Organized Crime in South Africa
STRATFOR's sixth in-depth look at organized crime focuses on South Africa. The abysmal social conditions created by apartheid made organized crime appealing to some segments of the local population, while organized criminals from other countries are attracted to South Africa's comparative stability and reliable infrastructure.
Editor's Note: This piece is part of an ongoing series on organized crime worldwide.
Few countries have seen such a positive turnaround in the past two decades as South Africa. Emerging from a broadly condemned policy of apartheid and decades of economic stagnation in the early 1990s, the nation of 45 million people at the southern tip of Africa has become a hub of business activity in the continent and an attractive destination for tourists and businessmen from the rest of the world. Gross domestic product growth has steamed along at around 5 percent since 2000, and South Africa is fostering relations with other developing countries in anticipation of increased investment in Africa during the 21st century. On top of all this, South Africa will host the World Cup in 2010, marking its move from pariah status to the world spotlight in just under 20 years.
But the same characteristics that attract foreign investors — world-class infrastructure, economic stability and good climate — also attract criminals. Organized crime is very visible in South Africa, from the drug trade to stolen cars to poached snails. Both indigenous and foreign criminal syndicates darken the positive image that South Africa has fostered for the 21st century. The legacy of apartheid, the political instability it created in the 1990s and geography have shaped the criminal world in South Africa into what it is today.
Organized crime in South Africa can be traced back to the gangs that operated in the prisons there starting in the late 19th century. Just as in prison systems around the world, survival in South African prisons at the time (and today, to a lesser extent) required membership in a gang for protection and sustenance. Prison wardens were at best indifferent to the health and well-being of criminals and at worst, physically beat them or denied them their basic needs. The organization of prison gangs ensured security against aggressive guards and facilitated the flow of necessities like food and water to counter the indifferent guards.
But organized crime in South Africa did not really pick up until the era of apartheid. After South Africa became a sovereign state in 1938, the ruling white class (by far the minority in a predominantly black country) quickly enshrined a system of strict segregation that had already loosely been in place. The system was designed to disenfranchise blacks and protect the power of the whites — especially the Afrikaner population, whose political party, the National Party (NP), held a firm grip on power until 1994.
By the late 1940s, blacks had been systematically removed from urban areas in Cape Town, Johannesburg and any other city where whites lived and placed into peri-urban areas known as townships. The general motivation for these moves was fear of unrest. Blacks formed a majority in the country and whites feared that their power could easily be undermined by sheer force should blacks become unhappy with the political arrangement. The townships were created in order to control (or at least attempt to) activities within the black community. But the black population generally was not moved far; townships were always located just on the edge of towns so they could be closely monitored and drawn on as a source of cheap labor.
The notion of "separate but equal" failed just as miserably in South Africa as it did in the United States. While blacks in the townships were supposedly seen as equal under the law, their situation was noticeably worse than that of neighboring whites. From the education system to medical care to the organization of labor, blacks were consistently and purposefully suppressed and treated as inferior.
As the situation in the townships got worse, people did start to organize to protest the apartheid policies. The banning of political parties, including the African National Congress (ANC), made all forms of anti-government political organizations illegal, so any meetings and coordination had to be done in secrecy. Secret labor unions began to form; groups that wanted to talk about the political situation would meet up secretly at shebeens — the townships' versions of speakeasies. These activities themselves are not considered organized crime, but the fact that even the most benign of civic actions were forced underground gave an air of conspiracy to almost any activities in the townships. The ANC, formed in the early 20th century, was forced to go underground during this period. A militant wing of the ANC — referred to as the MK, short for Umkhonto we Sizwe, or "Spear of the Nation" — formed in the early 1960s. It was moderately successful in attacking government interests but mostly only led to crackdowns in the townships.
Overseeing the day-to-day security of the townships was the South African Police Service (SAPS). Infamous for its brutality, the SAPS paralleled the prison guards of the 19th century: at best negligent, at worst extremely violent. The police were not stationed in the townships to provide order and security to the inhabitants; they were there to root out and crack down on any kind of activities that could be seen as political subversion. As for internal stability, the police were ambivalent toward violence among blacks. If they had any opinion on it at all, they probably condoned the violence, since keeping the opposition divided is a good way to control the population.
