Mayor Tom Bradley today proposed a series of financial sanctions against the white-minority government of South Africa, including an unprecedented tax on the sale of South African gold coins.
Bradley asked the City Council to cut all financial ties to U.S. companies and banks that do business in South Africa, and to levy a tax on the sale of Krugerrands in Los Angeles. Money from the tax would finance a campaign against South Africa's apartheid policy of racial separation and discrimination.
If approved, Bradley's plan would add the nation's second most populous city to a list of more than 20 cities and five states that have decided to cut financial ties to companies that do business with South Africa. Similar divestiture proposals are pending in 29 states and many other cities, Bradley said, and should encourage U.S. companies to curtail operations in the nation whose black majority has been denied full political rights.
Bradley called apartheid "the most vicious and morally reprehensible form of institutionalized racism in the world today."
Victoria Pipkin, a spokesman for the mayor, said that about 20 percent of the $4 billion in city pension funds is invested in U.S. companies with South African ties. Bradley suggested that these stocks and bonds be sold over several years to ensure no sudden loss of revenue.
Pieter Swanepoel, spokesman for the South African Embassy in Washington, said that although he has not seen Bradley's proposal, his government has criticized economic sanctions against South Africa as a violation of American and South African principles of free enterprise.
Swanepoel said this was the first time he had heard of a local government attempting to tax the sale of Krugerrands. Bradley said that "while we do not have the legal authority to ban the sale of Krugerrands outright," a fee or tax would "discourage the sale of Krugerrands and turn a share of the money . . . against that government's apartheid policies."
The money would pay for an "antiapartheid corporation" that could monitor South African activities of U.S. corporations and promote antiapartheid education in the schools, according to a background paper.
Mayoral counsel Mark Fabiani said he thought the tax, even if it affected only Krugerrands, would be constitutional under decisions allowing discriminatory taxes if they promote valid public policy. In answer to critics who say sanctions would hurt poor South African blacks, Bradley quoted murdered South African leader Steve Biko: "It would undoubtedly hurt blacks in the short run" but "we blacks are perfectly willing to suffer the consequences" to defeat "the present economic system of injustice."