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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

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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

 

 

 

 

 

 

 

 

 

 

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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.

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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

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Article II: Social Ventures in Africa: What Can Go Wrong? By Brian Ray Dinning, JD, LLM

Article 2:  Social Ventures in Africa:  What can go Wrong?

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

June 29, 2012

Sometimes committing your life to a worthy cause like social ventures comes with many challenges and obstacles such as:  differing world views, different goals and objectives (especially from banks and investors who have financial goals rather than the founders and social venture partners who generally have charitable and social goals as well as financial goals), the unpredictable nature of people and a limitless host of other complications and factors.  Business and social ventures are hard work – let alone business and social ventures in Africa, where resources, personnel and supplies can be scarce and corruption, violence and theft are rampant.

 

The US Government published that over 50% of all businesses started in the US fail within the first five years.[1]  New Venture Lab – Equipping Christian Entrepreneurs, quotes interesting statistics from Harvard Business School noting that the failure rate of businesses can be as high as 95% (depending on how you define failure).  Their website, quoting a Harvard Business professor, provides:

 

“Most companies fail. It’s an unsettling fact for bright-eyed entrepreneurs, but old news to start-up veterans. 

 

But here’s the good news: Experienced entrepreneurs know that running a company that eventually fails can actually help a career, but only if the executives are willing to view failure as a potential for improvement.

 

The statistics are disheartening no matter how an entrepreneur defines failure. If failure means liquidating all assets, with investors losing most or all the money they put into the company, then the failure rate for start-ups is 30 to 40 percent, according to Shikhar Ghosh, a senior lecturer at Harvard Business School who has held top executive positions at some eight technology-based start-ups. If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent. And if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90 to 95 percent.

 

“Very few companies achieve their initial projections,” says Ghosh. “Failure is the norm.”[2]

 

 

While this is the reality for businesses in the United States, a University of South Africa study indicates that the rate of small business failure in South Africa can be as high as 80%.[3]  MIT and other business schools note that the failure rate of social ventures will likely follow that of other for-profit businesses.

 

The challenge is to continue working to improve the lives of the 400 million people living on less than $1.25 per day in Africa regardless of past failures or challenges.  As Nelson Mandela states, “The greatest glory in living lies not in never falling, but in rising every time we fall.”  Quoting Vinod Khosla, billionaire venture capitalist and co-founder of Sun Microsystems: “There needs to be more experiments in building sustainable businesses going after the market for the poor. It has to be done in a sustainable way. There is not enough money to be given away in the world to make the poor well off.”[4] Researchers on social ventures at Duke note that: “We live in an age in which the boundaries between the government, nonprofit, and business sectors are blurring. This blurring results from a search for more innovative, cost-effective, and sustainable ways to address social problems and deliver socially important goods, such as basic education and health care.”[5]

 

Furthermore, Dees and Anderson realize that social venture projects and social entrepreneurs focus on the social impact of social venture projects and business-minded people focus on the financial returns thereby creating complexity.  “It is extremely hard to make strategic decisions about resource allocation or practical cost/quality tradeoffs when the social impact of these decisions is nearly impossible to measure in an efficient, timely, and reliable fashion.  It can become all too easy to focus too heavily on the more familiar, tangible and straightforward economic measures of success.”[6]

 

Businesses including social ventures fail for many reasons.  A New York Times columnist notes the top 10 reasons for small business failure:

 

“1. The math just doesn’t work. There is not enough demand for the product or service at a price that will produce a profit for the company.

 

2. Owners who cannot get out of their own way. They may be stubborn, risk averse, conflict averse — meaning they need to be liked by everyone (even employees and vendors who can’t do their jobs). They may be perfectionist, greedy, self-righteous, paranoid, indignant or insecure. You get the idea. Sometimes, you can even tell these owners the problem, and they will recognize that you are right — but continue to make the same mistakes over and over.

 

3. Out-of-control growth. This one might be the saddest of all reasons for failure — a successful business that is ruined by over-expansion. This would include moving into markets that are not as profitable, experiencing growing pains that damage the business, or borrowing too much money in an attempt to keep growth at a particular rate. Sometimes less is more.

 

4. Poor accounting. You cannot be in control of a business if you don’t know what is going on. With bad numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear until a real one is hired.

 

5. Lack of a cash cushion. If we have learned anything from this recession (I know it’s “over” but my customers don’t seem to have gotten the memo), it’s that business is cyclical and that bad things can and will happen over time — the loss of an important customer or critical employee, the arrival of a new competitor, the filing of a lawsuit. These things can all stress the finances of a company. If that company is already out of cash (and borrowing potential), it may not be able to recover.

