Abalone: gangster trade flourishes amid the tentacles of ...

INVESTIGATION

Abalone: gangster trade flourishes amid the tentacles of corruption

Western Cape gangs and Chinese triads control the illicit abalone trade and use it as a political weapon, JOHN GROBLER has established in an 18-month-long and ongoing investigation.

PLEASE NOTE: This is an English translation of a Vrye Weekblad article offered to readers for their convenience.

Read the Afrikaans article here: 


Gansbaai harbour
COASTAL COMMUNITIES ... Gansbaai harbour
Image: JOHN GROBLER

A DECADE  of debilitating mismanagement of South Africa’s fisheries sector under former president Jacob Zuma has driven the illicit abalone trade in the Western Cape deep into the arms of Chinese transnational organised crime, seemingly for political purposes.

From a cottage industry 10 years ago, the abalone-for-drugs trade has grown into a multibillion-dollar component of international organised crime, with South Africa’s most notorious gangs now controlling the poaching – and nine Chinese triads the international trade into Hong Kong – by using an ancient, trade-based financial settlement system known as “Chinese Flying Money”, fei qian (Mandarin) or fei ch’ien (Cantonese).

This financial system is what ultimately identifies the abalone and drugs racket as Chinese organised transnational crime. Both the Chinese and the local syndicate launder their money by preference via properties, bought via front companies or in the name of other relatives, and sometimes cheaply as payments in a non-linear fashion.

Both also never get caught and appear deeply embedded in both South Africa and China, with political contacts reaching into the highest echelons of power in these countries.

None of this is really news, but what is notable is the extent to which local and international crime has integrated abalone and drugs into a vertically integrated business model by exploiting South Africa’s fragile race politics.

The abalone farm in Port Nolloth was closed down when the new Chinese owners were caught with illicit abalone.
SHUT ... The abalone farm in Port Nolloth was closed down when the new Chinese owners were caught with illicit abalone.
Image: JOHN GROBLER

The Numbers

On the white-sanded beaches and craggy bays from Cape Agulhas to Cape Columbine, the word is that The Numbers, the prison-based gang of the 26s, 27s and 28s, is now in charge. On certain days, whatever comes out of the sea – abalone, lobster, periwinkle – ̶ belongs to them, a former poacher explains.

The various abalone-bearing areas have been divided up among The Numbers’ associates, but ultimately, all answer to the 28s, as they all risk spending time behind bars sooner or later.

So just call me Jason, he grins from beneath the beard and oversized cap.

Like everyone else, he doesn’t want to be named when talking about the 28s, South Africa’s most feared prison gang, which now rules the Cape beaches from within the deepest confines of the prison system. The 28s run the jail system – and, over the past few years, also the Western Cape’s illicit abalone-for-drugs rackets.

Poaching of the slow-growing mollusc prized in Asia for its buttery taste is now dominated by gangs of young black divers who descend in broad daylight and in large numbers on the craggy beaches to strip out whatever abalone they can find without the police lifting as much as a finger.

Where they come from and who they work for is also no secret, said Jason. “We all know they are fresh from the Eastern Cape,” arriving by taxi from the Western Cape’s impoverished neighbouring province.  

In Masakhane, the township outside Gansbaai and the epicentre of the Overberg coastal zone at the heart of the poaching industry, one can see them getting off the taxis, making their way to what appears to be kinsmen' homes.

The Democratic Alliance has been complaining for years that even though up to 500 000 young job seekers arrive in the Western Cape every year, no additional law enforcement resources are being made available to address the attendant rise in violent crime.

The mollusc has a buttery taste.
DELICACY ... The mollusc has a buttery taste.
Image: JOHN GROBLER

Political weapon

What is new is abalone poaching emerging as a political weapon to conduct a poison-the-well policy. Once a sort of cottage industry for the impoverished communities of fishermen between Cape Columbine and Cape Agulhas, it has become the weapon of choice in a secret war to challenge what is perceived as the economic and political dominance of white people in the only province that the ANC has never been able to win since 1994.

By effectively allowing the abalone resource to be hijacked by local and Chinese criminal interests  – at a huge social cost to local communities – the abalone industry has been de facto, if not de jure, privatised by a process of political legitimisation into the hands of local and Chinese organised crime, it emerged from an 18-month-long investigation.

Ernie “Lastig” Solomon is believed to be the boss of the 28s and the acknowledged king of the Cape abalone poachers – so famous a movie was made about him.

He does not want to discuss his role in any abalone poaching, claiming to news website IOL that this was all in his past. He could not be reached for comment from Namibia, but according to the IOL profile, was only willing to speak as the self-styled “king of the Khoisan”.

