[intro]The love of money says the Biblical injunction is the root of all kinds of evil. In his new book ‘Apartheid, Guns & Money’ researcher, journalist and human rights activist, Hennie van Vuuren, follows the money that fuelled the apartheid state. It’s a tough road that leads him to conclude that we still live in ‘The Long Shadow’ (the title of the concluding chapter) of the past. In the first of a two-part series we explore Van Vuuren’s amazing findings and how the whirlwind he has unleashed will unsettle the powerful for a long time to come.[/intro]

“The current struggle against corruption in South Africa is undermined by a basic lack of appreciation of the nature of that corruption and the criminal networks that facilitate it –namely, that they are continuities of a profoundly corrupt system that predates the first democratic election… The very wealthy need to show real contrition for these acts, which have been to their benefit. This cannot be relegated to a simple act of charity but … the super-rich in particular need to repatriate far more of their wealth and invest it in South Africa’s future. They and their children can no longer look away and pretend as if the source of the luxury with which they surround themselves is untainted.” – Hennie van Vuuren, Apartheid, Guns and Money: A Tale of Profit

It is a cold Saturday morning. A weak winter sun settles on the simple office décor of Community House. It’s a place that used to enjoy the moniker ‘Struggle HQ’ in the old days. Nowadays it’s a hub of human rights organisations, where we sometimes go for a post struggle socialist fix.

Hennie van Vuuren the Director of Open Secrets has a quiet, unassuming air. Perfect for an investigator who has had to become a bit of a counter spy to delve into a dark and complex world. But the exterior is misleading. Behind the soulful grey green eyes and the boyish face is a rock-solid determination that has resulted in five years of research, a 624-page book and a mountain of documents that dwarf the end product. And that’s not all…

After publishing in almost forensic detail the complex and deadly networks the apartheid government used to bust sanctions, flout the UN Arms Embargo and fuel its ideology, he is preparing for the next step: Court cases and activism that aim to hold corporations and governments to account for their crimes.

Open Secrets, the organisation Van Vuuren now runs, aims to promote private sector accountability for economic crime and human rights violations.

Apartheid’s Global Support

His book’s meticulous research shows how apartheid thrived because the National Party government had influential friends and supporters across the globe, sometimes in the most unlikely places. Even ANC/PAC supporter China is up there among those named and shamed.

The fabulous profits made by oil traders and suppliers had a deep knock-on impact on social upliftment in South Africa, something for which these businessmen should have been forced to account. Instead, as we have seen, they were either accommodated in the post-1994 democratic South Africa or were even allowed to feast yet further on corruption in the arms deal of the late 1990s. – Apartheid Guns and Money

Now you would think that 23 years after democracy there would be a new openness around the world and especially in South Africa. But Van Vuuren and his collaborators – it includes the SA History Archives (SAHA) – are still battling for access to secret papers. Some of these documents are in the archives of our government’s Department of Defence.

“We had access to about 500 boxes of information but about 400 remain under dispute, in the sense that the Department of Defence refuses to give us access to information. In some instances, we’ve had to give up,” he says.

So, there are still things that the state is ruling off limits and according to Van Vuuren, the former government’s collaboration with Israel is one of these ‘no go areas’.

But if the efforts of the Open Secrets team are successful we will finally get a glimpse into these boxes that are under wraps. One case will be heard in court next month. Together with SAHA they are requesting information being withheld by the SA Reserve Bank. This matter is set down for August 4th.

“The lens of what happened during apartheid needs to be a powerful reminder that we keep holding up to say, ‘look at where we’ve come from’. We cannot allow these things to happen again. We will come after you. We will find you. You will die but we will write about you.

“A reminder to people involved in these practices in the past and in the present that they can’t believe they will always get away with it,” says Van Vuuren.

Open Secrets, is involved in “ensuring accountability from financial institutions that were involved in economic crimes that are linked to human rights”. And, it’s activism that packs a punch… They are now focusing on among others the role of a major European company, the Kredietbank in Luxembourg (more later).

They are working on lodging a complaint with the The Organisation for Economic Co-operation and Development (OECD). This will be done in conjunction with the Centre for Applied Legal Studies (CALS) and potentially other partners.

