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His report, consisting of depositions from many of the principals involved in the scandal, focuses on a plan to undermine the Daily Mail and other opposition newspapers by secretly subsidizing a new, pro-government tabloid, the Johannesburg Citizen. In 1976, says the report, the department provided a fertilizer company directed by Businessman Louis Luyt, 46, with $15 million in government cash —a direct violation of treasury regula tions. In exchange, Luyt testified, he pledged as publisher of the Citizen to support editorially the government's apartheid policies. But, Luyt said, he soon tired of Eschel Rhoodie's incessant efforts to meddle in its affairs. In February, the department helped arrange a sale of Luyt's interest in the Citizen to businessmen including Dallas Lawyer David A. Witts and Beurt SerVaas, chairman of the Curtis Publishing Co. Luyt has yet to repay the loan or $3.3 million in interest.
Mostert's report suggests that the Rhoodie brothers lived very well at government expense. In one instance, the report says, they allocated $9,200 for a private box at Pretoria's rugby stadium, ostensibly for use as a secret meeting place; only the brothers and their families ever attended a game. Deneys Rhoodie, who racked up more than 200,000 miles in government-paid travel in one six-month period, was described as billing the department for a New York-to-Los Angeles flight for the purpose of "evaluating the services of a typist."
But Mostert's report does not touch on the alleged attempt to purchase the Washington Star. As described by the Daily Mail, the department in 1976 "loaned" $11.5 million from the slush fund to Michigan Publisher John P. McGoff, who is co-owner with Eschel Rhoodie and Mulder of a large farm in the Transvaal, to finance a $26.3 million offer for the paper. Joe Allbritton, the Texan who owned the newspaper from 1974 until he sold it to Time Inc. this year, denies that McGoff ever approached him. McGoff, whose Panax Corp. publishing company acknowledges bidding for the Star before Allbritton bought it, has denounced the Daily Mail story about a South African loan as "utter nonsense."
With an overwhelming majority in South Africa's parliament, the National Party is secure in office. But some of its leaders could suffer permanent damage to their political careers and reputations. Largely because he flatly denied to parliament that government funds were involved in funding the Citizen, one leading Afrikaans newspaper has suggested that Mulder should "review his position'' —a euphemism for resign. Eschel Rhoodie has hinted that an unnamed three-man Cabinet committee supervised the operations of his department. Prime Minister Botha has appointed yet another investigating committee, which is supposed to report to parliament in three weeks. Even John Vorster's name has been mentioned in the scandal; Luyt told Mostert that he agreed to start the Citizen only because he was led to believe that Vorster had personally selected him for the job At one stage in the press inquiry into the scandal, a crusading editor received a message that allegedly came from the former Prime Minister himself. "Tell him to lay off," the word was passed, "or he'll have to deal with me."