Article IX: Conclusion: What’s at Stake with Social Ventures in Africa? The Lives of 400 Million People Living on Less than $1.25 per Day by Brian Ray Dinning, JD, LLM and social venture lawyer

Article IX:  Conclusion:  What’s at Stake with Social Ventures in Africa:

The Lives of 400 Million People Living on Less than $1.25 per Day

 

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

July 27, 2012

 How many people in this world live on less than $2.50 per day?  A staggering 3,000,000,000 (3 billion people) or roughly half of the world’s population lives in desperate poverty according to the World Bank.[1]  In Africa alone, there are 400 million people living on less than $1.25 per day according to the United Nations.  And, even more shocking, over 21,000 children under the age of five die everyday from malnutrition and starvation according to UNICEF.[2]  In a given year, that’s 7.6 million children dying from preventable things such as lack of food, water or basic medicine.  Finally, the BBC reports that 200,000 children are sold into slavery and the sex trade each year in Africa.[3]

Many people ask me “why do you still work on social ventures after all that has happened?”  At the same time, I continue to ask myself and others “why aren’t more people working on social ventures to help the poor?”  The world’s population cannot sit by and let the preventable deaths of 7.6 million children occur each and every year without doing more.  I, for one, know that I cannot sit by without doing everything I can to help the poor and dying children of Africa.

Life is too short.  Material possessions and the comforts of life are fleeting.  The years of hard work at a job to simply receive a paycheck does not ultimately provide satisfaction for me and many other people – especially when our recent economic downturn shows us that it can all be taken away in a flash.  My family and my children give me a great sense of happiness and satisfaction in life as does my relationship with God.  It is because of my family and my belief in God that I am committed to helping others in need.  The Bible (along with most religions) teaches us that:

“Pure and genuine religion in the sight of God the Father means caring for orphans and widows in their distress and refusing to let the world corrupt you.”[4]

 What does it take to care for and help children and the poor?  One of two things:  your time or your money.  There are many people who have dedicated their lives to serving in charities, churches, missions organizations and even doctors without borders who give of their time to help those in need.  Yes, most of these people are paid – but they still give of their time and of themselves to help others.  Most of the world can help by giving money to help those in need.  Now, how much money is needed to help those children dying of starvation and the other three billion people living around the world in poverty.  A LOT!  But, each of us can help by donating to UNICEF, World Vision and organizations that feed and help needy children around the world.  Companies, individuals and organizations can also become financial partners by investing into social venture projects – which seek to help the poor and do even more – provide for jobs and a future for these children while also hopefully providing a financial return to the partners.

It is not an easy task!  In trying to help children and those in need in Africa, there are and will be many ups and downs:  children will still die, businesses and social venture projects will fail, people will do crazy things and pirates, dictators and rebel armies will still terrorize Africa and the rest of the world.  However, the real success is this:  some children will live by being helped by me or the many others who are working in Africa and around the world; some social venture projects will succeed; and more and more people will be given jobs and hope for a better future for themselves and their children.  In fact, if I can only help one child from starving then I believe that all my work in this life has been a success.[5]

I am truly proud to say that our social venture projects employed up to 60 full-time workers – which, in turn, fed 60 families or typically 300 people![6]  Now, how many more people could we help and jobs could we create when the social venture projects succeed?  A LOT!  Liz Hamburg in an article for The Huffington Post reported a 30:1 ratio for job creation from micro enterprise and social venture job creation at Women’s Initiative for Self Employment in San Francisco.  Meaning, for each of 30 jobs created, those employed women paid taxes and helped others with employment or other assistance thereby helping up to 900 total people.[7]  Ms. Hamburg reported,

“There’s a 30:1 return on investment as women create businesses, pay taxes, employ others and come off of public assistance. That means for every one invested in the program, 30 go back into the community through clients paying taxes, hiring others and leaving the welfare system.[8]

Thus, one successful social venture project in a rural community in Africa will change that community forever – and the lives of hundreds of people.  It was estimated by the Development Bank of South Africa that the Hole in the Wall project would have employed 23 people. If the project succeeds, it will create up to 57 full-time jobs in the local community feeding up to 285 people.  If you use the Women’s Initiative job multiplier as reported by The Huffington Post, then you could ultimately create up to 1500 jobs through a successful social venture project in one community in Africa.

You may be asking – what are these social venture projects?  What is it like at a community project in Africa?  What is the value of this property to the local community?  How about $98,818,000 of the most sought-after beautiful, untouched oceanfront land on the Indian Ocean in South Africa?  This is the value of the raw, undeveloped land held by the social venture between the community and Pure Africa as determined by a South African property expert and a real estate developer.[9]  For these rural communities in Africa, this land is their future and a means to lift their entire communities out of poverty. The local impoverished community should and must benefit substantially from the sustainable development of their land – it is their right and heritage.  Even if our social venture partners and I cannot finish the task, someone must help these communities benefit from the heritage, culture and land that they have had for generations.  It is a moral imperative and a social responsibility!

In order for you to fully understand the above statements, I will share a bit of our project vision for the local people in Africa with you and why the community land is so special. The local Xhosa people are very poor – most live on less than $1.00 per day, on average.  They are impoverished in a worldly sense but they are blessed with tremendous natural resources – their oceanfront land.  The average tribal leader has less than a sixth grade education, so while they have amazing land – they do not have the tools, skills or education to know how to maximize the value of the land.  This is where our social venture partners bring in the education, know-how, a professional team of lawyers and real estate companies and the finances to help the local community sustainably develop a real estate project to create jobs, job skills training and hopefully profits.  Don’t get me wrong – social venture projects are for-profit – so our goal was to maximize the value of the community land so that the community, our social venture partners and financial partners can all benefit.

Hole in the Wall is a cultural[10] and National icon in South Africa.  It is a large rock mountain in the Indian Ocean that boasts beautiful scenery and ocean views.  In 2004, the Development Bank of South Africa “DBSA” and the South African Government funded a study on creating a tourism project at Hole in the Wall.  In 2004, DBSA, the government and Incopho created a project summary for several projects including Hole in the Wall.[11]  In 2005, our social venture partners received a Lease from the South African National Government to develop the community project at Hole in the Wall[12] and a Record of Decision (building permit and authorization) was issued in late 2005.[13]

Now, it is well-known that nothing happens in Africa without a meeting:  we literally had hundreds of hours of meetings with the local chiefs, the tribal counsel, the community trust and the local people to show them the business plan and the proposed benefits to the local community.  In Africa, everyone has a right to speak so the meetings were attended by hundreds of people – both young and old.  Once everyone had a chance to voice their opinions and concerns, then we would finalize our social venture project plan.  Finally, after our projects were approved by the local community, we then sought approvals from the National, Provincial and local government.  Once everyone was happy with and had approved the business plan at a social venture like Hole in the Wall, then we would begin.  This initial process takes from 18 months to several years for each project!

At Hole in the Wall, after three years of meetings, the approved plan was to build a tourism site with 50 oceanfront rental homes and a boutique hotel[14] which would create a minimum of 57 jobs for the local community and the potential for hundreds of micro business jobs such as beadwork, tours, sea shell jewelry and other tourism souvenirs and hopefully profits from the development (the community owned 45% of the Hole in the Wall development as our partner).

Our professional team provided great endorsements of the projects.  We agreed to approach Sotheby’s International Realty to market the Hole in the Wall project.[15]  On May 6, 2008, Lofty Nel, a Principal with the firm of Sotheby’s International Realty provided a letter to the project, which reads:

“Lew Geffen Sotheby’s International Realty are extremely proud and honoured to be granted the exclusive mandate to market Pure Africa Development LLC Hole in the Wall project on the Wild Coast in South Africa.  Marketing of the project has commenced by word of mouth with the official launch of the project scheduled for the end of May, 2008.

 The development comprises 51 Ocean front homes in a gated estate at the Hole in the Wall, a national landmark in South Africa.  Earth Conservancy have also been appointed to manage approximately 5000 acres of pristine land adjacent to the project as part of a conservancy.  This will ensure that the amazing views and natural beauty of Hole in the Wall will remain intact for guests and owners at the Hole in the Wall development.”[16]

The 50 lots plus a hotel site were priced for long term lease at an average price of $120,000 per lot for total projected revenue to the social venture project of $6 million.[17]   The engineering firm prepared a lot layout for the Hole in the Wall and architects, engineers, and home builders were appointed to get the project ready to market.[18]

In addition to community and government approval, we also sought the approval of specialized real estate legal counsel.  On September 1, 2008, the law firm of Smith Tabata provided Pure Africa with a legal opinion letter:

“We act on behalf of the aforesaid Pure Africa, LLC as majority shareholder of Incopho Wild Coast Development Projects (Pty) Ltd.  Incopho, in turn, is the majority shareholder of the project company, The Reserve at Hole in the Wall (Pty) Ltd.  Our firm has represented The Reserve at Hole in the Wall project on behalf of Pure Africa since 2007 as legal counsel.  We also assisted in the referral of the project auditor, Charteris &  Barnes, auditors.

Based upon a review of the documentation, The Reserve at Hole in the Wall is an oceanfront and oceanview real estate development consisting of 50 stands and a small hotel.  The Reserve at Hole in the Wall is being marketed by Lofty Nel of Sotheby’s International Realty in East London, South Africa.

The original documentation for this project dates back to September, 2004.  For this letter, I have reviewed the following:

The Final Scoping Report dated September, 2004;

The Review of Documents relating to proposed Coffee Bay and Hole in the Wall developments by East Cape Development Corporation and the Development Bank of South  Africa;

The Ground Lease by and between the Kwa Tshezi Community and Earth Conservancy dated February 6, 2006;

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated February 2, 2006;

The Record of Decision from the Department of Affairs, Environment and Tourism dated August 10, 2005 authorizing Incopho “to construct 50 single storey chalets, a central restaurant, a curio shop and amenities and association infrastructure at Hole in the Wall, KSD Municipal Area.

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated June 21, 2008 which is a 30 year renewable lease at the option of Incopho for up to 90 years and continuing thereafter.

It is also my understanding that Title Deed to the land comprising the Hole in the Wall development is forthcoming to the Community in the next 6 months or longer from the Government of South Africa and the Department of Land Affairs.

Based upon a review of this documentation, Incopho has a valid lease with the Government of South Africa and the Kwa Tshezi Community for up to 90 years or more.  Under South African law, Incopho through The Reserve at Hole in the Wall (Pty) Ltd. can sublease the 50 stands to interested sublessees for rental payments over the term of the lease or the rent and lease may be prepaid.  It is my understanding that sublessees can “purchase” or sublease one or more of the 50 stands for an up-front payment of rent or with 10% downpayment of rent and the balance of the rent payments over 10 years at 12% interest.

It is my understanding that Sotheby’s International Realty will be acting as estate agent in the “sale” of the 50 subleased stands to the general public.  A separate company,  Villager Homes, will be constructing homes on the 50 subleased stands under separate written agreement between Villager Homes and the stand “purchasers” or sublessees. 

Finally, when Title Deed is ultimately vested with the Kwa Tshezi Community, it is planned that the 50 stand sublessees may have the opportunity to convert their lease to Title Deed ownership of their stand.”[19]

By May, 2008, all architectural designs, engineering, lot layout, utilities and infrastructure plans were completed and a contract to install all utilities, roads and services to The Reserve at Hole in the Wall were completed.  These crucial steps made it possible for marketing of long term leases for the 50 lots by Sotheby’s International Realty.

In May, 2008, Sotheby’s began to issue marketing materials for Hole in the Wall[20] and in September, 2008, Hole in the Wall was listed as a “hot property” in Conde Nast Home in South Africa and Media Press Releases were issued.[21]  Sotheby’s also went to great expense to create glossy brochures to begin marketing and they also launched a marketing website for the Hole in the Wall project.[22]  Pure Africa and the social venture partners put up a marketing Sign Board at the Hole in the Wall project.[23]  Everyone was excited because Sotheby’s and their marketing experts were certain that the property would lease quickly and that meant up to $6 million of projected revenue for the social venture project and the local community.

However, just as the marketing campaign was beginning, the aggressive bad press campaign team of Batte, Stiner and others jumped in to actively interfere with and destroy the marketing efforts at the Hole in the Wall project.  This was the most damaging tortious interference that resulted from the aggressive bad press campaign – anonymous phone calls from this coordinated group to our real estate professional team and social venture partners.[24] At the launch of the Hole in the Wall project and at other projects, Sotheby’s International Realty, government officials and others received several anonymous phone calls from Virginia and from South Africa stating that the projects were false, that we were trying to sell (versus lease) community land and that I was not someone to be trusted.  The callers also threatened to and did take the matter to the newspapers to discredit Sotheby’s and the social venture projects.  In discussions with Sotheby’s and other real estate firms, we were told that a new development, especially a social venture development, is a delicate matter and you only want positive information for the general public to view when seeking to spend money on a new oceanfront resort.  The decision was made to halt the marketing campaign at Hole in the Wall and try to regroup later.  This was devastating to us because it meant that years of time, effort, money and relationships were wasted.

Each time a project was halted by the malicious and negative actions of Batte and his coordinated bad press campaign, we had to stop everything and try to work on a new project that hadn’t yet been attacked by this group.  However, each time the task grew harder and everyone on the social venture team was tired of the negative attacks and the disappointment and damage that resulted from the negative attacks.

As I have said before, I am still working on social ventures in Africa and will continue to do so.  Each day that I work in trying to help create jobs for the needy in Africa will hopefully help save one or more of those 21,000 children dying everyday.  Does it take money to help save the needy in Africa and elsewhere?  Yes, a lot of money.  Does it take time and hard work?  Yes, a lot of time, effort and thankless hours.  Will this work get done by itself?  No – people have to get involved and do it.

Can you be paid to do this work?  Yes, you can be paid – just like I was paid and millions of others in the public and nonprofit sectors are paid.  And, that pay comes from donations, taxes and investment dollars – just like my consulting compensation.[25]  How does President Obama get paid?  He gets paid from our voluntarily contributed tax dollars.  The fact is public service and charity work is paid for by people contributing money to get a job or a project or a public service done.  If getting paid for social venture work or public service was wrong, then millions of people are guilty of the same thing on a daily basis in the United States.  Did you know that your tax dollars went to pay an abortion doctor to perform abortions or for a soldier to fight in Afghanistan or for a social worker to help inner city children learn to read – probably not but perhaps indirectly you were aware of it.

