Muldergate: The scandal that ousted a prime minister and his successor

‘It was nearly midnight at Miami International Airport. The lean figure in the St Moritz sweater stood up from a table near the Braniff Airline counter. Mervyn Rees stretched out his hand and said: “Dr Rhoodie, I presume?”’

So begins Muldergate (also known as the Info Scandal) by Rand Daily Mail investigative reporters Mervyn Rees and Chris Day. Published in 1980, the book details the clandestine web of department of information secret projects run by Eschel Rhoodie, and paid for out of a multi-million rand, secret slush fund.

Rhoodie, the former secretary of the department of information, was on the run as his elaborate propaganda war to polish the tarnished image of apartheid South Africa was unravelling back home. Millions had been spent on dozens of secret projects that included buying influence and politicians, attempts to buy foreign newspapers, and launching the Citizen newspaper and several magazines in South Africa. The launch of the pro-government Citizen came after a failed attempt to buy the anti-apartheid Rand Daily Mail.

Journalist Gordon Winter, an infamous government spy working inside the South African media, referred to some of these projects in his 1981 book Inside BOSS. ‘Some of the secret projects mounted by the South African Information Department and BOSS were mindboggling,’ he wrote. ‘Hand-picked men had been used to run sporting groups and cultural organisations which pretended to be unbiased but were totally controlled by Pretoria. Publishers had secretly been given large sums to bring out a wide variety of pro-government books glamorizing the “South African way of life”.’

In the weeks after the airport meeting, Rees and Day spent many days grilling Rhoodie as he revealed details of secret projects he had set up. In many cases he confirmed what they already knew, or filled in missing parts of the jigsaw of information they had collected. They also learned of projects they knew nothing about.

‘It was a series of disclosures that were to reverberate in the corridors of power in the United States, various African States, Britain, France, Holland, Germany, Norway, Japan, Israel and Latin America where Rhoodie had bought and sold opinion formers and decision makers from a massive slush fund,’ Rees and Day wrote in their book.

The late-night airport meeting was the culmination of a two-year investigation that spanned four continents, and had transformed Day and Rees into ‘international lounge lizards’ as they travelled the world following leads. Their investigation helped change the course of South African history. It played a major role in toppling Prime Minister John Vorster and split the National Party government. It also helped prematurely end the political career of Minister of Information Connie Mulder, who had been a frontrunner to succeed Vorster. And it brought down Hendrik van den Bergh, the all-powerful head of the sinister and secretive BOSS, the Bureau for State Security, who was a key player in the scandal.

The very real dangers faced by reporters digging into the scandal became clear when Van den Bergh chillingly told the Erasmus Commission of Inquiry into the Info Scandal that he had men under his command who would kill on his orders. ‘I have enough men to commit murder if I tell them: Kill … I don’t care who the prey is. These are the type of men I have …’

Muldergate was a high point in South African journalism, comparable to Watergate, which had brought down US President Richard Nixon a few years earlier. And as with Watergate’s Bob Woodward and Carl Bernstein’s ‘Deep Throat’, Rees and Day also had a source deep inside the establishment. Their source, a man they dubbed ‘Myrtle’, has never been identified. More than anything, it is a story about tenacious, old-fashioned, shoe leather journalism, with the reporters spending long hours poring over thousands of property and company registration documents trying to unravel the web of secret projects and companies that Rhoodie had set up.

While many journalists on different publications worked on the story, the real credit must go to Rees and Day, and Kitt Katzin of the Sunday Express, an investigative reporter on a small newspaper that punched far above its weight.

From the very beginning it was clear that it was going to be a game of high stakes poker with the future of the Rand Daily Mail on the line. Early on, Mail
editor Allister Sparks, aware that a misstep could give the government the opportunity to close the Mail down, insisted that they not publish until they
could do it in a comprehensive series of reports, preferably with simultaneous publication in overseas newspapers.

The Mail was finally pushed into publishing when Rees, frustrated at Sparks holding back publication, fed Katzin with information that he already had, but was unable to corroborate until then, according to former The Star editor Harvey Tyson, in his memoir Editors Under Fire. Tyson wrote that Rees had confirmed this for the first time in an interview with journalist Jo-Anne Richards (Tyson, 1993: 239). Richards said: ‘Mervyn told me that he was frustrated as he had been working on the story for so long and wanted to run with it, but Allister was nervous. He said the only way he could force Sparks’s hand was to feed some of his info to Kitt Katzin. Once the Express ran the Citizen story the floodgates were opened and the Mail began running the stories that Mervyn had been working on for so long (Interview, August 2018).

