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The fake news campaign that failed

South Africa has a long history of racial tension. Three businessmen tried tapping into that with a fake news network for their own gain. It didn't work.

Rodger Bosch / AFP/Getty Images

June 19, 2017, a news site in South Africa runs a story. It's no normal story.

"National Treasury Sold to Johann Rupert," reads the headline. 

In a majority black country, Rupert, a white business magnate worth an estimated $7 billion, is the second richest man.

There was no evidence to support the explosive headline, but the story wasn't retracted or corrected. It wasn't designed to inform, it was designed to mislead. It was fake news.

The story was posted on WMC Leaks, one of many fake news sites making up an online network of misinformation. Behind the network: a trio of Indian businessmen known as the Guptas. The Guptas are infamous in South Africa.

Gupta Brothers and Duduzane Zuma speak out

Ajay and Atul Gupta in 2011. 

Business Day/Martin Rhodes / Getty Images

Ajay, Atul and Rajesh "Tony" Gupta aren't your regular family of businessmen. With close ties to former president Jacob Zuma and constant whispers of politicians in their control, the Guptas were increasingly at odds with a hostile public who saw them as the face of corruption in South Africa.

In a move reminiscent of Russian operatives looking to disrupt the US during the presidential election and the UK during the Brexit referendum, the Guptas in 2016 decided to use the power of the internet, and social media in particular. What ensued was a scandal that became part of the increasingly global issue of fake news.

The phrase may be synonymous with the US' 2016 election, but fake news has caused concern in countries around the world. Many in Italy feared it would inform the country's early-March election, for instance. Meanwhile, the US ambassador in Kenya said the country's democracy is being undermined by fake news. The European Union said it found spikes in misinformation posted in Catalonia during its independence referendum last year.

So apparent is the issue of fake news that governments are now looking ahead, trying to figure out how to nullify its impact. Ireland will in April hold a referendum on abortion, for instance, and politicians have pressed the need for an official, independent fake news debunker. More controversially, the lower house of Malaysia's parliament last week passed a bill making fake news a crime punishable by up to six years in prison.

In most cases, fake news campaigns focus on an election or referendum. South Africa's fake news campaign was similarly political -- it sought to protect President Zuma, but its real mission was broader in scope: improve the reputation of the Guptas, whose alignment to Zuma was strong enough that some of the public referred to the group as the "Zupta government."

Through their Oakbay Investments company, the Guptas hired UK PR firm Bell Pottinger, allegedly paying it $2 million (24 million rand), to set up an online fake news campaign. The network went into effect around July 2016, working in full force for around a year.

Divide and conquer

The Guptas and their team got the message out with fake news sites and bots that shared stories from these websites, as well as retweeted Gupta-aligned political voices en masse. This worked in tandem with Gupta-owned TV and print media. All of it promoted one simple message to South Africans: You shouldn't be worried about the Guptas, you should be worried about the white elite.   

The campaign's key phrase: "white monopoly capital." Embedded in that phrase were two key components: The fact that South Africa's economy is still dominated by white-owned businesses, and the argument that these businesses influence the government more than the Guptas do -- and work to exclude the black majority from rising into affluence.

Here's how the campaign was run, according to data from the African Network of Centers for Investigative Reporting (ANCIR).

Politicians and activists worked with the Guptas, either because they were paid to or because it was mutually beneficial to do so, to push messages online in support of Zuma, or disparaging those who opposed alleged Gupta corruption. Scores of bots were used to amplify these messages. Bots amassed over 215,000 retweets of Gupta-aligned voices from July 2016 to June 2017.

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All of these messages were magnified with the help of ANN7, a 24-hour news channel, and the New Age newspaper, both owned by the Guptas. 

Here the campaign ran differently from Russia's meddling in US politics. Russian operatives stole or created identities to pose as Americans on Facebook and Instagram. The Guptas' campaign, meanwhile, relied more on real people to make political statements, and used a swath of bots and their own official media channels to trumpet those messages.

One such voice, ANCIR says, is Andile Mngxitama. Mngxitama is president of Black First Land First, a revolutionary political party.

"Andile would tweet about white monopoly capital or would tweet a link to one of his fake stories, and the bots would retweet it as much as possible," said Amanda Strydom, managing editor of ANCIR. "But Andile also had his little posse who would retweet what he had done or write their own tweets, so there were actually human people who would tweet, and the bots would be used to amplify whatever they tweeted."

This was further bolstered by a set of news websites, set up with corresponding Facebook pages. These included Gupta-linked "alternative news" sites like Weekly Xpose and Mngxitama's own Black Opinion, which resemble editorial-heavy propaganda sites, as well as completely phony ones like WMC Leaks, according to ANCIR. 

"The stories [some sites] created were completely fabricated," Strydom said, pointing to one of the sites posting photoshopped images of journalist Ferial Haffajee sitting on the lap of Johann Rupert in an attempt to slander her reports on government corruption.  

wmc-leaks

WMC Leaks was one of the phony news sites, according to ANCIR's report. It has since been pulled from the internet. 

Screenshot by Daniel Van Boom/CNET

It was all designed to counter one phrase: #StateCapture. Used to describe businessmen and politicians using government institutions for their own gain, state capture is a ubiquitous term in South Africa, and it's mostly leveled at the Guptas and Jacob Zuma.  

Right now, South Africa's Hawks investigators have reportedly issued arrest warrants for all three Gupta brothers in relation to the charge of state capture. The Hawks will be investigating Zuma for charges of bribery.