This is highly politically significant: as so-called king of the Khoisan, Solomons does not feel answerable to modern laws imposed in the wake of colonisation. He appears to be saying “I am claiming what is ours” ­– and the ANC government appears to be accepting that claim.

Though official production is valued only at R218 million a year, the fisheries sector directly employs 27 000 people while another 100 000 depend on it as a resource in one way or another. Most of this is in the opposition stronghold of the Western Cape, where Zuma had held not-too-secret talks with the various heads of the Cape Flats gangs in the run-up to the 2006 elections, including with Solomons.

This process of criminal indigenisation started in 2007. That year, corruption-tainted Zuma took over as president and proceeded to dismantle key parts of the regulatory infrastructure and specialised law enforcement units that had protected marine resource until then.

In hindsight, Zuma and the gangs appear to have found common cause. By moving political control of the fisheries sector out of the environment and tourism ministry to an expanded agriculture ministry under Tina Joemat-Petersson, the Western Cape fisheries sector became part of Zuma’s corrupt patronage network – and worse, as the drug trade flooded the small coastal communities.

It was brutal financial carrot-and-stick politics, and the stick got used first. Artisanal fishing communities who for decades had depended on making a living from the sea suddenly found themselves denied a right to basic survival. That they were the poorest of the otherwise wealthy Western Cape and most likely to be sympathetic to the ANC seemed not to matter.

The carrot was political access: parliamentary reports dating back to 2012 cite the coastal communities' main complaint as being used as political fronting, their names employed by the politically well-connected to land those rights for their own pockets only.

In effect, Solomons and his ANC associates are manipulating the awarding of fishing concessions to their own advantage, acting like a pair of pliers squeezing the impoverished coastal communities into political obedience. Access to the current list of concessionaires is impossible by design. 

Police in front of a warehouse believed to be an illegal abalone processing facility on Bellville South.
RAID ... Police in front of a warehouse believed to be an illegal abalone processing facility on Bellville South.
Image: SAPS

Thrown open to the wolves

Over the past decade, the cottage industry that was local poaching was thrown open to the wolves, especially after the joint SANParks and SA Navy patrols were closed down, as was every other specialised law enforcement unit that posed a political threat to Zuma.

It gets worse: on the ground, the carrots are sugar-coated with drugs, as abalone is often paid for partly in drugs. Little, if any, detectable cash flows between the various players, who instead use a form of trade-based financial settlement. This has defeated any attempts thus far at cracking the syndicates.

That there was a lot of cash in abalone is evident from the false economy it has created: during official crackdowns in December last year, local businesses saw turnover crash and petty crime surge, said a local tyre dealership owner.

The attraction is easy cash: a diver delivering 20kg of abalone for one dive earns R20 000 for a few hours work per month; and the owner of a ski-boat heading up a 28-sanctioned crew R200 000 or more per month, according to the former poacher.

Where and how the cash comes from has, until now, largely remained a mystery. The secret of their trade is the ancient, trade-based financial settlements system known as fei qian or "Chinese Flying Money".

“How do the poachers get paid for hundreds of tons of abalone?” asked Marcel Kroese, a former head of enforcement at the directorate of agriculture, forestry and fisheries and now an international fisheries consultant. In his past experience, they only found small amounts of cash in illicit abalone busts, which was odd for a black market, cash-based business.

Following the money as a means of identifying the main players yielded zero results. “We could not ever find the money,” he said, making water-proof court cases a major challenge.

Alleged former gang boss Ernie "Lastig" Solomon, right, and controversial businessman Jerome Donkie Booysen, bottom left, attend the funeral of well-known defence lawyer Noorudien Hassan.
KINGPIN ... Alleged former gang boss Ernie "Lastig" Solomon, right, and controversial businessman Jerome Donkie Booysen, bottom left, attend the funeral of well-known defence lawyer Noorudien Hassan.
Image: ESA ALEXANDER

Drugs

Instead, payment was made in non-traceable shipments of precursor drugs used to manufacture tik, a cheap and highly addictive form of speed. Precursor drugs like ephedrine are often shipped to Walvis Bay and then trucked down to Cape Town to be cooked up in backyard labs and, from there, finding their way via the 28s and their associates in the poaching syndicates into the local communities.

People mostly pretend not to see the poachers. Farmers along the craggy Overberg coastline area say the poachers made it clear they would burn down their houses if they were obstructed in any way. Many are elderly, isolated and afraid and know the police offer little, if any, protection from the poaching gangs. 