“The OECD has the national contact point mechanism through which civil society and others, particularly in the global South, can go to the countries where multi-nationals are based and where those multi-nationals have been involved in human rights violations, to lay a complaint that compels the authorities in that country to investigate the operations of the corporation. Of course, it’s reputational damage for these institutions.

“And, we need to look at the possibility that these banks need to be made to pay compensation to the victims of apartheid. Ultimately, we would want to see some kind of financial sanction placed on them. That is just some basic justice, given what we believe is the amount of money these institutions made off the back of creating an architecture that allowed economic crime to happen over a period of so many years.

“The crime of apartheid is a crime against humanity and they believe this is too old and this is dated but this problem is not going to go away.

“It’s also to send a message to other financial institutions that are currently supporting these types of systems around the world that they will be held to account. In the global arms industry, there’s never been a successful attempt to hold banks to account for their role as conduits for the cash that allowed crimes to take place.

“That’s forward looking and that’s not only about the South African story. That’s about the global narrative of the kind of injustice that these arms corporations, working with politicians, working with intelligence agencies and with the banks, are allowed to perpetrate.”

On the home front, Open Secrets is exploring potential legal action in South Africa. Van Vuuren is not prepared to say much more about this proposed litigation at this stage. He says the work of the Khulumani Support Group is instructive but that they need to set a precedent here in South Africa.

“I think that we cannot underestimate the power that private actors have in making us believe it’s impossible to hold them to account.”

Locally they are also seeking the results of an investigation into the doings of the diamond giant De Beers. The probe was conducted by the Auditor General and the government is refusing to release the findings.

“We haven’t written about it in the book but we obviously are interested in the issue of capital flight. There are still documents which we have requested about the involvement of De Beers.”

In 2008 the Parliamentary Standing Committee on Public Accounts (SCOPA) ordered the Attorney General’s office to investigate an allegation. It was claimed that as the old government was bowing out, De Beers exported an unusually high amount of uncut diamonds at formerly favourable tax rates.

“De Beers had moved uncut diamonds to the value of hundreds of millions of rand offshore in 1993 without paying sufficient tax. De Beers has disputed this. SCOPA ordered the AGs office to investigate it. The reports that the AG is said to have produced was never submitted to Parliament, the final report. And we have asked for the evidence that they’ve collected, because we do believe that they have substantial evidence that would be in the public interest.

“But that’s not in the book. There are dozens of those things. Those rivers that peter out just because we just can’t take them far enough.”

One river of information that fortunately did not peter out, is that of the foreign banks and their networks of complicity. It’s hard to fathom as we drink tea and coffee in a quiet corner of a conglomeration of NGOs, the extent of this geo political corruption. We talk between sips about international banks, governments and organisations committing crimes on a grand scale. The apartheid money laundering network was one of the largest the world has ever seen. The amounts are staggering.

The Arms Money Machine

Only one bank, according to the evidence we collected for this book, actively helped establish the architecture of front accounts and front companies in Panama and Liberia without which the scheme would never have worked. This was Kredietbank and its subsidiary, Kredietbank Luxembourg. – Apartheid Guns and Money

There are many people and organisations involved in such a network. But a key player that the book exposes is the Kredietbank of Luxemburg.

Van Vuuren’s writing style is as calm as his exterior. No trumpet fanfares and claims of ‘exclusive’ accompany his revelations. But it’s the first time that this European private bank’s role as well as the names and details of many influential people have been made public.

“I was fortunate that we had some sources that I cultivated as part of the research that assisted us with some of the documentation and that helped us to try and piece it together.

“There were bits and pieces that had been published in the past about a bank. Noseweek and others have said this. But we were fortunate that there were multiple sources that provided documentary evidence about this bank’s malfeasance. Much of that stemmed from one of the sanctions busters Jorge Pinhol.”

We Still Pay Apartheid’s Debts

Ironically it is a simple matter of crooks falling out that has led to the exposure of some of the apartheid dirty tricks. Pinhol is a racing driver who says he helped Armscor procure helicopters, via Portugal, in contravention of a UN Arms Embargo… a measure meant to isolate the apartheid state. He has taken Armscor to court in Portugal for failing to pay him a 10% commission on the USD $ 3-billion deal.

