The great Zuma con

2013-11-17 14:00

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How did a con man manage a meeting with the highest office in the land? Jacques Pauw and Charl du Plessis investigate.

The man sitting next to President Jacob Zuma in the photograph is an ­international con man and fraudster.

Willi Karl Balthasar Breuer has also been an illegal immigrant in South ­Africa for the past eight years.

Despite not having a work or home address and not even holding a legal passport, the 61-year-old German businessman secured a private audience with Zuma at his Johannesburg home last September.

German national Willi Breuer with President Jacob Zuma at his Johannesburg home.

City Press has pieced together the ­details that led to the country’s highest office meeting and engaging a con man and an illegal immigrant? –?described by a security expert as a complete failure by the intelligence services to protect the president.

Breuer boasted at the meeting that he and his company, Auxilium Africa, were going to invest billions in South Africa and transform waste management, particularly in poorer municipalities.

A source close to Breuer told City Press that Breuer’s proposal was ­“enthusiastically” received by Zuma.

Since his meeting with Zuma, Breuer has been trying to flog his project to ­municipalities in the Free State and KwaZulu-Natal.

A year after meeting Zuma, Breuer and Auxilium have not invested a cent in South Africa.

However, what the German businessman has done is to lure potential investors with claims that Auxilium is one of the biggest buyers and sellers of gold in the world, and that it has access to the Vatican’s vast stockpile of the ­precious metal.

A former Breuer confidant?–?who did not want his name mentioned but is prepared to testify in court?–?said ­Breuer used the Zuma meeting and photograph as a “marketing tool” to lure potential investors and boost his credibility.

City Press could not find any evidence that Breuer or Auxilium Africa?–? of which he is the CEO?–?was vetted by the presidency or the intelligence community prior to the meeting.

A simple Google search would have revealed details on online forums of complaints of fraud against Spain-based Auxilium International and its South African affiliate, Auxilium Africa.

Despite repeated requests, Zuma and the presidency failed to respond to questions about the meeting, what transpired there and who advised him to meet Breuer.

Breuer refused to divulge anything about his relationship with Zuma or the fact that he has been living and working illegally in South Africa for eight years.

He denied any claims of fraud.

A spokesperson for the home affairs department confirmed this week that Breuer entered South Africa on a three-month tourist visa in 2005.

He has ­neither applied for a work permit nor left South Africa again.

City Press is in possession of a copy of Breuer’s German passport, which ­expired in 2011.

One of Breuer’s business associates, Nicky Khan, said he attended the meeting and that it was “brokered” by a private investigator, Frans Richards.

Richards, who says he conducts ­investigations for government “at the highest level” and knows Zuma, admits that he also attended the meeting, but denied that he “brokered” it.

He said the meeting was arranged by “some Indian guys from KZN” and that he was asked to attend as an observer.

Richards says some time after the meeting, he performed “due diligence” on Breuer and Auxilium, and forwarded a “thick report” to the director-general of the State Security Agency (SSA) to investigate Breuer and his outfit because they were “con men”.

The SSA did not respond to questions about the report by Richards, and whether Breuer and Auxilium were ­being investigated.

City Press was told that Breuer and Auxilium subsequently met Free State premier Ace Magashule and then ­KwaZulu-Natal premier Zweli Mkhize, who is also the ANC’s treasurer-general.

Despite multiple phone calls and messages, neither Mkhize nor ­Magashule had commented at the time of going to print.

One of the municipalities that Auxilium targeted was Masilonyana (Theunissen) in the Free State. Breuer used Finance Union, a subsidiary of Auxilium, to pitch his project.

The Masilonyana council initially ­enthusiastically embraced the project before it was finally shot down.

DA councillor Philip Botha said the project included “astronomical” consultation fees and was nothing but a “scam”. They never heard from Finance Union again.

Breuer’s confidant said he worked with Breuer for two years. The German stayed with him on and off for almost a year.

He says Breuer moves around and does not have a permanent home or work address. This means that no one can trace him.

The consultant presented City Press with a dossier of documents that included Auxilium’s correspondence to investors.

There are also bank cheques, drafts and bonds from banks such as Banco do Brasil and JP Morgan Chase. The bank documents are forgeries.

“It was all false,” he said.

“Breuer is nothing but a con man and a thief. Everything they’re involved in is a fraud.”

He says he does not know about any instance where anybody made any money, other than Auxilium.

Breuer said he could not comment on any of the allegations and requested “proof from the various authorities” in order to respond.

The chief financial officer of Auxilium International, Arthur Hirner, ­referred to the questions by City Press as an “irritating mixture of statements and wrong evidences”.

Why does it matter?

The South African power elite have a long history of engaging with international fraudsters, con men and criminals.

South Africa’s history is peppered with colourful characters who came to South Africa to either hide here or to make money.

This has only been possible with the assistance of politicians, representatives of the security services or the department of home affairs.

Sometimes it is all three. One only needs to think of apartheid sanctions-busting billionaire Marino Chiavelli and wanted Mafia kingpin Vito Palazzollo, who entered South Africa in the 1980s.

In the mid-1990s, there was the arrival of such fraudsters as Emmanuel Shaw (Liberian dictator Charles Taylor’s corrupt finance minister), who worked closely with Penuell Maduna’s minerals and energy department. The Western Cape attracted Jürgen Harksen, the German fugitive who funded the DA.

In almost all these instances, the success of these individuals rested on two things?–?access to senior politicians who were beguiled by their silver tongues or their criminal resourcefulness.

If the facts presented by City Press are correct, the presidency must explain how it allowed an alleged con man (Willi Breuer) to meet the president and what the criteria are for such meetings.

It suggests very poor judgement by the president’s most senior gatekeepers and President Zuma himself for agreeing to such a meeting. Someone among the well-paid staff at the presidency must have asked: Who is this man?

The other crucial element is the role of the intelligence services, which are bound to protect the republic from the influence of such individuals.

This comes at the same time that the State Security Agency is beating the drum for more power to withhold information in the form of the ominous Secrecy Bill.

Instead of giving more power to the country’s spies, Parliament should be calling for a full investigation into this matter.

This should require the president and state security minister to explain how?–?and more importantly, why?–?alleged criminals have seemingly easy access to the Union Buildings.

»?Van Vuuren is the former head of the corruption and governance programme at the Institute for Security Studies. He is now a fellow at the Open Society Foundation

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