The spread of communism in sub-Saharan Africa and uprisings in the townships during the 1970s and 1980s threatened the regime and led to some of the most violent police crackdowns under apartheid. Blacks in South Africa had positive views of the liberation movements in Angola and Mozambique aided by the Soviet Union and its proxies. Blacks largely saw those movements as victories over white rule in southern Africa — a view that was worrisome to the South African government. But the involvement of the Soviet Union introduced the threat of communism into South Africa's security equation. After the Portuguese left southern Africa in 1976, and with Rhodesia facing serious difficulties fighting Zimbabwean liberation movements, the South African regime became nervous of being surrounded not only by black uprisings in neighboring countries, but also by communism. That many blacks sympathized with the revolutions (not necessarily because of communism, but more because it marked the end of white rule there) made the South African elite even more nervous.
Subsequent uprisings in the townships were met with harsh crackdowns. Mass casualties were inflicted by the police during protests outside of Johannesburg and Cape Town, further riling the population in the townships. By the late 1980s, facing economic troubles and soaring security costs, the NP began negotiations with the ANC and other political parties marking the beginning of the transition out of apartheid. By 1992 (not coincidentally, around the time of the Soviet Union's collapse), apartheid officially ended and by the 1994 elections, the ANC formed a government, ending more than 50 years of one-party, white-minority rule.
While the end of apartheid was a cause for celebration, there were dark sides to the event. The gangs and conspiratorial networks that had formed during apartheid were now no longer confined to the townships. Severe restrictions on the movements in and out of townships were immediately revoked, releasing the populations of townships (and the criminals among them) to move about the country and cities freely. A police force that for so long concentrated on stamping out political subversion was not able to control street crimes like drug dealing, thefts and stick-ups. The political wrangling over the future of the state police weakened law enforcement further. The result was a crime wave during the 1990s that is still visible today.
As outlined above, organized crime in South Africa really got its start in the prison system in the 19th century. Gangs formed within prisons to provide protection and basic needs for prisoners, and as prisoners were transferred across the country and served sentences at various locations, the gangs spread. By the time apartheid had become institutionalized in South Africa in the 1940s, the prison gangs were nationwide and were referred to as the Numbers. The 26s and the 28s are the two most prevalent gang systems in South African prisons. Membership in the gangs required a brutal initiation that often included killing a guard or fellow prisoner. The gangs built their history around folklore and a tradition of hierarchy. As members circulated between confinement and freedom, knowledge of the gangs spread across the prisons and townships of South Africa.
Living in prison was difficult in South Africa and so prisoners required tight groups to watch each other's backs. But the need for such protection gangs did not arise in the outside world until the 1970s and 1980s, when the situation in the townships became ever more heated. It was during this time that some of the "super gangs" of today got their start — groups like the Americans, a gang that got its name by identifying strongly with American paraphernalia. Meanwhile federations of gangs like The Firm gained strength and consolidated their resources.
Gangs may have gotten their start providing protection in the townships, but they quickly used their strength to work their way into the drug market. The Americans, allied with other local gangs like the Mongrels and Fancy Boys, and The Firm all got started in Cape Town — the center of criminal activity in South Africa where over 130 gangs are expected to be operating. In the late 1980s and 1990s, as more and more drug dealers and street gang bosses started going to jail, the connection between the prison gang system and the street gang system converged. The Americans and their allies aligned themselves with the 26s and the federation of gangs under The Firm aligned themselves under the 28s. By aligning with the Numbers gangs, the street gangs were exposed to a national network of criminals. Names and numbers mixed so that a franchise system was formed, with street gangs all over the country lining them up with the 26s (headed by the Americans) or the 28s (headed by The Firm).
