This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
26 Jun 2005: Maharaj, Mac
POM Mac, I'd like to go through how the underground and maybe I should divide it into two parts so that there's a clear differentiation between the two. One, how the underground, absent Vula, or what of it was there, was being financed prior to your coming into the country? And then two, how Vula itself was financed because Vula I think had a budget of about, what was it, $30,000 a year or whatever at that point?
MM Oh much more.
POM It was a big operation.
MM I don't know the amount.
POM But it was a big operation. Well everything from the purchase of the arms to the purchase of the cars, the purchase of the drivers, the travel, to the underground stuff.
MM And the payments to people, the full time workers, the mass organisations that had to be funded, all that, the campaigns. There was a huge thing, the amounts were huge.
POM So maybe break it down: keep the mass organisations aside; keep the ANC underground, as it was, as another part; keep the SACP as a third part; and then keep Vula
MM SACP separate, then Intelligence separate.
POM And Intelligence as the fourth part and Vula
MM And trade unions separate and then Vula.
MM I wouldn't know how each of them were financed but I know that the ANC underground was financed through the regular structures of the Revolutionary Council, that is the PMC, that was the regular and it was funded through the neighbouring countries and into the country. That applied also to the MK structures when we put up Operation Sekomo sending a large number of cadres, round about 85, into the country. They were given a particular amount of money by MK which was sent into the country, their infiltration was managed, the costs and everything.
POM OK, let's take each one. Let's take MK. Joe Slovo is sitting in, let's say, Lusaka. There's an MK budget for the camps and there's an MK budget for training and whatever. Now how does MK get money into the country to take care of its operations and maintain whatever small infrastructure it might have within the country?
MM Usually it would be smuggling in money across the border, giving it in hard cash, camouflaged in small amounts, because each unit, each operator needed money just for himself.
POM Now when you say hard cash are you talking about rands?
MM Rands. It was the job of Thomas Nkobi, the Treasurer General, to take dollars and pounds and convert them into rand notes all over the world, from Zurich to Geneva to London in the banks in small and large amounts and get them to Lusaka and give it to the PMC in Lusaka and the PMC would give it to the different structures, Maputo, Swaziland, Botswana, MK.
POM So would a courier go from Lusaka to Mozambique with the money? And from Lusaka to Swaziland and whatever?
MM Sometimes somebody would go from Swaziland directly to Thomas Nkobi and would say, "Oh these people, can they go to London and collect the money?" There were different mechanisms but essentially it was illegally transferring the money, but because in the end crossing it in the border from Swaziland or Zimbabwe or Botswana was not going in very large amounts to bring to individual units or individual operatives, the amounts were not that large so they could be hidden in various ways including the way you hid the arms in a car and taken over. The person could be given money that would last him and his unit three months, six months. So you broke it down that way. That's how the SACP did it also and Intelligence whose needs were burgeoning and who could not depend on ad hoc measures, you will see in the interviews somewhere it is said, or in the Vula correspondence, that a unit went to Sydney Mufamadi saying they were stuck in the country and they needed R6000 and he went to the mass organisations to get the money from their kitties and gave it to them. Now that was because there was no proper budgeting system and when units were sent in there was no proper accounting and budgeting what they would be needing but their needs may burgeon when they are in the country and they are stuck.
So because they would sometimes get stuck for money and it's not coming from outside, they would turn to people inside for money, like Sydney. Now Intelligence couldn't work that way. An operation of that size could not work that way. It had to have a steady supply of money timeously delivered so that it could pay agents inside the apartheid system. If you didn't pay them on time you lost the agent. So they had to develop a mechanism.
Mass organisations, you couldn't pay them R2000. You had to give them quite substantial amounts of money. They needed R100,000 to run a campaign and they can't wait for it so channels were prepared through Zuma and his Intelligence structures for parts of the mass organisations to get money.
POM Now he would be he first of all was in Mozambique, right?
MM He was in Mozambique in the PMC, in the Internal Political.
