Panama Papers. How and where, African leaders hide oil and mining revenues.

A number of African leaders have transferred revenues from oil and mining resources in tax havens. Though not always illegal, these methods are revealing about the opacity of the management of natural resources which deprives African states from badly needed incomes.

In early April, the International Consortium of Investigative Journalists (ICIJ) revealed the names of 140 politicians and relatives from all over the world who have been involved in a large scam. Accordingly, all of them have hired the Panamanian law firm Mossack Fonseca (MF) to open bank accounts in offshore jurisdictions in order to avoid paying taxes in their own countries. Yet, this looks as the tip of the iceberg, since ICIJ has received about 11 million documents showing that MF created between 1977 and end 2015, some 214,000 companies in 21 tax havens on behalf of their clients. More than half (113,648) are incorporated in the British Virgin Islands (BVI), which raises the question of the responsibility of the United Kingdom in the existence of this tax evasion network.

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According to the documents, a number of these offshore accounts holders are African leaders or their relatives and associates. Several are involved in a way or another in the management or the possession of companies from the oil and mining sectors.
One of them is the nephew of South Africa’s President, Jacob Zuma, Clive Khulubuse Zuma, a mining magnate and the representative of Caprikat Limited, an offshore company that controversially acquired oil fields in the Democratic Republic of Congo and which is incorporated in the BVI.
Another representative of the offshore BVI-based corporation , Denvest Capital Strategies Inc.and Panama-based company Grafin Associated SA, is President Denis Sassou Nguesso’s former energy adviser and CEO of the national oil company SNPC, Bruno Jean Richard Itoua. According to ICIJ, Itoua was implicated in the diversion of company funds that came to light in 2003. A lawsuit two years later by one of Congo’s creditors accused Itoua and the SNPC of conspiring to “divert oil revenues… into the pockets of powerful Congolese officials”.

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The current Angolan Minister of Petroleum, José Maria Botelho de Vasconcelos, who worked for years with Angola’s state oil company Sonangol, received in 2002, power of attorney for Medea Investments Limited, which was incorporated on September 13, 2001 in the Pacific micro-state of Niue and moved to Samoa in 2006.
A top figure of Nigeria’s elite, James Ibori, governor of oil-rich Delta State from 1999 to 2007, who pleaded guilty in a London court, in 2012 to conspiracy to money laundering offenses, admitted using his position to corruptly obtain and divert up to $ 75 million out of Nigeria through a network of offshore companies, although authorities alleged that the total exceeded $ 250 million.

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According to ICIJ findings, MF was the registered agent of four offshore companies connected to James Ibori, including Julex Foundation, of which Ibori and family members were beneficiaries. During court hearings in the UK, prosecutors claimed that Ibori opened a Swiss bank account in the name of Stanhope Investments through which millions of dollars were channelled to ultimately buy $ a 20 million private jet.
Holders of mining portfolios or interests are also mentioned in the Panama papers. One is the current Algerian Minister of Industry and Mines and President Abdelaziz Bouteflika’s former communication director, Abdeslam Bouchouareb who has been the sole owner since July 2015 of the Panamanian company Royal Arrival Corp., whose activities include the negotiation of commercial contracts, public works, railway and maritime transport. Another is the personal secretary of King Mohamed VI of Morocco, Mounir Majidi, who was appointed in 2002 head of SIGER the holding company of Morocco’s royal family with stakes in mining, agricultural and telecommunication businesses. In 2006, Majidi was charged by the BVI-incorporated company SMCD Ltd for which he received power of attorney privileges, to handle the purchase of a luxury 1930s schooner, which is now owned by the king. Majidi was also administrator of a Luxemburg company called Immobilière Orion S.A., which borrowed $42 million from a MF-incorporated company to buy and renovate a Paris luxury apartment. The ICIJ also gathered evidence about the case of the widow of the former President of Guinea-Conakry, Lansana Konté, Mamadie Touré. Accordingly, the lady was granted the power of attorney to the BVI-registered company Matinda Partners and Co. Ltd, in November 2006. There are suspicions that she may have transferred to this offshore company part of a sum of $5.3 million in bribes which she admitted to have received, according to US authorities, to help a mining company to obtain rights to the world’s richest iron ore deposit.

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Other close relatives of African heads of states have been transferring money to tax havens. One is the twin sister of Joseph Kabila, the President of the Democratic Republic of Congo, Jaynet Désirée Kabila Kyungu. Shortly after her brother was sworn in, the company Keratsu Holdings Limited of which she is co-director and owned stakes in one of the DRC’s major mobile phone operators was incorporated in Niue in June 2001. This same vehicle may have been used to receive transfers from her other companies including the Digital Congo television, internet and radio conglomerate.
The eldest son of Ghana’s former president between 2001 and 2009, John Agyekum Kufuor, John Addo Kufuor, was holder in 2001 of a bank account in Panama worth $75,000. And his mother, Theresa Kufuor, then Ghana’s first lady, was also a beneficiary. Files also connected Kufuor with BVI companies Fortiand Ltd and Stamford International Investments Group Ltd. The Ghanaian press reported allegations that Addo Kufuor gained lucrative government contracts, and private business deals through paternal connections but an official commission found no evidence of wrongdoing.
By contrast, the eldest son of the ousted former President Hosni Mubarak, Alaa Mubarak, was sentenced in May 2015 to three years in jail for embezzling millions of dollars in state funds intended for the renovation of palaces. Alaa owned the BVI firm Pan World Investments Inc., managed by Credit Suisse. In 2013, Mossack Fonseca was fined $ 37,500 for failing to properly check into Alaa Mubarak, “a high risk customer”.
ICIJ investigators name Rwandan Rwandan President Paul Kagame’s former physician, security adviser and spokesman, Brig. Gen. Emmanuel Ndahiro who also served as the chief of the National Intelligence and Security Services from 2004-2011 as the director of the BVI company Debden Investments Limited, which reportedly owned a jet aircraft.
Another director of this company, is the former ambassador of Zambia to the United States between 2000 and 2002, Attan Shansonga who was arrested in Lusaka in 2002 amid an investigation into the diversion of millions of dollars out of Zambian when President Frederick Chiluba was in office. Shansonga, was accused in 2006 by the Zambian government of receiving “misappropriated monies” and using offshore banks to launder the lot. In 2007, an English court held namely that Shansonga served as a conduit for $ 1.3 million to President Frederick Chiluba’s spy chief.

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The name of Mamadou Pouye, a friend of Karim Wade, the son of Senegal’s former President Abdoulaye Wade who held several ministries during his father’s presidency does also appear in the ICIJ files. The consortium reminds that both Wade and Pouye were arrested in April 2013 and charged with illegally amassing assets worth $ 240 million. Both were sentenced to jail in March 2015 by a judge who said that Wade had hidden away funds in offshore companies in the BVI and Panama while Pouye was guilty of complicity in illegal enrichment.  Pouye first appeared in Mossack Fonseca’s files in October 2008, instructing the law firm to open a bank account for the Panama company Seabury Inc. Between December 2008 and August 2012, Seabury and a company connected to Pouye – the Panamanian Latvae Group, signed contracts worth about $ 35 million for consulting and advisory services relating to the port of Dakar. At the trial against Pouye and Wade, Senegalese authorities alleged that they both enriched themselves through these government contracts.
While several countries elsewhere such as Brazil, Australia or Spain ordered investigations for money laundering and fraud concerning their citizens mentioned by the ICIJ, it remains to be seen whether African countries will do the same. (F.M.)



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