Both major street-gangs-cum-drug-syndicates operated much like a corporation. The Firm (founded by Colin Stanfield) and the Americans (founded by Jackie Lonte) built themselves up during the 1980s and 90s, merging with, swallowing up or simply stamping out the competitive local gangs. Their business plans called for them to be wholesalers; they both knew that the real money and power in the drug business lay in providing the drug dealers with product and forging partnerships with international drug producers.
Stanfield grew his operation and organized its drug activities into sectors, creating a system of what the Institute for Security Studies called "generals" to control areas like Johannesburg, Durban, Cape Town and any other market of significance. Local gangs had already taken over many of these areas, but instead of battling resistance, Stanfield essentially bought them out. He promised to provide the local gangs with a steady supply of drugs in return for their allegiance (ISS). In this way, Stanfield could grow The Firm quickly and pragmatically — invariably making enemies along the way, but getting his way largely through pragmatism. As a testament to his popularity in the Cape Town community, thousands of people from all over Cape Town attended his funeral in 2004; the locals there saw him as more of a community leader and hero than a criminal.
While a neat separation into two gang alliances facing off over the control of drugs in South Africa certainly plays well for the media, in reality it was not that simple. When drug wars erupted, allied gangs were expected to cover each other according to their Numbers alliance, but personal and economic interests often overcame national allegiances. Territories and drug shipments were still fought over, and the ephemeral nature of street gangs (very few gangs outlived their creator) made South African crime groups much more complex than the 26s versus the 28s. Furthermore, Stanfield's death from cancer in 2004 contributed to the instability in South Africa's 21st-century organized crime environment. The SAPS estimates that there are 10-15 major crime bosses in charge of the street gangs and drug syndicates of South Africa.
Another important element of South African organized crime is heist gangs. These hold-up and theft gangs might be associated with one of the larger drug dealing syndicates, but for the most part they too are ephemeral. The fierce competition among heist gangs has led to a kind of heisting elite. The most successful (and thus richest) heist leaders display their wealth conspicuously — wearing nice clothes, drinking expensive imported whiskey and driving nice cars. According to the book Gentlemen or Villains, Thugs or Heroes? by Jennifer Irish, an organized crime expert from the South African Institute of International Affairs, heist gang leaders will advertise their success to show other potential heist members that they are successful and worth building a team around. Lifestyle is a resume in the organized crime world and the more successful one looks, the more others want to work for him and be associated with him.
According to Irish, heist gangs usually consist of around 10 people and will work for weeks or months conducting surveillance on their target — whether a bank, cash-in-transit truck or a car dealership. They are made up of professionals who often have to provide money up front to finance the operation; considering the cost of such operations, members may have to put up several thousand dollars each, a barrier that can keep unestablished operatives from joining in. Due to the high security that the heist teams have to overcome, operations (especially those against cash-in-transit trucks) usually involve excessive violence, according to Irish's book. Expert drivers will run trucks off the road, then someone trained in explosives will blast open the truck while others stand back to provide cover fire. Guards are shot and often killed in an effort to get the money.
Ironically, more security features have meant more violence. Before major security companies like Chubb and Brinks came to South Africa, cash transits were done in regular cars, and personal vehicles typically did not have anti-theft systems. But cash now travels in armored trucks, and anti-theft systems come standard with most cars. The result is that criminals now use more violent measures to get their prize. Whereas before, heist gangs could overwhelm a cash-in-transit car with handguns and the threat of violence, they now use assault rifles and explosives, and many more bystanders are killed as a result. In the case of private vehicles, security systems have led to an increase in carjackings since the criminal now needs the occupant in order to get the car. Measures meant to increase property security have actually decreased personal safety in South Africa, according to Irish's book.
Economically, carjacking, cash-in-transit heists and cargo theft do not compare to the business of drugs. While the drug market puts South Africa on the global radar for heroin and cocaine producers and sellers around the world, the direct effects of heists usually stay closer to home. Stolen goods and money obtained from heists act primarily as currency in the informal markets in Zimbabwe, Swaziland and Botswana discussed above. Heists are also relatively rare. While over 100,000 drug related crime deals took place on the corners all over South Africa in 2007, according to the SAPS, there were 144 bank robberies, 395 cash-in-transit heists and 14,201 carjackings in 2005. But heists are much more visible, violent and perceived as random among the general population. While most heists take place without shots being fired, there are plenty of stories of people being dragged from their cars and shot on the sidewalk as the perpetrator (usually an amateur, for professionals rarely have to use force) drives off to cash in.
