#Declassified: Apartheid Profits - Behind the Iron Curtain

2017-09-29 14:49
Russian President Vladimir Putin at a news conference in Moscow. (Alexei Druzhinin, Sputnik, Kremlin Pool Photo via AP)

Russian President Vladimir Putin at a news conference in Moscow. (Alexei Druzhinin, Sputnik, Kremlin Pool Photo via AP)

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In this seventh instalment of the Open Secrets’ series, ‘Declassified: Apartheid Profits’ we take a look behind the iron curtain and discover that during the Cold War, all was not as it seemed. Apartheid’s alliances did not fit neatly into the narrative of the ‘communist threat’. This article is drawn from the research for the book Apartheid Guns and Money: A Tale of Profit.

In 1985, while PW Botha waved his finger about the Communist onslaught, the apartheid state was looking to purchase 160 Soviet-built missiles and 20 missile launchers via East Germany. This was not just sanctions busting, it was potentially politically dynamite for all parties concerned, if the full details were exposed. The bastion of anti-communism committed to fighting the rooi gevaar (red threat) needed some cover. To pull off this secret and delicate trade, an experienced arms middle man was required.

Our first hint of this story was found while on the trail of the alliance between French and apartheid military intelligence. A top-secret military memo reveals that in 1986, the South African Defence Force (SADF) plotted with French intelligence in one of their regular meetings to lure an arms dealer by the name of Georges Starckmann to Morocco.

With the codename ‘operation Daisy’, their plan of action was to use a “new transaction” to act as the bait to entice the Frenchman from whom they hoped to “reclaim the $20 million that the RSA was swindled out of.” Once there, the French were happy to let the South Africans deal with Starckmann as they saw fit. These details begged the question, who was Starckmann and how had he managed to steal such a huge sum from apartheid South African?

 

Starckmann has plied his trade in dodgy weapons deals throughout Africa for decades. Well connected within global intelligence circles, he was drawn into this deal with the apartheid regime by the Egyptian-born arms dealer and long-time apartheid regime sanctions buster, Gabriel Cheboub. Cheboub had been tasked with buying the Soviet missiles for the apartheid state.

It goes without saying that this was a tricky operation. To pull it off, Starckmann and Cheboub needed to obscure both the origin and the final destination of the missiles. In order to do so they created an elaborate ruse of smoke and mirrors.

The journey began when Strackmann flew to west Berlin, crossed over at checkpoint Charlie and met with an official from the East German state-owned company called IMES. From there, the arms needed to be transported in secret to South Africa. This is where the Danish shipping merchants stepped in, despite Denmark’s official adherence to sanctions. A ship called the Pia Vesta was identified to transport the missiles.

Documents from the infamous East German spy agency (the Stasi) archive suggest that they were aware that the Pia Vesta belonged to the Danish ship-owner, Jørgen Jensen. They were further aware of European investigations linking Jensen, amongst others, to multiple illicit shipments to South Africa. There can be little doubt that the sophisticated and notoriously informed spy agency was aware of the South African destination. 

As an added layer of plausible deniability, East German officials demanded that Starckmann obtain fake end user certificates to obscure where the missiles where headed. Starckmann drew on his connections in the Peruvian military and received the documents stating that the Pia Vesta was headed for Peru. However, this unholy alliace came with a surprise request from the East Germans. They had seen an opportunity and wanted to piggyback with an actual shipment of arms to their (unnamed) leftist allies in South America.

Starckmann faced exposure. He could hardly turn down the request without opening up difficult questions. This meant that the Pia Vesta had to actually go to Peru, en-route to South Africa. After lengthy negotiations with the South Africans, the route was changed and the Pia Vesta set sail from the Baltic port of Rostock, planning to go via the Panama Canal to the Peruvian port of Callao and then back via Panama and finally on to Durban.

