Secret letter to Thabo

Report reveals how ANC secret service scuppered recovery of R200bn-worth of apartheid-era loot.

Nearly two decades after the South African government was briefed on how extensive the dying apartheid-era’s looting was, nothing has yet has been recovered.

What is known on this matter is largely the result of the secret Ciex Report, dubbed Project Spear, which was completed in 1999 on instruction of then deputy president Thabo Mbeki and the head of the South African Secret Service, Billy Masetlha. In it, the London-based investigations company, headed by former senior British intelligence officer-turned-consultant Michael Oatley, provided the government with an itemised blueprint on how to reclaim the hidden money.

Since then South Africans have watched how this matter, with approximately R200 billion believed to have been stolen, has been pushed from one hearing to another; each saying the same thing – the state was looted but going after the perpetrators is too risky and costly. That the issue remained sensitive – for whatever reason – became clear when the SABC in 2013 found it necessary to ban the broadcasting of a documentary film on the subject that it had itself commissioned. (Copy and paste this link into your brower

Equally clear is that, at least until now, there has been little or no political will to tackle this issue. So much so that the belief has grown in some quarters that the ANC deemed it more advantageous to inherit the apartheid government’s secret funding sources, rather than expose them. This was demonstrably the case in the 1999 arms deal.

Interest in the report has been revived by the Public Protector’s recent report on apartheid-era looting, which referred to Ciex – and Noseweek – as key sources of information. The provisional report, leaked to the Mail & Guardian in January, immediately elicited furious denials from the first two parties implicated by Ciex – Absa and the SA Reserve Bank.

Less well-known is how South Africa’s post-democracy intelligence services tried at first to control and then scupper the investigation of apartheid-era looting of government resources and efforts aimed at recovering the stolen money from the perpetrators and their collaborators. These included major European banks and defence corporations, all listed in the Ciex Report (see nose131).

Noseweek can now reveal that in a “Private & Confidential” letter that Oatley sent to Mbeki on 13 October 1997, less than two months after Mbeki authorised the investigation, Oatley complained to Mbeki that Ciex had not yet been paid as promised – and that the South African Secret Service (SASS – now the State Security Agency) with whom he was told to cooperate was being anything but helpful.

“Forgive the frank and personal letter,” wrote Oatley. “Things are not going well with the project which you authorised at our second meeting on 26 August. I thought I should write to you directly as I now doubt whether matters can be put right without your intervention.

“You made it clear at our meeting you wanted the project pursued urgently.”

The promise of a “senior point of contact” in the secret service had not been kept. Instead, he told Mbeki, he had been assigned a “very junior member of SASS who… is inefficient and rather dozy, does not understand the project… and is allowed absolutely no authority to take action. In other words an un-respected messenger boy, which is how his superiors treat him!”.     

Oatley noted that the SASS “clearly don’t like this project… and are certainly not committed to its success”. He added: “…documents which I had asked for and been promised in preparation of our case on Absa are now described, a week later, as being government papers which I should not be given because I am not an official. SASS will look at them, at some unspecified time in the future, and give me selected quotes if they think it suitable to do so.”

Oatley, on visiting South Africa, was often kept in safe houses during which time “nothing happens for a long time”; he was also regularly stood up by senior politicians and the then Director-General of Intelligence, Billy Masetlha.

“So we are in a mess. I understand why [SASS] were brought in, but I think we can handle the security of the exercise quite well without them. I do not think we can handle the collaboration.”

Ciex was eventually paid a total of £600,000 to fund the first year of a wide-ranging international probe. For the second year, Ciex agreed to continue its inquiry for a 10% cut of all recoveries.

By the time Oatley wrote his letter in October 1997, he was already remarkably well-informed on South Africa’s secret affairs. Two years before the deals were signed, he told Mbeki that he could provide “objective information” into South Africa’s arms procurement programme – which, years later, would be found to have cost the taxpayer over R70 billion and was riddled with high-level corruption and collusion.

“I am looking at the ways in which the French, Spanish, British and German competitors are developing plans to obtain the South African defence contracts, and at aspects of South African oil dealings,” he states in the letter. “I believe we can do something really useful in this delicate phase of the country’s development – but not if we are kept at arm’s length and treated with suspicion.”

Whether known to Oatley or not at the time, the then-recently retired defence minister Joe Modise was already on the arms dealers’ payroll. Even before he was sworn in, experienced senior Armscor officers had helped him set up trusts into which bribe money could be safely hidden. (See nose132.)

Weeks before the final sign-off on the deals, Modise became the new chairman and major shareholder of Conlog, a company with extensive interests in the overall armaments package. His purchase of Conlog shares was made possible via a “German friend” who lent him R40 million, sent via Mozambique into the account of Kingsgate Clothing – controlled by Schabir Shaik.  

Online subscribers can see Oatley’s letter here.

To listen to our editor, Martin Welz, copy and paste this link in your browser

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Submitted by : Barry Midgley of DURBAN on 2017-01-31 12:04:44
Attached are two links which allegedly give a very different picture of the Reserve Bank
If half of what is said is true – you have to ask who is running the country. Reminds me of the West Side Story – I once knew a girl called Maria. After watching Martin’s TV interview no wonder “ever so clever” wanted to know the technique and after paying attention to His Master’s Voice he lands, bum in butter, with the Rothschild Bank and his squeezer is chief knob of ABSA.
Oh please tell me FICA serves a purpose, more Bravo Sierra for the pols (people of lesser standing).


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