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FBI Actions Strain Relations Between U.S., South Africa

By Gilbert A. Lewthwaite
The Baltimore Sun

American profit and South African pride are at stake in two conflicts straining the normally cordial relationship between the Clinton administration and the government of President Nelson Mandela.

South Africa has taken extreme exception to the use by FBI agents of phony South African identities to arrest a Pentagon attorney, her husband and another man for allegedly spying for the former Soviet Union and East Germany during the Cold War and, more recently, South Africa.

And the United States is objecting to a South African plan to legalize the import of cheap foreign drugs in apparent breach of international patent law, threatening to undermine millions of dollars worth of sales of U.S. propriety medicines here.

The U.S. ambassador to South Africa, James A. Joseph, is embroiled in both disputes. He has voiced U.S. objections to the proposed drugs law. In the FBI's use of South African identities to arrest the three alleged spies in a Washington "sting" operation, Mandela's deputy, Thabo Mbeki, and foreign minister Alfred Nzo have lodged an objection with Joseph.

Mbeki, in a statement issued through his spokesman Thami Ntenteni, said the use of the phony identities "was done without reference to or the knowledge of the South African government or any of its agencies."

He added: "The South African and U.S. governments are discussing this matter." A U.S. diplomat confirmed that the ambassador had spoken with the South African representatives. He refused to give any other details.

One of the South African identities assumed by the FBI was that of Ronnie Kasrils, the deputy defense minister here.

In a television interview, Kasrils said he had received a letter in 1995 from one of the accused spies, Theresa Marie Squillacote, praising his book "Armed and Dangerous." He sent her a "thank you" note in a Christmas card. The FBI, who had Squillacote under surveillance, were aware of the correspondence. In the "sting," FBI agents posed as South Africans sent by Kasrils allegedly to obtain secret information from Squillacote, 39, who is accused, with her husband, Kurt Alan Stand, 42, and another man, James Clark, 46, of conspiracy to commit espionage.

"I've not been involved at all," Kasrils said. "I feel the FBI, in entrapping this individual, used my name and that very innocent correspondence: my letter to her."

He added he was seeking legal advice but hoped the case would not damage the U.S.-South African relationship.

The drugs controversy stems from a law, initiated by South African health minister Dr. Nkosazana Zuma, that's working its way through parliament. It has provoked reaction not only from the Clinton administration and U.S. pharmaceutical companies, but also from European countries, particularly France and Switzerland which have large pharmaceutical industries.

The law is part of the Mandela government's effort to make health care here more affordable and accessible. It would allow the minister of health - "notwithstanding anything to the contrary contained in the 1978 Patents Act" - to import cheap, substitute medicines and register them in South Africa.

In a letter to Abe Nkomo, a member of the ruling African National Congress party and chairman of the parliament's health committee, Ambassador Joseph said the Clinton administration was concerned over "the apparent infringement of intellectual property rights."

Noting that the proposal gave the health minister the power to deny patent rights currently protected under South African law, he said: "We are concerned (about) the public policy implications of a law which would seem to infringe on the intellectual property of a patent holder, for even the best reasons, and especially if the power to undertake such action is vested in a single individual."

Echoing that concern, executives of U.S. pharmaceutical companies here, warned Nkomo's committee this week that the law could provoke factory closures, job losses, and a drop in foreign investments on which the government here is banking for economic growth.

Donald de Korte, chief executive officer of Merck Sharp & Dohme which returned to South Africa in 1996 after a 10-year apartheid-era absence, told the panel his company, which employs 300 locally, would be forced to consider pulling out of South Africa if the law was passed.

He warned that the proposal could produce "a flood of fake medicines." It also would threaten multinational investment here.