affordability study was complete. Chapter six of 
the JIT report also confirms that this project was severely flawed by 
tendering irregularities. The flagship offset project for the purchase 
of three submarines was to be construction by Ferrostaal of a US$1 
billion stainless steel plant at Coega that reportedly would create over 
16 000 jobs. Assessment by Warburg Dillon Read was that South Africa 
already had massive over-capacity in steel production, and that the last 
thing the country needed was yet another steel plant. (also sub-paras 
5.13 and 5.14).

 2.9 Paragraph of the JIT reports the military performance of 
the German Submarine Consortium (GSC) tender ranked fourth, and last. 
However, GSC was awarded the contract given purportedly massive offset 
benefits from the Ferrostaal steel plant. The Ferrostaal steel plant was 
cancelled only months later as being economically unviable, but South 
Africa remained obligated to the submarine contracts.


 3.1. The preamble to the Prevention of Organised Crimes Act (1998)


 There is a rapid growth of organised crime, money laundering and  
criminal gang activities nationally and internationally, and  organised 
crime has been internationally identified as an  international security 
threat. Organised crime, money laundering  and criminal gang activities 
infringe on the rights of the people as  enshrined in the Bill of 
Rights. It is usually very difficult to prove the direct involvement of 
organised crime leaders in  particular cases because they do not perform 
the actual criminal  activities themselves.

 3.2. Chapter 3 of the Act sets out the offences -- including failure to 
report suspicion regarding proceeds of unlawful money laundering 
activities – the penalties being determined as:

 8. (1) Any person convicted of an offence contemplated in section 4, 5 
or 6 shall be liable to a fine not exceeding R100 million, or to  
imprisonment for a period not exceeding 30 years.

 8. (2) Any person convicted of an offence contemplated in section 7(7), 
shall be liable to a fine, or to imprisonment for a period not  
exceeding 15 years.

 3.3. The Bill of Rights in section 38 (d) establishes that anyone 
acting in the public interest has the right to seek the protection of 
the Court and the granting of appropriate relief. My involvement in 
these matters results from my appointment by Archbishop Ndungane to 
represent the Anglican Church at the Defence Review that was conducted 
in Parliament during 1996 to 1998.

 3.4. Allegations of corruption associated with the arms deal arose in 
1998 when it was alleged during the Defence Review that BAE was bribing 
Mr Tony Yengeni and others with a £1 million “first success fee”, and 
that a further £3 million was being laundered via two Swedish trade 
unions to bribe other politicians to support the arms deal. I reported 
these allegations both in writing and orally to members of the 
executive, including the Plaintiff, but no action or investigation was 

 3.5. Through Campaign Against Arms Trade in London, I also requested 
the British government to investigate the allegations concerning BAE. 
The then Secretary for Trade and Industry appointed the London 
Metropolitan Police to the task, the eventual response being that it was 
[then] not illegal in Britain to bribe foreigners. 3.6. I later informed 
the British government that evidence of serious corruption relating to 
BAE had been forwarded to Judge Willem Heath for investigation and, 
pending his decision, that it would be fraudulent to proceed with the 
financing arrangements that give effect to the BAE Hawk and BAE/Saab 
Gripen fighter aircraft contracts.

 3.7.* *Mr Yengeni was eventually sentenced to four years’ imprisonment, 
the charges against him being watered down from corruption to fraud in 
order to circumvent the bribery clauses in the arms deal supply 
agreements. Mr Schabir Shaik, purportedly the “financial advisor” to 
former Deputy President Jacob Zuma, was eventually sentenced to fifteen 
years’ imprisonment, and the Constitutional Court on 29 May 2008 
confirmed that Mr Shaik had bribed Mr Zuma. In his judgement before 
sentencing Mr Shaik, Mr Justice Squires commented that Mr Pierre Moynot 
-- the executive employed in South Africa by the French government 
controlled arms company Thomson CSF -- admitted “with charming Gallic 
candour” that it was general practice in the arms trade to rely on 
political influence and bribes to secure arms deal contracts.

 3.8.* *A London court on 10 April 2008 found that the British Serious 
Fraud Office (SFO) had unlawfully succumbed to pressure by the former 
British Prime Minister Tony Blair to squelch investigations into bribes 
BAE paid to Saudi Prince Bandar to secure arms contracts with Saudi 
Arabia. The case has highlighted just how ensnared British government 
ministers, including Blair, are by BAE corruption that they were even 
prepared to subvert the British judicial system. The SFO has been 
investigating allegations of BAE bribery to secure arms contracts in 
numerous countries, including Saudi Arabia, *South Africa*, Chile, Czech 
Republic, Rumania, Qatar and Tanzania. Further illustrating its 
importance, this landmark case will be referred to the British House of 
Lords on 7 and 8 July 2008.

