This week, Open Secrets continues to profile the corporations and individuals implicated in corruption in the 1999 Arms Deal but yet to be held to account. The European arms corporations that profited from the deal used a similar modus operandi – pay well-connected middlemen and agents to guarantee access to politicians and key decision-makers. This week we turn the spotlight onto John Bredenkamp, who was contracted by British arms giant BAE Systems in relation to the Arms Deal. This is the first in a three-part series detailing the lucrative relationship between BAE Systems and its covert international network of middlemen.
As the 23 June date set for Jacob Zuma and Thales’ next court appearance approaches, it is important for us to remember that they are in a minority of those implicated to see the inside of a courtroom. Zuma and Thales will (despite their best efforts) ultimately have their day in court related to their formerly clandestine arms deal era partnership. Others have been more successful in their attempts to remain unaccountable for their own dodgy dealings related to the Arms Deal.
The notoriously corrupt John Bredenkamp is a good example. There is a great deal of evidence, detailed below, that he used his political connections to influence the multimillion-dollar agreements to favour BAE Systems. Yet, despite being seriously implicated, lackadaisical law enforcement agencies around the world and botched investigations have left him, and many others, unaccountable. As the Thales/Zuma trial kicks off, it’s time that South African prosecutors dust off the old dockets and reconsider the evidence that has been largely ignored over the past dozen years.
BAE Systems and the 1999 arms deal
Upon the signing of the final agreements related to the multibillion-rand Strategic Defence Procurement Package on 3 December 1999, BAE Systems (previously known as British Aerospace) secured the biggest slice of the arms deal pie. The British arms company 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.
BAE managed to land these contracts despite protests from heads of both the South African Air Force and the South African National Defence Force, who expressed their concerns about the exorbitant cost of BAE’s Gripen and Hawk, and its failure to meet the full requirement specifications.
So, how did BAE manage to secure these deals when the very institutions for which these aircraft were being purchased were in protest? The controversial choice only starts to make sense when examining the influential middlemen that they had on their side.
Enter, John Bredenkamp.
John Bredenkamp is deserving of the infamy that polite company fastidiously reserves for the corrupt Gupta family. He is a notorious figure in the world of international clandestine deals. A known smuggler, tobacco and arms trafficker, sanctions-buster and occasional businessman, Bredenkamp made a fortune across various industries despite being at the centre of numerous criminal allegations throughout his career.
According to Zimbabwean social media reports Bredenkamp passed away today, 17 June 2020. The soft glow of nostalgia is already evident on social media posts that recall Bredenkamp’s rugby playing days in Rhodesia and support until recently for his Zimbabwean alma mater Prince Edward School. But the facts are glaringly contrary – Bredenkamp’s fingerprints were to be found over decades on the scene of economic crimes that resulted in human rights violations. This is his legacy.
Bredenkamp is alleged to have assisted numerous pariah states to bust sanctions. Zimbabwean-born, Bredenkamp managed to find favour in the inner circle of both the Ian Smith and Robert Mugabe regimes. He has admitted to having assisted Smith, the prime minister of Rhodesia (now Zimbabwe) in the 1970s, to break international sanctions in order to ensure that the colonial regime remained armed. Despite this history, Bredenkamp was able to form a relationship with Mugabe as the new head of state, which allegedly included the provision of financial and logistical support to Mugabe’s regime. This included a role in the illegal exploitation and plundering of the natural resources of the Democratic Republic of Congo between 1998 and 2003.
The relationship resulted in Bredenkamp being added to the United States sanctions list, a decision which the European Union and Switzerland shortly followed. Bredenkamp’s legal team eventually had his name and companies removed from the European lists, but he remains on the US Office of Foreign Assets Control sanctions list.
In addition to his support of Mugabe, he also allegedly supplied arms to both sides during the Iran-Iraq war. Perhaps most important for present purposes, he also sought to bust sanctions with the South African apartheid government. Declassified South African military documents show that Armscor agents approached Bredenkamp in 1982 in an attempt to procure 20,000 flamethrowers. He agreed to take part and provided fraudulent end-user certificates in order to bypass the arms embargo. Thankfully, the deal fell through when Belgian authorities unknowingly intervened and halted the transport process. Nonetheless, it remains horrifying to imagine the suffering that could have been caused if flamethrowers had found their way into the hands of a regime which did not value black lives and deployed troops readily to townships during this time.
These connections with the South African military establishment mean it is little surprise that Bredenkamp is implicated in the post-apartheid arms deal scandal.
Bredenkamp’s role in BAE’s network
The importance of Bredenkamp to BAE’s bid for the South African deal was brought to the attention of South African authorities by authorities from the United Kingdom.
In 2006, after a number of unsuccessful or compromised attempts by South African authorities to investigate allegations of corruption in the arms deal, the United Kingdom’s Serious Fraud Office (SFO) submitted a request for assistance from South African authorities in its investigation into BAE’s conduct in securing the arms deal contract. South African investigators granted the request in January 2007.
In 2008, the favour was returned as the SFO submitted an affidavit, based on their investigation, to the National Prosecuting Authority to help further the SA investigation into Bredenkamp and other implicated individuals. The SFO provided damning evidence that BAE were paying a cool R1.2-billion (roughly R2.5-billion in current value) to maintain a complex web of agents, intermediaries and offshore companies that operated in the interest of BAE’s South African arms deal bid.
