Under the cloak of National Security; an interview about the causes of defense corruption

Wendela de Vries
Vredesmagazine nr. 1, 2010

In February 2010, the world's second-largest defense contractor, BAE Systems, agreed to pay nearly $450 million in penalties to settle U.S. and British charges related to a long-running bribery scandal. According to the Campaign Against Arms Trade in London “this decision means that there will be no opportunity to discover the truth behind BAE's activities in South Africa, Romania and the Czech Republic. Once again, BAE have been let off the hook.” Moreover, the role of high placed politicians and civil servants – both in the UK and abroad – will not be exposed. Corruption is covered up again.

Arms trade is the most corrupt of all international trades. Estimates are that arms trade accounts for 40 to 45% of global corruption. Some months ago Campagne tegen Wapenhandel in Amsterdaminterviewed Andrew Feinstein, the South African MP who has revealed the corruption scandal in his country of which the BAE case is part. The aim of the interview was to get a better understanding of the working of corruption in arms trade. 

Question: When there is so many corruption in the arms industry, why does it not come in the open more often? And why did it come in the open in South Africa?
Feinstein:“The corruption case in South Africa became public because of a combination of two elements. After Apartheid was replaced by democracy in 1994, South Africa had a very open democracy and a very investigative media. When the information about the corruption case first came to us in the Parliament we immediately made it public, because that was the nature of our democracy at that time. And the media made sure that the story was kept in the public domain by using their own research connections. It was a unique moment in history. Unfortunately this no longer exists, it was only in the first 4 years of democracy. The Public Account Committee of parliament was in fact destroyed by this investigation. And as a consequence parliament became just a rubber stamp for the ANC. If there is anything controversial now, it often does not even get to parliament.
Why defence corruption is not exposed more often? Probably because the corruption tends to be on a very high scale. The deals are so huge, there is so much money involved. Second is that it is very easy to bribe in the arms industry because there are very few people who make the decisions. And the most important reason is because the whole thing is hidden behind the magic cloak of National Security. Governments stop investigations and even court cases. They just say; it is national security so you can’t get the information.”

Question: The South African corruption case is in fact very tragic. There was such a hopeful start after Apartheid. Who do you consider guilty in this case? Was it the arms industry playing on the greed of the politician? Or was it the South African politicians who after years of struggle saw an opportunity to finally profit?
Feinstein: “They are both guilty. The South African Defense Minister Joe Modise - who has been the head of the ANC underground MKonto Msiszwe – was already known to be corrupt in the ANC exile years. He would send guerrillas into South Africa, in great danger, to shop for him in Johannesburg, buy nice cloths etc. At the same time, the global arms industry, especially the European companies, already in the early 1990’s started to make contact with people who had been identified by them of becoming significant in defense once democracy came to the country. So when for instance I worked as a facilitator in the negotiations that led to the first democratic election, there were rumours about people from French arms companies, from German and British arms companies, having meetings with Joe Modise and Tabo M’beki., to talk with them about future defense needs.
There is no doubt that the industry in a sense ‘preys’ on new democracies. They are constantly looking for new market opportunities and South Africa was promising. Because we had arms embargoes for so long we were assumed to spend money once we opened up. And they also assumed, correctly as it turned out, that we would be very naïve as to how the industry operates globally. Added to that, as Tabo Mbeki took over as president from Nelson Mandela, the whole style of democracy changed. It became all very closed, nobody outside a small inner circle was trusted. This had its roots in the exiled movement, where you had to be suspicious, and where you had to keep information closed, because well, ANC officers were not just killed in Southern Africa but even in Paris. But this whole style of secrecy was transferred to the new democracy and created the right sort of atmosphere for corruption.”

