THE INFORMATION SCANDAL

Eschel Rhoodie, 1979/80


In the latter part of the 1970s, South Africa was rocked by a major political scandal involving the Department of Information, which was allegedly misappropriating State funds for secret projects. The Information Scandal (or lnfogate or Rhoodiegate or Mulderqate), as it came to be known, was to culminate in the resignation of Cabinet Minister Dr Connie Mulder and the State President, B.J. Vorster.

One of the main players in this colourful drama was Eschel Rhoodie and his story really begins in Pretoria eight years earlier.

At the beginning of 1971, Eschel Rhoodie, then Press Officer of the South African embassy at The Hague, clandestinely negotiated an agreement with a Dutch publisher by the name of Hubert Jussen whereby Jussen agreed to help with the establishment of a new magazine - To the Point. To the Point was to be secretly financed by the South African government and was intended to counter some of the unfavourable press coverage South Africa was receiving oversees. This secret scheme had the approval the Prime Minister, B.J. Vorster; the chief of the Intelligence Services, General Hendrik van den Bergh; the Minister of Information, Dr Connie Mulder; and Mr Gerald Barrie, the then head of the Department of Information. To the Point was launched before the end of the year.

In July 1972, Rhoodie was appointed to the post of Secretary of Information. He was young, dynamic, enterprising and impatient - particularly with the bureaucratic process. These were the qualities that enabled him to get things done. With the advantage of hindsight, one might say, these were the things, which enabled him to get things done too well.

Shortly after his appointment to what would be called the 'Dirty Tricks' Department, Rhoodie recruited as his deputies Les de Villiers and his own brother, Deneys. Initially, To the Point was the only secret project in operation, but the Bureau of State Security had plans for a number of other schemes and long list of 'spooks' (secret agents) willing to see them through. It wasn't long before a second project was instituted. This time it was the creation of an organisation designed to counter South Africa's sporting isolation. The result was the Committee for Fairness in Sport. Then came a scheme involving a group of influential businessmen abroad. The 'Club of Ten', as the group was known, had the difficult task of tackling the media, the United Nations, other institutions, individuals and countries for their double-dealing and hypocrisy where South Africa was concerned. Not an easy task! A number of influential individuals operated more covertly to improve South Africa's image abroad.

From 1973 onwards, by which time Rhoodie was working in close cooperation with 'the power behind the throne' - General Hendrik van den Bergh, the head of the Bureau of State Security (BOSS) - new schemes and projects were constantly being introduced. They were all run by Eschel Rhoodie's Department of Information and they were all paid for with government money. Due to the delicacy of the situation, money was often handed over in cash - without any receipt.

In February 1974, Prime Minister Vorster gave official approval to covert action at a meeting in Cape Town attended by Rhoodie, Mulder and the Finance Minister, Nico Diederichs. Since it had become evident that the conventional methods that governments used to express opinions - in the form of films, brochures and hand-outs -were no longer effective, Vorster accepted that it was necessary to wage an all-out psychological assault on foreign opinion. New rules and systems were to be applied. Only objectives would count and the end would justify the means - any means. Towards the end of 1975, project Annemarie was conceived. (Annemarie was the name of Rhoodie's teenage daughter.) This was for the introduction of an English-language newspaper to counter attacks on the government by the English press - particularly the Rand Daily Mail. The man chosen to front this operation was Dr Louis Luyt, the fertilizer millionaire.

The first salvo in what was to become something of a newspaper war was when Luyt attempted to buy up shares of SAAN (South African Associated Newspapers). To give credibility to his take-over attempt, he went on television to explain his new-found interest in publishing. He also took the opportunity to announce that he had two prominent overseas publishers supporting his bid for SAAN. Despite Luyt's overtures to some of SAAN's major shareholders, his takeover attempt was blocked. Luyt then announced that he intended to create his own independent newspaper, which would go on to the streets in the second half of 1976. The name he chose for this newspaper was The Citizen.

The cost of running the newspaper was estimated to be around R l30 000 per month, but it was expected that the paper would pay for itself as time went on. At the Rand Daily Mail, the news that another English-medium newspaper was to arrive on the scene was greeted with disbelief. The Rand Daily Mail itself was losing money and was being supported by the moss circulation Sunday Times. Nevertheless, the Rand Daily Mail took Luyt seriously since he had never made empty threats. The owners of the Rand Daily Mail were also acutely aware that 25% of their readership had only a loose association with the newspaper and could be convinced to change. A struggle for survival was anticipated. Meanwhile, a loan of R 12 million was set aside to finance project Annemarie on the understanding that once the newspaper became financially self-supporting, this money would be returned to the State's coffers.

Unfortunately, the scheme was beset with problems. By the time the first edition of the newspaper was on the streets on 7 September 1976, Luyt, Rhoodie and their associates had already been forced to surmount a number of crises. Even after the newspaper went into full production, matters didn't improve.
By March 1977, the situation had become serious. The Citizen's growth was failing well short of expectations, and relations between Luyt and Rhoodie had deteriorated - almost to the stage of open hostility. But the worst was yet to come...

