Structural changes and growth in gang activities

The growth in the economy of crime

Gang-related crime is an effective indicator of the growth of gangs and their ability to strike terror into the heart of the community. The statistics in figure 2 show gang-related murders and attempted murders over the period 1997-1999 for the Western Cape. It also implies an increase in the rate of crimes committed by gangs.

There seems to be a geographic shift in the areas where gang crime has increased. Organisations such as the Western Cape Anti-Crime Forum (WCACF) have long held that gangs have been concentrating their activities in rural areas when it became too risky to continue in urban areas. The levels of displacement of crime committed by gangs are telling: areas on the West Coast have responded by starting their own anti-crime forum to deal with the issues at hand. In rural areas, gang operations differ markedly from those in urban areas. Conscious planning of the criminal enterprise is evident in rural areas, while gang problems in urban areas have remained the same.

Observers point out that the increase in killings could reflect battles for territory and market share in a world characterised by changes in the hierarchy of commodities. As the crack and cocaine markets are far more lucrative than the marijuana and mandrax markets, gangs may have been fighting for access to and control of these markets. It is also notable that the killings occur in predominantly black and coloured areas and very seldom include white communities.

It has been obvious to activist and gang investigators that gangs have had a strategy of ‘buying the town’ in rural areas especially on the West Coast in places such as Saldanha, Piketberg, Arniston and Paternoster. The same is evident on the South Coast in places such as Hermanus, Bredasdorp and Genadendal. The action involves gangsters initially buying property in these towns. They would then proceed to buy property that involves common use by the community such as petrol stations, shops and game arcades, to provide the means to recruit local youth to sell their commodities.

Often, it would involve bringing a few gang members of the Cape Town areas to live in the rural community for a few months before recruiting local members. This is exactly what happened in the Bredasdorp area where five gang members were burnt to death by the community. Community action against gang members has been consistent in the face of the perception that police officers are involved with gang members.

Gangs evolving to a more sophisticated and indeed higher level is a natural development that occurs in all countries that have in some way undergone transition. In the South African experience, specific factors have given rise to gangsterism, among them, unemployment, poverty, restricted access to opportunities and lack of education. These factors are still in place more than six years after the political transition. Foreign criminal syndicates have clearly attached great significance to the opening up of South Africa’s borders and regard the country as a new launching pad for their activities. This is further facilitated by the fact that South Africa is the healthiest economy in Africa and is therefore a potentially lucrative market. Poor law enforcement and corrupt officials further promote their activities.

The Hard Livings and the Americans: Gangs on the move

Until 1994, the Hard Livings and the Americans were the two biggest gangs on the Cape Flats with an estimated membership of between 3 000 and 10 000, respectively. Given the fact that these two gangs have had the monopoly on drug distribution for years, it was inevitable that they had to become the natural partners of foreign syndicates with better resources to bring drugs into the country. However, they did not have the monopoly on supply, which was the terrain of others.

Considering the fact that these gangs had access to all parts of the Western Cape through their distribution networks, their transformation into criminal organisations was a natural outcome.

Moreover, both gangs had to position themselves to enable them to operate on a level where they were able to both co-operate and compete with foreign syndicates. They experienced radical changes in structure and operation to prepare themselves as junior partners of organised crime in the Western Cape soon after 1993.

The year 1993 was a watershed year in the history of gangs. Firstly, it was on the eve of the political transition to democracy. Secondly, the government was in the process of relaxing social controls during the negotiations for a democratic South Africa. This signalled the opportunity to gangsters that there is money to be made. The fact that the government at the time and the opposition forces were discussing amnesty and indemnity from prosecution was a green light to gangsters that they too could benefit from the same negotiations. At a time when there was much uncertainty in the country, numerous political killings and upheaval, gang members interpreted the social and political uncertainty as an opportunity to commit crimes (in the name of freedom) and get away with it. It has to be pointed out that gang members presumably did not draw a distinction between the crimes they had committed and those committed by members of the liberation movements. In particular, they argued that the notion of amnesty and indemnity from prosecution should be extended to them as well, as they were also victims of apartheid.