In our social venture projects, donors and financial partners were given hundreds of pages of legal documents, business plans and other project-related information to review, study and provide to their lawyers and accountants.  Each of these financial partners or donors then chose to donate or invest pursuant to those legal documents and business plans.  In donating funds, there is no return other than the charitable donation deduction you receive for donating.  In becoming a financial partner, it was abundantly disclosed that like most businesses in the world, the social venture projects can fail.  The financial partners were informed that they could lose all of their investment and they were advised of the risks.[26]  While I hope that the social venture projects can be completed, even despite all of the obstacles and interference and crazy actions of others, it will still take a lot of time, money and hard work to get it done.  However, the rewards of completing the social venture projects and helping to create jobs, feed families and save as many lives as possible in Africa make it all worthwhile.

God Bless you all.


 [3] BBC 5 October, 2001 & Anti-Slavery Society.  See http://www.oprah.com/oprahshow/Sold-into-Slavery/

 [4] James 1:27 New Living Translation (2007).

 [5] Like many other people, I sponsor a little girl in Zambia through World Vision by providing enough money – roughly $1 per day – so that she has food, clothing and school supplies.  While this is clearly not enough – it is something invaluable to her and frankly, it means the world to me.  To help a child in need, see www.worldvision.org.

 [6] http://www.huffingtonpost.com/liz-hamburg/microenterprise-an-exciti_b_813738.html.  Liz Hamburg reports that each job created fed a family of five from the income from that job.

 [7] For a report on the multiplication effect from job creation in social ventures, see http://www.fieldus.org/Microtest/SROI.pdf

 [9] See Wild Coast Property Valuation.  This valuation was prepared by real estate expert Alan Bell and real estate developer David Stefano based upon comparable property values on existing real estate for sale on the Wild Coast of South Africa.

[10] Known in Xhosa tradition as the place of The Great Cattle Killing, Hole in the Wall is steeped in cultural fokelore and significance for the Xhosa people.  For a short version of the legend, see http://www.southafrica-travel.net/eastcape/wildcoast.htm

[11] See DBSA – Incopho Project Overview as Article 6 FN 4.

[12] See National Government Lease to Incopho.  There are dozens of leases between the local community partners and the social venture partners, which document the projects and the hopeful social benefit to the local community partners.  For years, the social venture projects paid lease payments to the various communities, paid local workers and paid development costs.

[13] See Record of Decision to Incopho.

[14] See Site Plan at Article 6 FN 7.

[15] See Pure Africa letter to Sotheby’s at Article 6 FN 10.

[16] See Letter from Lofty Nel of Sotheby’s International Realty at Article 6 FN 11.

[17] See Plot and Plan Pricing at Article 6 FN 12.

[18] See Model Home specifications by Villager Homes at Article 6 FN 13.

[19] See Opinion Letter of Smith Tabata Law Firm at Article 6 FN 14.

[20] Sotheby’s Booklet showing Hole in the Wall Development at Article 6 FN 15.

[21] See Conde Nast Home article naming Hole in the Wall a “Hot Property” at Article 6 FN 16.

[22] See Sotheby’s website layout at Article 6 FN 17.

[23] See Pure Africa Hole in the Wall signboard at Article 6 FN 18.

[24] See Pam Golding Properties Letter.

[25] My consulting compensation was paid pursuant to signed agreements on an hourly rate basis and payment of costs and expenses and it was acknowledged by the managers and boards of the various companies that agreed to hire me as a consultant.  See William Brown Letter.

[26] See Private Placement Memorandum of the Fund and the signed Subscription Agreement of Dr. Allan Stiner.

Advertisements

2 Comments

Filed under Uncategorized

Article VIII: The Lawyers: Lying, False Claims, Threats and Insanity: Social Ventures in Africa? by Brian Ray Dinning, JD, LLM and social venture lawyer

Article VIII:  The Lawyers:  Lying, False Claims, Threats and Insanity

 

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer[1]

 

July 20, 2012

 

What does a lawyer who was suspended from practicing law for three years for making false claims against me and others and not being truthful with a court and other unprofessional and tortious behavior with a history of insanity have to do with this story? A LOT!  He is one of the lawyers for the bad press collaborators (see Articles III through VII at www.socialentrepreneurshipinafrica.com).   Jason Christopher Roper and his close friend and former law partner, George Bowles are the lawyers for the aggressive bad press campaign collaborators.  These two lawyers not only participated in most, if not all, of the aggressive bad press campaign, they are the two people who have profited substantially by representing this group – earning hundreds of thousands of dollars in legal fees.

 

George Bowles was the lawyer for Batte and Stiner.  Bowles contacted business associates of Pure Africa, Earth Conservancy and me in an effort to damage and discredit the social venture projects in South Africa and me and to support his claims.  On at least two occasions, Bowles contacted our business partners (general contractors and builders from Virginia who were overseeing the development work on the Wild Coast of South Africa) to discredit me and to engage in a fishing expedition to solicit them as clients in a possible legal action against me.  Interfering with and damaging existing business relationships, providing false and inflammatory information and then seeking to represent these people is wrong – it is illegal and actionable (tortious interference) but it is also against a lawyer’s code of ethics.

 

These actions by Bowles are not only unprofessional and unethical but they cost the projects hundreds of thousands of dollars in lost investment and the loss of two or more business relationships.  Our business relationships with general contractors a year or more to develop since the projects are in Africa and generally included one or more due diligence trips to South Africa.  Each time one of these relationships was destroyed by Bowles, it cost the social venture projects in time, money and valuable resources.  Bowles and his clients also sent confidential and privileged information to Bossie Bosman, which was used to discredit us in South Africa with the government, our professional team, our local community partners and our business partners.[2]  He also admittedly shared confidential and privileged information with his good friend and former partner Roper.  It is unclear whether Bowles’ law firm, Williams Mullen is aware of the tortious, interfering and damaging conduct.[3]

 

Jason Christopher Roper was actively involved in the aggressive negative press campaign in an illegal and actionable way as well.  He openly advertised for new clients on the blog of Jeff Brown and he admitted to contacting the South African government and others in an effort to damage and discredit the projects and me.  He also admitted to working in concert with and sharing confidential and protected information with his good friend, Bowles.  Together, these two worked hard to damage and discredit the projects and me and they profited handsomely from their efforts through the payment of legal fees by Batte, Stiner and the other bad press campaign collaborators.[4]

 

The contact by Roper and Bowles to the government of South Africa, to Sotheby’s International Realty, to Pam Golding Properties and others stopped our projects on at least three specific instances directly:  at Mdumbi Bay with Fresh Properties,[5] at Hole in the Wall with Sotheby’s International Realty,[6] and with Pam Golding Properties.[7]  Each time this occurred, it stopped the marketing campaign and cost the social venture projects millions of dollars in revenue.  This revenue would have been used to repay our financial partners and to provide for a financial return to the local community and the social venture partners.  It is unclear how many indirect opportunities were lost to the bad press campaign but I know of several instances where business relationships ended due to the blog of Jeff Brown and others.

 

Many times, we tried to stop them from interfering by sending letters of support and seeking endorsements from all of our professional team members.[8]  We also sought and received endorsement letters and support from the Government of South Africa including South African President Jacob Zuma, National Cabinet Members and National and local government.[9]

 

Roper and Bowles coordinated the legal attack on me and the social venture projects to line their pockets with legal fees.  Instead of simply asking the social venture projects for a return of their money, they sued first using a generic fraud complaint.  Since the only way to get to an individual personally instead of the business is by alleging fraud, they started off by using a general allegation of fraud to file a lawsuit against me personally as well as against the social venture companies.  In the first three cases, the social venture partners and myself settled three lawsuits by paying back the investors in full with interest and attorneys’ fees.  The next legal battle was with the Stiners.  The social venture companies would have eventually paid them back as well when funding was available to settle the lawsuit but the damage that they did to the social venture projects through the aggressive bad press campaign plus the death threats against me led us to agree that settling the lawsuit was not appropriate and a countersuit was filed.  It was then that the Stiners dismissed their lawsuit forever.  The final lawsuit (other than the $30 million lawsuit pending against the bad press campaign club filed by me) was a lawsuit filed by Roper.  This suit cost Jason Christopher Roper his job because my legal counsel and I were present when the senior partners of his firm at McKenry Dancigars said to him that “there is no case.”  Roper continued with the lawsuit contrary to his firm’s advice and was fired.  Strangely, he then reportedly attempted to commit suicide, was hospitalized and then continued to practice law until his recent suspension.[10]

 

I was finally able to achieve a small victory with Roper through the Virginia State Bar.  Judge Karen Burrell documented Roper’s negative, unprofessional and attacking behavior against me in both correspondence and court order.[11]  On February 17, 2012, Jason Christopher Roper was suspended from practicing law for three years by the Virginia State Bar.  The announcement from the Virginia State Bar reads:

 

     “Jason Christopher Roper, 702 Lakeview Court, Mars, PA 16046

VSB Docket Nos. 09-021-080040, 10-021-080199, 10-021-080602

On February 17, 2012, the Virginia State Bar Disciplinary Board suspended Jason Christopher Roper’s license to practice law for three years for violating rules governing candor toward the tribunal; fairness to opposing party or counsel; respect for rights of third persons; confidentiality of information; conflict of interest: general rule; conflict of interest: former client; declining or terminating representation; meritorious claims and contentions; ; communication with persons represented by counsel; bar admission and disciplinary matters; and misconduct.”

 

This, in turn, gave me the necessary evidence to prepare and file the current $30 million lawsuit including claims for federal civil RICO against Jason Christopher Roper, George Bowles and the bad press campaign collaborators.  My goal with the lawsuit is to fight for the rights of the social venture partners, the investors and donors, the local poor communities in Africa and me against this negative and actionable conduct by a small group of people. These people cost us millions of dollars in potential profit, millions of dollars of costs and expenses and years of hard work and effort for the people of Africa.

 

Just to highlight the attacking, unprofessional and unbalanced thinking of this group, Roper sent this scary and threatening email to me:

 

“Mr. Dinning:

Good morning and congratulations on your indictment!  May you enjoy the next twenty to thirty years in a nice federal peneteniary without the comforts of your bimbo wife, your kids, or the finer things in life . . . Don’t worry about your wife.  If she appears at your trial, I will make sure to inform her that if she needs a good serving, she can always give me a call. 

 

Laughing still.

Jason C. Roper”

 

My legal counsel responded with:

“Mr. Roper –

I was just forwarded your communication with Mr. Dinning.  Note that your communication itself, as well as the content, are not only violative of PA ethical rules, but are unlawful in and of themselves.  Besides being disgusting and offensive. 

Given your history of unstable and violent behavior, I must take your statements, especially as to threatened sexual assault on Mrs. Dinning, as real threats to her well being and report the same as well as insist that you never, in any manner, communicate with my client again.  If you do so, appropriate legal action will be taken in Pennsylvania. 

I’m not saying this to argue with you, and I will not respond to any response or argument that you make in return.  You either comply or don’t.  If you don’t, I will take appropriate action.”

After sending this to my lawyer, misconduct bar complaints were filed by my legal counsel and me in both Virginia and Pennsylvania for this shocking and threatening behavior.

This is not the conduct of rational people.  What I have shared with you is the actual, documented conduct of some of our financial partners and their legal counsel in social ventures in Africa.  It is also the conduct of the principle instigators behind the current charges pending against me in the United States as a final blow in their aggressive bad press campaign.

 

While I am happy to face them in court, I wanted to tell my side of the story and to share with you my heart for the people of Africa.  While no one is perfect, all of my consulting fees, expenses, personal expenses and draw compensation was documented in consulting agreements and authorized by the social venture companies.  You do not have to take my word for it though, as I have attached a letter from one of our social venture partners, Dr. William Brown, Ph.D Professor and Fulbright Scholar to Assistant US Attorney Steve Haynie in February, 2012.  In this letter, Dr. Brown (which can be supported and corroborated by “dozens of people” according to Dr. Brown) openly discusses the aggressive bad press campaign and the fact that my consulting fees and expenses were all authorized and approved by the Board of Directors and by my consulting agreements.[12]

 

While I am happy to tell the truth, the whole truth and nothing but the truth in court, I can tell you that my reputation, family and over 16 years of work on social ventures has been irreparably damaged by this unjust process.  The truly sad thing is that the real impact of this will be against the local people in Africa, who were and are counting on us for help not to mention the wildlife that is counting on us for safety and protection.[13]  I can only hope that others will take up the cause of social ventures in Africa (despite the risks I have described) and help the local people of Africa to help preserve and conserve their land and natural resources for future generations to enjoy.

 

 


[1] My background is at http://www.avvo.com/attorneys/23321-va-brian-dinning-629141.html

[2] George Bowles, for his part in the aggressive bad press campaign, is listed as one of the defendants in the pending $30 million lawsuit by me and Pure Africa to reclaim some of the damage caused by their reckless and intentional actions in damaging me and the social venture projects.  Our goal is to ensure that the projects move forward for the benefit of the local communities in Africa.

 [4] Jason Christopher Roper has already been suspended for three years from practicing law for his unprofessional and attacking conduct against me by the Virginia State Bar as documented by Judge Karen Burrell in both correspondence and court order.  Jason Roper, for his part in the aggressive bad press campaign, is listed as one of the defendants in the pending $30 million lawsuit by me and Pure Africa to reclaim some of the damage caused by their reckless and intentional actions in damaging me and the social venture projects.  For his background, see http://www.avvo.com/attorneys/15219-pa-jason-roper-537025/reviews.html

[6] Sotheby’s emails.

[10] It should also be noted that Jason Christopher Roper was fired from his last two law firms (Blumling & Gusky and McKenry Dancigars) and it is reported to me by other attorneys that he was fired from two previous law firms for similarly bizarre and unprofessional behavior.

