Forty years ago, the country’s Apartheid regime was at the apex of its confidence and arrogance, and with its power and influence reaching deep into South African society. Even outsiders critical of the regime could easily have been convinced the Apartheid regime was going to keep its grip onto power for many years to come. This was especially true since a ring of Portuguese colonies, white-dominated Rhodesia and South African-controlled Southwest Africa to the north continued to shelter South Africa from the changes sweeping across the rest of the continent.

Despite this presumed geopolitical reality, South African government leaders were increasingly convinced much of the rest of the world was coming together in a veritable war against their regime. Their response to this became a no-holds-barred expression of their “laager mentality” (the very symbolic, last ditch, circular defence stand against rampaging enemy forces) that had strong resonances with Afrikaner nationalism. They weren’t entirely wrong, of course. World opprobrium against the regime’s brutal racial segregation (and its social, political and economic consequences) was growing. And in the years immediately following 1976, world disapproval grew stronger after the Soweto Uprising and the increased repression against the country’s black majority that followed that explosion of popular discontent.

Into this increasingly intense, swirling climate of fear and arrogance about South Africa’s relationships with an increasingly hostile world, stepped the flawed visionary, Eschel Rhoodie, the South African government’s secretary of the Department of Information. Rhoodie was a true believer in the virtues of Apartheid South Africa but, earlier than many of his contemporaries, he also saw the critical importance of what eventually came to be dubbed by Harvard political scientist Joseph Nye as the use of “soft power” in affecting national power and influence.

In the mid-70s the security of those Portuguese bulwarks in Angola and Mozambique collapsed and as the generally sympathetic, cold warrior-style Nixon administration in the US (and soon after Gerald Ford’s) was superseded by that of Democratic president Jimmy Carter and his new-found emphasis on human rights. With these changes uppermost in their minds, South Africa’s leaders now began to search for ways to bolster their case internationally and to protect vital trade and financial links abroad. But their methods ultimately led to severe international and domestic embarrassments for the country and charges of financial mismanagement that ultimately drove prime minister BJ Vorster and a clutch of others from their offices in disgrace.

The story really begins way back in 1971 when a young, eager diplomat, Eschel Rhoodie was a press officer at South Africa’s Embassy in The Netherlands. His first try with his surreptitious exercise of soft power was in a deal with a Dutch publisher to provide secret support for a new pro-South African news magazine, To The Point.

Rhoodie was not way off the reservation, however. His scheme had the secret backing of then-prime minister BJ Vorster and Vorster’s chief of Intelligence Services (BOSS), General Hendrik van den Bergh, along with Rhoodie’s minister of information, Connie Mulder. (Mulder was the father of deputy minister of agriculture in the ANC government, and the leader of the Freedom Front Plus, Pieter Mulder.) Following this trial run, the following year, Rhoodie returned to Pretoria and become secretary in the Department of Information – effectively its head of “dirty tricks.” Rhoodie was young, dynamic, enterprising and impatient with bureaucratic niceties – the perfect toxic mix to bulldoze through the bureaucratic thickets to get things done.

With Boss support, Rhoodie recruited a tight group of equally eager apparatchiks like his brother Deneys and Les de Villiers to take it to the “enemy”. Rhoodie launched the Committee for Fairness in Sport to counter the country’s growing sports isolation internationally. Then came the so-called Club of Ten international business leaders circle to tackle the activities of the UN and individual countries opposing South Africa’s political situation. By 1973, Rhoodie was working hand-in-glove with Boss head Van den Bergh on hatching a growing list of new – cash only – efforts to counter foreign pressure on the country.

They quickly moved on to bigger, while still secret, fish. Early in 1974, the prime minister and finance minister gave their go-ahead to Rhoodie’s ambitious covert action agenda (with a playbook that had echoes of the old Richard Nixon “dirty tricks” agenda). Moving well beyond the standard tools of above-the-line public affairs activities like gauzy, sympathetic films about the country’s cultural heritage and breezy, colourful magazines and cheerful press releases, Rhoodie and his troops agreed the time was right to finance a no-holds-barred secret campaign of psychological warfare against foreign opinion – and foreign opinion makers. The ends – protecting the Apartheid state – would justify the means for the newly christened Project Annemarie, named after Rhoodie’s daughter.

Their first really big, really audacious move was to position Louis Luyt, the starkly conservative fertiliser manufacturing magnate and rugby kingpin, to purchase the Rand Daily Mail, the country’s premier anti-apartheid newspaper, from the SAAN publishing group. If they were successful, they would be able to silence effectively the single most prominent media voice inside the country countering the regime. But it didn’t work out. Several of the holding company’s major shareholders refused to sell their prestigious but financially struggling title to the toxic Luyt.

