Читать книгу Tobacco Wars - Johann van Loggerenberg - Страница 9

The new kids on the block

All the conditions I have described – new legislation, increased ‘sin taxes’ and decreasing number of adult smokers – created new opportunities within the tobacco industry. Some sharp business people saw the gap in the market to offer unknown brands of cigarettes – or ‘cheapies’ as they are called – at a significantly lower price than the established, famous brands. Given the significant increase in the retail cost of cigarettes, those hooked on the habit simply couldn’t afford to remain brand-conscious and were prepared to move away towards new brands that were cheaper. From the early 2000s, new cigarette manufacturing plants were set up in South Africa run by small, independent businessmen, all trying to get a slice of the ‘pizza’ and many succeeding in doing so. They were smaller outfits, leaner and meaner than the multinationals who had once dominated the market, and as a result they could manufacture their products far cheaper than the latter. Within a few years, they sprang up like mushrooms all over the country and began to make serious inroads into the market share of the large tobacco firms. The myriad of smaller manufacturers, importers and traders did not form part of TISA and openly took on the monopoly once held by the big boys’ club in any way they could. Some of them were also quite prepared to cut corners with SARS and not pay their dues to the fiscus. In effect, the emergence of these new players also began to edge the counterfeiters out of the market and take over the slice of ‘pizza’ that the latter used to represent.

By 2012, some of the new independents began to put their heads together and formed their own ‘club’, the Fair-Trade Independent Tobacco Association (FITA). The primary founder members were Carnilinx Tobacco, Amalgamated Tobacco Manufacturers (ATM), Botswana-based Benson Craig, and United Africa Tobacco Manufacturers (UATM). These remained the major role-players. Several of the other smaller traders and manufacturers preferred to sit on the sidelines, belonging to neither the TISA group nor FITA, and continued to do their own thing. By 2017, FITA had grown to include companies like Afroberg Tobacco Manufacturing, Best Tobacco Company, Folha Manufacturers, Gold Leaf Tobacco Corporation (GLTC), Protobac and Home of Cut Rag, having also shed a few of the original members along the way. FITA was a registered not-for-profit company which relied on member contributions to operate and to pay for expenses incurred in furthering its stated aims. On the face of it, it was intended to counter the TISA ‘club’ and promote the interests of the newcomers to the tobacco industry. According to its website, FITA sought to encourage smaller manufacturers in the tobacco industry in southern Africa to collaborate in respect of industry, regulatory and legislative matters which are common to all and to which, individually, there is little hope of making any significant difference.

Not all local manufacturers joined FITA on its establishment, however. At first, GLTC stayed away, as did a few others. Some would tell me afterwards that it was because they did not really trust each other, and others thought it a waste of time. Among the first of these new kids on the block were Highway Hennie of Apollo Tobacco, Simon Rudland of GLTC, Tribert Ayabatwa of Mastermind Tobacco, and John Bredenkamp of Masters International. A few others soon followed, including Delta Tobacco and Westhouse. This motley crew of independent tobacco manufacturers had everything counting against them. They faced fierce competition and hostility from the ‘big boys’ and at the same time they became involved in all sorts of tussles with law enforcement agencies and SARS. Highway Hennie found himself in trouble with the state in the early 2000s in a court case that is still ongoing. One of Carnilinx’s directors was linked in the media to a cocaine dealer who was wanted by Interpol, and GLTC had a run in or two with the Directorate of Special Operations, better known as the Scorpions. Craig Williamson of Benson Craig was a notorious apartheid spy and self-confessed assassin, while the Zimbabwean John Bredenkamp was alleged to have been a sanctions-buster and arms trader. All of these reputational issues gave great ammunition to their commercial competitors for use as part of their propaganda campaign to make out the ‘independents’ as organised criminals. For the rise of the independents presented a worrying development to the established big names. In fact, the battle became vicious and ugly.

One law enforcement effort that the newcomers faced came in the form of the Illicit Tobacco Task Team, sometimes called the Tobacco Task Team. The primary agencies involved in this team were the Hawks (Directorate of Priority Crime Investigations), the South African Police Service’s Crime Intelligence division, the State Security Agency (SSA) and the National Prosecuting Authority (NPA). Significantly, SARS was never formally included as a member.

