South Africa: Ban Loans, Say U.S. Black Leaders

Two of America's foremost black church leaders issued a joint statement in mid-March pledging to "vigorously oppose" any new United States bank loans to the South African government or its agencies.

Reverend Leon Sullivan, author of the "Sullivan Principles" for U.S. corporate employment practices in South Africa, and Dr. William Howard. President of the National Council of Churches, warned: "Lending to South Africa, to the government or its agencies and other loans that support apartheid, will be met with a massive withdrawal of deposits, accounts and the divestiture of securities.

There is no doubt, say Sullivan and Howard, that these loans are a major support to the system of apartheid in South Africa. "U.S. bank loans enable that government to free up funds and utilize them for its massively expanding military might and its large military and police forces. In essence, U.S. bank funds indirectly assist in the repression. of the black majority."

Sullivan and Howard single out Citibank, which participated in a S250 million loan to the South African government last October, as an example of a U.S. bank bolstering the apartheid system. The National Council of Churches, in conjunction with the United Methodist Board of Global Ministries and the U.S. Office of the World Council of Churches has already divested S65 million in Citibank accounts in protest against the loan.

Robert Brannon, spokesperson for Citibank, denies that the loan aids South African repression: "We think the loan we participated in is a worthwhile loan." Saying that the money was designated for construction al new housing, education and medical facilities for black South Africans, Brannon said the loan was "not helping to support apartheid."

Tim Smith, Director of the Interfaith Center on Corporate Responsibility disagrees. Claiming that funds for these project, were already appropriated in the 1980 South African budget and were not dependant upon loan approval. Smith ,aid the loan "frees up money which can be used in the military budget and it gives South Africa a better public image."