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The Continuum: Corruption Did Not Start With The Guptas And Zuma

The author and researcher of the explosive 'Apartheid Guns and Money' tell us how economic thuggery of a supposedly bygone era permeates the present, and how its protagonists get away with it.

Marc Davies
Jul 11, 2017

The behemoth of state capture personified in the form of a few Guptas and their presidential conduit has had a much longer lifespan than the democratic era itself.

While some of the protagonists of state capture or economic crimes have changed, the authors of a best-selling new book reveal how many beneficiaries and benefactors of apartheid's shadow networks stepped unscathed into the new order in new guises, and survived attempts at truth and reconciliation.

"The concern we have with researching aspects of our past and even the more recent past, including the post-apartheid arms deal, are questions about the very real continuities that we see moving between the economic crimes of apartheid and those that came after," Hennie Van Vuuren author of 'Apartheid Guns and Money' told HuffPost SA.

A crucial example of continuity between past and present, he said, is the story of mainly European arms companies that benefited from the infamous arms deal in the 1990s.

The R70 billion arms deal, at a time "when government said there was no money for anti-retrovirals while buying weapons from European arms companies", demonstrated the progression of high-level forms of criminality in the economy from apartheid, persisting all the way to the current form of 'state capture', he said.

"We see many of the same companies who benefited from post-apartheid arms deal being primary sanctions busters for a long period systemically during apartheid," he said.

One of these is Thomson CFS, a French arms company, which Van Vuuren said can be implicated in 'sanctions busting', the deliberate flouting of sanctions imposed on the apartheid state. It is also the same company that acquired "one of the most important contracts in the post-apartheid arms deal".

The company, which changed its name to Thales in December 2000, was then alleged to have bribed a politician to secure the deal. "This politician," Van Vuuren said, " President Jacob Zuma". The 783 charges of corruption‚ fraud and racketeering still faced by the president, he said, relate primarily to bribery allegations linked to Thales.

The same company was also accused of using a Swiss bank account owned by Schabir Shaik as a conduit to channel money offshore for former presidential spokesman Mac Maharaj. While Shaik was meant to be jailed for 15 years for soliciting a bribe from Thint, a local subsidiary of Thales, Zuma is still fighting his day in court.

"We could probably argue, if anything, that the corruption allegedly involving these European arms companies has driven our president right into the arms of the Guptas because he needed new allies," Van Vuuren said. "He needed to shore up other allies who have money and resources and the Guptas are quite central to that".

'Connecting the dots in a longer story of economic crimes'

Unearthing the longer story of economic crime and state capture in the country demands connecting the dots including, but also beyond the scope of, the Zuma-Gupta connections, he said.

One key example, said Van Vuuren, is "middle-man [businessman] Fana Hlongwane who is alleged to have have been involved in some of the corrupt arms deal transactions never investigated properly by the Seriti Commission".

Van Vuuren said Hlongwane was the person who introduced the embattled British PR firm Bell Pottinger to South Africa. "How did he do it? He knew the head of Bell Pottinger's father who happened to be associated with British Aerospace, where he had allegedly conducted corrupt business during the arms deal," he said.

"He so helped to make the introductions that brought Bell Pottinger to spread its toxic, vicious message using social media and fake news this year."

Van Vuuren said there are evidently multiple layers of these kinds of connections that demonstrate how the 'deep state' works in the country which is "why it is so important to look all the way back to apartheid crimes to ensure powerful actors are held to account now".

Busting post-apartheid myths about corruption

Michael Marchant, a contributing researcher to the book, said one of the values of telling a longer story of economic crimes and state capture is to "bust the myth that corruption is a racialised phenomenon, because this deeply compromises our ability to deal with the problem of corruption". By this, he means the view that corruption was a phenomenon that started only when a black government took power.
He said it is "power and secrecy" at the centre of corruption, which is revealed "once you start to burrow down into deep state networks".

Framing corruption as "inherent to majority rule" in the post-apartheid period is a "powerful misconception, fueled both by former National Party leaders and persistent racism", the book's opening section argues. Another myth the book aims to dispel is the notion that the apartheid state was entirely isolated, where in reality it used its networks to "walk through open doors around the world" and work around sanctions.

The treatment of corruption as a purely public sector phenomenon, too, is a myth that helps conceal private sector transgressions, Van Vuuren said. "We need to look at the roles of corporations, the role of intermediaries, the banks, accountants, and lawyers who enable corruption, capital flight, illicit financial flows and tax evasion."

One example relating to private sector accomplices in their book is Kredietbank Luxembourg/Belgium that, according to evidence the authors have gathered, was responsible for up to 70% of the money laundering during the apartheid period related to arms sanctions busting. This would equate in current trading value to about half a trillion rands worth of weapons, according to Van Vuuren.

He said Open Secrets is working with the Wits Centre for Applied Legal Studies to force European authorities to investigate the activities of these banks, to seek the possibility of reparations or at least ensure the bank is held to account.

Why the apartheid archive must be opened up

Marchant said it is crucial that the apartheid archive be opened further so citizens have access to information. Hard evidence of wrongdoing -- particularly in the form of primary documents -- is pivotal to empowering society to act, he said.

"What we have seen with the Gupta leaks is that there is a power for the public when a primary document is produced, be it a letter, email or memo that concretely ties two people together," he said.
This is also crucial in halting the ongoing polemicising of debates around corruption in South Africa, including by small groups of populists, he said.

The current issue around Absa and the Ciex Report which prompted the public protector to demand Absa 'pay back the money', Marchant said, is one example of this problem. In the absence of access to the actual report, he said, it has been manipulated by various parties because "we're not allowed to see evidence of any of the so-called misappropriation of funds".

Marchant said while Open Secrets believes there was systemic economic crime in the 1980s and 1990s in the banking sector, in the absence of hard evidence it remains problematic to make claims of "grand crimes".

"There is a power in being able to move from conjecture: from things we basically know to things we definitely know," he said.

The book's seventh and final myth it hopes to bust is the myth that "we cannot undo this wrong". Exhuming an otherwise forgotten or dismissed archive,or demanding access to it through legal means where necessary, is one way the authors say 'connecting the dots' may be instrumental in the fight for a democratic state that would make proud those who forged it.

One might expect the democratic government of South Africa to be very eager to reveal and put on full display the darkest secrets of the apartheid past but this is not the case.

Researchers and activists are fighting government departments to unlock the archives and unearth the remains of buried or quietly stowed apartheid documents, or at least those spared former president FW De Klerk's 40-tonne mass demolition of inconvenient secrets in the early 1990s.

Van Vuuren and his researchers have found it difficult to penetrate the archive to stitch together the threads of a global shadow network of politicians, multinational corporations and businesspeople at the helm of remarkable economic thuggery and colossal international theft.


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