As a result, the schemers decided to underwrite, from scratch, an entirely new, avowedly pro-government English language newspaper, once again under Luyt’s ostensible entrepreneurial gifts. The new paper was christened The Citizen and prominent but thoroughly conservative journalists like Aida Parker and Martin Spring were brought in to guide the new publication to popular success. But not too surprisingly, launching a newspaper from scratch, then as now, turned out to be an expensive, cash-eating misadventure, consuming both the secret stash of cash as well as a surreptitiously organised loan to keep it going.

This money had been secretly channelled to the Department of Information from the defence establishment on the tacit understanding that nobody would ever notice a couple of million rand or so going to this little project out of a billion rand defence establishment (back then R5,000 could buy a nice new car). However, as things usually happen, it was the little things that began making trouble for the conspirators, just as soon as the plan unravelled. The bean counters in the defence establishment forgot to add Project Annemarie funds to their formal budget request to the Treasury. Meanwhile, then-defence minister PW Botha began showing increasing bureaucratic unhappiness at effectively being the bagman for all this cloak and danger stuff for a Cabinet rival.

By July 1977, unhappy rumours about the Department of Information’s creative accounting were sufficiently serious that an audit was needed. Then, amid the growing rumours about some seriously close ties between Rhoodie’s department and The Citizen, Louis Luyt opted out of the newspaper business and sold The Citizen to others. Then the smaller fry started to get caught off base, as their stories didn’t quite match up. Rhoodie deputy Les de Villiers bailed out from the department, left the country entirely and joined a PR firm in New York City. Meanwhile, the Information Department minister, Connie Mulder, then had to answer a litany of particularly indelicate parliamentary questions about this whole tangled mess. While under oath he declared that The Citizen newspaper had not been financed by government money, no siree! That creative use of the truth eventually led to his public disgrace and disbarment. And by this time, the scandal had reached much higher. Embarrassed and caught out, BJ Vorster was himself also forced to resign in disgrace.

Given the baying about the dissembling, the finance minister, Owen Horwood, finally felt compelled to appoint Justice Anton Mostert to carry out an inquiry that was specifically charged with looking into exchange-control violations. Finally, despite protestations by the country’s new prime minister, PW Botha, and the finance minister, on 2 November, Justice Mostert told the public what he had learned of the scandal.

The next morning, the Rand Daily Mail, the paper that had almost been purchased by the Project Annemarie plan, but which had then pursued the scammers ruthlessly, ran its famous banner headline that said, “It’s all True.” The story explained, “South Africa’s biggest bombshell burst yesterday when Mr Justice Anton Mostert made public startling evidence which has confirmed reports in the Rand Daily Mail and Sunday Express of massive misuse of public money through Department of Information secret funds. Judge Mostert released evidence, which shows beyond doubt, that The Citizen newspaper was financed through State funds. And in evidence under oath, Mr Louis Luyt named the former prime minister, Mr Vorster, the minister of plural relations, Dr Connie Mulder and General Hendrik van den Bergh, former head of the Bureau of State Security, as key figures in the secret project to finance the newspaper.”

Despite the distortions of the political and judicial processes in Apartheid South Africa, a fearless judge had pressed on to the unsavoury but necessary conclusions and made them public without fear or favour.

The same month, still another commission of inquiry under Justice Roelof Botha Erasmus heard testimony from Eschel Rhoodie. Although Rhoodie’s passport had already been pulled from him, he vanished from sight right after testifying before the Erasmus Commission.

By this point, Mulder was taking fire relentlessly in the media. He lost his cabinet post, his leadership position in the National Party and then, finally, his seat in the national parliament. The scandal ruined his political career with the Nats and he eventually lost the 1978 National Party’s leadership race to PW Botha. The Erasmus Commission, appointed by PW Botha, sealed his fate when it revealed serious financial irregularities and abuse of power in the Department of Information. He refused to accept the findings of the Erasmus Commission and was forced out of the National Party, shortly after resigning from Parliament. Mulder eventually became a force in the Conservative Party.

BJ Vorster’s fate was not much better. He resigned the prime ministership after being censured by the Erasmus Commission, even though he was exonerated of any actual involvement in the secret projects of the information scandal. The Erasmus Commission’s final report was actually published the following year.

As for The Citizen, for years the paper was discredited as an independent, albeit pro-government voice, given the circumstances of its birth. The paper’s second editor, Johnny Johnson, argued in an editorial on 6 November 1978, that, yes, “The Citizen was started and funded with government money. That is the finding of the Erasmus Commission. But the government did not direct The Citizen’s editorial policy. That is the assurance I have already given as editor-in-chief of this publication. And it is an assurance, which I repeat today, when the newspaper is at the centre of a new storm of controversy. The Citizen – and I cannot emphasise this strongly enough – was not, and is not, a government propaganda medium of the National Party.”