[11] See Letter from Judge Karen Burrell.  Article 8 FN Judge Burrell Letter re Roper

[12] See Letter of Dr. William Brown to Steve Haynie, Asst. US Attorney  Article 1 FN 1 Letter from William Brown to Mr. Haynie

[13] Letter from Xolile at Mdumbi Bay Community Trust.  Article 8 FN Xolile 2012 Letter

Leave a comment

Filed under Uncategorized

Article VII: On the Ground in Africa: Not Much Better by Brian Ray Dinning, JD, LLM and social venture lawyer

Article VII:  On the Ground in Africa:  Not Much Better.

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

July 17, 2012

 

With social venture projects in Africa, there is generally a team of social venture partners on the ground who are responsible for managing the project and the day-to-day operations.  For example, I’m currently working with an organic farmer in community farming projects in Africa, where there is a local non-profit organization with six full-time workers (providing free seeds and education to the local community), a for-profit farm manager (providing oversight and management to the community farmers) and the local community providing land and workers.  These are the project managers and workers who run the project on the ground.  Every organization, including the United Nations, USAID and the World Bank work with local partners on projects in Africa.[1]

 

With the initial farming social venture, the mining project and the tourism project, our local project manager was Michael van der Merwe and his brother, Pieter van der Merwe.  Whenever funding is needed on the ground in Africa for the social venture projects, there is a team of people who become financial partners and others who generally work on the projects.  In our projects, the funding partners were part of limited liability companies in the United States or a United States non-profit corporation.  The funding project company was managed by Pure Africa and funds were loaned to the social venture project in South Africa.  Those loan funds were then managed by the social venture project manager and invested into the project or used to pay project fees and expenses.  Finally, the financial partners would receive loan documentation and social venture project ownership for their loan to the social venture project or, in the case of funding provided by a US non-profit corporation, like Earth Conservancy, the funding was sent in the form of a grant.

 

The loan funds would then be under the control of the local social venture project manager, who had the responsibility of managing those funds to complete the projects and then repay the loan.  At Hole in the Wall and on the Wild Coast of South Africa, our local partner was Bossie Bosman, who was one of the founders of the social venture work at Hole in the Wall and other projects.  Like with Michael van der Merwe, funding for the Hole in the Wall project was generally wired from the United States to Bossie Bosman, who had responsibility of managing those funds, completing the project and repaying the loan.

 

Although we had sent considerable funding to Michael van der Merwe to secure rights to the three projects and to conduct due diligence, purchase reclamation bonding for the mining project and scoping and other costs, the Pure Africa Sustainable Development Fund and Pure Africa along with our nonprofit social venture partner, Earth Conservancy, did not want to do any projects with Michael van der Merwe.  There was a lack of business reporting, a lack of accounting and most of all, Michael van der Merwe maintained close ties with Wextrust Capital.  As stated before, a private investigation report was later ordered for Michael van der Merwe, which confirmed that he was not a man to trust[2] as he owned seven or more luxury homes in Pretoria, Waterkloof, Waterkloof Ridge, Midrand and East London, an office building in Midrand, a dozen or more luxury automobiles, motorcycles and other toys and his brother, Pieter, built a 20,000 square foot mansion.  This list doesn’t include the assets, which were given to the girlfriends of van der Merwe and Shereshevsky.  The Fund and Pure Africa did not want to risk any further involvement with Michael van der Merwe.  Despite his claims of profitability and viability of these projects, the decision was made to drop them and it cost hundreds of thousands of dollars in loan capital sent to him that will likely never be recovered.

 

In 2009, after a lengthy private investigation to locate loan funds sent to Michael van der Merwe on behalf of our financial partners, my brother and I confronted Michael van der Merwe at his luxury oceanfront home in East London, South Africa.  I asked Michael van der Merwe,
“what did you do with our financial partner’s loan capital and my money?”  A nervous van der Merwe said, “I am in the process of selling the tourism project and I will repay all of your loan money to you and your financial partners.”  In blaming Wextrust Capital, he said, “Joe [Shereshevsky] was a thief and we all lost money.”  When asked directly about his luxury cars, luxury homes and his brother’s mansion that were all paid for with cash, he said that he “bought them with money given to him by Joe Shereshevsky and Wextrust Capital.”  With promises of repayment from van der Merwe, we left after an hour-long meeting.  Of course, we all waited for years for a promised repayment from Michael van der Merwe that never came.  Naturally, when I was asked by our financial partners about the repayment of our loans, I could only pass along what van der Merwe told us many times:  that the projects were being sold and that he would repay all of loan money to us.  This – we found out – was one of many lies told to us by Michael van der Merwe and his brother – Pieter.  The fact is – they stole the loan money of our financial partners (and of Wextrust Capital’s investors) and used it to buy an estimated ten million dollars of luxury homes, cars and other items for cash.[3]

 

Again, this was another significant negative action that made us change our entire business strategy and move on to other projects.  Thus, Hole in the Wall and the Wild Coast projects became our principle focus.[4]

 

The Fund managers, Rick, Lou and John, along with Pure Africa, wanted to have someone “on the ground” in Africa and since my brother, Steve, has a passion for missions work, I suggested that he go to Africa to watch over the developments.   Steve traveled to Africa in the summer of 2006 with promises of an annual salary plus living expenses.  With all of the interruptions, bizarre and criminal conduct and the aggressive bad press campaign, it was very difficult to locate funding partners.  Everyone was turned off by the negative press campaign.

 

One of the first issues Steve encountered was with our local social venture project manager, Bossie Bosman.  Shortly after arriving in South Africa, Steve soon discovered that Bossie Bosman has misappropriated funds designated for the Hole in the Wall project to buy a new Landrover LR3 for cash in his personal name at a cost of $100,000 – a devastating blow – as the funds that he misappropriated were supposed to be used to pay the contractual wages for the local community workers, for my brother and the project managers.[5]  It was six months worth of budgeted expenses stolen by Bosman to purchase a Landrover for himself.  Ultimately, Bossie Bosman was reported to the police in South Africa and he was voted off the Board of Directors of the social venture project.[6]  Angry, Bossie Bosman then became the ally of Dr. Batte and Dr. Stiner and they corresponding regularly in their bad press campaign and coup attempt, which commenced in April, 2007.

 

 

The beautiful oceanfront and riverfront project at Mdumbi Bay

 

As our projects on the Wild Coast were moving closer to launching, they had great potential and we received many assurances that the Hole in the Wall and Mdumbi Bay projects would lease out in quickly.  This meant millions of potential dollars of revenue for the social venture projects and for the local community.  With these funds, all investors could be repaid and the local community would receive a large windfall of profits that they could use to build schools, medical clinics and other needed facilities.

 

However, despite great potential projects, the intentional damage and interference by Batte, Stiner, Bosman and others killed the project at Mdumbi Bay (see photo above).  In June, 2007, the project at Mdumbi Bay was ready to commence marketing by Fresh Properties in East London, South Africa.[7]  There were multiple meetings and conference calls between the marketing company, the financial partners and Pure Africa.  The project would entail the long-term lease of 46 home sites and a small tourism lodge.  On or about June 14, 2007, Fresh Properties set a meeting to discuss the current status of the Mdumbi Bay Marketing Plan.  In this correspondence, Mark Trow of Fresh Properties lists “definite potential cash buyers” for 39 of the 46 lots, with names of the buyers listed next to the lot they had chosen, which represented over $6 million in social venture project revenue.[8]  However, several anonymous phone calls were made to the South African government claiming that we were trying to “sell” the land instead of “lease” the land to potential buyers.  This immediately stopped the marketing effort and in November, 2007, we switched real estate sale companies to Sotheby’s International Realty.  Once again, we were so close to a social venture project success before the proverbial rug was pulled out from under us by Bossie Bosman, Batte and others.[9]

 

Bosman, Batte, Stiner and others then began to utilize the blog of Jeff Brown, a hotel owner and opponent of any development (other than his) at Hole in the Wall.  Jeff Brown told my brother that he will do anything he can to stop the development at Hole in the Wall and he became the bulletin board for all of the aggressive bad press, libel, slander and false information against the social venture projects and me.  They coordinated with Jeff Brown because he could post all of their information anonymously and he has sent it by automatically generated email to our investors, donors and the general public to discredit the social venture projects and me.  They have even utilized the blog to post supposed messages from my children and others – of course – all anonymously.  The unfortunate consequence of the Internet is that it is practically impossible to stop someone overseas from posting false and defamatory articles about you.

 

Hole in the Wall was another social venture project with great potential.  Our professional team provided great endorsements of the project.  On May 6, 2008, Lofty Nel, a Principal with the firm of Sotheby’s International Realty provided a letter to the project, which reads:

“Lew Geffen Sotheby’s International Realty are extremely proud and honoured to be granted the exclusive mandate to market Pure Africa Development LLC Hole in the Wall project on the Wild Coast in South Africa.  Marketing of the project has commenced by word of mouth with the official launch of the project scheduled for the end of May, 2008.

 

The development comprises 51 Ocean front homes in a gated estate at the Hole in the Wall, a national landmark in South Africa.  Earth Conservancy have also been appointed to manage approximately 5000 acres of pristine land adjacent to the project as part of a conservancy.  This will ensure that the amazing views and natural beauty of Hole in the Wall will remain intact for guests and owners at the Hole in the Wall development.”[10]

 

The 51 lots were priced for long term lease at an average price of $120,000 for a total projected revenue to the social venture project of $6 million.  The project was on the verge of success.

 

 

On September 1, 2008, Russell Linde, South African real estate attorney of the law firm of Smith Tabata provided Dinning and Pure Africa, LLC with a legal opinion letter which states:

“We act on behalf of the aforesaid Pure Africa, LLC as majority shareholder of Incopho Wild Coast Development Projects (Pty) Ltd.  Incopho, in turn, is the majority shareholder of the project company, The Reserve at Hole in the Wall (Pty) Ltd.  Our firm has represented The Reserve at Hole in the Wall project on behalf of Pure Africa since 2007 as legal counsel.  We also assisted in the referral of the project auditor, Charteris &  Barnes, auditors.

Based upon a review of the documentation, The Reserve at Hole in the Wall is an oceanfront and oceanview real estate development consisting of 50 stands and a small hotel.  The Reserve at Hole in the Wall is being marketed by Lofty Nel of Sotheby’s International Realty in East London, South Africa.

The original documentation for this project dates back to September, 2004.  For this letter, I have reviewed the following:

The Final Scoping Report dated September, 2004;

The Review of Documents relating to proposed Coffee Bay and Hole in the Wall developments by East Cape Development Corporation and the Development Bank of South  Africa;

The Ground Lease by and between the Kwa Tshezi Community and Earth Conservancy dated February 6, 2006;

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated February 2, 2006;

The Record of Decision from the Department of Affairs, Environment and Tourism dated August 10, 2005 authorizing Incopho “to construct 50 single storey chalets, a central restaurant, a curio shop and amenities and association infrastructure at Hole in the Wall, KSD Municipal Area.

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated June 21, 2008 which is a 30 year renewable lease at the option of Incopho for up to 90 years and continuing thereafter.

It is also my understanding that Title Deed to the land comprising the Hole in the Wall development is forthcoming to the Community in the next 6 months or longer from the Government of South Africa and the Department of Land Affairs.

Based upon a review of this documentation, Incopho has a valid lease with the Government of South Africa and the Kwa Tshezi Community for up to 90 years or more.  Under South African law, Incopho through The Reserve at Hole in the Wall (Pty) Ltd. can sublease the 50 stands to interested sublessees for rental payments over the term of the lease or the rent and lease may be prepaid.  It is my understanding that sublessees can “purchase” or sublease one or more of the 50 stands for an up-front payment of rent or with 10% downpayment of rent and the balance of the rent payments over 10 years at 12% interest.

It is my understanding that Sotheby’s International Realty will be acting as estate agent in the “sale” of the 50 subleased stands to the general public.  A separate company,  Villager Homes, will be constructing homes on the 50 subleased stands under separate written agreement between Villager Homes and the stand “purchasers” or sublessees.

Finally, when Title Deed is ultimately vested with the Kwa Tshezi Community, it is planned that the 50 stand sublessees may have the opportunity to convert their lease to Title Deed ownership of their stand.”[11]

 

By June 2008, all architectural designs, engineering, lot layout, utilities and infrastructure plans were completed and a contract to install all utilities, roads and services to The Reserve at Hole in the Wall were completed.  These steps made it possible for marketing of long term leases for the 51 lots by Sotheby’s International Realty.

 

In May, 2008, Sotheby’s began to issue marketing materials for Hole in the Wall and in September, 2008, Hole in the Wall was listed as a “hot property” in Conde Nast Home in South Africa and Media Press Releases were issued.  Sotheby’s also went to great expense to create glossy brochures to begin marketing and they also launched a marketing website for the Hole in the Wall project.

 

Then, the aggressive bad press campaign team started their bad press campaign in South Africa. This was the most difficult interference that resulted from the aggressive bad press campaign was the anonymous phone calls from this coordinated group to our real estate professional team.  At the launch of the Hole in the Wall project and then at the second marketing launch of the project at Mdumbi Bay, Sotheby’s International Realty received several anonymous phone calls from Virginia in the United States and from one or more individuals in South Africa stating that the projects were false, that they did not exist and that I was not someone to be trusted.  The callers also threatened to take the matter to the newspapers to discredit Sotheby’s and the social venture projects.  In discussions with Sotheby’s, we were told that a new development, especially a social venture development, is a delicate matter and you only want positive information for the general public to view when seeking to spend money on a new oceanfront resort.  The decision was made to halt the marketing campaigns and try to regroup under a new development company.[12]  This interference also cost us R25,000,000 or $4M from The Development Bank of South Africa.[13]

 

When another marketing project called The Wild Coast Explorer Club was preparing to launch in the Fall of 2009, similar anonymous phone calls were made to Pam Golding Properties, the real estate company handling the development and launch of this new project.  The callers again threatened to take the matter to the newspapers and to tarnish the name of Pam Golding Properties if they continued to represent the project.[14]  Sadly, again, this malicious, bad press campaign had succeeded in stopping a very promising project.  The Wild Coast Explorer Club had received endorsements from our law firm, accounting firm, real estate professionals, home builders and many others but marketing a new project cannot stand up to bad press – even if it is false.[15]

 

Each time a project was halted by the malicious and negative actions of Batte and his coordinated bad press campaign, we had to stop everything and try to work on a new project that hadn’t yet been attacked by this group.  However, each time the task grew harder and everyone on the social venture team was tired of the negative attacks and the disappointment and damage that resulted from the negative attacks.  In 2010, my brother had to return home penniless as he too was paid only a small fraction of the salary and living expenses he was promised by the social venture projects.