Both the drug syndicates and the heist gangs are loosely organized and alliances (while generalized by the media into the 26s and 28s) are very amorphous. The low-level, local street gangs are very territorial and will not hesitate to kill people who violate their territory, but mid- and upper-level leadership often coordinate and share resources when needed. Heist gangs are even more nebulous.
Organized Crime in South Africa benefits from the country's geography on three levels. Globally, South Africa's position between the Indian Ocean basin and the Western Hemisphere makes it an excellent transshipment point for drugs, stolen and counterfeit goods and other illicit contraband. Regionally, South Africa is a haven of (relative) stability on the tip of the volatile continent. Its advanced financial, transportation and communications infrastructure attract criminal enterprises from other countries in the region. Finally, within South Africa, the legacy of apartheid shapes the geography of race there. The high levels of inequality created a powder keg that went off after the fall of apartheid.
South Africa sits rather conveniently at the nexus of the global drug trade. Heroin-producing countries like Afghanistan, Pakistan and Thailand in Asia lie along the Indian Ocean basin to the east of South Africa, while the cocaine producing countries of Colombia, Peru and Bolivia in South America lie to the west. When these two regions trade their wares, South Africa stands to benefit as a middle man. As evidence of South Africa's popularity among international criminals (and terrorist organizations, too), South African passport forgery is a booming business. In 2004, British authorities uncovered a passport forgery operation in London along with boxes of thousands of forged South African passports.
Additionally, South Africa's colonial past gives it connections to the United Kingdom and the Netherlands, two very lucrative drug markets and gateways to the rest of the wealthy countries of Western Europe. South Africa supplements shipments of foreign-produced cocaine and heroin to Europe with its own domestically and regionally grown marijuana. According to the United Nations Office on Drugs and Crime (UNDOC), southern African countries accounts for 10 percent of global marijuana production. South Africa provides the majority of marijuana to the United Kingdom and is responsible for a large share of marijuana consumed in Europe. Worldwide, South Africa's share of the marijuana market is growing. The UNODC estimates that a gram of marijuana in South Africa will fetch around $0.20 whereas the same amount will fetch $10-$15 in Western Europe; thus there is financial pressure to export marijuana.
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Of course, the Indian Ocean-South American-European trade triangle does not only handle drugs. All kinds of contraband, from stolen cars to abalone (a mussel considered a delicacy in China) follow these routes. Understaffed ports and lack of strict oversight make South Africa even more attractive to transnational criminal groups operating out of China, Russia, Italy, the United States and Colombia.
Regionally, South Africa is an attractive base of operations for criminal groups in nearby Zimbabwe, Swaziland, Angola, Democratic Republic of the Congo and, farther away, Nigeria. Even by world standards, South Africa is an advanced economy with reliable financial and telecommunications services and a redundant transportation infrastructure. Compared to the rest of the countries in sub-Saharan Africa, South Africa has an infrastructure and relative stability that makes the country an economic magnet. While plenty of legitimate businessmen and traders flock to South Africa to run their operations, criminal organizations are attracted there, too.
South Africa's transportation and telecommunications infrastructures and financial services outstrip neighboring countries'. Africa's busiest seaport is in Durban, and Johannesburg has the busiest airport on the continent. South Africa has redundant road, telephone and high-speed Internet networks that, while not quite as reliable as North America's or Western Europe's, far outstrip its neighbors. The biggest international banks operate there, too, and while Barclays, Deutsche Bank and JPMorgan operate all over Africa, the concentration of world class financial services in Johannesburg and Cape Town is not seen anywhere else in southern Africa. Criminal syndicates operating in places like Nigeria or Mozambique that are looking to expand see South Africa as an essential market — both in carrying out their criminal activities and in spending their wealth.