 3.9. A massive international corruption scandal is unfolding in which 
even heads of government are implicated and compromised. It transpired 
that successive British governments have colluded with BAE to pay bribes 
in excess of £1 billion to Prince Bandar, and that these bribes were 
laundered via the now-defunct Riggs Bank in Washington DC.

 3.10. Accordingly, the Federal Bureau of Investigation (FBI) in May 
2008 against subpoenas detained the chief executive officer of BAE and 
the deputy chairman of Barclays Bank for questioning when they transited 
through Houston and Newark airports. The FBI also detained the former 
head of the British government’s Defence Export Service Organisation 
(which supervises the marketing of British arms exports) when he 
transited Miami airport.

 3.11. The further significance for South Africa is not only that 
Barclays Bank is financing more than 50 percent of the arms deal, but 
that it is the controlling shareholder of ABSA – South Africa’s largest 
banking group.

 3.12.* *BAE bribes are now under investigation in at least seven 
countries, plus the Organisation for Economic Cooperation and 
Development (OECD) which has international supervision over the OECD 
Conventions against Bribery of Foreign Officials.

 3.13. British government minister in 2004 conceded that “commissions” 
(for which read “bribes”) were paid to secure BAE’s arms deal contracts 
with South Africa but, she pleaded, they were “within reasonable 
limits”. It is now public record in Britain that BAE had intended to pay 
£180 million in bribes to secure the South African contracts, but that 
these were subsequently reduced to “only” £112 million (approximately 
R1.7 billion).

 3.14. BAE is an organisation in which bribery and corruption are 
standard practice. BAE well fits any definition of organised crime. It 
operates through a world-wide network of front companies, bank accounts 
and agents who do the “dirty work” on its behalf, thereby enabling it to 
claim that it operates within the law. BAE can rightly be described as 
the British counterpart of the Italian Mafia. Many of its agents in 
South Africa have been named in Parliament by Ms Patricia de Lille MP, 
as well as by the media, but no action has been taken against them.

 3.15. After five centuries of colonialism, the malevolent influence and 
impact of the war industry throughout British society – but especially 
within the body politic and government -- are at last being exposed.

 3.16* *In addition to the BAE investigations, authorities in Germany 
were until last week investigating bribes by Thyssen Krupp to secure the 
warship contracts with South Africa. Thyssen Krupp admits it paid 
bribes, but even pleads that such bribes were then tax deductible as a 
legitimate business expense. The German investigation was reportedly 
called off because of a lack of cooperation by South African authorities.

 3.17* *Irrespective of whether it was legal or illegal in Britain and 
Germany to bribe foreigners, it has long been illegal in South Africa to 
accept bribes. I have been fully vindicated in reporting my suspicions 
back in 1998 and 1999 in the public interest to authorities both in 
South Africa and Britain. Per sub-paragraph 1.12 above, Archbishop 
Ndungane and others called in August 1999 for an independent judicial 
investigation in response to my concerns during and subsequent to the 
Defence Review.

 3.18. Allegations were rife before his death in November 2001 that the 
late Joe Modise had been a recipient of bribes from many sources 
including BAE to facilitate the arms deal. Researchers in England 
believe that BAE’s personal bribes to Modise were transferred via a bank 
in Saudi Arabia, from whence they were transferred through banks in 
Algeria and Mozambique to South Africa.

 3.19. The bribery clauses in the arms deal supply agreements authorise 
the government summarily to cancel the contracts in the event of 
convictions for corruption, and even to claim financial compensation, 
but the government has instead repeatedly blocked and thwarted both 
investigations into corruption and prosecutions.

 3.20. An affidavit (annexure B) by Andrew Feinstein confirms that the 
Plaintiff pressured him to drop the parliamentary investigation into the 
arms deal, saying:

 We all know JM [as Joe Modise was known]. It’s possible there  was some 
shit in the deal. But if there was, no one will ever  uncover it. 
They’re not that stupid. Just let it lie. Focus on the  technical stuff, 
which was sound.

 3.21. The implication is clear. The Plaintiff knew, or at least 
suspected, that Modise was the recipient of bribes yet, in violation of 
the Prevention of Organised Crime Act, did nothing to report or 
investigate his suspicions. Indeed, his testimony before the 
parliamentary Standing Committee on Public Accounts (Scopa) in February 
2001 illustrates how he deliberately frustrated parliamentary and other 
investigations into allegations of corruption associated with the arms deal.