 

With regard to the negative attacks, there are emails, correspondence and witnesses to corroborate and confirm everything that I have said here today.  Additionally, in February, 2012, I filed a $30 million civil RICO lawsuit against Batte, Stiner and the group responsible for the aggressive bad press campaign in Suffolk Circuit Court in Virginia.  The goal is to recoup the social venture revenue lost to their libel, slander and interference and to complete one or more of the social venture projects, repay the financial partners and provide jobs and profits to the local Xhosa community.  It is no wonder that they have filed false reports and charges against me because they have to try to justify their negative actions and cover up their own wrongs.

 

Finally, many of you may say, the government is accusing you of using funds to buy a luxury home and cars.  In 2006, with my consulting contracts in hand from Pure Africa and Earth Conservancy, I was able to put a down payment on a nice home (along with significant financial help from my family) with a large mortgage.  In 2008, after learning that all of our money was stolen by Michael van der Merwe and Bosman and the interference by Batte and others, Pure Africa and Earth Conservancy were unable to pay me and my home was sold in a short sale per an agreement with the bank so that we could avoid foreclosure.  I sold or had two cars repossessed to pay the car loans.  The real difference between my compensation and van der Merwe’s and Bosman’s theft is that I was paid a fraction of the consulting fees promised to me by written consulting agreements and my home and cars were bought with bank financing like most people – not with stolen cash like the van der Merwes and Bosman.[16]

 

The next and final article in the series is: The Malicious Lawyers:  Lying, False Claims, Threats and Insa


[2] In the Investigation Report of Michael van der Merwe dated April, 2008, it is noted that the Lion’s Walk project was sold but the funds never went into the company nor were taxes paid.  We are still trying to recover our loan funds from Michael van der Merwe.

[3] There are many more sordid and salacious details to the stories about Joe Shereshevsky, Wextrust Capital and Michael van der Merwe and their rampant thievery and fraud but those stories will have to be told in another Article or series of Articles.  The real question is:  where are the Volvo loaders, trucks, excavators and other moveable equipment from all those mining projects?  Each mining project had approximately $5M of equipment and in my last conversation with van der Merwe – he said he and Wextrust Capital had seven mining projects.  That is perhaps $35M of moveable equipment that may be unaccounted for and likely liquidated by the van der Merwes at or about the time of the Wextrust Capital scandal.

[4] See Status Report of Fund dated July 2007 and September 2007.  Article 7 FN 4 Fund Status Report July 2007

 [5] See Minutes voting Bossie off the Board and Bossie Crimes letter.

 [6] We were also told later by local community and governmental leaders that Bosman was a hated man in the local black communities because it was widely known that he was a mean and malicious police officer in the Apartheid era and treated the local people very harshly.  It was also rumored that Bosman was present and participated in the beating death of black student peace advocate Stephen Biko in Port Elizabeth.  See http://en.wikipedia.org/wiki/Steve_Biko

 [7] See Fresh Letter.  Fresh Purchasers are Waiting

 [8] See Fresh 39 Cash Buyers email.  Fresh Cash Buyers for 39 lots

 [9] The $6 million of revenue from the sale of the lease lots at Mdumbi Bay would have paid all project costs, paid back the financial partners of Mdumbi Bay project and generated a significant profit for the local community and our social and financial partners.

[10] See Letter from Lofty Nel of Sotheby’s International Realty.  Article 7 FN 10 Sotheby’s Endorsement Letter copy

[11] See Opinion Letter of Smith Tabata Law Firm.  Article 7 FN 11 Pure Africa (Opinion Letter for Hole in the Wall

[14] PGP Email

[15] Endorsement Letters  White and Case and Grant Thornton Endorsement

[16] The completely false and slanderous news articles written about me state that our financial partners invested or donated $2.9M and I kept $2M.  Actually, most of the financial partners were recruited by Dr. John O’Neil, Rick Lally, Lou Dommer, Granville Batte and Dr. McTavish.  Of the $2.9M, approximately $800,000 was sent to Michael van der Merwe, Bosman and our project managers as loans and was managed and spent by them presumably on project expenses, $900,000 to the law firm trust account of attorney Gerhard Dreyer for his mining projects with Granville Batte, approximately $250,000 was used to repay loans and settle disputes by financial partners and the balance was used to pay company expenses such as rent, consulting fees for me and others, travel, repayment of loans and other business costs and expenses.  From 2005 to 2010, I was paid less than half of the consulting income I was contractually promised by the social venture projects.  In 2011 and 2012, I continue to work with social venture community projects in Africa on a volunteer basis without any compensation.  I live off consulting income from tax consulting with energy companies, teaching them to utilize tax incentives to become more environmentally-friendly and emitting less pollution.

Leave a comment

Filed under Uncategorized

Article VI: What’s at Stake with the Social Ventures in Africa: The Community’s Heritage and Prized Treasures by Brian Ray Dinning, social venture lawyer


Article 6:  What’s at Stake with the Social Ventures in Africa:

 The Community’s Heritage and Prized Treasures

 By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

 

July 13, 2012

You may be asking – what are these social venture projects?  What is it like at Hole in the Wall?  Why would people like Granville Batte, Jeff Brown (White South African hotel owner at Hole in the Wall and slanderous blogger) and Allan Stiner want to steal projects from the community, our social venture partners and me?  How about $98,818,000 of the most sought-after beautiful, untouched oceanfront land on the Indian Ocean in South Africa?  This is the value of the raw, undeveloped land held by the social venture between the community and Pure Africa as determined by a South African property expert and a real estate developer.[1]  To those trying to steal our social venture projects, this is like hitting the lottery – to the local community, it is their future and a means to lift their entire communities out of poverty.  My vision is to stop the cycle of Apartheid and the exploitation of the local community at the hands of people like Batte, Stiner and Brown, to a social venture structure where the community owns 25% to 45% of every project.  The local impoverished community should and must benefit substantially from the sustainable development of their land – it is their right and heritage.

In order for you to fully understand the above statements, I will share a bit of our project vision for the local people in Africa with you and why the community land is so special. The local Xhosa people live on less than $1.00 per day, on average.  They are very poor in a worldly sense but they are blessed with tremendous natural resources – their oceanfront land.  The average tribal leader has less than a sixth grade education, so while they have amazing land – they do not have the tools, skills or education to know how to maximize the value of the land.  This is where our social venture partners bring in the education, know-how, a professional team of lawyers and real estate companies and the finances to help the local community sustainably develop a real estate project to create jobs, job skills training and hopefully profits.  Don’t get me wrong – social venture projects are for-profit – so our goal was to maximize the value of the community land so that the community, our social venture partners and financial partners can all benefit.

Hole in the Wall is a cultural[2] and National icon in South Africa (see photo below).  It is a large rock mountain in the Indian Ocean that boasts beautiful scenery and ocean views.  In 2004, the Development Bank of South Africa “DBSA” and the South African Government funded a study on creating a tourism project at Hole in the Wall.[3]  Our social venture project company was called Incopho, headed up by Bossie Bosman.  In 2004, DBSA, the government and Incopho created a project summary for several projects including:  Hole in the Wall and the Golf Course at Coffee Bay.[4]  In 2005, our social venture partners received a Lease from the South African National Government to develop the community project at Hole in the Wall[5] and a Record of Decision (building permit and authorization) was issued in late 2005.[6]

Views of Hole in the Wall from Development Site

Now, it is well-known that nothing happens in Africa without a meeting:  we literally had hundreds of hours of meetings with the local chiefs, the tribal counsel, the community trust and the local people to show them the business plan and the proposed benefits to the local community.  In Africa, everyone has a right to speak so the meetings were attended by hundreds of people – both young and old.  Once everyone had a chance to voice their opinions and concerns, then we would finalize our social venture project plan.  Finally, after our projects were approved by the local community, we then sought approvals from the National, Provincial and local government.  Once everyone was happy with and had approved the business plan at a social venture like Hole in the Wall, then we would begin.  This initial process takes from 18 months to several years for each project!

At Hole in the Wall, after three years of meetings, the approved plan was to build a tourism site with 50 oceanfront rental homes and a boutique hotel[7] which would create a minimum of 57 jobs for the local community and the potential for hundreds of micro business jobs such as beadwork, tours, sea shell jewelry and other tourism souvenirs and hopefully profits from the development (the community owned 45% of the Hole in the Wall development as our partner).

Architect’s Rendering of Proposed Lodging at Hole in the Wall

In order to help fund the social venture project, Earth Conservancy and The Pure Africa Sustainable Development Fund provided initial funding of $563,000 to pay for engineering fees, architects, plans and approvals and initial project consulting and development costs.  However, funding for construction costs and utilities installation was still needed.  The Development Bank of South Africa expressed initial interest in providing funding to Incopho as early as 2006.[8]  The Development Bank of South Africa then told me that they submitted the social venture project at Hole in the Wall for approval for funding of R25,000,000 or $4,000,000 to put in utilities and facilities.[9]  One of the conditions of DBSA funding is matching funds from the social venture partners so we needed financial partners to assist in funding the project at Hole in the Wall.

Our professional team provided great endorsements of the projects.  We agreed to approach Sotheby’s International Realty to market the Hole in the Wall project.[10]  On May 6, 2008, Lofty Nel, a Principal with the firm of Sotheby’s International Realty provided a letter to the project, which reads:

“Lew Geffen Sotheby’s International Realty are extremely proud and honoured to be granted the exclusive mandate to market Pure Africa Development LLC Hole in the Wall project on the Wild Coast in South Africa.  Marketing of the project has commenced by word of mouth with the official launch of the project scheduled for the end of May, 2008.

The development comprises 51 Ocean front homes in a gated estate at the Hole in the Wall, a national landmark in South Africa.  Earth Conservancy have also been appointed to manage approximately 5000 acres of pristine land adjacent to the project as part of a conservancy.  This will ensure that the amazing views and natural beauty of Hole in the Wall will remain intact for guests and owners at the Hole in the Wall development.”[11]

The 50 lots plus a hotel site were priced for long term lease at an average price of $120,000 per lot for total projected revenue to the social venture project of $6 million.[12]   The engineering firm prepared a lot layout for the Hole in the Wall and architects, engineers, and home builders were appointed to get the project ready to market.[13]

In addition to community and government approval, we also sought the approval of specialized real estate legal counsel.  On September 1, 2008, Russell Linde, South African real estate attorney of the law firm of Smith Tabata provided Pure Africa with a legal opinion letter:

“We act on behalf of the aforesaid Pure Africa, LLC as majority shareholder of Incopho Wild Coast Development Projects (Pty) Ltd.  Incopho, in turn, is the majority shareholder of the project company, The Reserve at Hole in the Wall (Pty) Ltd.  Our firm has represented The Reserve at Hole in the Wall project on behalf of Pure Africa since 2007 as legal counsel.  We also assisted in the referral of the project auditor, Charteris &  Barnes, auditors.

Based upon a review of the documentation, The Reserve at Hole in the Wall is an oceanfront and oceanview real estate development consisting of 50 stands and a small hotel.  The Reserve at Hole in the Wall is being marketed by Lofty Nel of Sotheby’s International Realty in East London, South Africa.

The original documentation for this project dates back to September, 2004.  For this letter, I have reviewed the following:

The Final Scoping Report dated September, 2004;

The Review of Documents relating to proposed Coffee Bay and Hole in the Wall developments by East Cape Development Corporation and the Development Bank of South  Africa;

The Ground Lease by and between the Kwa Tshezi Community and Earth Conservancy dated February 6, 2006;

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated February 2, 2006;

The Record of Decision from the Department of Affairs, Environment and Tourism dated August 10, 2005 authorizing Incopho “to construct 50 single storey chalets, a central restaurant, a curio shop and amenities and association infrastructure at Hole in the Wall, KSD Municipal Area.

The Lease Agreement between The Government of the Republic of South Africa through the Department of Land Affairs, the Kwa Tshezi Community and Incopho dated June 21, 2008 which is a 30 year renewable lease at the option of Incopho for up to 90 years and continuing thereafter.

It is also my understanding that Title Deed to the land comprising the Hole in the Wall development is forthcoming to the Community in the next 6 months or longer from the Government of South Africa and the Department of Land Affairs.

Based upon a review of this documentation, Incopho has a valid lease with the Government of South Africa and the Kwa Tshezi Community for up to 90 years or more.  Under South African law, Incopho through The Reserve at Hole in the Wall (Pty) Ltd. can sublease the 50 stands to interested sublessees for rental payments over the term of the lease or the rent and lease may be prepaid.  It is my understanding that sublessees can “purchase” or sublease one or more of the 50 stands for an up-front payment of rent or with 10% downpayment of rent and the balance of the rent payments over 10 years at 12% interest.

It is my understanding that Sotheby’s International Realty will be acting as estate agent in the “sale” of the 50 subleased stands to the general public.  A separate company,  Villager Homes, will be constructing homes on the 50 subleased stands under separate written agreement between Villager Homes and the stand “purchasers” or sublessees.

Finally, when Title Deed is ultimately vested with the Kwa Tshezi Community, it is planned that the 50 stand sublessees may have the opportunity to convert their lease to Title Deed ownership of their stand.”[14]

By May, 2008, all architectural designs, engineering, lot layout, utilities and infrastructure plans were completed and a contract to install all utilities, roads and services to The Reserve at Hole in the Wall were completed.  These crucial steps made it possible for marketing of long term leases for the 50 lots by Sotheby’s International Realty.