While this may seem far-fetched to an observer, from their point of view, the gangs regarded this demand as legitimate. Hence, preparations for the elections continued with great expectations. The Hard Livings, in particular, used this as their reason for supporting the ANC. The same could not be said of the Americans who were split with its leadership supporting the NP and certain of its sections supporting the ANC.

Members of these gangs were prepared to pay for buses to transport people to political rallies held by both these parties. They expressed their goodwill towards particular parties by keeping the opposition out of each other’s territories. Nowhere was this more obvious during the 1994 elections other than in towns such as Manenberg and Bonteheuwel, in particular. Gangs ensured that political parties could campaign in peace in their areas. What was never made clear, however, was what the rewards would be for their participation.

Compared to past years, 1993 saw increased gang fights, with many people dying as a result of conflict over control of the various areas. It was indeed one of the most violent years in the history of gangsterism. Gang fights occurred between all the major gangs on the Cape Flats to the point where they were busy robbing each other for mandrax and dagga, Eventually, the Americans and the Hard Livings managed to succeed in establishing their leadership. They created effective organisations ready to deal with the changes that were about to sweep the country.

The leadership structures of the Hard Livings and the Americans changed to more centralised control over all operations. Their leaders no longer became directly involved in crime and set out to launder illegal money earned from the drug trade. Not shy to make new investments, they started to look for new partners to share their profits. At this stage, there was significant antagonism between the Americans and the Hard Livings with gang wars raging between the two.

Other gangs were offered protection at the cost of joining the Hard Livings or the Americans. They offered guns, cars and manpower in turn to assist in turf wars and were expected to pay through allegiance and loyalty. The Americans were the first to deal in drugs and were the most successful. Protection rackets were started, especially in relation to taxis and businesses, and extortion rackets were extended to businesses and shebeens located in poor neighbourhoods. It was not to remain limited to these areas, especially as the demand for drugs grew.

Very soon, all parts of Cape Town and its surroundings were affected and former white areas became the most lucrative markets because more people could afford the new designer drugs.

Violence was also displaced as the realisation grew that more profit was to be made from transactions within the city limits. As a result, more violent clashes occurred more frequently inside the inner city limits.

Among others, clashes, gunfights and brawls also occurred between local gangs and the Moroccans who operated a parking and protection scheme for local city night clubs. They ‘taxed’ businesses within the city limits for protection and the right to trade drugs in clubs.1 Local gangs started to resent the influx of foreign syndicates and soon they managed to set up bases in areas such as Sea Point, Kloofnek and Camps Bay. In fact, they deployed their own parking attendants and started to tax everyone parking vehicles in the city. These illegal parking attendants started to extract cash from the public when watching vehicles. Soon more gang fights occurred between competing parties, and the competition spilled over into prostitution and drug concerns.

The gangs had come of age and had realised that it was much more profitable to take direct control of the market and to keep the opposition out.

By 1992, The Firm — a cartel of drug dealers — was founded with gang leaders among its ranks. By 1993, The Firm was regulating the flow and supply of drugs into the Cape Flats. It demarcated certain areas that became the trading floors of specific dealers, and persuaded gangs that it was in their best interest to keep the peace in communities that were traditionally soaked in gang violence. It remains doubtful whether gang leaders such as those of the Hard Livings and the Americans were part of The Firm.

After the much publicised gang fights of 1993, a plethora of peace agreements were entered into in the run-up to the 1994 elections. Community-based organisations started to petition government to deal with gangs. It was commonly agreed in the gang underworld that police action and attention as a result of gang fights were bad for business. Most gangs declared their allegiance before the elections, causing renewed tensions between gang leaders, but The Firm reigned them in.

By this time, the gangs had also succeeded in capturing the attention of the government as a result of community protests. The same could also be said of the foreign syndicates, who desired to utilise the ready-made distribution networks of the gangs. By 1995, The Firm had succeeded in establishing itself as the main supplier to gangs in the Western Cape.