 3.22. Whether the Plaintiff was or was not personally enriched by the 
arms deal is immaterial and irrelevant. His failure to report his 
suspicions and/or to assist investigations makes him complicit, indeed 
an accessory, to such corruption.


* *4.1. Section 16 (1) (a) and (b) of the Constitution guarantee that 
“everyone has the right to freedom of expression, which includes:

 (a) freedom of the press and other media;

 (b) freedom to receive or impart information or ideas.”

 4.2. As the paragraphs 1, 2 and 3 above make evident, the executive 
branch of government and the Plaintiff in particular have gone to 
extraordinary lengths to squelch information from the public about the 
irregularities and corruption associated with the arms deal.

 4.3. The checks and balances enshrined in the Constitution have been 
shredded because of the arms deal. This has resulted in a constitutional 
crisis in every sphere of government. This includes the Judiciary as 
evidenced by the current suspension of the Judge President of this 
Honourable Court pending the Judicial Services Commission investigation 
in the related matter of the forthcoming trial for corruption of Mr 
Jacob Zuma -- the President of the African National Congress and former 
Deputy President of South Africa.

 4.4. The defamation action against me by the Plaintiff is yet another 
manifestation of abuses by the executive of the powers of political 
office. It is a spurious attempt to block public concerns about the arms 
deal, and exposure through the media and other instruments of freedom of 
expression of the Plaintiff’s crucial role in the arms deal.

 4.5. My involvement in the arms deal issues stems from my appointment 
by Archbishop Ndungane to represent the Anglican Church at the Defence 
Review that was conducted in Parliament during 1996 to 1998. I did so 
voluntarily and without financial remuneration, but in the public 
interest I took these obligations and responsibilities seriously when 
allegations of corruption arose.

 4.6. I have no intention of defending my right of freedom of expression

as that of an irresponsible “don Quixote” with an eccentric propensity 
to insult and defame authority figures. I submit that the issues of 
which the Plaintiff complains are legitimate political comment in a 
matter which is of enormous importance for the constitutional future of 
South Africa. In this respect, I refer to the 2004 judgment in 
Mthembi-Mahanyele versus the Mail and Guardian that “greater latitude is 
usually allowed in respect of political discussion”.

 4.7. Section 2 of the Constitution establishes that the Constitution is 
the supreme law of the Republic: law or conduct inconsistent with it is 
invalid, and the obligations imposed by it must be fulfilled. I 
represent myself in this matter but do so in the public interest and, 
accordingly, beg the indulgence of the Court when my affidavits are 
procedurally flawed.

 4.8. I represent myself after an amicable withdrawal by legal counsel 
mandated to defend the rights to freedom of expression, who admitted 
that he lacked both institutional knowledge of the “arms deal” 
complexities and the financial capacity to carry the case. The right to 
freedom of expression is a very important aspect of this case, but 
equally important is corruption as government’s deliberately intended 
economic policy which, in respect of the arms deal, is a fundamental 
violation of section 217 (1) of the Constitution.

 4.9. The supremacy of the Constitution, I submit to the Court, trumps 
any reliance by the Plaintiff and his counsel on legal points and 
manoeuvres and/or applications to strike out any portions of my 
testimony or affidavits. The Plaintiff’s conduct in respect of the arms 
deal has, I submit, fallen woefully short of the requirements of the 


* *5.1. The first and second grounds for strike out allege, without any 
substantiation, that I am motivated by /animus injuriandi /and malice. 
As evident from paragraphs 1.1 to 3.21, my involvement in exposing the 
corruption associated with the arms deal stems from my appointment by 
Archbishop Ndungane to represent the Anglican Church at the Defence 
Review. I did so purely in the public interest, with absolutely no 
personal malice against the Plaintiff, albeit I was and remain critical 
of his crucial complicity in the arms deal scandal that has ensued 
simply because he failed his constitutional obligations to the people of 
South Africa.

` 5.2. The third ground for strike out pleads that the Plaintiff’s 
reputation for financial probity has been irreparably damaged, both 
nationally and internationally. I do not dispute that, but counter that 
he should have considered that when he entangled this country in the 
arms deal scandal. The warnings of the affordability study and by civil 
society are now substantiated in the financial and socio-economic crises 
facing South Africa. Accordingly, the damage to the Plaintiff’s 
reputation is entirely of his own making, not mine.