All went according to plan until the 14th of June 1986 when the ship arrived in Panama, after its pistop in Peru. To the surprise of those on board, the crew were arrested and the cargo impounded in Panama. Starckmann has maintained that he had the green light from Panama’s General Noriega, but the fact remains that the law breaking arms dealer had himself been swindled. The fate of the Pia Vesta caused international ripples, not least for the apartheid government that found itself short of $20 million and no Soviet missiles to show for it.

Though they must have been fuming, Pretoria couldn’t make noise about their loss. Not only were they breaking international law by busting sanctions, but in the context of the Cold War they were also effectively doing business with the ‘other side’. It was at this point that the South Africans turned to their allies in French intelligence to help them settle the score with Starckmann. Given that the arms dealer continues to live in Paris, we can only assume that he and the apartheid regime came to a mutual agreement.

Working in the Stasi archive in Berlin, Open Secrets found that this was not the only record of collaboration between South Africa and East Germany. As shown in Apartheid Guns and Money Stasi reports on illicit trade in the 1980s, Robert Mugabe’s Zimbabwe was another sanctions busting route in the late 1980’s. In a Stasi memo dated March 1989, we found evidence that the East German state firm, Robotron, was selling embargoed computer technology to the South Africans via Harare-based company, ZCT.

ZCT enjoyed a close relationship with the ruling Zanu-PF and had been set up to facilitate deals in southern Africa, including apartheid South Africa, via a subsidiary in Botswana. It was closely aligned with ZIDCO, a company owned by Zanu-PF and thought to be similar to the ANC’s Chancellor House, alleged to provide kick-backs to the ANC through sweetheart deals.

The Stasi noted the presence of a ZCT office in South Africa. Aware of how this trade would look if revealed, they demanded that “the business in South Africa must be organised in such a manner that East Germany is not immediately identified as the direct partner in the production of these products.” The ZCT provided the perfect cover for these “complicated, politically sensitive” dealings between east and west while very likely adding to Zanu-PF’s coffers along the way.

 

East Germany’s willingness to help the apartheid government bust sanctions and buy weapons and technology is testament to the fact that profit trumps ideology.

On both sides there was a conspicuous discrepancy between publicly stated virtue and ideological purity, on the one hand, and private pragmatism and greed on the other.

In the world of intelligence agencies and arms deals trade took place across enemy lines. The strict dogma of the cold was nothing more than precisely that.  Given the nature of the apartheid regimes clandestine trade we can only assume that the erstwhile Russian secrets service had insight into these activities. Within a decade of this the former Soviet Union was transformed. Its rulers were replaced by a set of oligarchs with ties to powerful politicians. Dubbed state capture, it preceded the South African phenomenon by two decades. A man central to this network was Vladimir Putin, a former KGB agent who would later become the countries long standing ruler.

Putin a securocrat and conservative who does not tolerate much dissent has a friendly relationship with the Zuma administration. Part of the official spin is that Russia was a consistent friend of South Africans during the struggle against apartheid. While its collaboration was not as extensive as many Western powers, there was certainly duplicity in the manner in which it dealt with the apartheid regime.

We would do well to keep this in mind given that Russian nuclear power companies followed by the French, American and Chinese corporations amongst other are first in line offering power plants that could bankrupt the country.  We may struggle to undo the wrongs of history, but the real challenge now is to prevent any potential future criminal conduct by countries and corporations whose primary motive for engagement with South Africa is massive profit at public expense.

* Open Secrets is an independent non-profit with a mission to promote private sector accountability for economic crime and related human rights violations in Southern Africa. www.opensecrets.org.za

** Apartheid Guns and Money: A Tale of Profit by Hennie van Vuuren is published by Jacana Media

Read previous articles in the News24 ‘Declassified: Apartheid Profits’ series:

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#Decalssified: Apartheid Profits - Nuclear bunkers and Swiss bankers

#Declassified: Apartheid Profits – André Vlerick, Banker and Bigot

#Declassified: Apartheid Profits – Inside the Arms Money Machine

#Declassified: Apartheid Profits - Pretoria’s Beehive in Paris

#Declassified: Apartheid Profits – Who Killed Dulcie September?

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