Meanwhile, skip tracer-style investigative journalists had finally tracked down Rhoodie in Ecuador! He then moved on to the UK, then France and eventually the US where he ended up as a sort of property developer in Atlanta. Along the way, in an interview with veteran BBC reporter David Dimbleby, Rhoodie insisted he was the scapegoat for the whole tawdry business and a whole clutch of senior officials, including the prime minister, had expressly sanctioned the slate of those secret projects. Before he got to the US, however, Rhoodie was extradited by the French back to South Africa, for a trial where he was charged with various counts of fraud and theft. He, in turn, argued his handling of the secret funds had been perfectly clean, but, regardless, he was found guilty on five counts, although he successfully appealed his sentence.

After his final victory in court, Rhoodie gleefully told anyone who would listen, “I have always maintained I was innocent and that the case against me was a political one. That is why I strenuously resisted the government’s efforts to extradite me from France. It was a handful of powerful politicians who used the apparatus of the State, not to mention a vast sum of taxpayers’ money, to destroy me and my family, socially, politically and financially. There were other victims too, outside my family, but they must speak for themselves. These politicians launched a vendetta against the Rhoodie family in 1978, in an all-out effort to crush us, primarily to protect their own involvement in the government’s secret propaganda war of 1971 to 1978. I reject totally the Erasmus Commission’s whitewash of those ministers.”

After he had finally ended up in the US, Rhoodie published a very long, very tendentious, one helluva doorstopper of a book, The Real Information Scandal, that served up a whole stew of charges that dozens of other senior government officials were equally aware of other secret projects his department actively pursued with huge splodges of wonga.

One other major project, of course, reached back to Rhoodie and his allies’ feelings from years earlier about the need to deal with the enemy abroad was the effort to gain influence in Washington, the place that many government leaders feared was now becoming the real locus of their international troubles. As a result, they came up with the idea of buying their way to influencing the influentials in Washington. They wanted to gain control of the conservative but well respected, long established, but money-losing Washington Star, the capital’s oldest newspaper. Once it was in the hands of friendly forces, they could bend its editorial and news policy towards a more sympathetic view of South Africa as a bastion of anti-communism – thereby serving as a base for attacking the actions of liberal Democrats like senators Dick Clark and Gene Tunney, trying to limit support for Unita, among other goals.

They found their new Louis Luyt, Washington-style, in the person of John McGoff, a right-wing media magnate and conservative causes and Republican political campaign fundraiser. McGoff had built a media empire that by then included over a half dozen radio stations, a television outlet and more than 70 regional papers – the Panax Group – located in cities from Michigan to Texas. He also had business interests in South Africa. Project Annemarie funds were quietly made available to McGoff to purchase The Washington Star, but that paper ultimately wasn’t available for purchase, despite its wobbly financial position. (Washington Star filed for bankruptcy in 1981, and its building and printing presses were purchased by The Washington Post.)

In a bit of a double-cross on the schemers, however, McGoff then made use of those same funds to purchase The Sacramento Union in California instead. It seems it was a much better, more profitable business deal for McGoff, but it was clearly not much use for Rhoodie and his would-be American conservative media moguls for influencing Washington politics. 

Soon enough, however, the murky hidden sources of the money got McGoff in trouble with the US Justice Department. It charged him with receiving foreign funds and acting as the agent of a foreign nation – without doing the tedious but necessary registration needed to carry out such activities. McGoff, in turn, got off those career crashing charges on a technicality. The courts eventually dismissed the government’s case, but only because the case had reached the courts after the statute of limitations for this particular charge had expired.

In the end, however, like Rhoodie, Mulder, Vorster and the rest, things didn’t turn out very too well for McGoff either. Before he died he had to liquidate his media empire and declare bankruptcy.

Muldergate or Infogate was one of those rare but immensely rewarding moments of victory for both the media and actors from within South Africa’s judicial establishment in favour of the rule of law during the Apartheid era. Despite the robust pressures they faced, they persevered and found out the truth – and the culprits did not live happily ever after. This scandal made it clear, even to the country’s most Panglossian citizens, that government is not always right, or even truthful, and for the same government to bankroll a newspaper, especially via illegal channels, is a pretty damn stupid idea.

And it became a cautionary tale for future generations to, just as Woodward and Bernstein’s “Deep Throat” had so wisely advised reporters in America: “Follow the money.” DM

For more, besides the magisterial book by the two reporters who broke the story, Muldergate: the story of the info scandal, by Mervyn Rees and Chris Day, read:

• John McGoff, 73, Entrepreneur And Conservative Fund-Raiser
• The Information Scandal at Famous South African Crimes
• The Information Scandal at SA History Online
• Muldergate Scandal Figure Is Directly Tied To South African Rugby Tour Of The United States at the African Activist Archive

Photo: BJ Vorster, Prime Minister of South Africa from 1966 to 1978 and as the fourth State President of South Africa from 1978 to 1979. (Creative Commons)