At the beginning of 1976, there had been general consensus in the government and the opposition that the Department of Information was doing a good job. Even then, however, trouble was brewing behind the scenes. The money used by the Department of Information was obtained through the Department of Defence, since it was assumed that a few million rands would hardly be noticed in a budget that exceeded over R1 billion. Unfortunately, the defence account neglected to add the Department of Information money to the amount requisitioned from the Treasury. By the time the mistake was made apparent, there were no funds available. To make matters worse, the Minister of Defence, P.W. Botha, was unhappy about his department being used to finance a secret project. The first rumblings of internal discontent and scandal were surfacing.

By July 1977, rumours and speculation concerning financial malpractice in the department of Information became so serious that an audit of the department's books was ordered. There was also talk of The Citizen and the Department of Information being linked. Towards the end of 1977, Luyt decided to withdraw from the newspaper. (The Citizen was formally transferred to its new publishers, Jussens and Van Zyl Alberts, in February 1978.) In November 1977, Les de Villiers, one of Rhoodie's deputies, also resigned from the Department of Information, a job he had held for 17 years, and joined a public relations firm, Sidney Baron, in New York. Finally, in the face of mounting criticism, in May 1978, Dr Connie Mulder had to answer for his department in Parliament. In response to questions tabled in the House, he declared categorically that The Citizen was not financed by government money. (It was as a result of this lie that he would eventually be disgraced and disbarred.)

In the autumn of 1978, the Information Affair reached crisis proportions. The Minister of Finance, Owen Horwood, instituted an inquiry under the auspices of Judge Anton Mostert to probe exchange-control violations. On 2 November 1978, despite protestations from the new Prime Minister, P.W. Botha, and Minister Horwood, Justice Mostert called a press conference to divulge details of the 'scandal'. On Wednesday, 3 November, under the heading ‘It's all True’ the Rand Daily Mail wrote:
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.

In the same month, Prime Minister Botha instituted a judicial commission of inquiry into the whole affair under the chair of Mr Justice Roelof Erasmus. Eschel Rhoodie, who had already had his passport withdrawn, was summoned before the commission, gave testimony, then vanished.

Mulder, meanwhile, was being vilified by the media. He was first stripped of his Cabinet post, then his leadership of the National Party in the Transvaal, and was finally forced to resign his parliamentary seat. In a similar fashion, State President Vorster also resigned his presidency under a cloud of suspicion after being severely censured by the Erasmus Commission. In the commission's interim report, Rhoodie was accused of misappropriating State funds. P.W. Botha and a number of other prominent government figures, were completely exonerated with regard to any involvement in the secret projects of the information scandal. (The final report of the Erasmus Commission was published in June 1979.)

Although in the eyes of the public the Citizen newspaper was largely discredited, Johnny Johnson, the then editor vehemently denied the accusation that the paper was little more than a National Party organ. In an editorial on 6 December, 1978 he wrote: 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 emphasize this strongly enough - was not, and is not, a government propaganda medium of the National Party.

In February 1979, journalists finally tracked Rhoodie to ground in Ecuador. By this time he was South Africa's Most Wanted Man and the government had instituted legal proceedings against him. In March 1979, Rhoodie moved to Great Britain where he attempted, albeit unsuccessfully, to gain political asylum. In a BBC television interview with David Dimbleby on March 21, 1979, he strongly denied the accusations made against him, reiterating his claim that he was being made a scapegoat for the whole affair, and maintained that senior government figures, including the then Prime Minister, P.W. Botha, were both aware of and sanctioned the secret projects he had conducted as head of the Department of Information.

Shortly afterwards, Rhoodie moved to France, where he was eventually arrested by the French authorities and incarcerated for 88 days pending extradition to South Africa.

The trial of Dr Eschel Rhoodie began at the Pretoria Supreme Court on 22 September 1979. He was charged with seven counts of fraud, alternatively theft, involving a total of R63 205 of government money. Despite the fact that it was shown during the trial that he controlled a series of slush funds in Switzerland, Holland and Britain to finance the Information Department's secret projects - a total of between R18- and R20-million, of which ‘not a cent was missing' - he was found guilty on 8 October of five charges of fraud and sentenced to an effective six years' imprisonment. On 9 October he was granted bail of R90 000 pending an appeal.

A year later, in October 1980, Dr Eschel Rhoodie was acquitted on all counts involving State monies by the Appeal Court in Bloemfontein. The following day, he gave a press conference and issued a ten-page statement in which he expressed his abhorrence and outrage at the treatment he had received at the hands of the South African government. Amongst other things, he declared:
'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.'
It was estimated that the South African government spent R500 000 to establish that Dr Eschel Rhoodie was innocent of the fraud charges brought against him.

In March 1982, Dr Eschel Rhoodie and his wife Katie emigrated to the United States. His book The Real Information Scandal, which was published in October 1983, contained sweeping allegations of big-name involvement in secret information projects. He further maintained that dozens of senior government officials were aware of the secret projects his department actively pursued, and that R75million had been allocated over a five-year period to finance these projects. Official figures released when the scandal broke accounted for only R64-million.

Dr Rhoodie lived in the United States until his death in the mid 1990s. A second book: P.W Botha: The Last Betrayal 1978-79 was published in 1990.

Contents

 

 

The Serpent Under

South Africa Weird and Wonderful

 

 

Web Design & Artwork 2009