The case is ongoing. So far, Armscor has already been fined one million Euros (about R 14,5-million) for not complying with court demands. Sadly, this amount as well as Pinhol’s claim if successful and any other apartheid debts, will be paid by us the SA taxpayers.

“Remember Armscor’s responsibility today is the acquisition of weapons. It’s not a private company generating its own income. So, we will subsidise that process which is truly disgusting. It must be many millions of rand that has been spent on this court case. We are deep into the two digit figures here,”

First comes oppression then you settle your oppressor’s debts. It’s how the world works, we are told. But this is a book that refuses to accept this brand of conventional wisdom.

It is the papers that have been filed in support of the Pinhol court case that led Van Vuuren and his team to the door of private bankers Kredietbank. It occupies almost a city block on Luxembourg’s prestigious Boulevard Royal. Their slogan proclaims; “Caring for generations”.

The book’s research homes in on one of the bank’s top executives and founder of an elite European business school, the influential Baron André Vlerick. Van Vuuren says the Vlerick archives point to support for apartheid at a very personal level.

“I spent time in his archive in Belgium and it was just extraordinary to see his views and his writings, his recollections as he flew in a helicopter over Khayelitsha. The logic of apartheid and in a very crude sense the separation of races, is something that he strongly identified with. He actually thought that this was a model that Belgium could learn from.”

And from voicing mere admiration the bank officials and people like Vlerick ensured that their money and their mouths were in the same place. They provided loans, a safe-haven for slush funds and a conduit for money laundering.

“Kredietbank was home to politically well-connected men who benefited from the revolving door between political office and the bank, including Vlerick who became Belgian minister of finance in 1972 and was closely associated with the Flemish Christian People’s Party,” writes Van Vuuren.

Vlerick was given the title of Baron by the Belgian king in 1985 and two years later the SA government gave him the Order of Good Hope.

The vast fortunes being made and spent is indicated by one piece of information in Chapter 5 titled “The Arms Money Machine”. About US $ 15-million passed through the Armscor bank accounts in Luxembourg every week for a decade starting in the mid 80s. These accounts had a turnover of US $ 7-billion for this period. A source in the book suggests the money went mostly to the overpayments to middle men… and probably to the bankers that greased the process.

People made obscene amounts of money off the back of apartheid and some while professing to abhor the system in public.

A Tale of Profit

The Swiss gnomes and the Belgian bankers are worthy of singling out in view of their importance in propping up the South African economy. However, for many other bankers the business of loans to the apartheid state continued as usual. Among these, British, German and French banks were probably the biggest culprits. It is worth remembering that everyone was involved. The banks included Hill Samuel and Barclays in the United Kingdom; Deutsche Bank, Dresdner Bank, Commerzbank and all the major German banks; and the Parisian banks Société Générale, Paribas and Suez. US banks, including Citibank and Chase Manhattan, also did business with Pretoria until they felt the heat from the active US anti-apartheid movement… In 1994, South Africa was heavily indebted to these financial institutions, which had continued to lend to the apartheid regime right up until the brink of financial crisis. By this time, and with a new government in place, this debt and the significant repayments required formed a major diversion of funds from vital domestic spending. – Apartheid Guns and Money

It was a time of unparalleled abuse of power. When the struggle for South Africa’s freedom was at its fiercest, economic crime not only festered, but became state policy. Corruption, money laundering, sanctions busting and organised crime, the elements of such economic crime, had become a necessity. – Apartheid, Guns and Money

One of the overwhelming impressions as I read Apartheid Guns and Money is that evil often does not loom large in headlines. Evil is truly banal. It is to be found in the small, everyday details. As Van Vuuren’s previous book with Paul Holden about the arms deal scandal proclaims; “The Devil in the Detail: How the arms deal changed everything”.

And, Van Vuuren has learnt a very important weapon in the battle against forgetting. He fights detail with detail. He writes about supplies of timber going to the UNITA rebels of Angola’s Jonas Savimbi whom the apartheid government supported. There in amongst a ‘shopping list’ of the rebels’ needs are some specs for “wreck benches”. Ominous sounding implements take their place next to catering equipment and other benign necessities.

