A Watergate for Pretoria

Scandals shake the National Party

During its 30 years in power, South Africa's ruling National Party has been remarkably free of scandal. Not once, for example, has a high-ranking official been charged with misusing public funds. Last week that image of rectitude was shattered by the release of a 400-page report on an investigation being conducted by one of the country's most respected jurists. Confirming earlier newspaper accounts of widespread abuses in the Department of Information, an agency formerly controlled by one of South Africa's most powerful politicians, Supreme Court Justice Anton Mostert detailed alleged "improper application of taxpayers' money running into millions." Johannesburg's antigovernment Rand Daily Mail has dubbed the affair South Africa's "Watergate." Whether or not that proves to be the case, the judge's disclosures have shaken the six-week-old regime of Prune Minister Pieter W. Botha and could wreck the career of Minister of Plural Relations Cornelius P. Mulder, 53, who had been considered a leading candidate to become Prime Minister some day.

The alleged misdeeds center on a secret multimillion-dollar slush fund operated by the Department of Information when Mulder was Minister of the Interior and Information under former Prime Minister John Vorster. According to Mostert's report, some of the funds, intended for a covert campaign to secure favorable coverage for South African policies in the foreign and domestic press, were diverted to dubious business ventures and the personal pleasures of departmental officials. The main schemers were identified as the brothers Eschel and Deneys Rhoodie, who until a few months ago served as Secretary and Deputy Secretary, respectively, of the department. Witnesses told Mostert that the Rhoodies had illegally used government funds to subsidize an unprofitable South African newspaper, finance a $6 million movie that flopped at the box office, and traffic in diamonds. In addition, the Daily Mail has charged that the brothers conspired with a right-wing American publisher to try to buy the Washington Star. All of these activities, the press hinted, were known of and approved by Mulder--and perhaps other ministers as well.

When the story broke this summer, Vorster transferred control of the department to Foreign Minister Roelof F. ("Pik") Botha. He retired the Rhoodie brothers and ordered the former head of the Bureau of State Security to undertake a probe of the charges. Mostert was named as a one-man commission to look into possible violations of currency controls. After a heated meeting at which Prime Minister Botha urged Mostert to delay releasing the report, the judge declared, "I have endeavored to discover what particular interest of the state is furthered by suppression, albeit temporary, rather than disclosure of the evidence. I find none."

His report, consisting of depositions from many of the principals involved in the scandal, focuses on a plan to undermine the Daily Mail and other opposition newspapers by secretly subsidizing a new, pro-government tabloid, the Johannesburg Citizen. In 1976, says the report, the department provided a fertilizer company directed by Businessman Louis Luyt, 46, with $15 million in government cash --a direct violation of treasury regula tions. In exchange, Luyt testified, he pledged as publisher of the Citizen to support editorially the government's apartheid policies. But, Luyt said, he soon tired of Eschel Rhoodie's incessant efforts to meddle in its affairs. In February, the department helped arrange a sale of Luyt's interest in the Citizen to businessmen including Dallas Lawyer David A. Witts and Beurt SerVaas, chairman of the Curtis Publishing Co. Luyt has yet to repay the loan or $3.3 million in interest.

Mostert's report suggests that the Rhoodie brothers lived very well at government expense. In one instance, the report says, they allocated $9,200 for a private box at Pretoria's rugby stadium, ostensibly for use as a secret meeting place; only the brothers and their families ever attended a game. Deneys Rhoodie, who racked up more than 200,000 miles in government-paid travel in one six-month period, was described as billing the department for a New York-to-Los Angeles flight for the purpose of "evaluating the services of a typist."

But Mostert's report does not touch on the alleged attempt to purchase the Washington Star. As described by the Daily Mail, the department in 1976 "loaned" $11.5 million from the slush fund to Michigan Publisher John P. McGoff, who is co-owner with Eschel Rhoodie and Mulder of a large farm in the Transvaal, to finance a $26.3 million offer for the paper. Joe Allbritton, the Texan who owned the newspaper from 1974 until he sold it to Time Inc. this year, denies that McGoff ever approached him. McGoff, whose Panax Corp. publishing company acknowledges bidding for the Star before Allbritton bought it, has denounced the Daily Mail story about a South African loan as "utter nonsense."

With an overwhelming majority in South Africa's parliament, the National Party is secure in office. But some of its leaders could suffer permanent damage to their political careers and reputations. Largely because he flatly denied to parliament that government funds were involved in funding the Citizen, one leading Afrikaans newspaper has suggested that Mulder should "review his position'' --a euphemism for resign. Eschel Rhoodie has hinted that an unnamed three-man Cabinet committee supervised the operations of his department. Prime Minister Botha has appointed yet another investigating committee, which is supposed to report to parliament in three weeks. Even John Vorster's name has been mentioned in the scandal; Luyt told Mostert that he agreed to start the Citizen only because he was led to believe that Vorster had personally selected him for the job At one stage in the press inquiry into the scandal, a crusading editor received a message that allegedly came from the former Prime Minister himself. "Tell him to lay off," the word was passed, "or he'll have to deal with me."

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