 5.3. The fourth ground for strike out attempts to obscure the reality 
that the arms deal is a highly controversial political issue both in 
South Africa, and internationally. A gagging order against me in South 
Africa will have absolutely no impact upon investigations 
internationally. Such an order would however, tend to confirm public 
perceptions both in South Africa and abroad that heavy-handed measures 
have been applied to conceal corruption at the highest levels of the 
executive branch of government. Again, the Plaintiff’s alternative 
remedy is a thorough and independent judicial investigation into the 
arms deal, as called for repeatedly by leading voices of civil society 
including Archbishop-Emeritus Desmond Tutu.

 5.4. The fifth ground for strike out illustrates the malice with which 
the Plaintiff has acted towards me as Defendant in this matter. He has 
twice tried and twice failed to secure my financial sequestration. As he 
is aware, I represented the Anglican Church at the Defence Review and 
did so in the public interest without financial remuneration. As he is 
also aware, I spent approximately R5 million of my own money in opposing 
the arms deal and in exposing the corruption associated with it. I did 
so willingly, albeit never considering that our government would go to 
such extreme measures and contortions in its efforts to cover up the 
scandal, or that it would deliberately drive me to financial exhaustion. 
That is the reality of why my application 9987/01 failed to have the 
arms deal loan agreements set aside.

 5.5. Accompanying this affidavit, I shall be amending my plea and 
counterclaim filed on 20 May 2008 to substantiate notice then given that 
the judgement in that case 9987/01 was a miscarriage of justice due to 
deliberate misleading of the Court by the Plaintiff. I shall amend my 
counterclaim to include the matter of perjury, which is an extremely 
serious criminal offence committed with deliberate intent to subvert the 
course of justice.

 5.6. In paragraphs 12.4 and 12.6 of his notice, the Plaintiff argues 
that I have raised an issue in paragraph 20 of my plea which is not 
relevant, and it should thus be struck out. The reality is that the 
issue is highly relevant, and it goes to the core of his efforts to 
mislead the Court. In that paragraph 20 I noted the declaration under 
oath by Ms Maria Ramos on 6 March 2002 (with a confirmatory affidavit by 
the Plaintiff) that “the agreements he signed are self-standing loan 
agreements with binding force and not dependent on any other agreements 
entered into by government”.

 5.7. To a former banker, this declaration under oath was plainly false: 
it was tantamount to arguing that the purchase of a house has nothing to 
do with its mortgage. The statement was clearly intended to mislead the 
court. On legal advice, I filed for discovery of documents to prove the 
falsity. The Barclays Bank/Export Credit Guarantee Department loan 
agreement in my possession, and verified as authentic, sets out the 
purpose of the Barclays Bank loan agreement as the purchase and 
financing in five tranches of the BAE Hawk and BAE/Saab Gripen fighter 
aircraft. The BAE supply agreement, now also in my possession, further 
proves the falsity.

 5.8. This Honourable Court in March 2003 awarded discovery to me within 
ten days of the International Offers Negotiating Team and Financial 
Working Group papers pertaining to the arms deal. In so doing, Judges 
Blignaut and Davis had considered and rejected the Plaintiff’s arguments 
that it was not in the public interest to disclose how the government 
conducts its financial business. Notwithstanding the court order, the 
Plaintiff embarked upon extraordinary efforts during 2003 to frustrate 
that order. Eventually, 224 pages of documents were produced in November 
2003 albeit that I protested repeatedly that they fell far short of the 
discovery order.

 5.9. Accordingly, under case 7390/08 I filed for delivery of the 
documents awarded to me in 2003. Although the Court on 2 June 2008 
dismissed my application, it is evident that the Plaintiff (as 
respondent in this related matter) again misled the Court in respect of 
the compliance orders. Paragraphs 29 and 30 of the judgement by Mr 
Justice Dlodlo confirm that he relied heavily on the affirmation by the 
Plaintiff that he had complied with the order by Judges Blignaut and Davis.