The affidavit to the NPA sparked a number of probes into the conduct of BAE, and was central to a last-ditch effort by the South African Scorpions unit to enforce accountability for corruption in the deal. This was before it was shut down by order of President Motlanthe in 2009 and replaced with the comparatively toothless Hawks, who would go on to scrap their arms deal investigation by 2010.
What was particularly notable in the SFO affidavit was the huge sum of money paid to John Bredenkamp.
According to evidence obtained by the SFO, Kayswell Services Limited, a company registered in the notorious tax haven of the British Virgin Islands (BVI) and in which Bredenkamp held 60% of the shares, entered into a formal consultancy agreement with BAE in 1994. However, by 1999, the decision was made to channel payments to Kayswell through another BVI-registered company that was owned by BAE and used specifically for the purpose of ensuring secrecy and avoiding scrutiny of Red Diamond Trading Limited. Red Diamond was used by BAE to pay Kayswell approximately R400-million in relation to BAE’s South African arms contracts.
These staggeringly high payments were made despite BAE being unable to prove that Bredenkamp and his company had in fact completed any work for them. So why was Bredenkamp paid?
It is important to keep in mind that BAE was awarded these contracts despite concerns about the exorbitant cost of the Gripen and Hawk and their failure to initially meet the full requirement specifications. Were the payments for Bredenkamp’s assistance in securing the contract despite these concerns?
BAE’s former managing director for Africa and Asia, Allan McDonald, admitted that they paid Bredenkamp for political connectivity. McDonald told the SFO that Bredenkamp suggested identifying key decision makers and offering financial incentives to them for the selection of the Hawk and Gripen contracts. In particular, McDonald claims Bredenkamp and his team had direct access to Chippy Shaik, the Chief of Acquisitions for the arms deal, adding that they had obtained secret information about Shaik. It’s worth remembering that Chippy Shaik is the brother of Shabir Shaik who worked with Jacob Zuma and Thales to secure kickbacks in another part of the corrupt arms deal.
New evidence unearthed during the Seriti Commission – but which the commission failed to test or consider – linked a 2002 payment from Bredenkamp’s network of associates to a Julekha Mohamed. The most likely identity of this person is the Julekha Mohamed who was a lawyer to President Jacob Zuma and co-director of a company with Chippy Shaik. In October 2006 the Financial Intelligence Unit (FIU) in the tiny principality of Liechtenstein sent a note to the National Prosecutor of Liechtenstein. The FIU identified a number of Bredenkamp-linked companies and business partners; Kayswell Services, ACT Worldwide, Julien Pelissier, Trevor Wilmans and Walter Hailwax, as suspects for money laundering offences related to their receipt of funds from BAE Systems’ Red Diamond.
The FIU noted that Julien Pelissier – a business partner of Bredenkamp and significant shareholder of Kayswell – had received $661,000 from Kayswell Services and a further $1.6-million from other sources into a Liechtenstein-based account. The FIU further noted that according to a transaction list from Pelissier’s account, he had transferred $258,000 in September 2002 to an account held at UBS in Switzerland. That account was in Julekha Mohamed’s name.
Bredenkamp’s network of payments reached in many directions. The SFO investigations also determined that he used Jasper Consulting – another one of the many companies within his network of offshore businesses – to make payments to another individual central to the BAE network of agents in South Africa, Fana Hlongwane. Hlongwane is also implicated in the deal regarding his own contract with BAE and is the focus of the next instalment of Unaccountable.
What became of Bredenkamp?
There is a wealth of evidence from different jurisdictions that implicate Bredenkamp in possible crimes. Yet, like so many implicated in complex economic crimes, he escaped accountability until his death. This impunity allows covert and corrupt networks to survive and continue to profit.
The failure to pursue tangible accountability for Bredenkamp, from his sanctions busting activities all the way through to his arms deal escapades, allowed him to continue to grow his wealth and network of influence. Despite the US sanctions against him, he continued to run multiple offshore businesses until 2013 when they were all finally shut down. The wealth he accrued continued to support a luxurious lifestyle. Reports from May 2019 suggest that he continued flying his private jet until it was seized in the midst of claims that he was in a considerable amount of debt.
The Zuma and Thales trial provides us with the perfect backdrop to revisit and explore the roles of the politicians, middlemen and international corporations who have for the most part escaped scrutiny for their involvement in, and more than questionable profiting from, the arms deal. While it is too late for Bredenkamp to be held accountable, many more should follow them into the dock. DM
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Previous articles in the Unaccountable series are:
Unaccountable 00001: Dame Margaret Hodge MP – a very British apartheid profiteer; Unaccountable 00002: Liberty – Profit over Pensioners;
Unaccountable 00003: Dube Tshidi & The FSCA: Captured Regulator?;
Unaccountable 00004: Rheinmetall Denel Munition: Murder and mayhem in Yemen;
Unaccountable 00005:National Conventional Arms Control Committee: handmaiden to human rights abuse?;
Unaccountable 00006: Nedbank and the Bank of Baroda: Banking on State Capture.
Unaccountable 00007: HSBC – The World’s Oldest Cartel
Unaccountable 00008: FNB and Standard Bank- Estina’s Banks
Unaccountable 00009: McKinsey – Profit over Principle
Unaccountable 00010: Jacob Zuma – Comrade in Arms
Unaccountable 00011: Thales – How to buy a country