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THE SELLING OF SOUTH AFRICA

Why won’t this distant country leave Dallas alone? Because beneath the confrontations at City Hall is a parable of money, racism, and power.
By Sally Giddens |

N WEDNESDAY. JANUARY 21, 19S7, AROUND noon, the learned men and women of the Dallas Harvard Club gathered in the posh lobby of the Adolphus Hotel and after some cocktails and con-versation moved into the ballroom for lunch. The speakers were mayoral candidates Jim Collins and Fred Meyer, both Harvard MBAs. The men spoke of their plans for Dallas, making somewhat repetitious speeches with all but identical major themes: reduce crime and promote economic development. When the chocolate mousse had disappeared, it was time for questions and replies. Eric Moye, Harvard grad and Dallas attorney, stood from his chair near the head table. Moye, who is black, asked the candidates, both white, if they would support a city ordinance prohibiting the city from doing business with companies that had ties to South Africa. Meyer answered first. Very diplomatically, he told Moye that South Africa was a matter of foreign policy, and that the city should let the federal government take care of matters of state. Collins’s reply was essentially a “me too” with a gesture toward Meyer. Most of those in the room nodded in agreement.

Moye” was expecting that reply. A few weeks before in Moye’s office on Turtle Creek, Meyer had given the same answer. Looking past the creek and toward downtown, the men discussed the mayor’s race and the city’s future. As far as Meyer is concerned, Moye says, a city position on South Africa is not necessary.

But to Moye, and to many other opponents of apartheid, a city ordinance on South Africa is an essential tool for progress in Dallas race relations. For Moye believes, as do others, that the South African issue is the playing out of local racial problems on an international field. After all, the civil rights movement has lost momentum; the anguish in South Africa has been a rallying cry.

“Yesterday was the first time I have been in a gathering where people were talking about the future of the City of Dallas and nobody said, ’international city,’” Moye” says of the Harvard Club luncheon. “And maybe that’s a wonderful trend, because I hate to hear that talked about. It’s like you can talk yourself into being something that you are not. Dallas is a good city, and Dallas has potential to be a great city, and to be an international city. But you can’t just put the flags of a hundred countries around your city hall, you can’t have a Grand Prix race and honor a different country each year at Neiman-Marcus Fortnight and then say, ’we are an international city.’ Council members and the mayor and the chamber of commerce go to Japan and Germany and England and incite people from every other country on the globe to come to Dallas and look at the way we do things and say to them, ’this is a great place to be and to invest.’ And then they say South Africa is an issue of foreign policy and the city doesn’t have any business involving itself? That is the height of hypocrisy. It’s obscene in 1987 for people who are presumptuous enough to consider themselves enlightened to say that they are not going to take a stand on this issue”



THE ISSUE OF SOUTH AFRICA, OR MORE SPECIF Tically, the issue of a city ordinance severing ties to South Africa, is one that has refused to go away. Week after week since 1982, anti-apartheid activists like current mayoral candidate Marvin Crenshaw have approached the Dallas City Council asking the city to take a stand against the government-imposed plight of non-whites in South Africa. Everyone shares in the rhetoric of abhorring apartheid. But what are we, in Dallas, Texas, supposed to do about it? And just how extensive are our business dealings with Pretoria? More extensive than you might think.

The City of Dallas is involved with South Africa in two ways: through the investment portfolio of city employee pension funds, which has included some Blue Chip stocks in companies that have ties to South Africa; and through city purchases from businesses that have ties to South Africa.

Three Dallas-based companies have investments in South Africa. Two have very small interests-Dresser Industries Incorporated and Kimberly-Clark Corporation. The other, Caltex Petroleum Corporation, is one of the largest United States companies doing business there, and one of the largest employers in that country. These three companies, for differing reasons, have elected to stay in South Africa. At this writing, all three oppose disinvestment as a choice for their companies and as a solution to the problems there. But these three companies also oppose apartheid; they adhere to the Sullivan Principles, which were designed in 1976 by the Rev. Leon Sullivan, a black Baptist minister from Philadelphia, to mold U.S. businesses operating in South Africa into model equal opportunity employers.

In the past, Dallas-based financial institutions have made loans to South African companies and to U.S. companies trading with South Africa. Sanctions imposed by the Comprehensive Anti-Apartheid Act, passed by Congress last year, have since banned lending by all U.S. financial institutions to the public and private sectors in South Africa. Some exceptions are existing loans and loans for certain educational, housing, or humanitarian programs.