Numerous investigations became focused on these gangs as a result, but were unsuccessful. There were persistent allegations that senior police officers were involved in the gangs. This did not go down well with police officers who were faced with community protests about police corruption.

Gang leaders obviously did not want to divulge their interest in and links with the police. It was not until the Truth and Reconciliation Commission (TRC) that the links between the state and gangs were exposed. It emerged from testimony that there were agreements between the Americans and the Civil Co-operation Bureau (CCB), for example, to eliminate top anti-apartheid activists.

The chaos resulting from the transformation of the police opened the way for external criminal organisations to forge links with local gangs. The merging of eleven policing authorities in some instances made way for corruption and confusion. Some staff members were promoted without authorisation prior to integration into the SAPS. Where gangs were previously loosely structured according to the categorisation laid down by Pinnock — street/defence gangs, family mafia and prison gangs — they now appeared to have transcended these traditional boundaries. The Italian Mafia made contact with the gangs and it was soon revealed that Italian/Sicilian Mafia leaders had settled in South Africa, led by the infamous Vito Palazollo, the alleged money man of the Corleone family.

Significantly, government intelligence identified clear links between the Hard Livings and Palazollo. Similarly, one of the biggest drug dealers to emerge in the Western Cape, Colin Stanfield’s premises were raided by the police and he was arrested in 1996 after two years of painstaking investigations. During the raid, the police found millions of rands in cash and estimated that he was worth over R30 million. The arrest made headlines and the day before he was due to appear in court, the court was burned down. Stanfield was granted bail.

Until the early 1980s, dagga was the major commodity changing hands in the country’s prisons. The gangs of the early 1980s were not that tightly controlled as they were to become in the late 1980s and early 1990s. There were only a few drug suppliers at the time who controlled the market and who did not have to fight with one another. According to intelligence operatives, there was sufficient place for everyone at the time with the market growing.2

The prison market was consolidated with a few suppliers reaping rich pickings for a number years. The authority of these suppliers went unchallenged and even the gangs protected their identities and their businesses because the livelihood of the gangs depended on this supply.

During the early 1980s, suppliers such as Colin Stanfield had unrivalled control as they covered a wider area. The gangs acted as dealers, musclemen and distributors of the product to its end-users. Where there was competition, however, it was violently suppressed.3

None of the local suppliers had international contacts with whom they could negotiate prices directly. Usually, deals went through a middleman who in turn made his commission from setting up these deals. The only gang that did have some connections with international drug dealers was the Americans whose leader, Jackie Lonte depended on his connections in the CCB. The CCB was set up by the old security apparatus under the apartheid government to eliminate its opponents. Lonte had access to internal drug dealers because he was recruited by the CCB to ‘deal’ with supporters of the United Democratic Front (UDF). The Americans was the only gang that initially restructured its organisation to be able to deal in mandrax, in particular.

Members of the Americans first introduced mandrax in prisons. This move impacted the price of dagga in prisons. The Americans were also the first to set up their own crack cocaine factories to produce crack for local consumption. (Producing crack is not difficult if the financial resources and time are available). This move consolidated Lonte’s advance and entry into the world of organised crime in the early 1990s.

Other drug suppliers banded together after Lonte’s move into the crack and cocaine market and founded The Firm to exploit the market in such a way that there would be a fair share for everyone. Led mostly by gang leaders, The Firm rapidly consolidated its control over the local drug market. It had its own networks stretching from Cape Town to Upington in the Northern Cape, and members set about to recruit gang leaders and cement solid relationships in terms of distribution networks.

While The Firm had entrenched its operations, the Hard Livings gang was in the process of setting up its own empire. They started robbing members of The Firm. This action by the Hard Livings was seen as a threat by members of The Firm. At this time, the leadership of the Hard Livings was also setting up networks with police officers and smaller gangs that would jeopardise The Firm’s traditional trading floor.

