BAT IN BED WITH LAW ENFORCEMENT AGENCIES
In November 2013, the South African Revenue Services (SARS) announced that it wanted 15 local tobacco manufacturers and importers to be prosecuted for tax evasion and illicit trade. At stake was R12 billion (US$858.9 million) in unpaid taxes.
About 18 months later, the acting commissioner of SARS, Ivan Pillay, and 55 other top SARS officials, found themselves unemployed— the result of an aggressive campaign against SARS.
The plot involved the Sunday Times newspaper, which published false stories about an apparent “rogue” unit in SARS that supposedly spied on President Jacob Zuma and that set up a brothel aimed at infiltrating the ruling African National Congress Party. The paper subsequently apologised for printing the stories.
But in the wake of the articles, Pillay and the SARS head of enforcement, Johan Van Loggerenberg, were suspended and, after reaching a settlement with SARS, resigned..
A key player in the downfall of Van Loggerenberg is Pretoria attorney Belinda Walter. Walters and Van Loggerenberg first met during investigations of the illicit trade in tobacco and subsequently had a brief romantic liaison. It was after the break-up of their relationship that claims emerged that SARS was running a ‘rogue’ unit first emerged.
Ms Walter was allegedly a doubleagent.
She was an informant to the government’s State Security Agency (SSA) and also to British American Tobacco (BAT), to whom she gave confidential information on smaller rival manufacturers.
In order to infiltrate the rival companies, Ms Walters proposed creating an association, the Fair Trade Independent Tobacco Association (Fita), to represent these companies. The first Fita meeting was held late in 2012, at Walter’s offices, and she was elected chair.
In a court application, a rival has accused BAT of “corporate espionage” and working with government agencies to try to put it out of business.
BAT allegedly spent about $3.6 million a year to bribe politicians, gangsters and government officials in South Africa. The company is accused of money laundering, corruption, spying and the use of state resources to target competitors— all in the name of ‘fighting’ the illicit trade in tobacco.
BAT’s money gave it a seat on the official Illicit Tobacco Task Team, which includes representatives from the Hawks (a state agency tasked with fighting priority crimes), the SSA, South African Police, National Prosecuting Authority and the Tobacco Institute of South Africa.
This structure gives BAT access to state intelligence and the ability to influence who the state targets among BAT’s direct competitors.
A warning from the South Africa experience is that co-operating with the tobacco industry is harmful to democracy. It will use its influence to direct the powers, actions and resources of the state for the benefit of the industry.
Yussuf Saloojee
National Council Against Smoking
South Africa