POM Now if money was going, say, from the PMC to Mozambique and there's a structure in Mozambique which is a frontline state structure, is the money that comes in, that's not banked, right? That's all carried in cash?
MM Yes, carried in cash. You can't bank it.
POM So would he be in Mozambique, would he be what we would call the 'bag man', the guy you went to if you wanted money?
MM No, no, no. He's only relevant for his structures and then he is relevant because he's also part of head office in Lusaka. Joe Slovo is getting his money directly. Some structures are getting it directly from Nkobi but knowing that it has been cleared by the PMC. So it's all diverse mechanisms are being used because you cannot use one method and similarly when the mass organisations sometimes you would get Nkobi, OR, or somebody saying, look, they can get money from a Canadian group because here's a legitimate excuse of channelling some money directly to them. This is where this whole concept of struggle accounting arose.
POM So Nkobi might say I can get money from a Canadian group. Are you saying that this is a business organisation that is saying I can get money, what kind of money? Is it coming from anti-apartheid structures in Canada that are paid into Nkobi accounts in South Africa?
MM No, no, no, it would be paid into some front thing.
POM In South Africa?
MM In South Africa, it may be paid into London, it may be paid into Botswana.
POM OK, so it would be paid into an account. In the coms that we have at the moment there are quite a number of references to different bank accounts in London and in Canada.
MM That's because we were doing the exchange route.
POM OK. Maybe you will go through that.
MM We had developed a mechanism, people who want to smuggle out money from South Africa, ordinary business people, can you give us the money here, we don't tell them we're an organisation, we'd use a person like Schabir and others, including myself, I'd go to people, "You want money here? Give me the money here. You want to take your money out? Give me an account of yours abroad and I'll deposit the money abroad." So no money passes across the border, you give me R100,000 here, I'll give you the equivalent of R100,000 minus the commission that I want, and you tell me where you want it deposited, or if you want it in cash in London tell me which day, what time and let's agree how many pounds will be delivered to your man and I will arrange for him to get the money in London.
POM So would you then let Lusaka know, or somebody know that
MM I wouldn't. I would simply make an arrangement with OR, please arrange for our person or whoever you have in London to deposit so much money in the account of the Royal Bank of Scotland, Account number so-and-so, deposit it in cash, not by credit transfer, in cash so that it's not identified who put the money there, at branch so-and-so in London. They put it.
POM OK. Now to deal first and Schabir's name does surface in at least a couple of the coms regarding finance, what role did he play in this whole money exchange and provision operation?
MM From Mo and Zuma's side he found the people in SA who wanted to smuggle their money out, he arranged for the money to be collected from them inside the country, he ensured that that money was dispersed as per instructions of the ANC to whoever in the country they named.
POM So who would he go to? He's in SA, he's collected
MM It depends who they told him. If they told him go and deliver it to Boesak he will deliver it to Boesak.
POM Yes, he's done that. He's collected the money.
MM He's collected the money from a businessman called Peter.
POM Now he has R100,000.
MM And Lusaka tells him, Zuma tells him, deliver that R100,000 to Bishop Tutu. He delivers it in cash.
POM OK. Now who arranges for the corresponding transaction to take place with, say, a bank in London?
MM He says will you please deposit so much into an account in London, and they deposit it.
POM Now he tells Schabir that and then Schabir talks to
MM No, Schabir tells Mo and Zuma. They arrange for it to be deposited there. Then he, from that account, quietly gives the money to Peter Abrahams' contact in London.
POM To Peter?
MM We said Peter Abrahams gave him R100,000.
POM Yes, I've got you.
MM Now Peter Abrahams needs to be given ten thousand pounds in London but that ten thousand pounds is put into a nominated account by Schabir. Schabir takes it from that nominated account through his channels and gives it to Peter Abrahams' man. Right? That was the basic, and that was being done by everybody. The business people were doing that to smuggle their money. People went into business doing that but we found that possible but we needed a person who would go around quietly sniffing out and touching the people who wanted their money outside the country and were prepared to give it here. That was one of Schabir's jobs and one of my complaints was, as you will see in the correspondence, that independent of Schabir I had to keep doing it myself, and I said, "What the hell?"