And with the Mail being a known target for BOSS and Special Branch spies, Sparks demanded absolute secrecy, with even senior colleagues not being briefed on the investigation. An exception was the editors of the Mail’s sister papers – the Cape Times in Cape Town, the Natal Mercury in Durban, the EP Herald in Port Elizabeth and the Daily Dispatch in East London – who helped fund the investigation and who would meet from time to time to be briefed by Sparks. Like most investigations, the story began with a tip-off, in the form of a phone call to Rees from a trusted source in August 1977. His source introduced him to a highly placed civil servant who told him about corruption in high places, much of it centred on the department of information. With little more to go on, Rees began working the Pretoria cocktail circuit and also looking for contacts in the many government departments in South Africa’s administrative capital, starting with minions lower down the food chain. His search led him to a woman who had worked for the department of information, but left after her affair with a senior government official turned sour. She in turn told him the names of three other women, who had been ‘hurt’. Rees (1980) later wrote:

Women, in fact, played a prominent role in Muldergate, adding enormous colour to an already lurid tale. For many months newspapersdelved into the private lives of South Africa’s most prominent politicians and key personalities in the Info Scandal. What emerged was a picture of moral hypocrisy in which absolute power acted as an aphrodisiac to men who used their influence to seduce women both in South Africa and abroad.

Katzin was beavering away at the Express, a sister paper to the Mail. He was a meticulous reporter whose good looks and boyish charm hid a dogged and hard-edged side to his character. His flow of Info-related exposés quickly earned him a national reputation as a reporter – and some high praise from the Afrikaans media. The Citizen bubble finally burst on 29 October 1978, when the Express published a page-one lead under Katzin’s byline headlined: ‘The Citizen secrets revealed’. The Mail followed the next day with a comprehensive story they’d been sitting on. A bombshell followed a few days later when Judge Anton Mostert, who had been investigating the department of information, called a press conference where he announced that the Citizen, despite denials by Mulder and others, had been financed out of state funds. ‘It’s all true’, crowed the Mail the next day.

The story opened the floodgates that led to the toppling of Vorster and the fall from grace of Mulder – and thrust P.W. Botha into power. In his book Gods, Spies and Lies, John Matisonn, the Express’s political editor at the time, speculates that the information, based on a secret report by Auditor General Gerald Barrie, was leaked to tip the balance of power that helped Botha become prime minister. It was the ultimate irony that it was the ‘hated’ English Press – particularly the Rand Daily Mail – that many staunch Nationalist Party members had trusted to share information that exposed one of the biggest scandals in both their party’s and South Africa’s political history.

References

Matisonn, John. 2015. God, Spies and Lies. Cape Town: Missing Ink. Mervis, Joel. 1989. The Fourth Estate. Johannesburg: Jonathan Ball. Rees, Mervyn & Day, Chris. 1980. Muldergate. Johannesburg: Macmillan. Tyson, Harvey. 1993. Editors Under Fire. Johannesburg: Random House. Winter, Gordon. 1981. Inside BOSS. London: A. Lane.

Secret Revealed: Nat English newspaper bankrolled by Info secret funds

Kitt Katzin, Sunday Express, 29 October 1978

The Sunday Express can dislose today that the Nationalist English daily newspaper, The Citizen, has been financed heavily by public money channeled through massive – and secret – public funds. This means that taxpayers, without their knowledge, have been paying millions of rands – the total could top R12 million – towards the maintenance of an English-language Governmentsupporting newspaper. Not even Parliament knows officially that it has been happening. In fact, it was specifically denied in Parliament only four months ago …

Missing Millions

Mervyn Rees, Rand Daily Mail, 30 October 1978

The Rand Daily Mail can today reveal that not only were millions of rands in State funds secretly allocated by the Government to finance the Nationalist English daily newspaper, The Citizen, but that an amount of R13 million ‘disappeared’ en route to The Citizen. Attempts by the Government to recover the R13 million over a period of more than a year failed – as the money had been put into private enterprise in a bid to help an ailing company, despite the fact that The Citizen was desperately short of funds … The Mail can also disclose today that the Department of Information was forced, because of the misappropriation, to raise a loan believed to consist of millions of rands in Switzerland to continue to finance The Citizen operation. This means that not only have the taxpayers financed without their knowledge the losses incurred by The Citizen – estimated by the Nationalist Sunday newspaper Rapport to be R4 million a year – but they have also financed the secret amount of R13 million that disappeared into the private sector.

