Dispatches

ANGOLA: Oil, Diamonds & One Family’s Phenomenal Greed

Angola drain

Luanda, Angola – Recently, I was flagged down by a traffic policeman seeking a ride back to the station after finishing his shift in one of Luanda’s main thoroughfares.Candidly, he explained his predicament: The pick-up vehicle had broken down.

Angolans being more used to seeing traffic cops stopping cars to check papers or negotiate a petty bribe, I expressed my surprise. The officer then explained why corruption is endemic. He said official salaries are so low that regular police officers cannot afford even the basics of life.His income is only the equivalent of $120 per month, even taking the informal exchange rate as a guide.

The officer’s admission came days after a media circus organised by the Commander-General of the National Police, Chief Commissar Ambrósio de Lemos. Without due process, the chief presided over a ceremony to expel two traffic police officers suspected of having taken a petty 1,500 Kwanza ($3) bribe. This public humiliation was intended to convey the message that the police are fighting corruption in their ranks. But it was evident that only the small fry are targeted.

What about the big fish, such as Chief Commissar Ambrósio de Lemos himself? Ironically the chief is embroiled in an ongoing criminal investigation in Spain that has already seen nine people thrown into jail. He himself is suspected of taking millions of dollars in kickbacks in a corrupt scheme whereby the Angolan National Police paid $169 million to import equipment from Spain that was valued at just $50 million. But in Angola,the commander remains firm in his position.

ABOVE THE LAW

Another example that demonstrates how the police commitment to fighting corruption in Angola is a joke: In 2013, I revealed that Chief Commissar Ambrósio de Lemos was profiting on several counts from a conflict of interest. He was acting as the representative of the Brazilian weapons manufacturer Taurus in Southern Africa while purchasing weapons from them, via a private company that he owned, for the National Police. Our exposé provided evidence of his self-serving dealings: Taurus equipment for the Angolan National Police was supplied by his company R& AB. At the same time, his company and Taurus had the nerve to apply for tens of millions of dollars from the Brazilian government’s credit line to Angola, to finance that sale of equipment, including 95,000 guns of various types. Did this spark an internal investigation? Was the Chief Commissar publicly humiliated and sacked? Of course not.

The Chief of Police has been a loyal servant of the regime who has done all he can to ensure opposition and protest are repressed. He has presided over a force that regularly deploys hundreds of police officers to beat up, torture and arrest a handful of young activists who persist in their attempts to protest publicly against the corrupt rule of President José Eduardo dos Santos. This is why the commander enjoys a licence to engage in corrupt schemes as he sees fit, with impunity

The four hallmarks of power in Angola are: Corruption (nepotism included); impunity; propaganda; and repression. The Chief of Police has been a loyal servant of the regime who has done all he can to ensure opposition and protest are repressed. He has presided over a force that regularly deploys hundreds of police officers to beat up, torture and arrest a handful of young activists who persist in their attempts to protest publicly against the corrupt rule of President José Eduardo dos Santos. This is why the commander enjoys a licence to engage in corrupt schemes as he sees fit, with impunity.

In 1996 a High Authority Against Corruption was created. Twenty years later no one has been nominated to serve on it!

WHAT OF LAW ENFORCEMENT?

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Angola has a number of laws against corruption on the statute books. In 1996, the National Assembly passed a law (3/96) to create the High Authority Against Corruption, but in the intervening 20 years it has yet to nominate any members to serve on the High Authority, a delay typical of anti-corruption efforts in Angola, which exist in theory but are never put into practice.

Before parliament can nominate members to serve on the High Authority Against Corruption, the law requires the president to formally establish the institution. President dos Santos, who has been in power for 37 years, has never deigned to do so.

Although the High Authority has yet to come into existence, the law exists. And it specifies the procedures required of public servants to maintain a distinction between public and private affairs. It requires public office holders to publish their assets and income. It makes abuse of public office illegal, such as any act by government officials, members of the Angolan Armed Forces (FAA), the National Police, high-ranking civil servants or managers of public companies that would undermine the public interest or “the morality of administration.”[1]

The president’s act of omission in failing to create this body as required by the law passed by parliament, is unconstitutional and illegal. It reflects the lack of respect for the rule of law in the country. During its 40 years in power, the ruling MPLA party has shown an obsession with enacting laws. The aim is to assuage public opinion and maintain a veneer of legitimacy.