On a less concrete level. Dallas and Texas have some attitudinal ties to South Africa that have allowed business alliances to occur more naturally than they might between lands with sharply contrasting climes and cultures. South Africans-especially the Afrikaners, descendents of Dutch settlers who immigrated to South Africa beginning in 1652 and who now make up 60 percent of the white population-share a frontier spirit with Texans. Some call it stubbornness, others a can-do attitude, but the similarities are there. Many anti-apartheid activists would go further, saying that shared frontier attitude also includes inherent racism, a historic belief in white supremacy.

But beyond this simple outline, behind the ties that continue to bind Dallas to South Africa, our vision of that country on the verge of revolution is blurred by vastly differing arguments, by the growing fractiousness of South African politics, by the hidden agendas and myriad motivations of the players of this deadly, international game. Eric Moye quotes Randall Robinson, one of the founders of TransAfrica, an anti-apartheid activist group, who was in Dallas last year to address a gathering of attorneys: “On the issue of South Africa, people decide where they come down, and then they use the arguments from that side to bolster their point.” There are many issues about which rational men and women passionately disagree. South Africa is certainly one of them.



ON THE MORNING OF SEPTEMBER 24. 1986, THE Omembers of the Dallas City Council gathered for their regular Wednesday briefing. Two ordinances were before them, both providing for restrictions on certain business transactions relating to South Africa. One of the ordinances had been written by city attorney Analeslie Muncy at the request of Mayor Starke Taylor, in wording that parallels an ordinance that had been passed by the city of Houston. Another ordinance, written by Roy Williams and Marvin Crenshaw, who represents the Malcolm X Community Council, was also on the table. Deputy mayor pro tern Diane Ragsdale urged her fellow council members to vote on the Crenshaw/Williams draft, which took a stronger stand than Muncy’s. In addition to prohibiting the city from contracting with any company that did business with South Africa, the Crenshaw/Williams ordinance specifically prohibited the city from making contracts in excess of $10,000 with IBM, Xerox, Mobil, or Exxon. (At the time, all of those companies had ties to South Africa.) Mayor pro tern Annette Strauss, now a candidate for mayor, wanted the council to vote on the city-written ordinance, ’I had six votes for that ordinance,” Strauss says. “It was not as strongly worded as the [Crenshaw/Williams] ordinance, but it was a meaningful statement.”

The city-written ordinance addressed contracts of $10,000 or less, since, Muncy explains, state law requires the city to accept the lowest responsible bid on contracts of $10,000 or more. It would have also prohibited the city from buying goods that originated in substantial part in South Africa. In Strauss’s opinion, the city-written ordinance would have put Dallas on the record, with more than just a symbolic gesture, as being against the terrible discrimination and the lack of human justice in South Africa-an issue that she acknowledges strongly affects a large part of the Dallas community.

“But Ms. Ragsdale asked us not to present it, and out of respect for her. we did not,” Strauss says.

When the gavel fell, it was the Crenshaw/Williams ordinance that came up for a vote that day. It failed, with council members Al Lipscomb, Lori Palmer, and Ragsdale voting aye, and Jim Richards, Dean Vanderbilt, Bill Milkie, Craig Holcomb, John Evans, Strauss, and Taylor voting nay. Council member Jerry Rucker was absent. City attorney Muncy had advised the council that the Crenshaw/Williams ordinance was illegal and in violation of the state constitution.

“You can’t deny the privileges of government to specific individuals,” Muncy says, pointing out the conflict with state law requiring the city to accept the lowest responsible bid for services or purchases.

Attorney Moye argues that the word “responsible” gives the city some latitude in accepting or rejecting bids. And an economic argument can be made. Moye asks whether any company with heavy investments in South Africa can be called “responsible.” Given the possibility of revolution and a radical change in power, Moye thinks not. Leaders of the outlawed African National Congress make their opinion known loud and clear: they want U.S. companies out of South Africa. Those who go, they say, will be welcomed back when the ANC controls the country. Those who stay will have no place in the new South Africa.