The Mail has been told that the loan raised in Switzerland was repaid earlier this year – with funds that had been allocated for another, equally vast and controversial secret project overseas in 1975. According to the Mail’s informants, the funding of The Citizen was so secretive that not even some prominent people associated with the newspaper were aware of the true source of the funds. At least one of the Department of Information’s ‘front men’, however, is known to have been paid an amount of R20,000 annually and tax-free for his covert services. The Mail, however, also has information about the launching of the secret Citizen project and knows the identities of the central characters involved, as well as the code names that were used … When one of the Cabinet Ministers made the discovery he was horrified that funds from his department were being used by the Department of Information for this purpose.

Info’s U.S. Paper Bid

Mervyn Rees, Rand Daily Mail, 1 November 1978

Dr Eschel Rhoodie sent R10 million of the Department of Information’s secret fund to the United States to buy the influential Washington Star newspaper. The money was sent by Dr Rhoodie, then Secretary for Information, to Mr John McGoff, the right-wing American publisher who is a close friend of both Dr Rhoodie and Dr Connie Mulder, former Minister of Information.

Flop you paid for
Mervy Rees, Rand Daily Mail, 2 November 1978

More than R800,000 of Department of Information money was used by South African film magnate Mr Andre Pieterse to help finance Golden Rendezvous, an Alistair MacLean adventure film, starring Richard Harris, which was an international flop. The Rand Daily Mail on Tuesday disclosed that the money was set aside out of secret funds for commercial film projects. Mr Pieterse is a director of Film Trust (Pty) Ltd which had investments in Golden Rendezvous. Together with Pretoria advocate, Mr Retief van Rooyen, he was a director of Thor Communicators – a Department of Information ‘front organisation’. Mr Van Rooyen was the man who told the Mail he had given a special briefing on Department of Information projects to three Cabinet Ministers shortly before Mr P.W. Botha was elected Prime Minister … The sources say he ploughed more than R800,000 of this money into Golden Rendezvous. The Mail can find no evidence that the money has been paid back to the Government.

It’s all true!
Mervyn Rees, Rand Daily Mail, 3 November 1978

South Africa’s biggest political 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 out of 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 Hendrick van den Bergh, former head of the Bureau of State Security, as key figures in the secret project to finance the newspaper.

A nation swindled
Rand Daily Mail, 6 December 1978

In a series of sensational findings and disclosures, the Erasmus Commission last night blasted former Department of Information and those involved with it. The Commission, whose report will be debated by Parliament tomorrow, revealed ‘irrefutable indications of large-scale irregularities and exploitation’ of the Department’s massive R64,000,000 secret fund, including possible theft and fraud ‘through which the State suffered great losses’.

Dept spent R32m to fund The Citizen

Rand Daily Mail, 6 December 1978

Project Annemarie – the secret code name for the Department of Information’s The Citizen newspaper project – absorbed almost half of the Department’s R64,000,000 secret fund, the Erasmus Commission’s report discloses. The total amount spent on The Citizen up to the time of the appointment of the Commission in November was R31,907,732,73 – almost R5,000,000 more than the R27,000,000 the Rand Daily Mail estimated had been spent on the project. The amount has still not been recovered. This amount included R220,000 from the secret fund to enable The Citizen to sponsor the 1976 Grand Prix. One of the most sensational findings involving The Citizen was the Commission’s conclusion that the newspaper was intended and had acted as a vehicle of National Party policy.

Rhoodie’s mansion in Miami’s millionaire row

Mervyn Rees, Rand Daily Mail, 9 December 1978

This is the lavish mansion at Miami Beach, Florida, which Dr Eschel Rhoodie bought out of his huge secret fund – made up mostly of money from the Defence Special Fund. The Rand Daily Mail traced the R278,000 mansion after an exhaustive search which took it to Millionaire’s Row on the island of La Gorce in Biscayne Bay. This is the luxurious front view. Behind are sweeping lawns, a large swimming pool and mooring for a sea-going yacht. Beside the mansion is the famous La Gorce Golf Course. The Mail can disclose today that Dr Rhoodie, the former Secretary for Information, bought the mansion out of the R10 million in secret fund money originally allocated to buy the Washington Star. The house was purchased in 1975 in the name of Pinetree Drive Company, a company run by Mr Daniel J. McGoff, brother of Mr John McGoff, the Michigan publisher and president of the Panax Corporation, who tried to buy the Washington Star.