Seven years ago, in 2009, the president declared a ‘zero tolerance policy against corruption.’ One year later, Parliament enacted another anti-corruption law, the Law on Public Probity. Ironically, the word corruption appears nowhere in the text.

Seven years ago, in 2009, the president declared a ‘zero tolerance policy against corruption.’ One year later, Parliament enacted another anti-corruption law, the Law on Public Probity.Ironically, the word corruption appears nowhere in the text. This law also requires public office holders to submit a yearly declaration of assets and income – but only to the Office of the Attorney General, with the information not being for public disclosure. The evidence suggests this provision is neither enforced nor taken seriously.

The Attorney General, whose job it is to enforce this, does the opposite. That same year, 2009, the office of the Attorney General, Army General João Maria de Sousa, issued a statement confirming that he is the co-owner of Imexco, a private company that acted as a supplier both to his own public office and other government institutions.

The Attorney General, along with the President of the Military Supreme Court, General António Neto, while holding public office, were simultaneously managing partners of the same company. His office justified this clear conflict of interest as a “legal entitlement” the Attorney General enjoys in his capacity of “private citizen,” in blatant defiance of the law.

BUYING GOVERNMENT LAND FOR PEANUTS IN ANGOLA

More recently, I exposed another conflict of interest involving the Attorney General, this time in the role of areal estate entrepreneur who bought rural land from the government for peanuts, in order to build a seaside housing condominium. From the top down, Angola’s lawmakers and judges are as deeply involved in corruption as the lowliest police officer.

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WHOM TO TURN TO?

The international scramble for Angola’s oil (along with the revenues therefrom) provided the Angolan president the leverage to gain all the international support he needed to quell internal dissent and to rule unchallenged. In a bold move, he enforced a requirement that any significant foreign investor in the country had to have a national partner. Invariably, this ‘national partner’ involved members of his own family, senior public officials and their families. As a result, foreign companies who have invested in Angola became part and parcel of the corruption schemes.

OPERATION CAR WASH – THE BRAZILIAN CONNECTION

The same can be said of a number of governments. A case in point is the biggest corruption scandal in Brazilian history, “Operation Car Wash” (in Portuguese: Operação Lava Jato), which revealed Angola’s involvement in money laundering schemes designed to funnel millions of dollars into the electoral campaigns of Lula da Silva’s Workers’ Party – apparently to influence Brazilian investment in Angola (both are Lusophone, or Portuguese-speaking countries).

It is in this context that the Angolan parliament is set to pass, in coming days, the 2017 State Budget, which is a work of fiction that also serves to mask institutional corruption. For instance,the Ministry of Finance claims that it will collect three times more tax revenues from beer consumption (165 million Euros) than from diamond extraction and sales (49.2 million Euros). Angola is the fifth largest diamond producer in the world, and beer is one of the cheapest products consumed in the country. How is that possible? Binge drinking? No, the simple answer lies in the private control of the diamond extractive industry by the presidential family and powerful generals for their own enrichment.

The international scramble for Angola’s oil provided the Angolan president the leverage to gain all the international support he needed to quell internal dissent. In a bold move, he enforced a requirement that any significant foreign investor in the country had to have a national partner. Invariably, this ‘national partner’ involved members of his own family, senior public officials and their families

In 2010, President dos Santos’s first-born daughter, Isabel dos Santos, set up a company named Victoria Holdings in Malta. She incorporated it as a joint venture between herself and the Angolan state-owned diamond company Sodiam. The latter is the clearing-house that has the exclusive foreign sales rights on all Angolan diamonds. By 2012, this joint venture was doing so well it bought 75%of the stock of the Swiss jeweller De Grisogno for $100 million. There has been no public disclosure of how much of that was paid by the Angolan state. But experts believe De Grisogono has been a conduit to funnel diamonds out of Angola to fund Isabel dos Santos’s ventures. Announcement of this merger in the world of entertainment and business news was a coup aimed at seducing Hollywood, and serving to glamorise Angolan involvement while masking its corruption.