 

6. Operational mediocrity. I have never met a business owner who described his or her operation as mediocre. But we can’t all be above average. Repeat and referral business is critical for most businesses, as is some degree of marketing (depending on the business).

 

7. Operational inefficiencies. Paying too much for rent, labor, and materials. Now more than ever, the lean companies are at an advantage. Not having the tenacity or stomach to negotiate terms that are reflective of today’s economy may leave a company uncompetitive.

 

8. Dysfunctional management. Lack of focus, vision, planning, standards and everything else that goes into good management. Throw fighting partners or unhappy relatives into the mix and you have a disaster.

 

9. The lack of a succession plan. We’re talking nepotism, power struggles, significant players being replaced by people who are in over their heads — all reasons many family businesses do not make it to the next generation.

 

10. A declining market. Book stores, music stores, printing businesses and many others are dealing with changes in technology, consumer demand, and competition from huge companies with more buying power and advertising dollars.

 

In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually, everything shows up in the soup. If people don’t like the soup, employees stop working for you, and customers stop doing business with you.  And that is why businesses fail.”[7]

 

 

Aside from the ten reasons noted above, in my experience with social ventures in Africa, the ventures did not work out as planned because of differences in goals and objectives between the partners, tension between the profit-making side and the social aspect of helping people and outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others which interfered with, delayed or handicapped the social ventures.

 

Of all the reasons for small business and social venture failure noted above, it would be the outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others, which caused our social ventures in Africa to either fail, be delayed or become handicapped.  In order to fully illustrate this point and to tell my side of the story, I will publish this seven part series complete with documents, video, photos, letters and email.

 

In addition to documents, video, photos, letters and email, there are also witnesses to most or all of this outlandish behavior including from the perpetrators themselves.  While some of these people are looking forward to a day in court against me, they will have to take the witness stand (under penalties of perjury) and answer for their outlandish behavior and actions and, hopefully, they will understand how their actions harmed the social venture projects, other investors and donors and the local people of Africa.

 

 

Article 3 is entitled:  Social Ventures in Africa:  Wextrust Capital – The Good, the Bad and the Ugly.

 

 

 

 

 


[1] Small Business Administration

[3] Mabaso, NR, University of South Africa (March 2008).

[4] MIT Entrepreneurship Review: From the Lab to the Land: Social Entrepreneurs Explore Appropriate Technology Dissemination (Nov. 26, 2010).

[5] Dees and Anderson, Duke Social Entrepreneurship: “For Profit Social Ventures,” (2003).

[6] Id.

[7] Goltz, J., “Top 10 Reasons Small Businesses Fail,” New York Times (Jan. 5, 2011).

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African Economic Growth Strong for 2012 through 2013 according to Reuters by Ray Dinning, social venture lawyer

(Reuters) – The African Development Bank said on Monday it forecast the continent’s economy would grow 4.5 percent this year and 4.8 percent in 2013, but warned the festering euro zone crisis may hurt demand for African exports.

Africa’s economy grew 3.4 percent in 2011, with North Africa’s economic output expanding 0.5 percent and sub-Saharan Africa growing by more than 5 percent.

“The economic outlook for Africa remains optimistic. Natural resource-rich economies are expected to do better than more mature emerging economies,” AfDB said in its annual African Economic Outlook.

(Reporting by Duncan Miriri; Editing by George Obulutsa)

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Solar Reading Lights for Children in Africa – by Ray Dinning, social entrepreneurship lawyer

Today I am working an environmental awareness conference to help a social entrepreneur sell 150 solar light kits.  The solar light kits come complete with two solar lights, arts and crafts supplies and everything necessary to make a fun and innovative renewable energy project with your children.  Having helped make 150 solar light kits, I will be volunteering to help to market this small social venture with a BIG impact in the lives of children in Africa.

The beauty of this project is that for each solar light kit sold for $20.00 this weekend or over their website, the social entrepreneurs are sending FIVE (5) solar reading lights to school children in Africa.  They spent a month this year making solar lights with school children at Mt. Kilimanjaro and this project will hopefully help another 750 children receive solar reading lights.

This is important because the rural huts have no electricity so the only way for the family to have light in the evenings and for children to read and study for school are these solar reading lights.

For more information on this project or to help, contact social entrepreneur Terry Maynard at http://www.passonthelight.com and help him bring light to children in need.

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