Staggie and the Hard Livings were invited to become members of The Firm soon after 1994. The Hard Livings would become a major asset to The Firm because it had muscle power and could harass the opposition, particularly the Sexy Boys. By 1994, Staggie had succeeded in setting up operations in Sea Point and was entering the prostitution market and the drug business on a large scale.

The Western Cape was divided according to The Firm’s hierarchy, as well as geographic areas and everyone was reasonably happy. After 1995, a call was made for everyone to stop the fighting so that peace could reign. Gang fights were considered as bad for business, as it often drew the attention of the police to their activities. Peace in the communities across the Cape Flats often facilitated the consolidation of drug businesses ran by gangs, and served to resuscitate their links with suppliers.

From 1995, a peaceful calm descended on the Cape Flats and gangs could go about their business in peace. This was the result of an internal arrangement between members of The Firm, but it did not last very long. However, it should be borne in mind that not all gangs on the Cape Flats were members of The Firm, something which was set to change between 1996 and 1998. More importantly, the formation of Pagad was to change the playing fields forever as far as organised crime was concerned.

A dangerous development in the gang underworld has been the decentralisation of gang activities. Where gangs were previously very strong and centralised, they had also laid their leadership open to police investigations that could disrupt organisation. Decentralisation made perfect business sense, in that leadership was cascaded and minor leaders were each set up with their own sections and infrastructure for distributing drugs.

Before 1995, gangs had centralised their activities under the command of a strong leader who had to take personal responsibility for ordering the death of an opponent, negotiating a drug deal, possessing and distributing weapons, as well as having to deal with collecting money from street dealers. Decentralisation was a necessary strategy to free gang bosses from their day-to-day responsibilities to concentrate on supplying dealers and collecting money at the end of the week. More importantly, it released gang bosses from personally taking responsibility for having incriminating evidence such as drugs and guns on their person and in their houses. This exposed leaders in the past to considerable risks as they had to flee, more often than not, from the police as all fingers invariably pointed to the leaders of such gangs. However, they were seen as ‘untouchable’ as the police were very seldom able to pin crimes onto them. They normally portrayed a clean image, while giving orders to take out opponents and supplying local drug dealers at the same time.

Another part of organised crime involved the entertainment industry, which was particularly vulnerable to extortion rackets. This is one of the arenas where members of the former old security establishment decided to base themselves after the 1994 elections. Protection rackets were mainly run by groups of former security police, and murder and robbery informants. They are allegedly controlled by a local group of security companies. They started to emerge in the late 1980s and provided security for parties and the old Coke clubs. They also had an association with the Americans gang because of its links to the former security establishment.

Protection rackets provided bouncers to nightclubs from their bouncer networks. These bouncers would distribute designer drugs such as Exstacy and LSD. This market is smaller than the hard drugs market, but is more jealously guarded.

These racketeers preferred not to deal with the Hard Livings, because of its image associated with street-fighting. Most if not all of these operations took place in Cape Town’s inner city and, to lesser extent, in the northern suburbs like Durbanville and Kraaifontein.

What distinguished international syndicates from local gangs was the former’s ability to supply drugs in large quantities. The Nigerians and the Chinese, in particular, have been unable to break into the market because, although they possessed the means to drugs in bulk, they have been unable to sell these as they had no access to the distribution networks controlled by local gangs.

The Nigerians were initially so desperate that they even went to prison to negotiate entry into the market with prison gang generals. When they were unsuccessful, they decided together with the Somalis to undercut local prices by setting up their own operation in Sea Point. After local gangs attacked them, gang fights broke out all over town. This eventually led to an agreement between the foreign syndicates and local cartels over distribution rights. Soon local suppliers set up their own mandrax processing plant just outside Cape Town. This factory was uncovered and raided by police. It belonged to a prominent drug dealer who had links with a prison gang. The dealer is currently the subject of court action by the Investigative Directorate of Organised Crime (IDOC).

