TRC Final Report

Volume 2

Chapter 6

Part Part4

Subsection 6

■ SCHEDULE OF SECRET PROJECTS

69 The Auditor-General has provided the Commission with a schedule of secret projects received from eight government departments: the NIA; the Department of Justice; the South African Police Services (SAPS); the Department of Foreign Affairs; South African Secret Services; the Department of State Expenditure, the South African National Defence Force (SANDF) and the Department of Arts and Culture, Science and Technology.

70 This information was made available shortly before the termination of the work of the Commission. Code names and/or numerical references were used, rendering this information of limited value. The NIA, for example, identified 749 code-named projects with limited or no detail. Given the closure of investigative work by the Commission on 31 July, no opportunity existed for these matters to be pursued.6

■ AN OVERVIEW OF THE TYPE AND NATURE OF SECRET PROJECTS

71 The Commission had requested the Auditor-General to provide an in-depth analysis of ten to fifteen window cases illustrative of the type and nature of the secret projects under consideration. Due to the scarcity of information and documentation available this was, however, not possible.

72 There were only a few projects for which all the audit documentation needed for a proper window-case presentation was available. These are Project Coast (a programme involving chemical and biological warfare initiatives) and some projects of the Department of Foreign Affairs, although here too, little information was made available to the Commission. The audit of Project Coast is still to be completed, as is the Auditor-General’s investigation into the fairness and reasonableness of the determination and/or calculation of the cancellation fee and the amounts paid to the then SADF for the shares and loan amounts of the companies involved. An investigation by the Office for Serious Economic Offences into the alleged irregularities has also not been completed, as stated in the Auditor-General’s audit reports to Parliament. The Auditor-General was therefore unable to express an opinion on this project.

73 The projects instituted by the Department of Foreign Affairs were constituted mainly around sanctions-busting operations. They involved the setting up of financial trusts and various front companies and organisations in a number of countries around the world.⁷

74 According to information supplied, but not audited, the following amounts were transferred by the Treasury, and later the Department of State Expenditure, to departments in respect of secret funds between 1978 and 1994:

75 The above amount of R15 285 000 does not reflect the amount that passed through the Defence Special Account. The Auditor-General has provided the Commission with a schedule that identifies a total amount of R49 648 737 969 passing through this account, with a further R586 501 609 being expended on ‘sensitive line function projects’ between the 1974–75 and 1994–95 financial years.

76 Similarly, information provided by the Auditor-General concerning amounts paid by Foreign Affairs ‘for control of sanctions and disinvestment out of secret funds’ lists a total of 417 projects with an expenditure of R210 087 535.32, including, for example, project No 35 with an expenditure of R25 million.

■ CONCLUSION

77 From the limited information at its disposal, the office of the Auditor-General attempted to provide the Commission with as complete a picture as possible of the auditing of all secret funds. To the extent that information and documentation has been destroyed, and persons with the appropriate knowledge have left the relevant departments, the Auditor-General was not able to provide any assurance that the information was completely accurate or complete.

78 This report does, however, provide an insight into the environment in which the Auditor-General operated for almost the entire period under review. Whilst Parliament required the Auditor-General to provide audit assurance, state departments often gave access to information on a limited and reluctant basis. There is no evidence to suggest that the office of the Auditor-General did not seek to exercise its mandate to the best of its ability within the constraints of the law and the culture of secrecy that prevailed at the time. The Auditor-General is on record as saying:

As a result of the foregoing, the Office has always maintained and has publicly reported that the audit assurance obtained from auditing secret funds is lower than would normally be the case. It is with regret that, because of the inherent limitations of any audit as well as the particular circumstances set out earlier, the Office must accept that expenditure audited by it may have been incurred, or assets may have been acquired, from the relevant secret funds for the purpose of committing gross human rights violations.