Besides the fact that South Africa has become a regional business and trade hub for sub-Saharan Africa, migration to the country spiked after apartheid when the borders opened up and trade increased as South Africa returned to the international community. There are hundreds of thousands of Nigerians there illegally, and nearly three million Zimbabweans have come to South Africa seeking a more stable home. Certainly not all of these people are criminals, but often low-skilled, impoverished immigrants turn to crime early on and then build upon it, with the successful ones making a career out of it.
South Africa's success has created regional inequality, which has led to a boom in organized crime.
Just as South Africa has had to deal with the unintended consequences of regional inequality, it has also had to deal with the very intentionally created domestic inequalities. The geography that was created during 50 years of apartheid has created very wealthy, white neighborhoods next to squalid townships where blacks were forced to live.
The policy of apartheid created 10 "Bantustans" — territories declared independent states and set aside by tribal identification by the apartheid South African government, aimed to be a homeland and destination for surplus black labor — that were designated as black-only areas similar to the U.S. system of Native American reservations. This rigorous segregation was enshrined in the 1950 "Groups Areas Act" that essentially barred blacks and whites from living in the same area. Leaving the Bantustans was tightly restricted by the police, and blacks had to have the proper paperwork in order to leave the area; anyone caught without the requisite "pass book" would end up in jail. Along with the Bantustans were districts and townships. Two of the biggest and most commonly referred to districts are the Cape Flats (the black-only area on the outskirts of Cape Town) and Soweto (short for South Western townships), situated accordingly outside of Johannesburg.
Inside these zones, the living conditions were miserable. Whole families lived in shelters constructed of mud and whatever materials they could salvage. Education, medical and law enforcement services were well below standard, and blacks were disenfranchised from the political system. In some Bantustans, residents technically even lost their South African citizenship (a measure which was overturned by the ANC when it came into power). In stark contrast, whites lived in comfortable suburbs, and their movements were not restricted. In the townships, poverty fueled high crime rates and indifference from the national police created a demand for security within the townships. Street gangs provided security to youths and used their collective power to steal from others, creating a kind of gangland rule of law within the townships.
Alcohol and Mandrax (a sedative drug, legal until 1977) were restricted or altogether outlawed in the Bantustans. The consequences of this were similar to prohibition in the United States; local bars known as shebeens sprouted up all over the townships, initially peddling illegal alcohol. By the 1980s, the role of shebeens expanded and they became much like speakeasies, where locals could come to socialize and get other illegal goods like marijuana and credit. The evolution of shebeens into the business of credit solidified their illicit nature. Once cash entered the mix, shebeen owners found it necessary to employ street gangs in order to collect their debts and keep other shebeens from encroaching on their territory. Thousands of shebeens existed throughout the townships in South Africa and, although they existed illegally, police did not always intervene, as they were more concerned with stamping out political opposition, not enforcing alcohol restrictions.
The Bantustans created during apartheid in South Africa created a parallel society in the country, and when apartheid ended, the social effects that came with reintegration mirrored the economic reintegration that occurred in Germany after the fall of the Berlin Wall or the shock that Russia went through after the collapse of the Soviet Union. The magnitude was smaller in South Africa, but years of segregation had shaped the country's geography and demographics and all of that came crashing down when the ANC came to power in 1994 and abolished the Bantustans. All of a sudden, impoverished and angry blacks were free to go wherever they pleased.
Certainly not all residents in the Bantustans were criminals, and the shebeens by no means had a monopoly on organized crime. White South Africa had its fair share of criminal activity as well. Organized criminals were relied upon to work around the sanctions that were placed on South Africa because of their apartheid policies. La Cosa Nostra boss Vito Palazzolo was offered sanctuary in South Africa after escaping from a Swiss prison in 1986. He helped the South African government bust sanctions and in return was allowed to conduct his criminal activities (largely money laundering) from within the country. Also, members of the government and especially members of the state police were involved in the illegal trades of precious stones from neighboring countries, ivory, weapons and marijuana to support state coffers and supplement their own salaries. By the end of apartheid, few aspects of South African society were not involved in some kind of illicit activity.