POM I think you also complained, Mac, saying that you could get a bloody better rate yourself.
MM But I have to weigh up in the end, I say I can get more but look at the trouble that I have to take.
POM So he had the contacts.
MM And look at the risk, and then he can tell me, "But by the way, you got 15% premium in Jo'burg, sorry in Durban I got 12½%." I can't say to him he's lying and I don't think it was me, it was somebody else expressing a frustration, I think Gebuza, feeling that, well, wait a minute, we could get a better rate. And I am saying - guys, if we spend our time trying to get the extra 2½% is this worthwhile?
POM Let's go back again, I want to pull these loops together in some way. So Zuma from his position as the head of Intelligence and also part of that as the head of the Operation in Mozambique
MM No by that time he's no longer heading the Mozambique operation.
POM OK, he's now head of Intelligence and he's moving around.
MM Counter-intelligence, yes.
POM Now he's handling or arranging for quite significant sums, quite significant sums of money are coming to him for disbursement.
MM For two purposes, mainly for the counter-intelligence but secondly also to give to certain people in the mass organisations and then thirdly we begin to latch into that mechanism. So that's his purview. It may not be the only channel he was using because you never keeps your eggs in one basket and statically all the time in one basket. We, in Vula, started with money being brought in by couriers directly in cash to us, in rands. Then we began to do the exchange to the same formula and I had already known of these fronts but I had been supporting Mo and them setting up the front. I was not interested in myself being occupied in that work, so I would tap into them. But their operations did not work smoothly in the beginning. You were cheated, there were times when somebody says to you, "No, no, no, you first deposit the money in my account in London, then I'll give you the money." And you deposit the money in London and the guy disappears. Those things happened and I suppose at other times, maybe it was just before my arrest, I had taken money from somebody here and before I could send a message to say transfer the money in London from account so-and-so to account so-and-so I got arrested, so he's looking for me.
POM Is he still out there?
MM Yes. So I think that for simplicity's sake there were two models basically, one was a model where physically the money was stashed, hidden and transferred across the borders in small amounts, in larger, but they were limited to that. The other one was to exploit the state of the South African economy where people wanted to get their money out into foreign currency and stash it abroad and we then said, look, you don't have to take your money out, give us the money in the country and we will give you your money outside the country. That mechanism was used by business, normal business, by all sorts of people in SA. The most sophisticated in SA was the business people who used the financial rand, who applied to the Reserve Bank to take out money legitimately for purposes of business and travel, etc., in the meantime took it out, converted it into financial rand as investments coming in at a better rate, brought it into the country, the same money, the R100,000 they took out from here came back now under the Finrand as R150,000 which they invested here to satisfy the Finrand, then they took out another R100,000 and brought it back as Finrand worth R150,000. So they were converting each R100,000 through the Finrand mechanism into virtually one and half times its value by round-tripping.
POM That sounds pretty good.
MM Yes it was a fantastic deal for the big businessmen, and the scandal of the Finrand is well known. In fact this is where Trevor Manuel's amnesty things come in. You saw the figures that with his amnesty he overshot his calculations, because now they had got all this money abroad that they had siphoned out for years and years but now they see him trapping them in terms of tax and every other way and he says I'll give you an amnesty if you declare it and you pay a penalty of 10%. But he wanted the money declared and brought in.
POM Brought back to the country.
MM To save him the whole hunting job. And of course I am sure that if I had an opportunity, if I was in Schabir's position, for the sake of the organisation I would take advantage of the Finrand mechanism too. The question for the underground was only which was the most secure.
POM Now I know you had to prepare a budget every year and submit it.
MM We didn't really, all that correspondence about budgets, they were not strict budgets. You could handle projects budgeting project by project, but forecasting
POM A revolution.