 5.10. The pagination of the documents in my possession (annexure C) 
provides prima facie evidence that this is not so, and that I received 
less than 2.8 percent of the documents of which discovery was ordered by 
the Court in 2003. This indicates these documents exceeded 8239 pages. 
That contention is also confirmed by pages 248 to 250 (annexure D) of 
the JIT report, paragraph of which notes:

 The final affordability assessment was submitted to the Ministers’  
Committee in August 1999. It was a *voluminous* document that  dealt 
comprehensively with all the relevant issues. It also  superseded all 
previous reports and inputs that were submitted on  the matter of 
affordability. It sufficiently equipped the Ministers  concerned to make 
a properly informed decision, as far as issues of

 affordability were concerned. Affordability is ultimately a question

 of political choice. The task of the Affordability Team was not

 to make that choice, but to enable the ultimate decision makers to

 make a well-informed choice about what the country could and  could not 

 5.11. Whilst 8239 pages can rightly be described as *voluminous,* the 
224 pages that I received in November 2003, and only after two court 
applications, plainly do not meet such a description.

 5.12. Perchance, page 8236 refers to the risk weighting for the 
national industrial procurement (NIP) offsets, and notes “the high level 
of uncertainty about these future projects.” This assessment seemingly 
confirms international experience of offsets as reckless, corrupt and 
economically-discredited. It is consequently unsurprising that the 
Plaintiff went to such extreme lengths to frustrate discovery of the 
International Offers Negotiating Team and Financial Working Group papers.

 5.13. Pages 8238 and 8239 are even more scathing. The memorandum dated 
19 July 1999 from Warburg Dillon Read asks whether

 South Africa needs another steel plant. To be honest, my answer is  
“no”, regardless the nature of projects, because of the structural  
overcapacity problem in the country…. The South African steel  industry 
faces one of the most serious overcapacity problems in the world.

 5.14. Yet, as noted in sub-paragraph 2.8 above, the selection of the 
German Submarine Consortium to supply South Africa with three submarines 
was driven by wildly inflated offset promises of a massive stainless 
steel plant at Coega which, not surprisingly, has failed to materialise. 
Paragraph on page 168 of the JIT report confirms that the 
presentation to Cabinet calculated the cost of three submarines at 
R5.212 billion which would generate offsets worth R30.274 billion to 
create 16 251 jobs. This was the “flagship” offset project for the arms 
deal, and illustrates why offsets are internationally discredited as a 
scam perpetrated by the armaments industry.

 5.15. The submarine contracts are invoiced in Euros rather than Rands, 
which in the last two years have depreciated by approximately 60 
percent. In addition to the risks that the offsets would not 
materialise, the affordability study also highlighted the foreign 
exchange risks of the arms deal. These warnings were also ignored, with 
consequent massive increases in costs of the arms deal in rand terms to 
South African taxpayers.

 5.16. The submarines are being financed by Commerzbank against 
Bundestag guarantees for seventeen years, i.e. until the year 2016. 
Given extreme volatility in foreign exchange markets, it is impossible 
even to guess what the final costs will be in rand, except that they 
will be very dramatically greater than R5.212 billion.

 5.17. Confirmation by the Court that the Plaintiff did not comply with 
the 2003 discovery order and that that he then deliberately misled the 
Court would, I submit, constitute perjury. Perjury, as the Court is 
aware, is an extremely serious criminal offence committed with 
deliberate intent to subvert the course of justice, and very 
considerably more so than defamation.

 5.18. Judges Blignaut and Davis had considered and rejected the 
Plaintiff’s arguments that it was not in the public interest to disclose 
how the government conducts its financial business. This is the crux of 
why he has gone to such extreme lengths against me including his 
defamation application, and why he continues to suppress vital 
information. The documents will prove to the country that the Plaintiff 
and his cabinet colleagues were warned in 1999 that the arms deal was a 
reckless proposition, and that recklessly they committed South Africa to 
the arms deal scandal that ensued.

` 5.19. The reason for such reckless conduct was plainly the bribes paid 
by BAE and other arms deal contractors that are now being exposed by 
international financial investigators.

* *5.20. The sixth ground for strike out yet again confirms the 
Plaintiff’s vindictiveness and his abuse of political power. He admits 
that he has no prospect of financial remedy, yet he wastes the Court’s 
time and resources in an effort to squelch public concerns and 
criticisms about the corruption associated with the arms deal scandal, 
and to divert attention from his complicity in the fiasco.

 5.21. The seventh ground for strike out again attempts to obscure the 
reality that the arms deal, and the Plaintiff’s role in it, is a 
political issue not just in South Africa, but internationally. If the 
Plaintiff is “embarrassed” as he has good cause to be, it is once more a 
matter of his own making. Again, his appropriate remedy as a senior 
member of the executive branch of Government, is a thorough and 
independent judicial investigation into the arms deal.

