hundreds of thousands of rand into a top-secret trust hidden from his donors and trustees. Pat Sidley and Justin Pearce report THE Weekly Mail & Guardian has discovered that Dr Allan Boesak and some of his close colleagues set up a trust for business operations, so secret his donors and trustees didn’t know about it.
This is the latest in a series of allegations of financial mismanagement plaguing the ambassador- designate to the United Nations in Geneva. So serious have these allegations become that Boesak and at least some of his staffers are facing the possibility of criminal prosecution.
Boesak’s Foundation for Peace and Justice ploughed hundreds of thousands of rand into his Rural Ministries & Development Trust (RM&DT). But trustees of the foundation did not know of the existence of the RM&DT, nor did the funders whose money was being used. And RM&DT trustees were themselves not informed of all its activities.
The trust was intended to operate various business interests, including the Kings Hotel in East London, which would be profitable and in turn fund the foundation’s charitable projects. This was seen as a way of securing financial self-sufficiency for development projects because foreign funding appeared to be drying up after 1990, and the foundation did not have a mandate to sponsor profit-making projects. According to the WM&G’s sources, at least R400 000 of foundation money was lost through the RM&DT.
The RM&DT was set up with four trustees: Boesak, foundation treasurer Freddie Steenkamp, Cape Town advocate Denzil Potgieter and Boesak’s spokesman and business associate Norman Michaels. The purse strings were apparently controlled by Boesak and Steenkamp. A former RM&DT trustee, who asked not to be named, said he was not aware of the trust having received any money or carrying out any development projects. However, the WM&G has reliably learnt of an account at the First National Bank in Bellville in the name of RM&DT, which on at least one occasion was used to settle foundation debts. There were, according to sources, international brokers and large commissions planned if the RM&DT turned a profit, but that did not occur.
On at least one occasion last year, questions were raised about the possible involvement by Boesak and some of his associates in a fishing business. The issue was resolved when Boesak’s involvement was denied and Michaels announced the venture had been entered into on behalf of small fishermen. Some observers did wonder why no fishermen were represented in the company, and why a noble venture had been undertaken in secrecy.
The disclosure of the secret trust and allegations that have surfaced during the past two weeks have forced the foundation’s trustees to call in an independent firm of auditors. This investigation is running alongside one initiated by DanChurch Aid and backed by Scandinavian donors, who have hired Johannesburg attorneys to investigate the problems of the foundation’s expenditure and the allegations of irregularities.
Foundation trustee chairman Reverend Jan de Waal, a close friend of Boesak, has denied trustees could have been aware of any possible wrongdoing. He said the trustees had called in auditors.
Late last year, as the problems became clearer to funders and clergymen, Dr Beyers Naude and Professor Charles Villa-Vicencio went separately to Deputy President Thabo Mbeki to prevail on him to pressure Boesak into clearing up the mess. Both urged Mbeki to suspend Boesak’s posting to the UN until the air was clear. These missions followed repeated attempts to get Boesak to deal with the problems himself.
As events unfolded this week, former trustees and staffers of the foundation, for many years a church- based anti-apartheid organisation, told of their misgivings.
Villa-Vicencio, an academic and clergyman, resigned his position as a trustee of the foundation in January 1992 because of what he saw as a lack of transparency. Trustees seldom met and when they did they were given so little adequate information that Villa- Vicencio believed he could not properly perform the task of a trustee. When he resigned, he told donors why he was doing so. At that stage donors had not yet raised serious questions about the running of the foundation. Shortly afterwards, however, some inquiries wer made. But all suggestions of impropriety were met with the stock response that enemies of Boesak had their own agendas.
A long-standing associate of Boesak suggested it was Boesak’s political standing, and the political paranoia of the 1980s, that allowed the alleged mismanagement of the foundation and other funds to continue.
An official of one of the Scandinavian funding agencies which bankrolled the foundation said the agency provided funding “based on the confidence from our side that organisations know their business”. “We should have started talking a long time ago,” said one former staff member, “but there was no tangible proof, and jobs were scarce.” Former foundation staff member and trustee Leslie Liddell and former staffer Sandra Vlotman made a statement this week indicating their discomfort at the running of the foundation and at the involvement in it of Boesak’s wife, Elna.
The RM&DT trustee who spoke to the WM&G was also a trustee of the Eleutheria Trust which funded Elna Boesak’s video production company, Camelot Communications, and was unaware of any formal connection between Eleutheria and the foundation. The source said Eleutheria had apparently been set up for similar reasons as RM&DT, namely to do work which might generate profits, and which therefore fell outside the foundation’s ambit.
However, Camelot operated from foundation offices in Bellville and continued to use foundation premises after the operation was moved to central Cape Town. Comments by staff and others who had dealings with the foundation point to the following characteristics: * Secrecy around how money was spent.