This year, De Grisogno made international headlines for buying the biggest diamond ever found in Angola, for more than $16 million, as well as the most expensive diamond in the world for $63 million. In a nutshell, Sodiam sold the Angolan diamond to its own venture with Isabel dos Santos. Was this a real sale? Does Sodiam accrue any benefit from such transactions? Although all state-owned companies are obliged to publicly disclose their annual reports, Sodiam and its parent company Endiama, which has the exclusive rights for licensing diamond concessions, have never done so.

In 2010, President dos Santos’s first-born daughter, Isabel dos Santos, set up a company named Victoria Holdings in Malta. She incorporated it as a joint venture between herself and the Angolan state-owned diamond company Sodiam. The latter is the clearing-house that has the exclusive foreign sales rights on all Angolan diamonds. By 2012, this joint venture was doing so well it bought 75% of the stock of the Swiss jeweller De Grisogno for $100 million. Experts believe De Grisogono has been a conduit to funnel diamonds out of Angola to fund Isabel dos Santos’s ventures

Further adding insult to injury, in June, the president appointed his daughter Isabel head of the Angolan oil company Sonangol, giving her full control of a business that accounts for 95% of Angola’s exports.

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Other family members also have their snouts in the trough. Three years ago, President Dos Santos appointed his son Filomeno José dos Santos head of Angola’s Sovereign Wealth Fund, which was kick-started with a $5 billion purse and an endowment of 100,000 barrels a day.

WHEN A FAMILY HAS A COUNTRY

As demonstrated by the examples above, within the Angolan regime the corrupt have their grip on everything, including law enforcement,so few can successfully stand up to them. Opposition parties are dependent on government subsidies for their survival. The international community colludes, or turns a blind eye.

Inspired by the 2011 Arab Spring, hundreds of youth have been harassed, tortured and jailed for protesting against corrupt rule. Their drive has become instrumental in challenging the status quo and building a ‘revolutionary’ mindset against a regime that came into power and has clung on to it while trumpeting its own ‘revolutionary’ credentials

It is therefore commendable that a handful of journalists, against all odds, have continued to find creative ways to expose the corruption at the heart of an authoritarian regime. Inspired by the 2011 Arab Spring, hundreds of youth have been harassed, tortured and jailed for protesting against corrupt rule. Their drive has become instrumental in challenging the status quo and building a ‘revolutionary’ mindset against a regime that came into power and has clung on to it while trumpeting its own‘revolutionary’ credentials. These new ‘revolutionaries’ opposed to the old-guard ‘revolutionaries’ have made it an article of faith that President dos Santos must be forced to step down before the bonds of corruption that have kept the country hostage can be broken.

In the past few years, Angolans have taken to social media to vent their discontent against the scourge of corruption. The chorus of voices opposed to the excesses of the regime is growing and they demand accountability.

https://www.dmcc.ae/content-page?404-Carat-Rough-Diamond-Acquired&articleid=a055F00000p7U4qQAE

http://www.forbes.com/sites/robertanaas/2016/09/12/de-grisogono-brings-63-million-813-carat-rough-diamond-to-biennale-des-antiquaires/#7d9f098e8a25

http://www.arabianbusiness.com/one-of-world-s-largest-diamonds-now-in-dubai-631369.html

http://www.forbes.com/sites/trevornace/2016/02/17/largest-diamond-found-angola-flawless-404-carats/#e1879d4681de

http://www.nemesisinternational.com/single-post/2016/08/23/Angola%E2%80%99s-SODIAM-Diamond-Firm-Second-Largest-Exporter

[1] Assembleia Nacional (1996).

By Rafael Marques de Morais
Mr de Morais, Angola’s leading anti-corruption advocate, is winner of the Allard Law School 2015 Prize for International Integrity and the Transparency International Integrity Prize