While Palazzolo was running money-laundering operations for La Cosa Nostra in South Africa during the 1980s, many other foreigners were taking advantage of the chaotic environment in South Africa and still do to this day. Russians (who were undergoing their own organized crime renaissance during the 1990s), Indians, Nigerians, Chinese, Zimbabweans and many others were getting in on the action. South Africa was a kind of organized crime free trade zone where criminals (as long as they shared their earnings with the appropriate power brokers) could wheel and deal as they pleased.
Viktor Bout, the infamous weapons dealer, operated out of South Africa during the late 1980s and early 1990s (while his home, the Soviet Union, was breaking up). He operated an airport along the Botswana border and put the entire staff on his payroll. Before he was chased out of the country, he supplied weapons from the Soviet Union to arm conflicts in Angola, Liberia, Mozambique, the Democratic Republic of the Congo and Sierra Leone. Once the criminal world in Moscow really got heated up in the mid-1990s, Russian mobsters saw South Africa as an ideal place to launder their earnings. Russians there bought up property and used car dealerships and traded in precious stones. In fact, Bout often accepted precious stones as methods of payment for his arms deliveries, seeing as how many of the countries he supplied were rich in them. It is likely that he went on to sell these stones to fellow Russians in Johannesburg or Cape Town as a step in their money laundering activities.
In the early 1990s, the Indian criminal boss Dawood Ibrahim was interested in South Africa as a source of cheap labor. In Misha Glenny's book McMafia, Ibrahim's network is said to have recruited men from South Africa and put them to work on the construction sites in Dubai, Abu Dhabi, Doha and other oil-rich cities on the Arabian Peninsula. Going the other direction was heroin harvested in Afghanistan and Pakistan and shipped out from Karachi, where Ibrahim's network had considerable power. This trade relationship was not quite slavery (South Africans signed up to go and were paid — not well, but paid nonetheless) but the hopeless situation for blacks in South Africa made this arrangement particularly sinister.
Triads, the criminal groups that work out of China, have an interest in the South African abalone supply (and poached products in general). Abalone has been over-harvested in the waters near China, and Chinese suppliers have been forced to look further and further abroad to find stocks of the delicacy. South Africa's waters still have abalone (for now, at least), and so Triad gangs are attracted to the market there. Neighboring countries also provide poached products like ivory, shark fins and endangered hides to gangs tied to the Triads operating in South Africa.
Nigerians make up a large proportion of criminals in South Africa. While there is disagreement over exactly how they got involved, the relative stability of South Africa was the underlying factor for their success there. Nigerians started trickling into South Africa during the 1980s, but once the restrictive border was opened up after apartheid, immigration from Nigeria boomed. There is even a district of Johannesburg named "Little Lagos" after the capital of Nigeria. Naturally, not all came for criminal reasons, but Nigerians are behind much of the crime in South Africa. They are blamed for introducing the drug trade to South Africa; while small-time trade had always taken place in South Africa, there is a correlation between Nigerians arriving in South Africa and the increase in drug activity. They have not restricted themselves to drugs, though. Nigerians are often behind car-theft rings, the weapons trade and, most famously, phishing scams. Relying on South Africa's more reputable business environment, Nigerian e-mail scams often route the money through a bank in South Africa or, in more elaborate schemes, involve meeting the target in South Africa.
Since the fall of apartheid and the incorporation of South Africa back into the international system in the early 1990s, other avenues of prosperity besides crime have opened up to the population. But many in the generation of blacks brought up in the townships under apartheid and illegal migrants from neighboring poor countries still see crime as the easiest way to earn money. Top criminals can pull down hundreds of thousands of dollars a year in a country where the per capita gross domestic product is around $5,400. South Africa's top criminal boss — The Firm's Stanfield — was a millionaire many times over, with investments (both legal and illegal) all over the country.