Given the failure of the September ordinance, where does the city stand on South Africa? As far as city employee pension funds are concerned, the city council passed a resolution in the summer of 1985 that “urged” that city employee pension funds not be invested in companies that did business in South Africa. At that time, council member Richards, who sits on the pension board, said that the board’s obligation was to maximize interest earned, not to make a political point. Again, rational people argue both sides of that point; those who would disagree with Richards point to studies that show employee pension funds in other cities have actually increased in value after disinvesting in companies that had ties to South Africa. Those against such a resolution say that if the pension board will just hold off on disinvesting. the companies will pull out on their own. According to the Investor Responsibility Research Center, seven United States companies pulled out of South Africa in 1984; in 1985 the total jumped to thirty-nine. Forty-two left in 1986, and by the end of February this year, three more U.S. nationals had pulled out, leaving 222 U.S. firms with ties to South Africa. Seven of those are headquartered in Texas-three in Houston, three in Dallas, and one in Fort Worth.

As far as a city ordinance on South Africa is concerned, the ball is in Ragsdale’s court. Strauss says that for several weeks after the September vote, she tried to put the city-written ordinance on the agenda, but Ragsdale and Crenshaw wanted to wait. Sometime in March, before the mayor’s election, Crenshaw expects Ragsdale to present another city ordinance on South Africa to the council.

“It is time for us to move past symbolic gesturing.” says Crenshaw, who calls the city-written ordinance “a smokescreen.” But he adds that he is not surprised that the council rejected his earlier draft. “This city has never been on the side of human rights,” Crenshaw says. “Of the ten largest cities in this country. Dallas is the only one without an ordinance on South Africa.”

Naturally, one would expect college towns such as Ann Arbor, Michigan, and Berkeley, California, to refuse dealings with South Africa, but according to the Investor Responsibility Research Center, sixty-five cities, few of them radical hotbeds, have policies limiting or forbidding business with South Africa. Among them: Atlanta, Georgia; Chicago. Illinois; Columbus. Ohio; Detroit, Michigan; Gainesville, Florida; Minneapolis, Minnesota; Omaha. Nebraska; Raleigh. North Carolina; Tucson. Arizona; and Wilmington. Delaware. Thirteen counties have official policies on South Africa, as do twenty states.



THE CITY OF DALLAS CONTINUES TO STRUGGLE Tover its stance on South Africa, but one Dallas-based bank cast its lot against apartheid more than a decade ago. Following the violent 1976 riots in Soweto, the large black township near Johannesburg. Dallas-based RepublicBank became one of the first U.S. banks to institute a policy against lending directly to the government of South Africa. John Falb, managing director of the multinational banking group for Republic, says that Republic also put in its policy a statement officially condemning apartheid. One exception to the hands-off policy was a loan in 1980 to the Soweto municipal government for the construction of black housing, the rebuilding of schools, and the extension of electrical services in the city.

Through the late Seventies and early Eighties, Republic made export financing available for U.S. exports to the South African government and South African-owned corporations. But in August 1985, following the refusal of President P.W. Botha to make meaningful changes in the apartheid system, Republic closed the door on South Africa and discontinued all lending to both the public and private sector. It also stopped selling the South African Krugerrand.

Republic was not the only business entity disappointed with Botha’s speech. U.S. businesses had expected Botha to announce significant changes to the apartheid system. Instead, Botha dug in his heels; today he stands firmly in favor of South Africa’s current system of government, which mandates three separate parliamentary chambers-one for the nation’s 4.5 million whites; one for the 2.8 million people of mixed race, known as “coloreds”; and another for the 794,000 Indians and Malays. The country’s 23.4 million blacks are not represented but govern separate ’”homelands.” Botha has recently called for a whiles-only general election in May, saying that a one-man/one-vote system in South Africa would lead to chaos.



THE CHAOS THAT ALREADY EXISTS IN South Africa is easily exported. On November 25. 1986, most downtown Dallas workers left their offices around noon and took to the streets expecting lunch-as-usual. But those who ventured to the Plaza of the Americas that day got an eyeful of something not often seen in Dallas-protestors. Upstairs was (he target of their protest: the Dallas Council on World Affairs was hosting a luncheon featuring as guest speaker Mangosuthu Gatsha Buthelezi, chief minister of KwaZulu, president of the Inkatha political organization, and leader of South Africa’s 6 million Zulus.

The vastly differing perceptions of Chief Buthelezi are perhaps the best illustration of the fractiousness of South African politics and the blurred picture of South Africa presented to the American public. Depending on who you talk to or what publications you read, Buthelezi is an Uncle Tom who bows to the Botha government, or the Moderate Messiah of South Africa, one of the few rational voices calling for change, or anything in between.