MM - would take too long a period for forecasting. The uncertainties, the imponderables, the variables were so many. You had to move ad hoc and I would give a budget and then I would say this is for three months. Then quite often I would say it's spent already, it's two months, we're nearing the end of it. So it was still a sort of budgetary tool where you could anticipate that you were running out before you ran out so that you could alert Lusaka, you could show the work done and you could say I need more. To be fair, in the case of Vula, they often found that more.
POM On one occasion at least you bailed out Mo's group because Mo's group was totally out of money.
MM Many times. And they bailed me out, because the bailing out is a timing question, your money has not arrived, you're in a crisis. It's going to arrive? OK, I'll lend it to you and you will repay it. Sometimes in the hurly-burly of these things you forgot about repayments, so that happened too.
POM Why I'm trying to put this in a framework because you touched upon it the other night and that was Pat and I were at your house, you said you didn't think that Zuma was really a corrupt man. One can begin with him, he just moves up through the struggle, he's on Robben Island, he comes out, he's moving around, he's always engaged, he has the cash he needs to do things, he gets the cash he needs to carry out the operations that he carries out. He then comes back to SA in 1990, he's engaged in some of the prior negotiations in Switzerland and some of the negotiations that lead up to Groote Schuur and then he's back in the country and he's bump.So like yourself, like many people who came back to the country, most of you who came back who lived that way, you never had bank accounts, you never had anything to do with money in your lives and suddenly you're in a money economy but it's the handling of money.
MM The point about it is that in exile, take that as an example, you were given your food, you were given your clothing, handouts one to six months. If you had to travel the organisation authorised it and paid for it, or found the money. Now your own needs were taken care of in that environment. The one thing that you had to worry about was how you spent the organisation's money for the organisation. That you had to worry about but what is it for yourself didn't count, you didn't bother about that because I needed to get to London, I go to my Political Committee and say I need to go to London. They say, approved, what are you going for, this, that and the other approved. Fine, now go to the Treasurer General, here's a note saying we have authorised you to travel and he must provide you with a ticket. And in providing you with a ticket he must provide you with X amount in British pounds for use in the course of your work in London for that two, three days. And that's it.
Now you were not given money to go and live in posh hotels or anything like that, you went and lived with comrades and you didn't turn round at comrades' place, if I came to stay at your place I wouldn't be saying, Padraig here's my money for my breakfast tomorrow. You would go and you'd look, OK, this evening I'm going to be at home so you say OK, I'll cook the dinner for you guys, come on guys, at whose place I'm staying. So I would go and buy some meat and vegetables and cook the dinner and they'd appreciate it because I'd relieved them from cooking and they may say, well, bloody hell, you don't have to buy the stuff, the stuff is there in the fridge but it would be nice to you'll be home at four o'clock, fine, what a nice thing that we will be home at six o'clock and there will be a supper waiting for us. Or you'd go and buy a bottle of wine and give it to them. That was how it went on. So you didn't have bank balances. You could have accumulated, you could have stolen the organisation's money but you did not feel that that would be the right thing to do. So you grew up with that culture. Maybe some people did that and sometimes they got caught and we punished them for misusing money of the organisation. But it was not like you started a secret account now and started planning to become a millionaire and you'll break away from the whole movement and live on your own. When we came back we had no expectation that our personal lives would change, we would still be in the service of the struggle and the struggle will decide what I get according to its means.
So I am saying, when I say I don't think he was corrupt, I don't think he took the money for himself, I think it was for needs, I think he was living in KwaZulu-Natal. I understand the violence there, I understand the need for safe houses, I understand when Walter Felgate was breaking away from Inkatha, you had to immediately find him a safe accommodation, bodyguards, food, need for his family, his wife's needs, all taken care of so that he could cross over and he could live in a place undetected and if he was detected to move him to another safe place. Nobody could budget and say in next year January Walter Felgate is going to cross over. Zuma himself, his own security, he would move. You don't sit down and you say I'm living here at No. 4 San Raphael, a report reaches me tonight to say move, the enemy has detected you, they plan to hit your house. You don't turn round and say I'm going to go and call a meeting, get an approval; I move and then through the structures would take it up but I move, I find another place, I start living there, then I report, then issues arise that now chaps I can't find another place, it costs more. I need to change my car, who can I give it to and where can I get another car? I need this assistance and that assistance. Those things kick in later but that you do not feel is for you. You feel that you're preserving yourself so that you can continue to play your organisation's role.