The origins of the team lie in a meeting held in November 2010 at the request of the head of the State Security Agency, Gibson Njenje, who had called for an extraordinary meeting between the heads of various components of the criminal justice system. Those invited included the Asset Forfeiture Unit’s Willie Hofmeyr, Hawks head Lieutenant General Anwa Dramat, Financial Intelligence Centre manager Murray Michell and SARS deputy commissioner Ivan Pillay.12 Njenje first met with a SARS delegation, before the main meeting was to start. Here an SSA official, Ferdi Fryer, the acting head of the agency’s Economic Intelligence Unit, presented a report claiming to have evidence of corruption by senior members of SARS. I, together with another senior SARS official, was present with Pillay at this meeting. We had come prepared, as we’d been tipped off in September that year by persons within the tobacco industry of efforts under way to use the intelligence services, the Hawks and NPA to discredit SARS and its investigators looking at the tobacco industry. We had recordings of these tip-offs, certain documents to prove the claims and even evidence that R600,000 had been set aside to ‘influence’ the NPA and Hawks to discredit officials at SARS.13

Pillay took the opportunity in the short meeting with Njenje to propose the formation of a multi-agency task team. Fryer hastily removed his presentation, and instead the meeting revolved primarily around seeking consensus on the view that the tobacco industry presented a big challenge to the South African fiscus, and that all enforcement agencies should work together to tackle the problems involved. Nobody disagreed, as the proposal made absolute sense. In effect, it was here that the Illicit Tobacco Task Team was formed.14 In December 2010, a month later, I and another senior SARS official met Fryer, and took him through all our tobacco-related projects and cases we were involved in. It was understood that Fryer would act as the primary go-between between all agencies in the establishment of the task team. We did not hold back, and Fryer likely received the most detailed and insightful briefing on the tobacco industry he would ever hear. It was all hail-fellow-well-met, but after this meeting, I would never see the man again. When he left us with some files under his arm, we hoped we would meet him again at the first joint session once he had conducted similar exercises with the other agencies, but such hope soon faded. What I subsequently learned from the grapevine was that the team had ultimately been established, but SARS was never invited to attend any of their meetings.

It seems that as it was constituted, the team had as its head an informal group of law enforcement officials who basically determined its activities and investigations. The team was overseen by a Hawks officer, Brigadier Casper Jonker, who had once been a detective engaged in primarily white-collar crime investigations. His close colleagues were Crime Intelligence police officer Lt Colonel Hennie Niemann and, initially, Ferdi Fryer, who was soon replaced by Fryer’s second-in-charge, Chris Burger. Advocate Johan van Heerden was the main representative of the National Prosecuting Authority and Warrant-Officer Willie Schreiber represented the detective service. These were the main people on the task team.15

My criticism of this task team was no secret, nor was their dislike of me. I held the view that they pandered to the interests of BATSA and TISA only, often at the expense of smaller and local tobacco manufacturers while ignoring evidence that implicated TISA members and their agents. I took issue with the way they operated, their collusion with the multinationals and their agents, and the element of corruption I came to discover that resulted from this incestuous relationship.16 Some people in this team, in turn, accused me of being obstructionist and of not wanting to help them. Others seemed to want to believe rumours that I was corrupt and there were several attempts made to try to find ‘dirt’ on me. By the end of 2013 and the start of 2014, the task team seemed more preoccupied in activities relating to this than their real work. It was laughable at first, and then turned serious rather quickly. The animosity between us was palpable, so much so that in February 2014, in total exasperation, I called a meeting with the SAPS head of detectives, Lt General Vinesh Moonoo, and Hawks boss Lt General Anwa Dramat, to try to broker some kind of truce between us. This didn’t really result in much, because Moonoo in his wisdom brought Brigadier Jonker along, without apparently realising what he was doing, and I had to hold my punches.17

It seemed to me there was mounting evidence that pointed to what some academics refer to as the ‘regulatory capture’ of the Illicit Tobacco Task Team. This practice refers to the ways in which private corporations with significant influence, surreptitiously and ever so slowly, begin to direct and influence the way in which state agencies and their officials operate in order to advance their own agendas. I was convinced that this had happened to this task team and had said so on many occasions. This certainly did not endear me to the task team or some of the TISA members. Long before ‘state capture’ became a common term on the lips of South Africans, I used it to describe the relationship between multinational tobacco companies and the task team. I said outright that some of their officials had been captured and were serving the interests of the big boys. Time would prove me right.