In May, 2008, Sotheby’s began to issue marketing materials for Hole in the Wall[15] and in September, 2008, Hole in the Wall was listed as a “hot property” in Conde Nast Home in South Africa and Media Press Releases were issued.[16]  Sotheby’s also went to great expense to create glossy brochures to begin marketing and they also launched a marketing website for the Hole in the Wall project.[17]  Pure Africa and the social venture partners put up a marketing Sign Board at the Hole in the Wall project.[18]  Everyone was excited because Sotheby’s and their marketing experts were certain that the property would lease quickly and that meant up to $6 million of projected revenue for the social venture project and the local community.

However, just as the marketing campaign was beginning, the aggressive bad press campaign team of Batte, Stiner and others jumped in to actively interfere with and destroy the marketing efforts at the Hole in the Wall project.  This was the most damaging tortious interference that resulted from the aggressive bad press campaign – anonymous phone calls from this coordinated group to our real estate professional team and social venture partners.[19] At the launch of the Hole in the Wall project and at other projects, Sotheby’s International Realty, government officials and others received several anonymous phone calls from Virginia and from South Africa stating that the projects were false, that we were trying to sell (versus lease) community land and that I was not someone to be trusted.  The callers also threatened to and did take the matter to the newspapers to discredit Sotheby’s and the social venture projects.  In discussions with Sotheby’s and other real estate firms, we were told that a new development, especially a social venture development, is a delicate matter and you only want positive information for the general public to view when seeking to spend money on a new oceanfront resort.  The decision was made to halt the marketing campaign at Hole in the Wall and try to regroup later.  This was devastating to us because it meant that years of time, effort, money and relationships were wasted.

Each time a project was halted by the malicious and negative actions of Batte and his coordinated bad press campaign, we had to stop everything and try to work on a new project that hadn’t yet been attacked by this group.  However, each time the task grew harder and everyone on the social venture team was tired of the negative attacks and the disappointment and damage that resulted from the negative attacks.

While the social venture projects on the Wild Coast in partnership with the Xhosa community have great potential, many people want to take them over for their own personal gain. Why does it seem to be so difficult to help the poor in Africa?  I know that Oprah Winfrey had a very hard time starting up her social venture project in Africa[20] and the Washington Post and others have reported on the United Nations aid workers sexual abuse of children[21] and also on billions in stolen aid money[22] and corrupt practices by US companies.[23]  In fact, this must be commonplace because I was on the phone with two other social venture project managers in Africa who have had similar experiences to mine.

The next Article describes how Batte, Stiner and others started coordinating with people in Africa in an organized “Wonga-style” coup attempt to either take the social venture projects for themselves or destroy them and me.  The next Article is entitled:  On the Ground in South Africa:  Not Much Better –  Social Ventures in Africa.


[1] See Wild Coast Property Valuation at Article 6 FN 1.  This valuation was prepared by real estate expert Alan Bell and real estate developer David Stefano based upon comparable property values on existing real estate for sale on the Wild Coast of South Africa.

[2] Known in Xhosa tradition as the place of The Great Cattle Killing, Hole in the Wall is steeped in cultural fokelore and significance for the Xhosa people.  For a short version of the legend, see http://www.southafrica-travel.net/eastcape/wildcoast.htm

[3] DBSA Scoping Report is attached hereto as Article 6 FN 3.

 [4] See DBSA – Incopho Project Overview as Article 6 FN 4.

 [5] See National Government Lease to Incopho as Article 6 FN 5.

 [6] See Record of Decision to Incopho as Article 6 FN 6.

[7] See Hole in the Wall Aerial Lot Layout and Site Plan at Article 6 FN 7.

[8] See Development Bank of South Africa letter to Incopho at Article 6 FN 8.

[9] See Development Bank of South Africa email to me at Article 6 FN 9

 [10] See Pure Africa letter to Sotheby’s at Article 6 FN 10.

 [11] See Letter from Lofty Nel of Sotheby’s International Realty at Article 6 FN 11.

 [12] See Plot and Plan Pricing at Article 6 FN 12.

[13] See Model Home specifications by Villager Homes at Article 6 FN 13.

[14] See Opinion Letter of Smith Tabata Law Firm at Article 6 FN 14.

[15] Sotheby’s Booklet showing Hole in the Wall Development at Article 6 FN 15.

 [16] See Conde Nast Home article naming Hole in the Wall a “Hot Property” at Article 6 FN 16.

 [17] See Sotheby’s website layout at Article 6 FN 17.

 [18] See Pure Africa Hole in the Wall signboard at Article 6 FN 18.

[19] See Letter from Dr. Brown to South Africa Department of Land Affairs at Article 6 FN 19.

[20] For an overview of the sexual abuse and other scandals at Oprah’s social venture projects, see http://www.time.com/time/specials/packages/article/0,28804,1939460_1939452_1939416,00.html

FOOTNOTE ATTACHMENTS:

Article 6 FN 1 Land Valuation

Article 6 FN 3 DBSA HITW Scoping Report

Article 6 FN 4 DBSA Overview of Projects

Article 6 FN 5 South African National Government Lease for HITW

Article 6 FN 6 Record of Decision

 

 

 

 

 

 

 

Article 6 FN 8 Development Bank of South Africa initial letter

Article 6 FN 9  Development Bank  of South Africa R25 Million email

Article 6 FN 10 Pure Africa letter to Sotheby’s

Article 6 FN 11 Sotheby’s Endorsement Letter copy

Article 6 FN 13 Villager Home design for Hole in the Wall

Article 6 FN 14 Pure Africa (Opinion Letter for Hole in the Wall

Article 6 FN 15 Hole in the Wall Listing in Sotheby’s

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Article 6 FN 19 William Brown Letter to Land Affairs Mtata Ltr Oct08 re false information from Bosman Stiner

 

 

 

 

 

 

 

 

 

 

Leave a comment

Filed under Uncategorized

Article V: Murder for Hire, Aggressive Bad Press Campaign and other Distasteful Actions: Social Ventures in Africa? by Brian Ray Dinning, social venture lawyer

Article V: Murder for Hire, Aggressive Bad Press Campaign and other Distasteful Actions:  Social Ventures in Africa?

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

 

July 10, 2012

I know that some of these stories are hard to believe, and my reason for telling them is not out of revenge, hatred or bitterness, but rather to simply tell truth and the reason for why it has been a great challenge to accomplish the goals, vision and mission I have had for Africa.  I am sure most of you reading this have had obstacles standing between you and your dreams.  For the social venture partners and me, it was not just one person or one thing standing in the way, it was a mixture of people, many of whom I thought were my friends and business partners.  Unfortunately, many of these people demonstrated a lack of integrity, honesty and professionalism.  While I along with others have lost a great deal trying to help the people of Africa, one thing that I still have is the heart and passion to help the needy communities and hopefully make a positive change for future generations.

So up to this point, my vision for the social venture projects in Africa was slowed down or hindered by the fraud of Wextrust Capital and then by the drug-using financial partners.  Can you see why changes had to be made to the entire business structure and social venture projects so that the projects could continue to move forward?  I thought the situation with Rick, Lou and John described in the “Article IV:  Cocaine, Ecstasy and Swingers:  Social Ventures in Africa?” was inconceivable,[1] however, the next situation is one that I never thought would ever happen, especially from doctors like Granville Batte and Allan Stiner.

Upon our return to the United States in January, 2006 from the crazy trip to South Africa with Rick, Lou and John, I was shaken and unsure about the reliability of the Pure Africa Management funding sources and the new management team.  As our South African social venture partners asked me to “not allow those guys (John, Rick and Lou) to come back to the local community” based upon their drug use, partying and overall unprofessional behavior, I was unsure of what to do.  Many of you might ask, why did you continue to work at these social venture projects with so many interruptions, bad behavior and illegal actions by our financial partners?  Because I, along with my social venture partners in Africa, believe that we were called into this ministry to help the poor in Africa become more sustainable and self-sufficient and to help them maximize their resources to create income and jobs for them and for us.  In fact, the entire world was beginning to take notice of social ventures because of the Bill and Melinda Gates Foundation, Oprah Winfrey and the Grameen Bank. Furthermore, a number of us had already donated or invested money to start these projects and we wanted to work hard to try to save that investment of money along with years of hard work.

I had to begin making plans to slowly distance myself from my new partners and yet at the same time, I had accepted a new job with them and I needed the consulting income until I could find new financial partners.  Additionally, the four of us had already started setting up a new fund, The Pure Africa Sustainable Development Fund that would be operated by Pure Africa Management.  John had invited friends and colleagues to meet for a presentation on the Fund on several occasions in late 2005 and early 2006 and several people were interested in investing into the social ventures.

Rick, Lou and John offered me a consulting job from the Fund at an annual consulting salary of $250,000 pursuant to a written Consulting Agreement with the Fund.  As funding for my position was not regular and would only be available when funding was available, I was offered a draw salary with use of debit cards and bank accounts as money was available.  As I was the only full-time consultant, I was also told that my consulting income was first priority over payment of all other expenses. As I was (and still am) entirely committed to our African projects, I offered to pay back my draw compensation if the projects didn’t succeed within ten years.

By mid-2006, the Fund had five investors who invested a total of $545,000, one of whom was John and the others were his friends and colleagues, whom he invited and recruited into the Fund.  Lou prepared financial statements and Rick prepared status reports for the investors.  I provided needed help from the business plan writing and draft legal documents.  However, the Fund was dysfunctional because of the prior drug use and unprofessional behavior by John and others and the inherent mistrust caused by their partying lifestyle and criminal actions.  I was forced to adapt and change the projects already underway and restructure midway through or lose everything.  At my request, we all agreed that the Fund would stop raising money for the foreseeable future, in my mind, to protect others against any further potential loss or negative actions and to secure a management team that the local community and social venture partners would accept.

One of the first investors into the Fund was a long time friend of John and also a friend of Rick and Lou.  His name was Dr. Allan Stiner of Norfolk, Virginia.[2]  Pure Africa Management agreed to allow Dr. Stiner to invest his $250,000 into the Fund in February, 2006.  In February, 2006, in a meeting with Dr. Stiner at his home, he reviewed the legal documents a final time and signed the Subscription Agreement.  However, in making his investment, he had one other request:  he would only invest his money if Rick, Lou and John had no access to his funds as he was aware of the bad behavior of the group in South Africa the month before.

As the Fund was intentionally winding down in the Summer of 2006, two of John’s colleagues, Dr. Jeff McTavish and Dr. Granville Batte[3] approached me. We began to discuss the establishment of a new consulting company called Pure Africa, LLC to take over management of the social venture projects as they agreed that the social venture projects should disassociate from Rick, Lou and John.  Batte had recently lost his job and he had time to spend on the projects.  Dr. McTavish said he could devote his spare time to helping manage the projects.  This opportunity seemed like it had the potential to replace the failed management team from Pure Africa Management.  I discussed openly the past failures of the prior financial partners with both McTavish and Batte as it is always wise to provide full disclosure to everyone involved.

Like all other financial partners, Batte and Dr. McTavish were interested in taking a due diligence trip to view the projects for themselves.  In October, 2006, Dr. Batte and I took a trip to South Africa to visit the project at Coffee Bay and Hole in the Wall.  The trip went well and everything seemed ok.  At the conclusion of the trip, however, Batte decided to stay on in South Africa and travel with some male companions of very ill repute[4] he had just met – they were going for a month or so to Coffee Bay and then to Lake Kariba for a fishing trip.  I warned Batte that he should not go on this trip as he had just met these nefarious companions and that many places in remote Africa can be very dangerous.  Oddly enough, Batte stayed on with the travel companions for a month or so in Africa and I returned back to the United States.

In January, 2007, Dr. McTavish, Batte, Stiner and others went on a trip to the Wild Coast of South Africa.  Everyone had agreed to focus on the projects on the Wild Coast of South Africa because of the sheer beauty and market potential of these social ventures. Furthermore, no one seemed to trust the social venture partner, Michael van der Merwe, who was one of the founders of the farm, tourism lodge and diamond mine projects.[5]

The trip was generally good and everyone was excited about the projects.  We met with our legal team, Sotheby’s, and other professional team members as well as our social venture partners and the local community.  However, toward the end of the trip I began to grow concerned about Stiner’s behavior.  He seemed kind of withdrawn and emotional, erratic, as if in the throes of a personal crisis.  Commenting about Stiner’s emotional behavior, a fellow traveller on our trip said Stiner “seemed fine at the beginning of our trip, but the last few days of our time in Africa he was acting odd: not making eye contact, crying, and distancing himself from the group.”

During this time, Stiner gave me a book called “The Wonga Coup” and he stated that I should read it because it was going to happen to me.[6]  I immediately read the book about a group of wealthy men and mercenaries who organized a plot to overthrow a country in Africa to take over the oil and other riches of the country for themselves.  I did not understand what he meant at that time but over the next few months and up to the present time, I now have a much better understanding of what he meant.  He meant that from that time forward, Batte, Dirk Uys and others began to think about how they could either take over the projects for themselves and assume management control or discredit me and destroy the projects.[7]  After our experience with Wextrust Capital, this was unfortunately not a novel concept.

At the end of our trip, an acquaintance, Gerhard Dreyer, a minerals and mining attorney from South Africa came to visit me with Batte in the lobby of my hotel in Pretoria.  Dreyer pitched two new mining projects to me, but I wasn’t interested as I already had too much work on my plate.  Batte stepped in and agreed to do the financing for the new mining projects, while I would remain separate concentrating on the Wild Coast social venture projects.

Upon our return to the United States, Batte, McTavish and I began to solidify the Pure Africa consulting company to allow us to keep track of our time and expenses.  Dr. Batte wanted to have a salary of $350,000 per year as he lost from his job as a doctor in 2006.  I signed my consulting agreement with Pure Africa and we all began to track our time and expenses as they related to specific projects through an Excel spreadsheet program created by Dr. McTavish.[8]

Just a few weeks later, Batte became increasingly dictatorial, making an aggressive push to control Pure Africa and her social venture projects, especially the new mining projects.  He told both Dr. McTavish and I that he wanted to manage and control the projects of Pure Africa as the primary person in charge.  It was surprising that he did this as Pure Africa was a collaborative, communal venture and not one that was singularly directed.  In addition to Batte’s misunderstanding of our mission, he also had zero business experience and we just learned that Batte and his travel companions were reviled by the tribal leaders for some terrible behavior.  So, of course, we refused his request.