Now in the violence in KwaZulu-Natal it was one of the storm centres and I think that there is no doubt in my mind that Zuma, not alone Zuma, I think Madiba played an enormous part, but Zuma played a central role on the spot there interacting with all sides and keeping things moving on track, and for that I think he needed enormous resources. I think it's now clear that part of the money that even Madiba gave went to the royal family. It may have been for the protection of the royal family, it may have been also to draw them closer to the ANC as part of a process of looking after their needs.
POM He's never complained.
MM He never complained. But so did Gatsha. He did the same thing with the King's budget. Gatsha used his position in traditional society so that he is the gatekeeper for the King and if you were not the gatekeeper and you wanted to supplant the role of the gatekeeper you had to find another way to do it.
POM You sound tired.
MM Yes, I just yawned, I had a big yawn. Anyway, carry on.
POM I see I'm getting the picture here. So when you came back in 1990 these financial structures would still have been in place right up to the time you were arrested.
MM Yes, with this difference that in the case of Vula, because I was in that structure with Madiba, Madiba then said that OK we will now begin to make money available for you right here in the country from the organisation. And I told you the story about those mailbags of money. So we began to collect money on the ground.
POM Just to cover, were your interactions with Zuma confined to well your normal interaction on the Revolutionary Council and on the structures like the other kind of Lusaka structures, but outside of that there were these kind of peripheral but not overlapping use of Mo's Intelligence structures which was on the one hand providing you with information that safeguarded Vula and on the other hand providing him with operations that allowed him to pursue Bible?
MM Yes and also, as I say, the role with Bible began to be such that I began to assist him because I wanted them to develop, I wanted them to penetrate the security forces in a pro-active way and we helped them if we thought there was a potential recruit or there was an operation that was needed to be conducted in selecting a person and if we could play a role we would play a role, but assessing it on the basis of how much does it endanger our operation, how much does it improve our capacity. And he would do that in the same way as we begin to turn to him more and more because he began to access files now at our request, so his prioritisation began to take into account our requests. We begin to work closely and I have reason to feel that while I was out of the country, or after I returned to the country and surfaced lawfully, the structure in Durban between Gebuza and Ronnie began to draw Mo into a collective. It's a suspicion I have.
POM Gebuza, Ronnie and Mo?
MM Began to work as a collective.
POM That would have been an SACP collective or?
MM No, it would be ANC/MK. I suspect that because I see very few people supported my arguments about the need for intelligence and political structures, the separation, very few people supported that, and the textbook that we were learning from in the socialist countries did not emphasise that at all. So I know post my arrest, my release, I saw how Mo obviously discussed my thinking with Zuma and how they stuck to their position, no, no, no, they were right. I think from time to time and I have a feeling that it's still there up to a point. But I'm saying your framework of the co-operation, yes, correct.
POM Yes, OK. But when you said that that thinking is still there, you think there at the moment? What thinking is that?
MM I think people in Intelligence continue to wield more influence than they should in the making of a decision.
POM I know another model you're referring to. This is the one you had out with Mo when Mo wanted to be part of the leadership structure and you said, "No, we ask you for your intelligence and then we put it into the decision making but you don't come in here saying well I've got something that I have, that I throw on the table as part of something, that I'm superior to you, that I've got more information than you have." It's an input.
MM I've got information I can't reveal myself but it has credibility and has to be given the highest rating.
POM OK Mac, that will do it for tonight.Have a good night.
MM Thanks pal.
POM Thank you. Bye bye.