Tobacco Wars. Johann van Loggerenberg
sent her a message: ‘I’m done.’
Days later, on 28 May 2014, all hell broke loose. I asked SARS to place me on special leave and walked out of my office, for the last time, as it turned out. In November I was suspended very soon after Tom Moyane had taken the helm at SARS. In December 2014 more senior SARS officials were suspended. By 2015, Project Honey Badger existed in name only. The five units and other parts of SARS that had collaborated to take on the tobacco industry had all been decimated or disbanded. It was game over.
Years later I spoke to one of the directors of ABC Tobacco. He said to me: ‘Ja, you had us there. We were in trouble … We were very lucky because of what happened at SARS. We got away with it, sure.’ He chuckled.
This episode sums up for me many of the themes and patterns that will unfold in this book. In it, you will meet many of the companies and people involved in the South African tobacco industry, and learn about the shenanigans in the tobacco trade, which have never been revealed publicly before. You will learn how the different sides began to come to blows, in many instances using the dirtiest of tricks imaginable. And you will discover how a handful of state officials and law enforcement agencies were captured and used to advance the commercial agendas of some players in the industry, at the expense of others. You will come to know the characters involved in these wars: they can variously be described as shrewd, conniving, double-dealing, criminal, colourful; a mixture of chancers, mavericks, rascals and opportunists. You will come to understand how state institutions and officials, politicians, organised criminals, industry players and big money all came to be so enmeshed that the tobacco industry can fairly claim to be one of the murkiest, corrupt and venal in southern Africa.
The independent tobacco manufacturer Yusuf Kajee once said in 2010: ‘There’s no pussy-footing around this: organised crime is ugly and illicit trade fuels crime with guns, drugs and hijackings.’3 The very next year, Kajee’s warnings proved true. In January 2011, a police officer, Johan Nortje, was killed in his driveway on a Monday morning. He had been a key investigator in an operation with SARS codenamed Duty Calls, which had netted over R120 million of seized contraband in Durban. Two men were seen running away from scene but were never arrested or convicted. The murder remains unsolved. In the weeks before Nortje’s murder, there had been two other attempts to kill customs officials in Durban.
In the same year, SARS spokesperson Adrian Lackay told the media, ‘Customs officials are being targeted by smuggling syndicates. We have decided that we do not wish to disclose too much information, as doing so might well increase the risk that our officials are facing. Late last year, a SARS official in Durban was shot and seriously wounded. This was the second time he had been attacked. There have been other incidents too. We believe that our officials are under threat.’4
In 2011, Glenn Agliotti, notorious for his role in the killing of mining magnate Brett Kebble, and for bringing down his friend, former police commissioner Jackie Selebi, in a corruption case admitted to smuggling cigarettes. Agliotti seems to have been involved in the cigarette game for some time, because in 2006 one of his ‘associates’, Anthony Dormehl, stated under oath that he was asked by Agliotti to organise storage space for four incoming containers of untaxed Marlboro cigarettes. He said that Agliotti used to call him with instructions as to who should pick up the contraband. Agliotti was still at it in 2014, meeting two people in the trade and proposing all sorts of hare-brained schemes to smuggle tobacco.5 In November 2016, someone arranged a meeting, where I found Agliotti, who suggested I ‘front’ for him and another person to open up a tobacco manufacturing plant in South Africa. I laughed.6
In October 2014, a van belonging to a tobacco manufacturer was hijacked at Sebenza on the East Rand. It was one of many such incidents reported in this year. In December, a hijacking led to the death of a bystander in Moreleta Park, during a shooting between the hijackers and police. In May 2015, the media reported that an underworld war had broken out between three gangs, one from Johannesburg and two from Cape Town, involving control of the multibillion-rand industries of illegal cigarettes and drugs. At least six people were murdered in Cape Town in the spate of this battle. In 2016, a driver of one of cigarette manufacturer Carnilinx’s trucks, en route to the Eastern Cape, was shot through the face in a hijacking attempt. In February 2017, a well-known debt collector and former nightclub bouncer, who reportedly had links to the illegal cigarette trade, Raymond ‘Razor’ Barras, was shot in the head and chest and killed while sitting in his car in his driveway at home.7 In January 2018, eight hijackers posing as police officers robbed a truck transporting tobacco products in Mitchells Plain outside Cape Town.
It also came to light in 2019 that one tobacco grouping had allegedly used ‘gang networks in Ryger Park to carry out a (failed) assassination’ of tobacco-whistleblower Luis Pestana, in an incident where his bodyguard, Gerard Strydom, was shot and wounded.8 As recently as January 2019, it emerged in an official report compiled by a Western Cape police intelligence officer that a ‘hit’ (assassination) was ordered on an employee of Carnilinx, controversial strongman and self-confessed killer Mikey Schultz. The officer thought it important and serious enough to report this and warn Schultz of the impending danger to his life. Around this same time, a whistleblower and his wife were reported to have received threats to their safety after exposing the controversial findings from research conducted on behalf of the big tobacco companies.
The fact of the matter is that the tobacco business is as dirty and nasty as it is dangerous.
PART 1
THE BATTLEFIELD
1
The tobacco industry: imagine a pizza
In early 2017 I was invited to meet a group of students in the School of Economics at the University of Cape Town and engage with them in an informal discussion of the tobacco industry in South Africa. The invitation came from the professor who has been heading their research into the tobacco sector, Corné van Walbeek, whom I regard highly. He is one of the few academics in South Africa who truly understand the key dynamics in the industry and is probably the foremost expert on the tobacco sector in southern Africa, even if much of what he has published does not necessarily win the agreement or approval of the major players in the industry.
Facing the group of eager and bright students, I started off by using an analogy that best describes for me how the tobacco sector is composed and how it functions. ‘Imagine a pizza’, I began, ‘one large pizza.’ Each slice of the pizza represents the market share of the various role-players in the industry. As I made clear, my focus was only on the cigarette component of the tobacco industry, whose products also extend to cigars, cigarillos, snuff, chewing tobacco, tobacco for pipes or self-rolled cigarettes, or fancy contraptions like the ‘hubbly bubbly’, and even insect repellents. But the biggest game is in cigarettes.
How big the ‘pizza’ is overall is difficult to quantify. In 2012, it was estimated that approximately 7.7 million South Africans smoked about 11.4 cigarettes per day. That amounts to almost 880 million cigarettes each day or over 32 billion per annum. The annual revenue in 2012 was thought to be around R22 billion, with an additional R8 billion attributed to illicit activities. In that year, BATSA, the largest manufacturer and distributor, commanding the biggest slice of the ‘pizza’, reportedly employed about 14,000 people in South Africa and relied on over 150,000 retailers countrywide to sell its products.
The students listening to me at UCT were all in their twenties, and given the dramatic changes that have taken place in the tobacco industry over years, I took them back in time to when I was a young boy. This was the golden era for the big-name tobacco manufacturers, the makers of brands like Marlboro, Benson & Hedges, Dunhill, Rothmans, Winston, Camel, Peter Stuyvesant and Kent. They were the only players in the marketplace, and really had only themselves to contend with. The social and health problems we nowadays associate with smoking were simply unknown or else disregarded, and there were no restrictions on where you could or could not smoke. People regularly lit cigarettes in aeroplanes and in restaurants. Smoking also had a certain cachet, or so the advertisers would have one believe. I told the students how, without fail, one or other well-known cigarette brand would feature in lengthy advertisements shown at the cinema. These were almost a standard feature before the main movie would start.