The Guptas were contacted for comment through their Oakbay Investments firm but did not respond. Mngxitama, for his part, denies involvement in the conspiracy. "If the bots retweet me, what does it mean?" he said. "Do I have control over who retweets me? It's the most strange way to accuse someone."

Though he denies being paid by the Guptas, Mngxitama said he would be willing to work with them.

"We have argued that in South Africa the Guptas are not the problem. They did not take our land, they did not take our economy," he said. "To the extent that the Guptas are the enemies of white monopoly capital, it makes the Guptas our tactical allies." 

Hit and miss

Did the campaign succeed in demonizing white monopoly capital? Yes, but not in a way that helped the Guptas' image.

"The whole purpose of the Bell Pottinger campaign was to make the point that the Guptas were being fingered because they were Indian immigrants," said Steven Friedman, professor of political science at the University of Johannesburg.

Their argument, Friedman says, is that the private sector, run almost entirely by powerful white businessmen, is just as guilty of state capture, but the Indian Guptas and mostly-black government catch more flak because the all-powerful white minority is trying to suppress coloured wealth.

There's something to this. Atul Gupta in 2016 was the wealthiest of the brothers, with an estimated net worth of 10.7 billion rand ($890 million). That's significant, but a fraction compared with South Africa's most wealthy. Rupert's current net worth is around eight times that, while Nicky Oppenheimer, a white diamond magnate, is estimated to be worth $7.7 billion. The country has five billionaires, according to Forbes, and only one is black.

In 2015 a staggering 93 percent of the country's "poor peoples" were black, according to the country's government.  

"[The Guptas] didn't invent the feeling that white business has excessive power, that's always been there," Friedman said. "It was just used in a self-serving way by people who were trying to justify very dodgy activity."

Unlike fake news in other parts of the world, which is feared to have influenced elections and referendums, the campaign didn't achieve its goal of improving the Guptas' image. Partially, this was because a lot of citizens in the country figured it out after a few months, according to ANCIR.

"We could all see what they were up to," said Maxine Lambert, a 29-year-old resident of Johannesburg. "The news on [Gupta-owned news channel] ANN7 just promoted the ANC and did not really speak to what was really happening in the country."

Still, the hope was that since the white elite do dominate economically, the message would be strong enough to resonate. That didn't happen either.

"It wasn't a terribly effective campaign," Friedman said. "What it was supposed to do is to make the campaign against the Guptas appear to be racist, and because 90 percent of South Africans are black, it was assumed that there would be a huge well of black support, and that didn't really happen."

The problem in retrospect is obvious: It's possible the black population can be against both white monopoly capital and black corruption at the same time.

Study after study has shown corruption to be a handbrake to economic growth, a particular problem in emerging countries. South Africa isn't a third-world country, but despite tremendous natural resources and a large population, it's not a first-world one either.

"The black middle class South Africans, professional people, business people in middle class activities, tend to feel that black people have not been given the economic opportunities they're entitled to under democracy here," Friedman said. "But they also don't like corruption because they're in the private sector. They see it as a leech on society."

SAFRICA-POLITICS-ZUMA-PROTEST

An April protest in Pretoria, South Africa, against then-President Jacob Zuma. Zuma had just controversially dismissed an anti-Gupta finance minister. 

Mujahid Safodien / AFP/Getty Images

But the Guptas' online campaign wasn't a complete fail. ANCIR's Strydom says that while it wasn't effective at directly swaying public opinion, it was an effective means of agenda setting.

"It certainly had a longer-term effect on how politics were understood," she said. "Suddenly, people were talking about white monopoly capital, even if to just dismiss it."

White monopoly capital was a gift to those who benefited from, supported or tolerated Zuma's corruption. Gupta-aligned politicians couldn't publicly say corruption is good, Friedman points out, but they could say white monopoly capital is bad.

Precarious positions

One of the biggest victims of the Guptas' social media campaign wasn't a person, but a company. Bell Pottinger, the PR company hired through the Gupta-owned Oakbay Investments, became a disgraced firm. In September of last year, in direct fallout from the scandal, Bell Pottinger was kicked out of the Public Relations and Communications Association trade body, and collapsed soon thereafter. It had been operating since the mid '80s.

Jacob Zuma, following internal pressure from his ANC party, resigned as president on Feb. 14. He was replaced by Cyril Ramaphosa, who months prior in December had defeated Zuma's ex-wife, Nkosazana Dlamini-Zuma, to become president of the ANC.

The Guptas are on the run. Ajay Gupta was named by South Africa's chief prosecutor as a "fugitive of justice" a day after Zuma's resignation. Atul and Tony, who also face arrest warrants, are no longer in the country.

In a letter produced by their lawyers, the brothers denied any guilt and called the state capture investigation "an exercise in political showboating," stating it will not be "conducive to the resolution of identified or identifiable issues."

"Our clients are not presently in the Republic of South Africa, being absent for business reasons," the letter read. "Accordingly, our clients decline the invitation to appear before the portfolio committee."

Much of the Guptas' online network has been dismantled over the past months. WMC Leaks, for instance, has been pulled from the web. However, South Africa is has many conundrums to deal with. White monopoly capital may be a fake hashtag, but it's a real problem. So is state capture.

"Are we going to go down the tube? Absolutely not," Friedman said. "Are we going to realize our potential? I'm not so sure about that either."

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First published March 30, 2018 at 5 a.m. PT.
Update, April 2 at 6:15 p.m.: Adds information on Irish, Malaysian fake news.