This culture of fear has integrated organised crime into the very fabric of the local community, with everyone dependent on the trade in one way or another: from the lookouts and the garage owner selling them fuel to the granny storing a night’s catch in a backroom freezer.

In effect, this has pushed the artisanal fishing communities into the arms of organised crime, as epitomised in that photograph of Brett, former fisheries minister Zokwana and ANC MP Tebele. It is a picture that, at the very least, Solomons has shown to many people upon whom he wished to impress his political legitimacy.

Abalone discovered in April in Table View, Cape Town.
MILLIONS ... Abalone discovered in April in Table View, Cape Town.
Image: SAPS

Corruption

“It’s just shocking how open the corruption has become,” said former head of fisheries Shaheen Moolla, now MD of the highly influential fisheries advisory consultancy Feike. “But what do you expect when the DG [director-general of fisheries] admitted in Parliament that the department is basically in a meltdown?”

The turmoil in the directorate has in fact been a god-send to the fishing industry, both legal and not, as everyone is now bribing their way around regulations, said Moolla – and it has been like this since his stint as head of fisheries. “Even where we have gone to the minister with hard evidence, nothing ever gets done. Corruption is [now] at substantive levels,” he said. This corruption, he concurs, has its roots at the political level and has opened the front door to the likes of Solomons.

Solomons, local sources say, has big political ambitions and wants to become the ANC coordinator for the Overberg area.

So has the ANC’s alignment with the 28s produced the desired political Western Cape results in the May 8 elections? The results suggest not: both the DA and the ANC have lost voters, mostly to former Cape Town mayor Patricia de Lille's new GOOD party.

The only real winners have been the shadowy Chinese gangs known to have been at the heart of the drugs-for-abalone interface since the early 1990s.

In State vs Miller, the court set out in its 2017 ruling how the Chinese had operated a smuggling pipeline via the in-bond cold stores in Cape Town harbour (and likely also the Walvis Bay facility in Namibia) by using a specific set of numbers of 3, 4 and 7 to identify what amounted to production lines of poached abalone.

The Institute for Security Studies' Peter Gastrow in 2004 identified them as the 14K and Table Mountain Gang in 2004, believed to be the same group an earlier investigative article on the same topic had traced to a cluster of luxury homes in Plattekloof – all with a fantastic view of Table Mountain. As in the Miller case, all operations are run via brief-case companies set up in employees’ names, a common feature to a mysterious business empire that investigators believe to be worth several billion rand by now.

But linking these companies to actual acts of organised criminal behaviour in any court of law by way of a financial paper trail is well nigh impossible because it is all built on a cash-only system hidden behind a facade of legitimate operations.

Zuma’s political gutting of the various specialised law enforcement and prosecutorial agencies to enable massive looting is a matter of record. While there are still many really dedicated people left in the ranks, there is no political direction, says Moolla. The only specialised agency, the Hawks that handle abalone cases related to organised crime, are hobbled by a shortage of experienced staff and lack of resources.

But there is new light at the end of the tunnel: President Cyril Ramaphosa, when announcing his 2019 Cabinet in the last week of May, moved fisheries back into the environment and tourism portfolio and appointed rising ANC star and technocrat Barbara Creecy as minister.

This implies that at the very least, quotas for harvesting any marine resource will have to meet the quite strict environmental standards before being set and awarded.

But will she be able to stop the culture of corruption that has engulfed the fisheries sector? Its anaemic contribution to the gross national product relative to the country’s 2 850km-long coastline is a clue to a larger but hitherto ignored reality: a large part of it appears to have disappeared into the international black market, the largest of which is Hong Kong, where just the illegal abalone trade is conservatively estimated to be worth R1,5 billion a year.

If the associated drug trade is included, this implies a Chinese syndicate turning over several billion dollars per year that has the entire Western Cape political elite in its pocket.

What is needed, according to Feike’s Moolla, is political inclination to deal with the problem, the manpower and political will. But Creecy is up against it: no-one knows the abalone poaching industry better than the Chinese. “They told us often, ‘Your officials are very cheap, so easy to bribe,’ ” says Moolla.

And until that changes, nothing will break the Chinese chokehold over South Africa's abalone resources.

The former poacher has the best advice, though: “We always made sure they never owe us more than R10 000 because that’s what it cost to hire a Chinese hitman in those days. Because then it became cheaper to whack you than pay you.”

It’s advice that Creecy would do well to heed in dealing with Chinese interests, both on and under the table.

 

  • This article was made possible wih financial support from the EU Journalism Fund's Money Trail grant programme.
  • This story was updated on the 11th of June 

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