 5.22. The eighth ground for strike out is addressed in sub-paragraphs 
4.1 to 4.9 above. This is an egregious assault on constitutionally 
guaranteed freedoms of expression. The Plaintiff’s attempt to exclude 
foreign media reports from the Court of international investigations and 
action into BAE corruption, which are of huge relevance to South Africa, 
further illustrates the absurdity of his defamation action against me.

 5.23. The Federal Bureau of Investigation (FBI) in the United States is 
now detaining BAE executives and the deputy chairman of Barclays Bank 
for questioning about money laundering when they transit American 
airports. A British court has been scathing in its judgement about 
British government complicity in the laundering of BAE bribes, and its 
involvement with BAE and Saudi Prince Bandar in deliberately subverting 
the rule of law in Britain.

 5.24. The Plaintiff’s pretence that the Court should not take 
cognisance of these developments and realities makes a mockery of the 
requirements under section 195 (1) of the Constitution setting the basic 
values and principles governing public administration.

 5.25 Irrespective of the Court’s eventual decision in this matter 
between the Plaintiff and myself, international and South African media 
investigations will continue to expose of the corruption associated with 
the arms deal.



 Sandown Crescent E105

 Royal Ascot, Milnerton, Cape Town











* *Hofmeyr, Herbstein & Gihwala Inc

 21^st Floor

 2 Long Street


 TEL: 021-405-6000

I certify that:

1. the deponent has acknowledged that:

1.1. he knows and understands the contents of this declaration;

1.2 he has no objection to taking the prescribed oath;

1.3 he considers the oath binding on his conscience.

2. the deponent thereafter uttered the words “I swear that the contents 
of this declaration are true, so help me God”.

3. the deponent signed this declaration in my presence at the address 
set out hereunder on this 26th day of June 2008.





in the matter between






RULE 28*


*BE PLEASED TO TAKE NOTICE *in terms of Rule 28 that I serve notice that 
my notice filed on 20 May 2008 is amended by explanation to paragraph 5 
and by the inclusion of paragraph 7, and now reads:

1. The matter is an abuse of the Court in what is a political rather 
than legal issue,

2. That the Defendant’s criticisms of the Plaintiff are fair, accurate 
and in the public interest,

3. That the summons is an abuse of the constitutional right of freedom 
of expression guaranteed by section 16 (1) (a) and (b) of the Constitution,

4. That by the Plaintiff’s own admission, he has no prospect of 
financial remedy,

5. Although Mr Justice Dlodlo on 2 June 2008 dismissed my application 
7390/08, paragraphs 29 and 30 of his judgement confirm that he relied 
heavily on the affirmation by the Plaintiff on 9 May 2008 that he had 
complied with the discovery order in March 2003 by Judges Blignaut and 
Davis. Documents attached to my affidavit filed on 26 June 2008 indicate 
that this is not so, and that the 224 pages supplied by the Plaintiff in 
fact constituted less than 2.8 percent of the documents of which 
discovery was ordered.

Accordingly, the Court is requested to consider whether the Plaintiff 
committed perjury with deliberate and criminal intent to subvert the 
course of justice and, if so, to determine an appropriate remedy,

6. That the Plaintiff’s conduct is inconsistent with obligations imposed 
by the Constitution in respect, inter alia, of section 92 (2) and (3) 
(a), 195 (1), 216 (1) and 217 (1) of Act 108 of 1996,

7. My involvement in the arms deal issues stems from my appointment by 
Archbishop Njongonkulu Ndungane to represent the Anglican Church at the 
Defence Review during 1996 to 1998. I did so voluntarily without 
remuneration and in the public interest, but I took my responsibilities 
seriously when grave allegations and evidence of corruption emerged. The 
summons brought against me by the Plaintiff is but the latest 
manifestation of his vindictiveness against me, and represents his 
further attempt in his capacity as Minister of Finance in the executive 
branch of government to squelch widespread public concern about the 
corruption associated with the arms deal.

I have spent an estimated R5 million of my own funds in exposing the 
arms deal scandal. Accordingly, I now institute a claim in terms of 
section 195 (1) against the Plaintiff for reimbursement of R5 million 
plus interest calculated from 23 August 1999, being the date on which 
Archbishop Ndungane called for a full and public judicial investigation 
into the arms deal.

In terms of rule 28 (2), unless written objection to these amendments is 
delivered within ten days of this notice is received, I request that 
these amendments are effected.

DATED AT CAPE TOWN on the 7th day of JULY 2008.



 Sandown Crescent E105

 Royal Ascot, Milnerton, Cape Town











* *21^st Floor

 2 Long Street


 TEL: 021-405-6000


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