Question: Do you think it possible that BAE Systems will be convicted for this corruption?
Feinstein:“The British government will protect BAE. Their working relation is so close that senior people of BAE have passes that allow them to go into Department of Defense buildings as if they were employed by the Department. And there is a constant exchange of employees, people going from the government to work for the arms industry and people going from the arms industry to the government. One of the defense secretaries under Margaret Thatcher went straight from government on to the board of BAE. When Labour came into power in 1997, within days the junior trade minister made a decision to renew an export license for weapon sales to Indonesia. Shortly before the election he had resigned as a board member of BAE. The relationships are incredibly close, so when BAE finds itself in difficulty the government will protects them. And when you have that level of protection your mindset is “we can carry on whatever way we want”. Meanwhile BAE tries to convince the public that it has changed its policy, that they will introduce responsible corporate governments and ethics. This is a façade, they continue to do business in the way they did it in South Africa where they paid as far as we know 160 million pounds in bribes.”

Question: Last year the UK introduced guidelines against corruption, especially for arms industry, written by Lord Woolf. Critical commentators said that if BAE would really follow these guidelines it would go bankrupt. What do you think of these guidelines?
Feinstein: “All the scandals put big public pressure on BAE. The company then hired Lord Woolf, who was the senior Law lord in the UK, which basically means he would be head of the supreme court if the UK had one. BAE paid him 6000 pound a day to head this commission to write guidelines. But he was hired under the precondition that he would not look into the company’s past. So he could not look at any of the wrongdoing BAE had done. This was completely absurd, because how can you propose improvements if you cannot look at what went wrong in the past? But he was completely naïve about that. I spoke with him about it and said I considered it a complete waste of time as long as the company was not prepared to come clean about their past actions. And he said – and remember this was the most senior lawyer in the UK- : “Yes but you have to understand from their perspective their legal difficulties if they do that.” But isn’t that the whole point, that if you have broken the law you suffer the consequences? But Lord Woolf couldn’t see it that way.”

Question: While South Africa was signing its big defence contracts in Europe it had just seen a Parliamentary Defence Review which said that South Africa should not buy big offensive weapon systems because there was no serious external threat within 5000 miles. Still these arms were bought. Did this had an impact on the South African military strategy eventually?
Feinstein: ”Fortunately, not, on the one hand. South Africa is not a very militaristic country and a large part of what our defence department is supposed to be doing is peace keeping operations around the continent. But unfortunately we have the wrong equipment for that. For example we bought 24 British fighter jets. Keep in mind that our air force had said that it would only take these jets if they were forced to do so by the politicians. Because they didn’t meet the technical specifications of the air force and they were two-and-a half times more expensive than the Italian jets the air force actually wanted. They were not on the shopping list and still we got them. It was the most expensive contract that the democratic South Africa has ever entered into. But our defense minister Joe Modise had decided to remove cost as a procurement criteria.
Of the 24 jets that were bought only six are operational now, and these six make less than 100 flight hours a year. In 2007 the head of the air force told the parliamentary that they desperately needed a transport plane for peace keeping operations and for disaster relief work. But unfortunately, there is no money for that, because the air force will be paying for these jets that they did not wanted until 2018.”

 Question:Did South Africa not try to sell these jets? A couple of years ago The Netherlands ordered armoured cars that were not needed and now they are for sale on the second hand arms market.
Feinstein:There have been some attempts to sell them, but the problem is that many of them are in state of disrepair because we can’t afford the spare parts and we can’t afford the ongoing maintenance. Just like we can’t afford to fly them, it’s too expensive for us to fly them. But the government is also not too keen to sell them because if they did, it would expose the fact that they bought the wrong things. And that would make the whole government look incredibility stupid. You must know that in 1998-1999, when the government negotiated these deals, five and a half million South Africans were living with the HIV virus. And Thabo Mbeki stated at the time that the government could not afford to provide antiviral medication through the public health system. While he was spending 5 billion dollars on weapons that we did not need. And at least 320.000 South Africans died of Aids simply because they were too poor to afford the medicines that would keep them alive. So instead of keeping over 320.000 South Africans alive we bought fighter jets. That’s the reality of the deal, and they get away with it. In this case, in fact, they get away with murder.”