In Dallas, an eloquent Buthelezi spoke to an audience of mostly white businessmen- not because the Dallas black community was excluded from the invitation list, since black groups were invited, but because it was the conservative white business community of Dallas that wanted to hear what Buthelezi had to say. Buthelezi had come to Dallas directly from Washington, D.C., where he met with President Reagan and Secretary of State George Shultz. Buthelezi praised Reagan for his stance against sanctions and spoke strongly against disinvestment. U.S. companies, he said, were making headway against apartheid. Buthelezi, a longtime foe of apartheid, spoke of a nonviolent solution to his country’s problems, one that must involve cooperation between people of all races.



W.C. DUNNING, VICE PRESIDENT OF RE-gional operations for Caltex in the Philippines and Southern Africa, is a dapper man, well-versed in the world of international business, He spends a lot of time on the phone, more time traveling. And if it’s possible to get used to such a thing, Dunning, like Caltex, is used to operating in the political hotbeds of the Eastern Hemisphere. He doesn’t spend much time in his Las Colinas office.

Dunning was present at that Dallas council luncheon, and had the opportunity to renew his acquaintance with Buthelezi, whom he has met many times during the years and agrees with on disinvestment.

“Our policy is to stay in South Africa because we feel morally correct in staying,” Dunning says. “That’s not to say that people who think we should get out are immoral or incorrect. They just have a different view of the situation.”

The Caltex view of South Africa is based on seventy-five years of doing business in (he country. Caltex is one of South Africa’s largest employers and was one of the original Sullivan signatories. Dunning says, with considerable pride, that his company has “led the way in many of the social reforms among businessmen in the country, including equal pay, equal use of facilities, and breaking down job reservation rules.

“We were the first company to hire blacks to drive trucks and to hire blacks to work with computers, at a time when these jobs were reserved for white people. We are proud of Caltex’s accomplishments. We think we have been an example not only for American companies, but for all companies in South Africa,” Dunning says.

Caltex, which operates about 1,000 Caltex stations in the Republic of South Africa and the homelands, employs approximately 2,000 people in South Africa: 48 percent are non-whites. A loan and grant program set up by the company has enabled non-whites, who have not otherwise been able to borrow money, to become station operators. Additionally, the company has various health and housing programs for its black, colored, and Asian employees and for non-employees. Caltex has operated an Adopt-a-School program since 1979 as a part of its contribution to the education of non-white children in South Africa. More than 30,000 children at thirty-six schools have been enriched by this program, Dunning says.

“When you are dealing with a country that has the system of government that South Africa has, and the repression that blacks, coloreds, and Asians live under, these are very important things,” Dunning says. “They might seem insignificant to a city council or a university where people feel strong emotions and sympathy for people in South Africa. Changes like these may seem like small potatoes-but they are not small potatoes because they are changing or helping to change the whole country,”

Many supporters of disinvestment say that any good that American companies are doing in South Africa only touches a small minority of non-white workers, that companies that stay in the country are just propping up the Botha government and the system of apartheid.

Dunning would disagree. Caltex’s investment in the country is large; its money means power; that power means influence.

“The South African government leaders ask me why Caltex is political, why we tell them they should do away with apartheid. And I say that it’s very simple. Approximately half of Caltex’s employees are non-whites, half of Caltex’s people are not being treated properly, and therefore, Caltex has the right to tell you that your government is wrong and that you should change your laws and treat them properly,” Dunning says.

It would not be easy for Caltex to pull out of South Africa even if it wanted to. The company has among other assets a refinery in Cape Town, a lube oil refinery in Durban, thousands of oil and storage depots and service stations.

“You don’t just pick up all of these assets and say you are going to leave,” Dunning says. “You have an obligation to your employees and an obligation to serve the needs of all of the people.”

Indeed. Caltex has been through tough limes before in other decades, other revolutions, other countries. It has never been the company’s policy to pull out.

“We stayed in Vietnam through the war, for instance, and they never attacked any of our installations there because everyone needs petroleum products,” Dunning says.

But foreign political strife has been costly to Caltex in the past.

“Caltex lost all of its assets in China when the communists took over. But we were the first ones invited back in. In Vietnam when the communists took over we lost everything. We stayed through revolutions in Uganda. In Zimbabwe [formerly Rhodesia] we stayed on. and we continue to do business there,” Dunning says. And in South Africa, Caltex will stay. As a private company owned by two public companies-Chevron and Texaco-Caltex is influenced, but not controlled, by public opinion.