Word of the conduct of Batte’s travel companions and, by implication Batte, was making the rounds and it was worse than we ever could have imagined.  The tribal leaders reported that members of his party were paying young boys in the local community for sex.  We were shocked.  The economic inequities that we were trying to address between America and Africa are staggering, and to take advantage of that gap in wealth to pressure children with little opportunity into prostituting themselves is appalling.  It turns out that the month-long trip that Batte took, that seemed so risky and puzzling to me at the time, was reportedly a male-only sex party, which later carried over into the Hole in the Wall and Coffee Bay area causing us to have to take immediate action to protect the local children and the social venture projects.  I had the unfortunate difficulty of carefully documenting this in an email to Batte in April, 2007.[9]  I was asked by our social venture partners and the community tribal leaders to not allow Batte and his companions to come back to Hole in the Wall and Coffee Bay.[10]

 Again, terrible conduct by others made us have to restructure our entire business model and work toward insulating the local community and the projects from any further harm from people with bad intentions.  Dr. McTavish and I immediately demanded that Batte leave Pure Africa.  However, Batte did not go gracefully, but implemented every bullying tactic in the book “The Wonga Coup” by launching a planned and coordinated attack on my character and the social venture projects. Through this slanderous and calculated attack, Batte not only took over the mining projects but he also permanently damaged business relationships and projects.

Batte began an aggressive bad press campaign against me by sending emails to our social venture partners and financial partners.  Steve Geller, a golf course renovator who was working with Earth Conservancy on the golf course project in Coffee Bay, received one of these emails from Batte.  In forwarding the email, Geller said about Batte, “I can usually tell when someone is “different”, very different!!!”  In the email, Batte states:

 my suggestion is to start an AGGRESSIVE ‘bad press’ campain, and I will happy to pitch in as well . . . I also know of others who are very unhappy and might be willing to coordinate as well. The most important thing is to ‘DO IT’ and not just talk about wanting to do it . . . I don’t know exactly how much help I can be, but we can surely share stories and information.  Yes, I’m pissed-off too, and like many others, have my own ax to grind.[11]

This was the first real evidence I had of the coordinated and planned attack on my character and the attempted “coup” or take-over of our projects.  One of the “others” that Dr. Batte began his coordinated his aggressive bad press campaign with was Stiner.  On February 17, 2007, shortly after our trip to South Africa, Stiner asked me to meet him at the Pure Africa office in Norfolk Virginia.  At this meeting, Stiner clearly wanted out of the projects.  He was in the midst of a failed real estate venture with his brother and no longer wanted to participate in our African projects, demanding that we return his money.  Stiner said to me, “we can do this the easy way or the hard way.”  Stiner laid out six notecards in front of me.  On the note cards were written names and addresses “of friends and fraternity brothers in high places who can bring you a world of pain” Stiner stated.  He named the individuals on the cards as a litigation attorney, a journalist, a US attorney, an FBI agent, a Federal Judge and lastly, an organized crime person from Philadelphia.  Stiner said, if he did not get his money back by April 15, 2007 that he would ask all of “his friends in high places” to come after me.  Referring to the organized crime contact, Stiner ominously said, “if you want to spend the rest of your life with your children and family, you better get my money back.”

Since Stiner’s money had already been used to pay consulting fees, business expenses and project expenses, the companies did not have the money to give him.  Trying to stop him from hurting me or anyone else, the companies offered him a promissory note and company shares to placate him.  On April 12, 2007, Stiner again asked me to meet him.  I stated that it had to be in a public place like Starbucks.  Speaking loudly and aggressively at this lengthy meeting, Stiner stated that he had hired some sort of mobster from Philadelphia who would “fuck me up,” and “that the days of your life are numbered.”

I wrote Stiner on April 24, 2007 by certified mail to remind him that he’d threatened my life and those of my family, and that he was recklessly heading down a very dangerous path.[12] His response was chilling and simple, he said “the sand in the hourglass is almost empty.”[13]

Stiner, having seemingly come unhinged, called Dr. McTavish and told him of his plot. Dr. McTavish recounted to me that Stiner calmly and deliberately described his plan to hurt or kill me.  Stiner informed McTavish about his mafia friends in Philadelphia and the fact that he had hired or was about to hire someone from Philadelphia to travel to Virginia for the purpose of hurting or killing me. Dr. McTavish’s wife urged McTavish to call me immediately and to warn me of Dr. Stiner’s plan.  Upon hearing of the plan from McTavish, I immediately called my wife to warn her of Stiner’s threat.  I also called my children’s school to warn them as well.

I contacted the local police to tell them of Stiner’s threats against me, my wife and my children and the officer gave me a police report number and assured me that they would dispatch police to patrol the area around my home.  I was also referred to the police in Norfolk, Virginia because Stiner’s threats occurred in Norfolk.  I visited the Norfolk Police Department and informed the Norfolk Police of Stiner’s threats.  An Emergency Protective Order was entered against Stiner prohibiting him from any contact with me or my family and he was later arrested for stalking and threats to my life. The Emergency Protective Order issued by a Judge reads:

“Mr. Dinning works for Earth Conservancy and received a cash donation from Dr. Stiner earlier this year.  Since that time Dr. Stiner has requested the return of his donation.  Mr. Dinning alleges that Dr. Stiner has been extremely aggressive and hostile in his attempts to get the money returned. Accordingly, Dr. Stiner has made numerous phone calls and met with Mr. Dinning in person making threats to his person and his family.  He is in fear for his life and that of his family.” [14]

Stiner, however, was not finished.  Calling my church, Stiner told my church leaders that the social venture projects are not real and that I should not be allowed to lead a Bible study (which my wife and I did for three years).  Stiner also contacted Professor Dr. William Brown, Fulbright Scholar, Church Deacon and Board Member at Earth Conservancy and Dr. Brown’s employer at Regent University to discredit me and the social venture projects as part of the aggressive bad press campaign.  Dr. Brown told me that he interpreted these actions by Dr. Stiner as “aggressive and threatening”.  In an email, Brown states that Dr. Stiner’s statements were “untrue” and “slanderous.”[15]  Stiner also contacted Professor Joseph Umidi, a Senior Pastor and Board Member at Earth Conservancy at his place of employment at Regent University to discredit me and the social venture projects.  In an email confirming Stiner’s negative call, Dr. Umidi states that Stiner’s statements were “bothersome and bordering on intimidation.”[16]

This aggressive bad press campaign by Batte, Stiner and others was a planned and coordinated coup attempt to take over the projects for themselves.  In departing from Pure Africa, Batte filed a lawsuit through his father against me.  As part of this lawsuit, Batte demanded the rights to two mining projects in exchange for agreeing to stay away from the community and projects at Coffee Bay and Hole in the Wall.  It is my understanding that Batte ruined the two mining projects shortly thereafter by threats and intimidation against Attorney Gerhard Dreyer.

Even to this day, Batte, Stiner and others have continued to harass me, slander me and try to harm me and my family.  This current action is the work of Batte and Stiner starting in early 2007 as part of the negative bad press campaign.  When enough negative information (even if false) is spoken, written and reported by people, it begins to look like the truth.  The truth is:  I look forward to the opportunity to face these men in court and see them testify on the witness stand about their aggressive bad press campaign and more importantly – the murder-for-hire plot of Stiner and the reckless and damaging actions of Batte and his travel companions in Hole in the Wall and Coffee Bay.  These two people, more than any other, have delayed, damaged and even halted the beautiful community projects on the Wild Coast of South Africa.

So, the social venture partners, Dr. McTavish and I began to reorganize, regroup and continue to move forward in our vision to help the people of Africa.  Many times I have questioned whether it is worth it – is helping others worth the loss of reputation, the loss of liberty and freedom and even the loss of life.  I am comforted by the words of so many business pioneers who state that perseverance is the key to success.  Like President Nelson Mandela states: “The greatest glory in living lies not in never falling, but in rising every time we fall.” 

                                                  NELSON MANDELA, Autobiography


[1] See www.socialentrepreneurshipinafrica.com for the full series of Articles.

[2]  Dr. Allan Stiner’s background is at http://www.vitals.com/doctors/Dr_Allan_Stiner.html

[3] Dr. Granville Batte’s background is at http://www.vitals.com/doctors/Dr_William_Batte.html

[4] Dirk Uys and his friends are South African professional hunters and anti-poaching mercenaries that frequent a bar named “At the Asshole” (in English).  Dirk told many stories about poachers and “kaffirs” he had killed over the years and he bragged about a collection of knives, spears and other possessions he had taken from his victims.  Our social venture partner, Bossie Bosman, and a game ranger warned me about their past background and bad reputation in January, 2007.

[5] An investigation of Michael van der Merwe was conducted in 2008 and our concerns about his character, his projects and the loss of our investment were confirmed by the investigator.

[7] According to Sotheby’s International Realty and many others, the project at Hole in the Wall and other breath-taking sites were some of the finest oceanfront real estate in South Africa.  In fact, the social venture project at Hole in the Wall was written up on Conde Nast Home “Hot Properties” in 2008 and the projects had the potential of making millions of dollars for the the local communities in Africa, the social venture partners and the financial partners.

[8] Dr. McTavish created an Excel spreadsheet so that all of our consulting time, business expenses and personal expenses could be tracked and allocated on a project by project basis.

[9] See attached email dated April 22, 2007 from me to Dr. Batte.

[10] Child trafficking and pedophilia is a major problem in Coffee Bay and Hole in the Wall.  In addressing this problem, our church-based missions teams and I organized two full-time orphan care missionaries to work in Coffee Bay and we built a church/community center and orphanage playground.  Most of the child sex trade centered around a local Shabeen or bar in Coffee Bay.  To the joy of the local community and the church missions teams, the owner of the bar was subsequently charged with 104 counts of sexual assault of children.  We all agreed that Batte and his travel companions had to leave Pure Africa and the social venture projects.  For more information on the child trafficking problem on the Wild Coast, see http://ufh.netd.ac.za/bitstream/10353/364/1/Ngwira%20(M%20Sc)%20Geography.pdf

[11] See email from Dr. Batte to Steve Geller.  To this day, Dr. Batte and his coordinated group have maliciously attacked me, my family and the social venture projects in South Africa and they are the principle motivators of the current charges pending against me.

[12] See Certified Letter to Stiner dated April 24, 2007.

[13] See Email from Stiner.  I interpreted Dr. Stiner’s statement to mean that I did not have many days of his life remaining, because Stiner was going to carry out one of his threats to kill me.  Based on this statement, I truly feared for my life and the lives of my wife and children.

[14] See Emergency Protective Order against Dr. Allan Stiner.

[15] See Email from Dr. William Brown, Ph.D regarding Stiner.

Leave a comment

Filed under Uncategorized

Article IV: Cocaine, Ecstasy and Swingers: Social Ventures in Africa by Brian Ray Dinning, JD, LLM and social venture lawyer


Article 4:  Cocaine, Ecstasy and Swingers:  Social Ventures in Africa?

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

July 7, 2012

As you have read in the prior Articles in this Series, for years my goal, vision and passion was, and still is very much so, to help dozens of needy communities in Africa by helping them to create jobs, hope and a better future.  But, as you have also read, unpredictable and unfortunate situations, such as the fraud of Wextrust Capital, created obstacles and roadblocks, which necessitated a change in partners or strategy or the direction of the project to ultimately accomplish what I have hoped for and worked toward for many years.  Each new change of direction however added a year or more onto each project as it took time to locate new partners, rebuild relationships and hold community and governmental meetings in Africa to communicate the new strategy with our social venture partners.

What do you do when people who you thought you could rely on for professionalism, honesty and integrity demonstrate the complete opposite and instead get in the way of the goal of helping others or your dreams?  Think about it – do you just give up on that dream?  Does it just become a thing of the past?  Or, do you pick yourself up and know that you can overcome any challenge (big or small) by making some changes so you can ultimately fulfill that dream and vision?  What you are about to read is one of the many challenging obstacles that created a course for change in the goal of helping the people of Africa.

Since I no longer had a job after quitting Wextrust Captial, having witnessed Joe Shereshevsky reveal himself as a man only too eager to sexually harass women, commit all manner of fraud and indulge himself with prostitutes, I needed to find a new job.  Furthermore, I wasn’t the only person hurt by Wextrust Capital – many of us had lost time, effort, money and ownership in the three social venture projects.  While I had to find a job, we all wanted to continue to move forward with our vision, not willing to give up on the people and projects we’d invested so much in.  We all wanted to continue to move forward with our vision of helping the local people of Africa with social venture projects and we all immediately started over – not willing to give up on people in need and on social venture projects that we had all worked so diligently on.

I was hired by a company in Fairfax, Virginia in March 2005 at an annual salary of $250,000 plus bonuses.  All of my spare time went toward working on social ventures in Africa.  Earth Conservancy, a non-profit that I consulted with over the years, opened an office in Alexandria, Virginia and employed four full-time consultants and several web designers and grant writers.  I was asked to coordinate the office in my spare time and to oversee the launch of a fundraising and social venture campaign for Earth Conservancy and Sunpoints Southern Africa to help rebuild the social venture projects.  Based upon the hard work of these consultants, I was asked to draft a treatise and power point presentation for the United States Department of State on the subject of for-profit/non-profit ventures entitled “Beyond Micro Enterprise,” and was invited by the State Department to speak at the World Africa Growth Opportunity Act Conference in Dakar, Senegal and Washington, DC in 2005 and 2006.

After losing projects to Wextrust Capital, the social venture partners still had the opportunity to resurrect portions of the first three projects as Wextrust Capital’s main pursuit was diamond mining.  So, once again, we were in need of other financial partners.  Having two venture capital firms fail to provide the agreed upon help to the local communities and fail to live up to the promises and agreements made to Sunpoints and the social venture partners, the group discussed raising the needed funds through friends and family to avoid the problems and shortcomings of the Wall Street Investment Banking world.  Unfortunately, as you will see, the friends and family option can also be full of challenges and perils.