The economy of organized crime in South Africa also requires investment into the community. Criminals who have the support of a township or a whole city (like Stanfield did in Cape Town) are in a much more powerful position than criminals who are simply seen as drug dealers. People who turned out at Stanfield's funeral in 2004 praised the man for paying their utility bills and providing food and water when times were hard. By paying attention to those who were largely neglected by the government, Stanfield ensured that when the government came looking for him, it was not likely to get any help from the people he assisted. Stanfield was eventually arrested on tax evasion charges but was only in prison a short while before being diagnosed with cancer and released shortly before his death.
Building up the kind of community support that Stanfield had took money. Granted, he was only providing the most basic of services, but he did so for many people. In the end, he earned more money selling drugs than he paid for people's support, but buying support most likely cost him a large percentage of his holdings.
Of course, Stanfield could not just deposit his net earnings at the nearest bank branch and go about his business; laundering the money is the second job that every organized criminal must take after becoming successful enough to draw attention from law enforcement agencies. Virtually any business venture can be converted into a money laundering operation, but the most attractive outlets are ones that do not attract too much attention and have a high rate of cash turnover so as not to raise suspicion from investigators. Businesses that fit these criteria are bars, restaurants, cash loan businesses and cell phone shops. Before the end of apartheid, shebeens (ever the home of illicit activity) acted as effective money laundering operations. But for those more successful, discerning criminals who have more cash to launder than would be possible to run through a bar or cell phone shop, there are more elaborate solutions: Car dealerships, real estate investments, casinos or physically moving stacks of cash strapped to couriers' bodies over borders and into foreign operations can place a barrier between the original source of the money and the criminal pulling the strings.
This process becomes simpler the more contacts one has. With access to a complicit attorney, criminals can put their money in a trust account and then withdraw it a week later, successfully turning their cash into a check. Or criminals can use family or friends' names to set up fake bank accounts and so spread out their earnings over a broad enough base to not raise suspicion. Criminals can also use contacts within credit and debit card facilities in Johannesburg to move cash electronically across borders into secure, offshore accounts.
However, the most effective form of hiding illicit economic activity is to rely on the informal economies that make up much of Africa's economic activity. Like Bout's weapon/diamond/cash business arrangement, many criminals in South Africa simply trade in illicit goods to get what they need. Stolen cars or other goods are turned in for illicit drugs which in turn are traded for weapons which buy diamonds which are then sold to indiscriminate jewelers from Tel Aviv, New York and London. By the time cash is handed over for the diamond, the link to the stolen goods is virtually untraceable.
In February, the ruling ANC moved to disband a special anti-organized crime police force known as the Scorpions. They had been chartered in 1999 as a tool to fight against the country's raging crime wave and proved successful in their mission. But high-level investigations have led to allegations that the Scorpions have become more of a political tool than crime fighting tool. Their mission will continue, but they will be weakened as a result of being incorporated into the SAPS.
But this does not necessarily mean that organized crime will return to the way it was in the 1990s. Many of the underlying factors for the crime wave then are not as potent now. The police force has been integrated and, while still battling corruption, is moving away from its oppressive legacy. Security technology and more private security firms are working to prevent crimes so that the police can focus more on investigating and solving crimes. Finally, the inequalities that apartheid created, while certainly not erased, are being corrected. The shock of desegregation after apartheid will take at least a generation to absorb.
On the other hand, geography — something South Africa can not change — will remain. While the local level of apartheid geography discussed earlier does not play as serious a role anymore, global and regional position certainly still do. South Africa's position between the heroin-producing Indian Ocean basin and cocaine-producing Andes will not change. As South Africa grows richer, domestic demand for drugs will likely increase. As long as there are drugs in South Africa, domestic and foreign gangs alike will be attracted there.
Regionally, South Africa still lives in a bad neighborhood. The situation in Zimbabwe in particular threatens to stimulate organized criminal activity. Political instability, racial discrimination and a dismal economy all make up ingredients for a healthy informal economy run by organized crime groups. South African organized crime groups are positioned well to benefit from the situation, further strengthening their position in southern Africa.
Where it can improve the situation, South Africa is certainly taking steps to stem organized crime, but there are still too many factors that are largely out of South Africa's control that will enable organized crime there to flourish.