Shadow of SA corruption can be exploited by those who could profit

SOUTH Africa remains a deeply unequal society, battling the legacy of apartheid and the persistence of corrupt networks that seek to “capture” its democratically elected leaders.

In forging its future, a new generation of South Africans need to grapple with the baffling silence regarding apartheid-era economic crime and ask difficult questions of those who profited from it. In an extract from his book, Apartheid, a Tale of Profit, Guns and Money, Hennie van Vuuren, provides the evidence and the motivation to do so. The following is an edited extract.

The lawyers, with great skill, ensnared the archbishop. As Desmond Tutu left from early Friday morning Mass in December 2012, I watched as they waited for the right moment to engage the anti-apartheid cleric. A fixer facilitated the briefest of introductions.

After being told that these were good guys, Tutu sounded pleasantries – “You must bring back the apartheid money” – and gave his generous, mischievous laugh as he shuffled off.

If Tutu had been fully briefed about his well-wishers’ intentions, his smile might have been far less generous. Some in this party like myself had stumbled onto this scene after being told that we would discuss a stunning reparations claim.

However, it was soon evident to me that this was little more than an attempt to make money for some very wealthy people – off the back of legal claims on behalf of people of questionable character.

Chief among these is Jorge Pinhol, who was represented by the lawyers trying to draw Tutu into their scheme. Pinhol is a Portuguese former racing-car driver and arms middleman.

Starting in 1985, he developed close ties with the Armscor office in Paris, whose officials first asked him to provide them with fraudulent end-user certificates for weapons sales.

Very soon, Pinhol was in the business of supplying clandestine arms to South Africa and recalls several meetings in Pretoria and across Europe with some of Armscor’s top leadership at the time.

By far the most important business deal between Armscor and Pinhol was negotiated in 1986-87 as part of Project Adenia. Pinhol claims he created a Portuguese clandestine channel that Armscor used to illicitly import 50 Super Puma helicopters (in disassembled kit form) and spare parts from France. This channel was created with the assistance of the Portuguese military, with which he had good contacts. Signed affidavits by four retired Portuguese generals confirm the role of Pinhol in establishing this “channel”, of which they carried personal knowledge at the time. The Portuguese Air Force imported the unassembled helicopter kits but ensured that they made their way to South Africa. In return, the Portuguese Air Force was given helicopter kits and spares at Armscor’s expense to upgrade its own fleet of Puma helicopters.

In return, Pinhol claims he signed an agreement that guaranteed him a 10% commission fee on the $3 billion (R38.5bn) deal, which was camouflaged by the channel he had helped create. According to him, the money was never paid for his commission as Armscor officials, sensing the forthcoming change in government and the end of the embargo, lost interest in him. He alleges that this was especially true after they secured the support of the Portuguese Air Force generals for their new channel.

In court papers he claims that he is therefore owed a $300 million fee (escalating to $500 million with interest) for facilitating a massive apartheid-era arms sanctions-busting deal. This involved the French arms manufacturer, Aérospatiale, a group of Portuguese generals, Armscor (and, by extension, the South African government) and its chief sanctions-busting bank, Kredietbank Luxembourg (KBL).

In making his claims, Pinhol has been involved in a legal dispute over the past 25 years that is yet to yield him any significant pay-off. However, he is assisted by a small group of international lawyers funded since about 2006 by a generous Canadian billionaire, John Risley.

Acting as a venture capitalist “investor”, Risley has sustained Pinhol’s legal campaign to the amount of, I am told, a few million dollars. It would be a curious alignment of characters, were it not for a shared interest in fast cars and profit. If the claim is successful Pinhol, his lawyers and Risley (as the wealthy investor) stand to make a small fortune of up to R5 billion. At one point, Pinhol’s lawyers told me that they would be prepared to settle with Armscor at $300 million.

Who will stump up the cash for this apartheid-era sanctions-busting claim? The stateowned arms procurement corporation, Armscor. This means that the claim, if successful, will have to be authorised and financed by the Treasury. Effectively, the apartheid sanctions buster is trying to force a payment out of the pockets of every South African citizen. This is a deeply unjust proposition, an additional apartheid tax to fund an avaricious adventurer.

Pinhol’s claim represents one of many aspects of the long shadow of our past. Similar deals have been kept secret for many years and are ripe for manipulation by parties and individuals who continue to operate in the shadows. Even the name of President Jacob Zuma has been mentioned as a party with an interest in resolving this matter.

There have been a few attempts to pull me into this scheme given my interest and work in uncovering the machinations of the modern-day deep state. For example, in late 2012 one of the lawyers suggested I should join their team. I declined. To my surprise, he let drop into the conversation the remark: “A young man like you would do well in politics; however, that would require the necessary resources. There may be a mutually advantageous situation.”

Having passed up the offer, I have followed the matter from some distance.

The lawyers at one point suggested that their case might change into a potential general “reparations claim” against foreign corporations that supported apartheid.

They said this claim would be worth tens of billions, all for the South African people. Of course, they too would profit from such an enterprise.

Van Vuuren’s book is published by Jacana Media for R280. He is a researcher and anti-corruption activist.