In 2005, I was discussing my social venture work with Dr. John O, a doctor and former client (“John”).  He was fascinated with the social venture work and wanted me to meet two of his friends, Richard L. and Louis D (“Rick” and “Lou”).  Both MBAs, Rick was a Business MBA and Lou was a Finance MBA – both very valuable skill sets for any business or social venture project and they operated a successful business.  They seemed like the perfect fit and they truly embraced the idea of helping the local communities in Africa. At that time, the social venture partners were seeking to resurrect several community projects including:  Honingklip II, a mining project adjacent to the one taken from us by Wextrust Capital, Sunpoints Farm, a farm project, and Lion’s Walk Lodge a planned tourism lodge.  These projects were controlled by Michael van der Merwe and his brother, Pieter van der Merwe, as the social venture partners. Other social venture projects including amazingly beautiful properties on the Wild Coast of South Africa, which were started by Bossie Bosman as the social venture partner.

After discussing the non-profit and for-profit model of social ventures, Rick, Lou and John said that we should form a company to develop these projects and raise the necessary funding, which they calculated was approximately $10 million. In helping to conduct due diligence, enter into contracts and scope out these potential the projects in 2005, the three men donated money to Earth Conservancy as charitable donations.  The donations were used to pay due diligence costs, development expenses, operating expenses for Earth Conservancy, consulting fees, business expenses, travel and entertainment expenses and personal expenses pursuant to written Consulting Agreements and Business Plans.[1]  All funds that were wired to South Africa in 2005 for the scoping of these potential projects were sent to two South African social venture partners: Michael van der Merwe and Bossie Bosman.

On the for-profit side, Rick, Lou, John and I agreed to form a company called Pure Africa Management so that the four of us could all keep track of our consulting time and expenses and be reimbursed for that time and expenses as money became available from investors or from the potential project cash flow.  This was all documented in the voluminous Private Placement Memorandum and other documentation of the newly-forming Pure Africa Sustainable Development Fund, managed by Pure Africa Management.  I was asked to work full-time on the documentation, business plans and power point presentations.  John said that he would set up meetings at his home or at the office of Rick and Lou and they would invite their friends and colleagues to explain the projects to them so that they could raise the $10 million of necessary funding.  Rick would handle business administration and community relations in the Hampton Roads area and Lou would be the Chief Financial Officer and manage the funds and books of the business including the preparation of financial statements.

Before taking any outside investment, all four of us agreed that a due diligence trip to verify the existence of the projects, review the documentation, meet the South African social venture partners, meet the professional team including Sotheby’s International Realty and Smith Tabata Law Firm was necessary and prudent.  In January, 2006, we traveled to South Africa to view all projects and determine which projects to focus on.  In taking this trip, I was again asked to work full-time as a consultant for Pure Africa Management and the Pure Africa Sustainable Development Fund, LLC starting in February, 2006 by Rick, Lou and John.  In accepting this position, a Consulting Agreement documenting my consulting compensation was agreed to and signed.  Like everyone, I had bills to pay and personal obligations like child support, housing, food, car payments and more plus I would be leaving a lucrative job to focus on more risky social ventures start-up projects as a consultant.

The three men assured me that they would raise the necessary funds to pay my consulting fees of $250,000 plus all expenses for me to work full-time.  My employer did not want me working on African projects and instead wanted all my time and effort devoted to their company.  When I went on the due diligence trip in January, 2006 and committed to full-time work with these three men at Pure Africa Sustainable Development Fund, LLC, I would be leaving a good job.  However, I was excited by the new consulting work and the help from Rick, Lou and John on the social ventures and with this newly forming endeavor, we headed out for South Africa.

The trip was truly amazing at first and we visited the tourism site at Lion’s Walk Lodge, where  Sunpoints Southern Africa had secured a contract to purchase this farm in 2004 and a financial partner was needed to help build a tourism lodge there.  We also visited a possible diamond mine claim at the Farm Rugalatte named Honingklip II[2] and the Sunpoints Farms, large operating farms in the Free State of South Africa.[3]  We then flew to the Wild Coast of South Africa to view the project at Hole in the Wall and other sites.[4]  Hole in the Wall is a National Heritage Site for South Africa and it is truly beautiful.[5]  The trip was going very well and Rick, Lou and John seemed to be excellent business and financial partners to grow these social ventures for the people of Africa and provide the necessary funding.

But, as always, circumstances change and the entire project would have to be radically altered by what I and two other trip participants refer to as “The Trip from Hell.”  Once we were at the Wild Coast, we set up camp in Jeffreys Bay, a world-renowned surfing town located a few hours from the Wild Coast.  The first night, we ate at a local Mexican restaurant, as it was the only restaurant that was open.  When we were getting ready to leave after dinner, I noticed that John was gone.  I asked Rick and Lou “What happened to John?”  They replied, “he went with a guy he met at the bar to get some party supplies.”  “What party supplies? – Africa is a dangerous place at night and he left with a total stranger,” I said.  I was genuinely worried and concerned for John’s safety.

Later that night, I went to the room of Rick, Lou and John to check if John had returned.  On the glass dining room table, I witnessed several bags of white powder and lots of pills.  I asked “what is this?”  John said he “bought eight grams of cocaine and 100 ecstasy pills to make the trip more fun.”  Shocked by this, I said to John and the other guys: “this is so wrong – first, because you bought drugs, second, because this is Africa and you could go to prison and third, we are on a business trip to help represent our social venture partners and this is not the way to help others in need.”  Laughing off my comments, John asked after he snorted a long line of white powder, “do you guys want to do some coke with us?”  Disgusted and dismayed by John, three of us declined and went back to our own rooms leaving John, Rick, Lou and one of our companions in their room with their newly-acquired drug cache.

Back at my room, we all discussed what we had just seen.  I worried most of the night and the rest of the trip.  I did not even want to be in he same vehicle or lodging with these guys.  Thoughts of Rick, Lou and John going to jail in South Africa for illegal drug possession, harming the other members on our business trip, going to the hospital for a drug overdose and other concerns about their conduct plagued me for the rest of the trip.  I was awoken later that same night by sounds outside my third floor balcony so I jumped out of bed and ran to the balcony door.  There was Rick and Lou trying to break into my room by climbing from balcony to balcony some twenty feet or more above the ground. I said, “what in the world are you guys doing?”  In an excited and intoxicated state, they said, “we want the car keys to go get some food and drinks.”  “At two o’clock in the morning?”  I asked.  I told them to “go back to bed because we have a schedule to keep tomorrow morning” and with that the men laughed, took the car keys and left.

The next morning we were late for our scheduled activities so three of us went to check on John and the others.  John and a travel companion came out to open the door and we went into the kitchen and sat down – trying to get everyone up and moving.  Scantily clad and with white powder and crusty snot outlining their noses, the travel companion told us that “we stayed up most of the night partying” as this person drank directly out of a two liter bottle of coca cola and burped loudly.  John just seemed groggy and out-of-it.  Needless to say, the three of them and a companion proceeded to party for a week straight, while being late to most of the scheduled meetings.  They stayed up all night and slept most of the day.  Their partying and behavior was so obvious and embarrassing that Bossie Bosman and our local partners asked me to never bring them to the local community projects again. The embarrassment was only heightened when one of the men, apparently too intoxicated to get up, simply went to the bathroom in his bed, which cost us $500 in damages from the lodge owner.  I also received bar bills for thousands of dollars of drinks from the places we stayed from their late night drinking and partying binges that they simply did not pay.

Do these seem like the type of people you would want working with you to you help you accomplish your goals and vision?

Because the local people are working with us on a trust relationship, I was told that we cannot have Rick, Lou and John representing the social venture partners in front of the local chiefs, the tribal council, the community and the government.  I was shocked and embarrassed and I did not know what to do at that point.  What would you do if you were working with a poor community in Africa who is counting on you and the social venture partners to help them with their most valuable assets and you find out that some of the people on your team were using drugs and acting inappropriately?

Furthermore, unbeknownst to me, John and his wife were swingers and near the end of the trip, he said, “I think my wife would like you and your wife, so would you be interested in swapping wives when we get home?”  Stunned by this question, I said to him that my wife and I loved each other and we were not interested in that lifestyle.  However, I was stunned and amazed at this turn of events:  I just left my job to start a new company with these three men and now I am in the middle of a complete mess.  This is one aspect of social ventures that I did not expect to encounter:  cocaine, ecstasy and swingers.

Upon our return to the United States, I had to begin making plans to slowly distance myself from my new partners and yet at the same time, we were already setting up a new fund, The Pure Africa Sustainable Development Fund that would be operated by Pure Africa Management with project ownership to be held by Pure Africa Holdings.  John had already invited friends and colleagues to meet for presentations on the Fund on several occasions in late 2005 and early 2006.  One of the first investors into the Fund was a long time friend of John and also a friend of Rick and Lou.  His name was Dr. Allan Stiner of Norfolk, Virginia.  After one of these informal gatherings organized by John, Dr. Stiner told the Fund that he wanted to invest in the social ventures because he had just inherited millions of dollars from his father and had money to invest.  At Dr. Stiner’s request, a Private Placement Memorandum documenting the potential projects and the risks inherent in investing in projects in Africa, a Subscription Agreement and other legal documents were provided to Dr. Stiner for he and his legal counsel to review.

Pure Africa Management agreed to allow Dr. Stiner to invest his $250,000 into the Fund in February, 2006.  In February, 2006, in a meeting with Dr. Stiner at his home, he reviewed the legal documents one final time and signed the Subscription Agreement.  However, in making his investment, he had one other request:  he would only invest his money if Rick, Lou and John had no access to it as he was aware of the bad behavior of the group in South Africa the month before.  Dr. Stiner read the substantial Private Placement Memorandum of the Fund and he signed his Subscription Agreement (both legal documents which detail the risks of the project along with background information).  Dr. Stiner then gave me a check written out to me personally as the Fund had not yet set up its bank accounts.  The $250,000 was deposited into the Sunpoints Southern Africa bank account as the Fund had acquired all of the Sunpoints Southern Africa projects in South Africa including its bank account. With these funds, my outstanding invoices were paid for the time and effort I had put into the social venture projects and necessary project and business expenses were paid.

Based upon the strange events of The Trip from Hell in January, 2006 and my recent departure from my paying job, I was paid as a consultant pursuant to a written Consulting Agreement with the Fund through its bank account in Sunpoints Southern Africa for a large portion of my 2006 pay because I was feeling very uncertain about my future with Rick, Lou and John.  Furthermore, since I was the only person working full-time, the Fund managers knew that I was relying on my consulting pay to relocate from Washington, DC to the Virginia Beach area.  With my consulting pay and funds loaned to me by my family, I was able to purchase a home in Suffolk, Virginia.  With my two children and the hopes of having additional children and/or adopting children, my wife and I bought a five-bedroom home in a nice neighborhood where my children had many friends and an area that was very safe and close to my children’s school. [6]

By mid-2006, the Fund had five investors who invested a total of $545,000, one of whom was John and the others were his friends and colleagues, whom he invited and recruited into the Fund.  Lou prepared financial statements and balance sheets and Rick prepared status reports for the Fund investors.  I provided needed help from the business plan writing and coordinating with South Africa and US legal counsel.  However, the Fund was dysfunctional because of the prior serious actions by John and others and the inherent mistrust caused by their potentially criminal actions.  Furthermore, the drug use, partying and lack of professionalism had ruined their reputation with the social venture partners.  I was forced to adapt and change the projects already underway and restructure midway or have all of us lose everything to financial partners once again.  At my request, we all agreed that the Fund would stop raising money for the foreseeable future, in my mind, to protect other financial partners against any further potential loss or negative actions.

Once again, I had just left a high-paying job to work full-time on social venture projects as a consultant for Pure Africa Management and the Fund and now, I was faced with an uncertain future:  a new home and social venture projects that did not have a reliable funding source or a reliable management team.

While the events of this story seem outlandish or unbelievable, there were seven witnesses to the cocaine, ecstasy and swinger Trip from Hell (including John, Rick and Lou).  One witness stated, “it was the worst trip I have ever taken in my life.”  Another witness said that, “I was initially excited to see three professional men like Rick, Lou and John getting involved to help the needy in Africa but I was deeply saddened and disturbed when I saw this unethical behavior by three professional men who were husbands and who had families acting in such a reckless manner by taking drugs and partying in an out-of-control way.  While on the trip, I was scared to be anywhere near them because they were carrying such a large amount of drugs and acting so childishly and unprofessional.  Later, I was hurt that these men not only let down the poor people in Africa and potentially ruined the vision of the company because they misrepresented the company, the projects and they gave the people of Africa a negative impression of Americans.  In meeting with government officials, Sotheby’s, the local chiefs and the community, it was embarrassing to have them in meetings because they looked hung over and unprofessional.”

If you do not believe me, then perhaps legal counsel will ask them on the witness stand under penalty of perjury to tell the truth.  If they do not do so, then there are four witnesses who can testify to their actions.  Once again, the social venture projects needed a funding partner and a management team and, unfortunately, the next partners were equally as challenging in their behavior and more devastating to the projects than anyone else.

Again I will ask, what would you do in a situation like this? Give up your dream? Give up the opportunity to help thousands of people have a better life?  Or, do you pick yourself up and know that you can overcome any challenge (big or small) by restructuring and making some changes so you can ultimately fulfill that dream and vision and protect others from the negative actions of a few.

The next article in the series is:  Murder-for-Hire, Aggressive Bad Press Campaign and Other Distasteful Actions:  Social Ventures in Africa?


[1] See Letter from William Brown, Ph.D to Asst. United States Attorney, Stephen Haynie acknowledging my consulting agreement at Earth Conservancy and payment of consulting fees, and personal and business expenses.

[2] See  http://www.youtube.com/watch?v=KDRhTrs7PyM&feature=channel&list=UL  Social venture partners, Michael van der Merwe and his brother Pieter van der Merwe, take us on a tour of the Honingklip I Diamond Mine and show us the adjacent site of The Farm Rugalatte named Honingklip II.  Funds were sent to Michael van der Merwe in 2005 to secure the mining claim and necessary bonding so that due diligence could be done on the potential mining project.

