Abramoff+-+South+African+connection



=Abramoff's South African connection=


 * Alec Hogg**


 * Posted: Mon, 09 Jan 2006 08:00 | © Moneyweb Holdings Limited, 1997-2005**

There is an interesting South African connection to the corruption scandal that’s rocking American politics, promising to escalate into a repeat of the Watergate debacle.

At the centre of the scandal is 46-year old influence-monger Jack Abramoff, who left behind a posse of unpaid creditors after making a B-grade movie here in the late 1980s.

Last week Abramoff pleaded guilty to a string of fraud charges relating, in the main, to providing gifts and entertainment for US Congressmen in return for supporting his clients. He faces between nine and 11 years in jail.

Abramoff’s plea bargain has lifted the lid off what The Economist magazine describes as “the biggest corruption scandal in a generation.” It is being likened to events which toppled US President Richard Nixon in 1973.

Among Abramoff’s admissions is that he took politicians on golfing weekends to Scotland; arranged luxury holidays for them at a Pacific island paradise; and regularly treated these elected officials to the best seats in the house at major sporting and cultural events.

Abramoff’s methods of garnering influence have already killed the ambitions of America’s second most powerful politician behind US President George W Bush.

Over the weekend, former House Majority Leader Tom DeLay abruptly changed tack, saying he would no longer seek to be reinstated to the position he gave up in September. After the lobbyist’s arrest by the FBI, DeLay, who once described Abramoff as “one of my closest and dearest friends” had temporarily resigned the most powerful post in the US Congress.

Abramoff, father of five and a supposedly devout orthodox Jew, has few friends in the new South Africa. The now infamous lobbyist’s involvement here happened during the late 1980s when together with brother Robert, Abramoff turned a script he had written into a movie called Red Scorpion. The story revolves around a Soviet “Rambo” played by Dolph Lundgren, who changes sides after initially being sent to assassinate a Western-friendly African leader.

Peter Leon of legal firm Webber Wentzel acted for those who tried in vain to get what they were due from Abramoff. He remembers the disgraced American as being “very closely connected to the right wing of the Republican party. There was obvious sympathy with the Apartheid Government which provided extras, military equipment and the location (Namibia) for the movie.”

Leon says: “Abramoff allowed the production company to go into liquidation. A lot of people weren’t paid. There was a court case but he (Abramoff) just disappeared. All involved in the movie suffered; actors, people who provided the equipment, everyone.”

Among those hurt was local casting doyenne Moonyeen Lee who recalls that “we were all so excited about making a movie here that it was a long time before we woke up to what was really happening. I remember a terrible fight when we realized that it was right wing propaganda. And although we tried for a long time afterwards, nobody who worked on the movie got paid.”

But the resurfacing of Abramoff’s sordid South African adventure is the least of the man’s worries. A media frenzy has erupted around the man. It is predicted that disclosures about his practices will have major implications. Experts believe it will alter the lobbying-for-influence industry in the same way that the collapse of Enron forever changed corporate governance and financial reporting.

Cheated thespians won’t be the only South Africans paying close attention to what emerges next in the Abramoff saga. Many in the corporate and media sectors are concerned that similar practices here are defended as legitimate “relationship building” exercises.

On Saturday, Personal Finance editor Bruce Cameron disclosed that the country’s biggest retail bank, Absa, intends paying for its specially invited guests to attend the World Cup soccer finals in Germany later this year.

Among Absa’s invitees was Financial Services Board (FSB) head Rob Barrow, who Cameron notes, declined the bank’s offer.

Speaking to Moneyweb yesterday, a still irritated Barrow confirmed the invitation and his rejection, and asked: “Is this widespread or just an aberration with Absa? I remember this kind of thing happening years back with the likes of TMA which used to induce brokers to give it business by taking them for holidays to the Mediterranean, that kind of thing. But I haven’t seen much since then.

“To me it’s clear cut, it’s a very basic thing. Whatever people want to call it, you don’t build relationships with your Regulator. And from our side, you don’t compromise your independence. You don’t even create the perception that your independence can be compromised.”

Disclosures of the promised World Cup jamboree is the second time in as many months that Absa has been thrust into the spotlight over Abramoff-style practices.

In November, Absa executives brushed aside criticism of an all-expenses paid junket for newspaper editors and their wives to the island of Reunion. They were defended by London-based David Roberts, executive director of controlling company Barclays Plc, who said it was an appropriate practice in South Africa.

The South African financial services regulator thinks differently. Says FSB Head Rob Barrow: “I would have thought that an ethical newspaper editor would have automatically turned down that trip to Reunion. How can you be wined and dined in that way and report independently about the company?”


 * From: http://www.moneyweb.co.za/specials/corp_gov/780024.htm **

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