Because of the opposition of local gangs, the Nigerians started to enter the synthetic drug market and started to supply Exstacy, LSD and speed. These are mainly drugs with meth-amphetamines as the base. The Nigerians also started to extort other illegal immigrants in the inner city, and to undertake business protection rackets.

The Moroccans have also had a hand in protection rackets and have teamed up with a local white security company to provide the muscle power necessary to extort money from club owners.

What usually happens, is that a company is approached for a security contract. The company refuses if it already has a contract with a security company. The Moroccans are then contacted by the security company to harass the business. Thereafter, the same security company approaches such a business and offers to protect it from the Moroccans. The company agrees and the contract is usually signed. The Moroccans are also know to have provided protection at local flea markets and car parks.

The Chinese triads were the successors of the Table Mountain Taiwanese gang. The main commodity of the Taiwanese was sharkfin which is marketed as an aphrodisiac in the East. They were displaced by the Chinese 14K Hau and the Wohing Wo triads from Hong Kong. They managed this by murdering some of the Taiwanese gang members. They subsequently teamed up with local suppliers belonging to a gang to help them set up processing plants. China is the main supplier of methaqualone, an important ingredient of mandrax, a fact which was to their benefit. They did not deal with the Americans, as they had their own crack cocaine processing plants.

The Italian/Sicilian Mafia has also been another player in the Cape Town area. They have allegedly been able, through the links set up by Vito Palazollo, to set up legitimate businesses, although the police and Interpol are investigating members of this group for money laundering.4

Information on the type of business dealings undertaken by the Italian Mafia has been sketchy, but it is believed by police intelligence that it could include extortion of established businesses in the formal market sector and in the inner city. Vito Palazollo was reported by the police to have met with Hard Livings leader, Rashied Staggie, but the exact nature of the meeting was not disclosed. It remains unclear what the precise nature is of the business of the Italian Mafia in Cape Town.

Another area where there has been clear growth since 1996, is prostitution. Statistics indicate that an absolute growth pattern in this area. This is not uncommon in cities that are also undergoing a transition as a result of recent political changes. It is also one of the emerging markets on which gangs have focused their energies. The growth is also associated with Cape Town’s development as a tourist mecca.

Local gangs, in particular the Hard Livings, moved very fast and started recruiting more people, especially schoolchildren, to become sex workers in Cape Town. It is a commonly known fact that one of the most notorious leaders of The Firm operates a prostitution market that spans the entirety of Voortrekker Road in Goodwood, Parow, Bellville and Kuilsriver.

Local gangs have also not discontinued their theft syndicates, which are responsible for robbing warehouses. Clothing items obtained in these robberies are sold to the communities where gang members live. Moreover, the alcohol market is far larger than the drug market, and provides gangs with their base income, especially from illegal shebeens. The liquor trade continues to be the number one activity for extending gang control.

It is estimated by a senior police intelligence officer that the drug trade is so lucrative that the Americans gang is reportedly churning out between 50 to 60 kilograms of cocaine per week. The above provides some idea of the extent to which drugs, liquor, prostitution and stolen items are peddled in Cape Town and its surroundings.

It is arguable whether the current market share in terms of drugs, alcohol, prostitution and the entertainment industry will remain as it is presently. As gangs become more sophisticated, they will continue to develop better operating methods such as setting up front companies to launder money.

What is clear at present is that local gangs have not allowed the foreign competition to grab a sizeable share of the market. Instead, local gangs themselves have assumed the role of suppliers and have acquired a sophisticated edge in dealing with international markets. This is evident in the fact that local gang members are now supplying the Amsterdam and London markets with dagga. It still constitutes only a small percentage of the drugs the Nigerians are supplying to these markets. However, intelligence officials estimate that, of the mandrax, cocaine and dagga markets in the Western Cape, local gangs control about 90% of the markets, with the Nigerians, Moroccans, Chinese and other syndicates controlling the rest. This is largely the synthetic, designer drug market like speed, LSD and Exstacy.