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South African Investigators Say BAE Graft Probe May Take Years to Complete
South African authorities said investigations into allegations of corruption linked to the purchase of fighter jets from BAE Systems Plc’s British Aerospace unit and frigates from a group of German companies may take another five years.
The government has faced accusations since 1999 that officials took bribes from companies that won weapons contracts worth $5 billion.
About 300 million rand ($41 million) may have illicitly changed hands in the BAE deal, and a further $25 million during the purchase of warships from the German Frigate Consortium, Anwa Dramat, head of the police’s Hawks investigative unit, said today. An earlier probe implicated President Jacob Zuma. Charges against him were dropped in April last year.
“It must be appreciated that the investigation spans a period of 10 years,” and a successful prosecution will rest on securing cooperation and information from the German and British authorities, Dramat told lawmakers in Cape Town today. It needs to be determined “whether it is in the best interests of the country to pursue these investigations.”
Investigators in the BAE case have had to wade through 460 boxes of evidence and 4.7 million computer-generated documents that were seized from a raid on seven premises in November 2008.
‘Unconscionable’
The failure by South African authorities to complete their investigation by now is “unconscionable,” said Mark Steele, a lawmaker for the opposition Democratic Alliance. “They have taken years and years and years and we have still to see a conclusion.”
The BAE case was referred to prosecutors in June, and they are assessing whether to institute criminal charges against two suspects, said Menzi Simelane, head of the National Prosecuting Authority.
BAE, Europe’s biggest defense company, agreed in February this year to pay almost $450 million to resolve bribery and fraud investigations by U.S. prosecutors and the U.K.’s Serious Fraud Office, some of which were linked to the arms sales in South Africa.
The South African case was excluded from the plea bargaining, Dramat said. The agreement in the U.K. may make witnesses less likely to testify in South Africa, he said.
In June 2008, German state public prosecutors dropped a two-year bribery investigation of ThyssenKrupp AG, Germany’s largest steelmaker, part of the group that supplied four frigates to the South African Navy. Two former ThyssenKrupp employees who were involved in the sale were fined and given summary suspended jail terms of six and eight months for offences not directly connected with the deal.
To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net.
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