“Suddenly you will find a list of supplies for a mobile interrogation unit and then you think about the people and what interrogation means, possibly torture to extract information. Those moments punch you. Those are moments that are quite powerful between just reams and reams of very officious reports.”

It’s a bit inappropriate asking him about the motives of the people he has studied all these years but I ask him anyway. Why their need for recording the minutia?

“In all of this there’s this bizarre efficiency argument. There’s talk about costs down to the last rand. They believed that this system they were upholding was a just one so therefore the efficiency argument was about making it work as effectively as possible.

“Outwardly there was covering up tracks and clandestine activity. But there’s an undeniable sense that this is right, particularly in the 70s, 80s and in the 90s. In the military and foreign affairs and other archives there’s this forward planning for what will happen afterwards. You don’t read in the documents a sense of foreboding. There is a concern about military spending but the fact that the military will survive is a given.”

While much of this information is revealed for the first time, for me most of it is not all that surprising. However, a side story of an arms shipment that came from Shanghai via Zaire to Pretoria is shocking. The Chinese were supporting and arming the liberation movements at the same time as they were selling weapons to the enemies of the ANC and PAC.

So What Now

So where does all this leave us today? A final graphic spells out the extent of the impact on South Africa today.

  • Jorge Pinhol is claiming US $ 300-million
  • We had to pay almost that same amount in apartheid’s foreign debt
  • There are almost a thousand corruption and fraud charges related to the arms deal
  • About R 70-billion in tax money is being moved offshore illegally every year

It never stops.

Hennie van Vuuren’s coffee plunger is empty. My Rooibos tea is done. The simply furnished room is awash with unfinished business. I ask him about the personal sacrifices he’s had to make. We swop notes briefly about the intimidation from shady characters we’ve both experienced.

“These are hard things to do. I’m not going to pretend it was a walk in the park. These are very dark places and these are very dark people and institutions and there’s invariably a sense of vulnerability that comes from doing this work.”

His voice trails away and the look in his eyes makes up for the lack of volume.

“Personally, it is important for me to recognise that this particular piece of work is different perhaps from the work on the post-apartheid arms deal… These are things that white South Africans have to grapple with. They have to grapple with their complicity, they have to grapple with what that meant and the way in which the system was supported and the manner in which it operated. How this has resulted in an inordinate amount of human suffering.”

But the personal is an area that makes Hennie van Vuuren uncomfortable. When the question comes about white guilt he hesitates for a while then stumbles a bit. But he recovers.

“You’ve really taken me into difficult places which I’m very happy about.
“The past is what it is. This isn’t a story that’s been driven by guilt from the past but a sense of responsibility for dealing with that, for dealing with the damage that has resulted and contributing towards the process of justice. It is about responsibility and creating discomfort. I certainly felt the discomfort in doing this work.

“When you look right down deep into this very sinister place, this space, I guess there’s some kind of mirror on the present. You see why it is why we are where we are. It’s also recognising that we no longer live in that country. I just feel very lucky to be alive right now in South Africa,” says this young man who started studying at the University of the Witwatersrand in the year of the first democratic elections.

And then the vulnerability comes rushing back and he asks:

“Does that make sense?”

The country has, for much of its past, been beholden to the interests of corporations that sought to extract its abundance to the detriment of most of its people. The fight for political control of South Africa has therefore inevitably involved powerful private interests. The first European settler community in the Cape did not serve a king but the Dutch East India Company, the world’s first multinational corporation and one of the wealthiest corporations in human history, which made its fortune off the spice trade. – Apartheid Guns and Money

In the next edition of the Journalist, in the final part of this series, we look at new evidence in the unsolved assassination of Dulcie September. Then the inevitable post-apartheid topic: South Africa as the 7th most unequal nation in the world, with two families, that own half of everything.

Apartheid, Guns and Money is written by Hennie van Vuuren. Additional research is by Michael Marchant with Anine Kriegler and Murray Hunter. The graphics are by Gaelen Pinnock.

The work of Hennie van Vuuren and Open Secrets is supported by the Open Society Foundation, the New York based Human Rights Initiative, the Claude Leon Foundation, the Heinrich Böll Foundation and the Bertha Fund, among others.

The organisation also works in collaboration with the SA History Archives and Lawyers for Human Rights (LHR).