President John Vorster resigned today after a government report concluded that he was involved in illegal state funding of a multimillion-dollar propaganda drive in South Africa and abroad, and that he then tried to cover up financial irregularities in the secret project.
His resignation from the ceremonial presidency was announced in Parliament by Prime Minister Pieter W. Botha, who along with his finance minister was cleared of wrongdoing in financial abuses that surrounded the drive to influence public opinion in favor of South Africa's apartheid policies.
The resignation of Vorster, 64, brings to an end a long political career that peaked in his 12 years as prime minister. His demise in disgrace is a major blow to the self-image and sense of rectitude of the Afrikaners, the Dutch-descended whites who rule this country as a minority under a racially segregationist policy of apartheid.
At the same time the probers' findings, presented in Parliament, described how more than $6 million "was lost" to South Africa in the hands of Michigan publisher John McGoff, who reportedly borrowed $11.5 million from the white minority government to finance an unsuccessful attempt to buy The Washington Star and his purchase of the Sacramento Union.With another loan of $1.3 million, McGoff bought a half share in UPI-TN, a London-hased television news agency, the report said.
This is the first official South African confirmation of government involvement in McGoff's purchases of the Sacramento Union and UPI-TN and his attempt to buy The Washington Star.
[The U.S. Justice Department has opened a preliminary review to determine whether there is any evidence indicating McGoff broke U.S. law, a Justice Department source said. McGoff was unavailable for comment yesterday on the new South African findings.]
The three-man South African investigating team said in its 72-page report that it "finds in incredible . . . that no one knows what happened to the $6.4 million that was lost." It also acknowledged that because there were not specific written contracts between McGoff and the South African government, it is unclear how much right the South African government has to "these assets" - the Sacramento Union and TPI-TN - in shares.
The commission, chaired by Judge Rudolph Erasmus and appointed by Botha, presented what is meant to be the final government answer on the scandal that has plagued the South African government for more than a year.
In clearing Botha and Finance Minister Owen Horwood, the commission apparently is rescuing Botha's eight-month-old administration from collapse. This fall looked possible at one point because of continued press reports implicating the prime minister and Horwood in the financing of covert projects that were part of the propaganda campaign.
Today's report, however, made no mention of bribes and illegal campagin contributions that allegedly were part of the government's influence-buying projects, according to a former civil servant, Eschel Rhoodie. Rhoodie used to head the now defunct Information Department, under whose aegis this covert propaganda campaign was carried out. He is now in self-imposed exile evading warrants for his arrest here no charges of theft and fraud.
He has claimed that bribes were paid to labor union officials in Western countries. Other sources involved in the opinion-molding drive have alleged that South African government money found its way into the campaign coffers of U.S. politicians to make them more favorable to South Africa. No details of these projects have been revealed.
There was no indication in the report that Vorster personally enriched himself. But the findings did show that he was not above misleading government investigators when he gave evidence, and his resignation under such a cloud was the first of its kind in South Africa.
Vorster stepped down as prime minister last September, saying this health was not up to the demands of the Post. Public opinion clearly was skeptical of that reason, however. It was widely suspected he moved into the presidency because the he knew the press was close to breaking the scandal with stories on government financing for a pro-apartheid English-language newspaper called for The Citizen.
That secret project, meant to counter negative press coverage of the government by the other English-language newspapers, cost the South African taxpayer $36 million. Code named "Annemarie," it was one of the secret schemes of Rhoodie's Information Department.
The Erasmus team's final report today dramatically reversed it findings of last December, when it found Vorster not responsible for the Information Department's covert activities and in particular for The Citizen. The investigators today reported that Vorster "knew everything about the basic financial agreements for the Department's funds."
"He was consulted about the secret funds as well as the projects themselves and because he did not reveal irregularities that came to his attention; concealed them from the Cabinet and delayed . . . taking purposeful steps to put an end to this wrong state of affairs, he is jointly responsible for the fact that irregularites continued, includi The Citzen," it added.
In exonerating Botha and Horwood, Erasmus essentially concludes secretly for the propaganda campaign when they stepped into their jobs.
However, the report skirts the question whether Botha knew of the Transfer of $11.5 million from the Defense Department Budget to McGoff to buy the Washington Star.
"The project was regarded as top secret, and so large a sum of money could not be provided from the Defense Department . . . without revealing the existence of the projects," the report said.
It went on to say that the $11.5 million was transferred to a Zurich bank at the end of September 1974, and from there was put into McGoff's U.S. account.
Pains were taken to arrange the transfer so that it appeared as an interest-free loan so that if McGoff were ever asked about the source of the money he could furnish proof that he had obtained it in Switzerland and not from South Africa, the report said.
According to the Erasmus report, McGoff later convinced Rhoodie he should buy the Sacramento Union with the money. He and Rhoodie verbally agreed to do so, it added.
McGoff later got $1.3 million from South Africa so that his Global Communications could buy 50 percent control in UPT-TN, the report said. At one point when the South Africans were pressing McGoff to repay the loan, the publisher allegedly told one South African official, "I realize I represent you in that company," according to the report's text.
At the end of 1976 McGoff repaid in cash almost $5 million to the South African government, the report said. He was then involved in a law suit that required him to give full statement of his assets and liabilities and wanted to sever his financial ties with South Africa because if they became know it "would destroy him politically," the report said.
According to one of the witnesses that testified to the scandal-probing team, Rhoodie agreed that McGoff could write off the remaining debt except for $1 million. No one know where that money is or why it was written off, the report concluded.
Rhoodie and McGoff declined invitations to put their side of the story of the commission, the report said. CAPTION: Picture 1, JOHN VORSTER . . . implicated in coverup; Picture 2, JOHN McGOFF . . . reportedly borrowed $11.5 million