“Our shareholders have shareholders,” Dunning says. “And our shareholders’ shares are being sold over this matter. But Texaco and Chevron support Caltex’s efforts in South Africa. They support what we are doing for all people in South Africa, and they think we are right,” Dunning says.



AT DRESSER INDUSTRIES. SOME OF THE shareholders disapprove of that company’s small operations in South Africa. During the last few years, shareholder proposals calling for disinvestment have appeared on Dresser proxies. Herb Ryan, director of investor relations for Dresser, says the shareholder proposals have come from church-related groups and have traditionally not garnered much support.

“We have a very small operation in South Africa that primarily produces mining and construction equipment. The operation has several hundred employees, and in terms of asset size or sales, in round terms, it is maybe 1 percent of Dresser,” Ryan says.

From Dresser’s headquarters in downtown Dallas, the tiny South African plant is worlds away. “From our perspective, it is essentially insignificant,” Ryan says.

Dresser acquired the South African operations in the mid-Seventies as part of a larger purchase. For a number of years, Ryan says, the company had its own principles, similar to the Sullivan Principles, for equal opportunity employment. But in 1984, Secretary of State Shultz asked Dresser to adopt the Sullivan Principles. Dresser had some objections regarding the independent audit by A.D. Little & Co., a consulting firm in Cambridge, Massachusetts, that rates the Sullivan signatories. Each year, the A.D. Little staff analyzes each company’s progress regarding such things as promotion of non-whites into management positions, social spending for housing and education of non-whites, desegregation of the workplace, and equal pay for equal work. In the past, abiding by the Sullivan Principles has been voluntary. But with the passing of the Comprehensive Anti-Apartheid Act of 1986, U.S. companies doing business in South Africa, for the first time, are required by law to adhere to the Sullivan Principles.

Ryan explains that Dresser was reluctant to start a precedent of outside audit. “But we determined in 1984 that that was probably the right thing to do, and since that point, we have received the rating of ’making progress,’” Ryan says.

Ryan says that at this point, Dresser has not seriously considered disinvestment.

“We think from the employees’ standpoint that we can be a more effective force by constructively working to improve their life than if we turned our back and walked away,” Ryan says.



YET ANOTHER VARIATION OF THE DALLAS-

South Africa story is offered by locally based Kimberly-Clark. The firm has a 39 percent noncontrolling interest in Carlton Paper Corporation. Limited, a South African manufacturer of a broad range of disposable tissue products. The remaining ownership of the company is divided. Malcor, a South African corporation, owns 41 percent. Another 20 percent belongs to the South African public.

Kimberly-Clark’s claim to tame is that despite its minority ownership position, it was “successful in persuading Carlton’s other shareholders to permit Carlton to become the first major South African-controlled company to endorse the Sullivan Principles,” says a company spokesperson.



HERE IN THE UNITED STATES AT LEAST. THE complicated South African political situation is, in the minds of many, finally reduced to one issue: disinvestment. In South Africa, to advocate disinvestment is a crime. In the United States, to speak of disinvestment is to invite heated debate.

Don Edward Beck, Ph.D., director of the National Values Center in Denton, is an adviser to South African companies and a lifetime human rights activist. During the last decade, this Texan has traveled from Denton to South Africa and back again many times. He says he has watched the real engine of reform in South Africa-the economic advancement of blacks-grow in intensity.

“Western investments in South Africa have set the stage for the change,11 Beck says. “The more blacks become interwoven into the economic tapestry through jobs, labor union activities, the potential of boycotts, etc., the more this internal pressure has contributed to positive reform-without destroying the delicate infrastructure.”

Viewed in Beck’s light, the Dressers and Caltexes of the world have played a major role in promoting reform, and sanctions are a double-edged sword, one directed at the South African government, but one that also cuts deeply into the employment opportunities for non-whites.

But from Eric Moye’s perspective, disinvestment is essential to the dismantling of apartheid. “I don’t think the government can stand without the support of the U.S. and Great Britain. It is only a matter of time and of how change will come. Will it be one, five, or ten years? Will it come after a nuclear bomb is set off outside of Soweto and millions of people are killed? It’s going to happen,” Moye says. “The question is, when the smoke clears and a semblance of justice comes back to that part of the world, are the new leaders going to look at the United States and say, ’you helped us,” or are they going to say, ’these are the people who tried to keep us under the yoke of oppression’?”

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