The evidence suggesting all was not well at the Illicit Tobacco Task Team began piling up to support my views. When SARS, in terms of Project Honey Badger, sought to look at all role-players in the tobacco industry, across the value chain, and uncover all sorts of malfeasance, the task team would hear nothing of it, especially where TISA members were concerned. The growing evidence that TISA and a private security firm in the employ of TISA and BATSA, Forensic Security Services (FSS), participated in driving and directing some of their cases concerned me greatly. There are unfortunately some facts which I am unable to divulge publicly for legal reasons, but there is enough I can mention here to prove my point. Firstly, it was common knowledge that representatives of BATSA and FSS, through TISA, attended planning meetings and sessions of the task team, where they seemingly got to influence the law enforcement agenda. One of those who attended these closed meetings was Martin Potgieter, who was officially an employee of BATSA, but had been seconded to TISA, acting as their law enforcement liaison. Allegedly, BATSA’s presence gave it access to state intelligence and the ability to help determine whom the law enforcement agencies should target, among them its direct competitors. According to one source, a senior member of BAT plc, Allan Evans, even went so far as to present a detailed proposal for the investigation of a commercial competitor, Gold Leaf Tobacco Corporation (GLTC).18

Another matter emerged in the public domain years after it had occurred. After SARS had detained trucks of a transporter, a South African subsidiary of the London-based company Lonrho, named Rollex, SARS wanted to conduct a raid on its premises but was halted by formal requests emanating from members of the task team. Only years later would I come to learn that Fryer and one of his informants had flown to London, and made a presentation to the Lonrho board alleging how ‘corrupt’ SARS was and claiming that its officials were not to be trusted.19

In another matter, which took place in 2013, a heavily armed police team, together with members of the elite police task force, descended upon the premises of local tobacco manufacturer Amalgamated Tobacco Manufacturers (ATM) in Pietermaritzburg. More about this raid will be given in a later chapter. Suffice to say that although complaints were made by the proprietor of ATM, the colourful and outspoken businessman Yusuf Kajee, against Casper Jonker and the team that conducted the raid for having assaulted and intimidated his workers and maliciously damaging property, nothing came of them.

I also received reports that members of the private security firm FSS were accompanying these sorts of raids by law enforcement agencies, including some conducted by SARS. As a result I gave an instruction to all units that reported to me to not allow FSS to attend inspections and raids and to be wary of being directed by them, lest we be accused of advancing the interests of one group in the tobacco industry above or at the expense of another.

Another matter that came to my attention in 2013 was a criminal complaint registered by the tobacco manufacturer Carnilinx, alleging that members of the Illicit Tobacco Task Team and FSS had illegally entered its premises and unlawfully planted a tracking device on one of its trucks. Carnilinx director Adriano Mazzotti would explain to me later how he came to discover this device, which used a SIM card, and said he asked a private investigator to look into it. What the investigator found was that the device and its SIM card had been used interchangeably by both FSS and the government.20 Despite complaining about this to the Hawks, Mazzotti said nothing came of this case either.

After having left SARS, I came across an affidavit by the FSS whistleblower Daniel François van der Westhuizen, in which he related in 2016 how two years previously, at Rietvlei Dam resort, just outside Tshwane, members of FSS and of the Tobacco Task Team and even a few SARS officials had come together to have a party in honour of Niemann. With the braai fires ablaze, meat sizzling on the grills, and lots of booze flowing, there appears to have been no distinction between law enforcement official and private investigators – they partied together just as they worked together. According to Van der Westhuizen, it was on this occasion that members of the task team, an SSA official, two SARS officials and an FSS man, sipping at their beers, swore to each other never to utter a word about how they had illegally entered Carnilinx’s premises and planted the tracking device without the necessary authority. As one of the SARS officials remarked, if this ever came out, their jobs would be on the line.21

The Illicit Tobacco Task Team was never really in the news for the right reasons. They certainly did not have any great track record of massive busts or convictions of significant criminal offenders in the tobacco trade. They appear to have plodded along with the sort of raids carried out on ATM, small seizures of illicit cigarettes at ports of entries or incidental busts, as if these were the outcome of many months’ work and a specific plan of action. Usually these investigations resulted in the arrests of truck drivers or factory workers. Other than that, they seemed overly preoccupied with what SARS was doing and its own successes, and with finding ‘dirt’ on me and other SARS officials. They were much ado about nothing, I’d say. They were unceremoniously shut down, rather quietly, sometime in late 2014, with little or no success to their name.