THE COMMISSION FINDS THAT:

• SECRET FUNDING WAS USED TO PROMOTE A POLITICAL CLIMATE THAT LED DIRECTLY AND INDIRECTLY TO GROSS HUMAN RIGHTS VIOLATIONS.
• BEFORE 1991, SECRET FUNDING WAS USED TO PROMOTE PARTY POLITICAL AND SECTARIAN POLITICAL INTERESTS.
• SECRET FUNDING WAS INADEQUATELY ADMINISTERED AND AUDITED – ALTHOUGH ATTEMPTS WERE MADE AFTER 1991, THROUGH THE KAHN COMMISSION, THE MINISTERS’ COMMITTEE ON SPECIAL PROJECTS AND THE EVALUATION COMMISSION, TO REDRESS THIS SITUATION.
• INITIATIVES UNDERTAKEN BY THE AUDITOR-GENERAL’S OFFICE TO EXECUTE A MORE PRECISE AUDIT WERE HAMPERED BY LEGISLATIVE CONSTRAINTS AND A `NEED-TO-KNOW’ MILIEU WHICH PREVAILED IN STATE DEPARTMENTS, AS WELL AS BY THE REFUSAL OF SOME STATE OFFICIALS DEALING WITH SECRET FUNDS TO PROVIDE THE DOCUMENTATION AND OTHER INFORMATION NEEDED FOR AUDITING PURPOSES.
• AGENTS AND STATE EMPLOYEES WORKING ON SECRET PROJECTS RECEIVED FINANCIAL AND OTHER SETTLEMENTS WHEN SPECIFIC SECRET PROJECTS WERE TERMINATED, WHICH SHOULD BE REGARDED AT LEAST AS MORALLY QUESTIONABLE.
• FUNDING THROUGH THE SPECIAL DEFENCE ACCOUNT IN PARTICULAR WAS NOT SUBJECT TO ADEQUATE AUDITING UNTIL AT LEAST THE 1985–86 FINANCIAL YEAR.
• THE FUNDING OF CCB ACTIVITIES WAS AT NO TIME SUBJECTED TO AN ADEQUATE AUDIT.
• THE KAHN COMMITTEE AND THE SUBSEQUENT BODIES DID NOT PROVIDE SUFFICIENT DETAIL REGARDING STATE SECRET FUNDING. PROJECT DESCRIPTIONS PROVIDE LIMITED INFORMATION. AN EXAMPLE CAN BE MADE OF PROJECT ECHOES, WHICH IS DESCRIBED AS "AN SADF ACTIVITY AIMED AT COMBATING VERBAL ATTACKS ON ITS DUTIES AND FUNCTIONS. ITS ACTIVITY RELATES TO THE ACQUISITION OF INFORMATION IN RESPECT OF MK MAINLY, AND PASSING THIS TO THE MEDIA." THE AUDITOR-GENERAL’S REPORT DESCRIBES IT AS "MAINTAINING A SA ARMY COMMUNICATION CAPABILITY TO WITHSTAND MILITARY AIMED PROPAGANDA ACTIONS". THE COMMISSION HAS INFORMATION THAT (INTENTIONALLY OR OTHERWISE) LINKS PROJECT ECHOES TO HUMAN RIGHTS VIOLATIONS, IN THAT AN ASSASSINATION ATTEMPT ON MR DIRK COETZEE WAS FACILITATED UNDER COVER OF PROJECT ECHOES. THIS INFORMATION CONFIRMS THE OBSERVATION OF GENERAL PIERRE STEYN IN HIS INVESTIGATION INTO THE STRUCTURES AND ACTIONS OF MILITARY INTELLIGENCE, THAT IN A NUMBER OF INSTANCES, DUBIOUS AND ILLEGAL ACTIVITIES HAD BEEN SUCCESSFULLY WOVEN INTO AUTHORISED AND OFFICIAL OPERATIONS, MAKING DETECTION MORE DIFFICULT.
• QUESTIONS REMAIN AS TO BOTH THE ACTIVITIES AND FINANCIAL RESOLUTION OF SEVERAL PROJECTS. IN PARTICULAR, THE ISSUE REGARDING THE USE MADE OF THE LARGE SUM OF MONEY LOCATED IN A FOREIGN TRUST ACCOUNT IS OUTSTANDING. IT IS SUGGESTED THAT THE ASSETS OF THE TRUST WERE IN THE VICINITY OF R20 MILLION, AFTER THE PAYMENT OF RECOMMENDED SETTLEMENTS.

THE COMMISSION FINDS THAT INSUFFICIENT INFORMATION IS PRESENTLY AVAILABLE TO DESCRIBE THESE PROJECTS ADEQUATELY AND RECOMMENDS THAT FURTHER RESEARCH AND INVESTIGATION BE DONE INTO THESE SECRET PROJECTS TO ESTABLISH A FULLER PICTURE OF THEIR RANGE OF ACTIVITIES.