[3] See Video at http://www.youtube.com/watch?v=jxE7zjXsgTo&feature=channel&list=UL  Social venture partners Pieter van der Merwe along with the farm manager take us on a tour of the Sunpoints Farms in the Free State Province of South Africa.  As working farms, the goal of this social venture projects was to educate the local people in modern farming methods and to operate profitable farms.  Funds were sent to Michael van der Merwe in 2005 and 2006 to sign contracts to become a social venture partner in this existing farming operation.

[4] See Video at http://www.youtube.com/watch?v=OysOjCVKXB0&feature=channel&list=UL After the local leaders and our Xhosa community social venture partners greeted us with traditional dancing, Rick, Lou, John and I were escorted around The Cliffs at Coffee Bay golf course by social venture partner, Bossie Bosman.  The golf course is owned by the local community and they leased it to Earth Conservancy and Pure Africa so that the golf course could be renovated.  World renowned golf architects and other golf experts were flown in to prepare a plan to renovate the golf course in 2006 and 2007.  Ault Clark and other golf experts commented that The Cliffs at Coffee Bay was similar to Pebble Beach with cliffs and sweeping ocean views.

[5] See Video at http://www.youtube.com/watch?v=M-9E-8qtpW0&feature=channel&list=UL  Social venture partner, Bossie Bosman takes us on a tour of the Hole in the Wall project.  Hole in the Wall is a National Heritage Site for South Africa and it holds significant cultural value for the Xhosa community.  As one of the premier natural tourist sites in South Africa, Hole in the Wall is regarded by Sotheby’s and other professionals as a major tourism lodging site.  Funds were sent to Bossie Bosman in 2005 and continuing to allow for Earth Conservancy and Pure Africa to become social venture partners at the Hole in the Wall project.  With 50 oceanfront lodge sites and a hotel site, the plans at Hole in the Wall would allow for up to $6M of lodge lease income and continuing revenues from the hotel site.  The project is structured with 45% ownership by the local Xhosa community.

[6] When Rick, Lou and John first set up investor presentations in 2005 and early 2006, I was working full-time for Trident Systems, Inc. for $250,000 plus bonuses and I was also working as a consultant for several social venture companies.  In February, 2006, I was hired as a consultant by the Pure Africa Sustainable Development Fund and I was also a consultant for Earth Conservancy and other projects.  My combined consulting contracts were designed to provide me with $350,000 or more of income as and when funding was available.

Article 4 FN 1 Letter from William Brown to Mr. Haynie

Leave a comment

Filed under Uncategorized

Article III: Wextrust Capital and Social Ventures: The Good, the Bad and the Ugly by Brian Ray Dinning, Social Venture Lawyer

Article 3:  Social Ventures:  Wextrust Capital – The Good, the Bad and the Ugly

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

July 1, 2012

 

My aunt and uncle were Christian missionaries in Africa and my family performed missions work in South Africa for over 35 years.  Brought up in a dynamic faith-based household, I was always taught that we must care for orphans, widows and the poor – and that everyone is born with a purpose in life.  As unlikely as it might sound, by the age of 10, I knew I wanted to be a lawyer, and I also knew that one of my purposes in life was to help people in Africa. It wasn’t until much later in life that I understood how I might combine those two ambitions.

 

I’ve been a practicing lawyer for 22 years and, up until recently, I’ve had a spotless record, full of accomplishments and commendations that have brought me and my family a great deal of pride.  I have had the privilege of traveling to Africa over 60 times, and in 1992 through 1994, I helped my professor write a legal textbook on how nonprofit organizations can do for-profit social ventures, which is the foundation of the modern day social venture or social entrepreneurship project.  This work resulted in the legal treatise entitled, “Michael I. Sanders, Partnerships and Joint Ventures Involving Tax Exempt Organizations” (Wiley & Sons 1994).

 

I started doing work for clients in Africa in 1994 and have been working on social venture projects in Africa ever since then.  These were missions-type projects where we would help build a church or community center, help with clean water, renewable energy, organic food and more.  In this work, I realized that the local people of Africa had dreams to become something more, to be connected to the world that existed beyond the boundaries they were confronted by – to also ensure that their children had a future.

 

So, I believe that I was blessed with the talents, ability and vision to look for innovative ways to help the local people in Africa to create jobs, income and a future.  This was – plainly stated – to look at their natural resources (land, water, wildlife, mineral rights etc.) and help them locate the tools (people, money and education) to help them maximize those resources – by building a tourism lodge, starting a micro business or starting a minerals project.  This way, the local people could achieve sustainability – meaning they could feed their families, afford to send their children to school and have clean water.  More importantly, they could provide a future for their children.

 

In 2003 and 2004, Dr. William Brown, a Fulbright Scholar and Ph.D Professor, brought an innovative film crew to work with Earth Conservancy to produce two award winning HIV/AIDS education films with local actors in the local African language for audiences in Kenya and Tanzania. This was done in conjunction with the United States Department of Defense. The films focused on the true-life stories of soccer stars who helped promote the message of education, testing and awareness of HIV/AIDS.  Traveling by jeep, from village to village throughout Kenya and Tanzania, these award-winning films were touchingly, often projected on bedsheets that had been sewn together by those eager to help.  The films won awards at the Houston WorldFest flim festival and, more importantly, the films achieved the goal of education young people about HIV/AIDS.

 

The local people we were trying to reach in Africa were intelligent and kind, but also very isolated from the more sophisticated abstractions we’re accustomed to. At one point when the film was being shown to a Maasai community in Tanzania, there was a scene where a lion appeared on screen. The lion is the mortal enemy of the Maasai people who traditionally raise cattle. The crowd screamed in terror and one Maasai warrior jumped up and threw his spear through the screen in order to save his people from the lion, simultaneously comic and courageous.  Earth Conservancy stills works in Tanzania and I am working on the establishment of proposed social ventures with Dr. Steven Kiruswa, Ph.D – a Maasai warrior himself.

 

In 2002, my law firm was sponsoring The Shakespeare Theatre season of productions in Washington, DC.  I was asked to represent the firm at a gala banquet for the Shakespeare Theatre in Washington, DC.  There I dined with Justice Ruth Bader Ginsberg, Justice Rehnquist and the newly-appointed Head of Africa at USAID, Constance Newman, now Assistant Secretary of State for African Affairs.  Ms. Newman was fascinated by the social venture model of partnering for-profit and non-profit companies together to promote community-based projects in Africa.  Ms. Newman asked that I meet with her staff at USAID and provide power point presentations and keep her updated with any progress.  This was exciting, important people were interested in our work in Africa and I felt like I was making progress.

 

In 2003 and 2004, I was practicing law and working as a consultant for social ventures in Africa.  Working in this capacity, helping the local people of Africa in stewarding their natural resources and talents for job creation is immensely fulfilling, indeed, a life-altering vocation.  My job as a consultant for social ventures in Africa was similar to the work I did at law firms but I would be helping destitute people in Africa by helping to locate community projects, drafting business plans, helping find social venture partners, and assembling management teams to help implement projects.  It was a big undertaking, but I was happy to take it on, and even now, I’m still happy I took it on.

 

Over the years, with Earth Conservancy, I met and worked with a hard-working group of people in South Africa who had three projects:  a mining project, a farming project and a beautiful nature reserve.  All three projects were structured as social ventures to provide jobs and a minimum of 10% of the income to the local community according to the business plans.  All three social venture projects had great potential.  The projects were organized under the social venture name of Sunpoints Southern Africa. The challenge was to find a financial partner who had similar values and charitable inclinations toward the local community who would be interested in funding these social venture projects. However, this was in the early stages of the social venture movement so venture capitalists and bankers did not necessarily have the best interests, or even any of the interests of Africans in mind – they would be looking purely at the profit-making potential of these social ventures.

 

In 2003, these three projects were presented to a venture capital firm based in New York and Colorado. After a short power point presentation, the venture capital firm agreed to fund the three projects for a total of $3.5 million.  With this funding commitment and an excellent team of people working on the three social venture projects, the projects were started in January, 2004.  Starting the projects meant that the South African social venture team had to sign contracts to purchase and develop the projects based upon the funding commitment, conduct due diligence, expend funds to acquire rights such as bonding of the mining project or a downpayment on the game reserve real estate, create business plans and start the operations and management of the projects.  This was an exciting time as these projects were designed to create hundreds of jobs and 10% of the potential profits of these three projects were designated for the local people.

 

Because circumstances generally change, by March, 2004, the venture capital firm told Sunpoints Southern Africa and the social venture project partners that they were delayed in their funding commitment, which was potentially disasterous because funds had already been committed and contracts signed.  Sunpoints then began to search for a replacement financial partner and in April, 2004, Sunpoints and the social venture partners were introduced by a lawyer to Joe Shereshevsky, COO of Wextrust Capital.

 

Wextrust Capital was, at that time, a company that claimed to have approximately $1 billion of real estate and assets and it purportedly owned and/or managed large office buildings around the United States.  After discussing the funding predicament, Joe Shereshevsky stated that Wextrust was interested in becoming the funding partner for the social venture projects after a due diligence trip to see the projects firsthand.  After visiting the projects and meeting the South African social venture partners, Wextrust Capital committed to providing bridging capital to fulfill the failed funding commitment from the first venture capital firm.  At that time, on or about June, 2004, I was asked to work in the office of Wextrust Capital to help oversee these three initial social venture projects as the liaison between Wextrust Capital and the social venture partners in Africa.  The social venture partners and I were happy because the projects were saved and could now proceed with a new funding partner.

 

Unfortunately, our celebration was short-lived.  By the end of 2004, I had witnessed enough of Wextrust Capital to know that they were not the appropriate financial partner for the social ventures and I had to separate myself completely from them.  When I told the Board of Directors of Wextrust Capital that I was not going to work with them anymore, Joe Shereshevsky was furious and he began to bad-mouth me to my business contacts and the social venture partners in Africa.  I asked Joe Shereshevsky if Wextrust Capital was going to honor their commitment to the local community and Joe Shereshevsky stated, “No, we are the major shareholder and we do not agree with giving 10% to the local community.”  Devastated, I said, “the 10% to the local communities is in all of the written business plans, financial projections and was discussed in all of our meetings.”  I was told, “Wextrust has millions of dollars in the bank and you can try and sue us but you will lose.”   Because of the significant financial, tax, legal and social transgressions I witnessed by Wextrust Capital, I told all of the South African social venture partners that it was better to give up everything including all ownership rights and projects to Wextrust Capital because you do not want to be in business with them now or in the future.

 

In March, 2005, after resigning from Wextrust Capital at the end of 2004, I was asked to fly to Chicago to meet with the Board of Directors.  At that meeting, they offered me a seat on the Board of Directors, up to 10% ownership in Wextrust Capital and increased compensation and benefits.  I immediately refused. I sent my feelings on this debacle to Joe Shereshevsky via email. [1]   Although I very much wanted to share my reasoning with the world, I was obligated not to disclose this information, even though it hurt me dearly not do so, through attorney-client confidentiality rules.

 

After the Wextrust Capital scandal erupted, I asked the Virginia State Bar if I could disclose the information so that the investors could possibly recoup some of their investment.  I was told that I could only disclose the information if requested pursuant to a court order.  I would have gladly given the information to the government but I was never asked to testify or provide any information or documents.  Most of the social venture partners in South Africa including myself and many other innocent parties lost everything in those three projects including our time, money and ownership.  The local community was also robbed of their benefits of the three projects.

.

It was an immensely difficult and often acrimonious time, and after being ridiculed by Joe Shereshevsky, losing three social ventures that were near to my heart, and in which I had staked  my time, reputation, effort and money, my parting words to Joe Shereshevsky were: “I expect to see you in five years on trial for $100M of fraud.”  Joe Shereshevsky laughed at me and insulted my capacity as a lawyer.  He also likened the South African social venture partners to “stupid monkeys” and the local community as “useless and deserving of their station in life.” It could hardly have been an uglier situation.  Later, I would learn that thousands of other people would lose up to $255 million to the fraud and malicious actions of Joe Shereshevsky and Wextrust Capital.

 

It is well documented that the substantial fraud of Wextrust Capital occurred from mid-2005 to 2010 or so – thankfully after my departure.  In reflecting on that time, I wish that someone would have asked me about those times as my testimony along with the good social venture partners in South Africa may have been able to help in the Wextrust Capital investigation.  Furthermore, I may have been able to shed some light on where or with whom some of the assets were held as a group of us hired a private investigator to follow up on the fraud committed by Wextrust Capital against us in April, 2008.  However, I was never asked to provide any information and I could not offer the information under the guidance of The Virginia State Bar and attorney client confidentiality rules.

 

In order for social ventures to work properly, the financial partners must have some social motivation for helping the local communities wherein they work.  Furthermore, social venture policies, procedures and goals for helping the local people should be agreed upon and documented by all social venture parties.  Social responsibility is not only good business but it is an absolute must if we are to help the 400 million poverty-stricken people of Africa who live on less than $1.25 per day.

 

In my experience, the social venture partners and the local community are the “good,” Wextrust Capital and Joe Shereshevsky were the “bad” and the terrible acts of fraud, deceit and thievery done to the general public by Wextrust Capital are the “ugly.”  I wish I could say that this was the only bad experience I had with financial partners for social ventures in Africa but that is, unfortunately, not the end of the story.

 

Article 4 is entitled, “Cocaine, Ecstasy and Swingers, Oh My:  Social Ventures in Africa.”

As a footnote, the name “Pure Africa” was created by the first venture capital firm and me.  It was taken by Joe Shereshevsky and used without our permission.  The “Pure Africa” entities that were established by me and others in 2006 and beyond have no affiliation or relation in any way to Joe Shereshe


[1] See email dated March 27, 2005 from me to Joe Shereshevsky, COO, Wextrust Capital detailed my basic reasons for separating myself from them, which is attached hereto at the link below.

Article 3 Wextrust Departure Reasons

Leave a comment

Filed under Uncategorized