* A lack of distinction between the funds of the foundation, the trust, Eleutheria and Camelot — with Boesak and Steenkamp and/or Elna Boesak holding the purse strings.
* Trustees kept in the dark. Former foundation staff members say that all executive decisions concerning the foundation were taken by Boesak and Steenkamp.
* Former staff and other observers have pointed to the apparent extravagance with which the foundation operated at a time when staff were being told to tighten their belts. This extravagance was apparently echoed in the lifestyles of the Boesaks and Steenkamp.
Aside from Boesak’s political and career problems and the possibility of criminal charges, he faces personal ruin and bankruptcy.
Discipline, dedication pays off Nombuyiselo Maloyi TEAMWORK and discipline create the magic for good results, says the principal of Reasoma High in Soweto – – which produced Gauteng’s top Department of Education and Training matric pupil, 19 distinctions and 38 university exemptions among its 81 students writing matric. Reasoma is led by women, principal Thembi Buthelezi and vice-head Smileth Ntutela, and has never before had matric students. The school began in 1990 with a Standard Six class only and was temporarily housed at Tetelo Primary School in Protea North. Two years later it was moved two kilometres away to its own hastily constructed brick buildings, and Standard Seven and Eight classes were added. The school has more facilities than most, with a library and a laboratory. A single computer has recently been donated. The school goes up to Standard 10, with a student complement of 1 135 and a teaching staff of 38. Classes average about 30 students.
“Our pupils are a very co-operative group and highly motivated,” says Buthelezi, who adds that parents respond to every call at school. Reasoma students don’t pay school fees: they participate in fundraising in the community, projects such as raffles, cake sales and — at the school — fines for teachers and students who breach discipline. Such activities create a good team spirit between teachers and pupils. Teachers don’t have a problem with textbooks at the beginning of the year because they have a good system of collecting textbooks from pupils. “Books outstanding means results outstanding,” says Buthelezi.
Discipline is so strong at Reasoma (which means “we are working”) that the school is known as “Sun City”, the nickname of Diepkloof prison.
But Buthelezi believes the only way to restore the culture of learning and teaching in school is for both teachers and pupils to be committed to work in harmony with their principals. It has certainly worked for top matric pupil Khopotso Tsotetsi, who said if it had not been for the support of teachers and parents, she wouldn’t have made headlines. “I just realised how wonderful and good they are.” She said the teachers had been like parents to them. Buthelezi says the new, single education department should balance resources. She believes one of the major factors contributing to the high failure rate in DET school was the pressure black pupils were under, writing two papers a day.
All in all, however, the outgoing DET produced better results this year than last, with 4 014 distinctions attained, compared with 1 405 in 1993. Countrywide more than 30 schools achieved a 100 percent pass rate. @ Trustees `not responsible’ THE Reverend Jan de Waal, close friend and chairman of the board of trustees of the Foundation for Peace and Justice, does not believe he or other trustees should take any responsibility for any possible financial irregularities which may appear from investigations into the foundation.
De Waal, who is one of the few original trustees still attached to the foundation, was responding to questions about his own role in the possible foundation financial mismanagement in not having seen irregularities.
He said the foundation had “practically ceased to exist” and in 1994 it had been decided to close it. However, there were no meetings of the foundation trustees (and had not been any apparently for two years) and so the decision had not been effected.
“Our role (as trustees) was a matter of delegation,” he said. Staff, he said, were trusted to carry out their tasks and trustees were never asked to participate in the running of the foundation. “What we relied on at the annual meetings were the reports (financial and narrative) which did not show anything untoward”.
The donors, including DanChurch Aid (the Danish donor agency), were co-operative and there was no hint of negligence or recklessness.
He said that when the foundation had been under control of the Belville church congregation, there had been more accountability and reporting.
Part of the problem in recent years had been the fact that there were no meetings of trustees, and neither he nor Boesak had communicated regularly over the running of the foundation. One of the reasons for this was Boesak’s frequent trips which had taken him away from the day-to-day running of the affairs of the foundation.
Because of the problems now becoming evident, the foundation trustees had called in their own independent auditors to thoroughly investigate the situation.
De Waal said he had never benefited from money that had passed through the trust nor had he or other trustees been asked by donors to guarantee the accuracy of the amounts reflected in financial reports.
He denied that his close friendship with Boesak had obscured his ability to see a looming problem clearly. He remained a friend of Boesak.
Meanwhile, Boesak, who broke his silence this week, has distanced himself from any possible wrongdoing within the foundation, effectively blaming staff for any problems that arose.
He also denied that he had been involved in any unauthorised financial dealings or any mismanagement of the funds and stated that he was not asked by President Nelson Mandela to withdraw from his post as ambassador designate to the United Nations in Geneva.