| Africa's illicit money sent to Western banks
By David Randall and Greg Walton
Some of the continent's leaders used the US financial system to protect millions of dollars
Several African leaders, their relatives and associates used Western banks, including British ones, to move hundreds of millions of dollars out of their countries and into accounts and companies they controlled, according to a US Senate report released late last week.
It says that, in 2007, President Omar Bongo of Gabon brought $1m in shrink-wrapped $100 notes into the US in a suitcase; that Teodoro Obiang, son of Equatorial Guinea's president, moved "more than $100m in suspect funds through US bank accounts, including $30m to purchase a residence in Malibu"; and that, between 2000 and 2008, Jennifer Douglas, fourth wife of a former Nigerian vice-president, "helped her husband bring more than $40m in suspect funds into the US".
The banks through which these funds were channelled include Bank of America, Citibank Private Bank and HSBC. Although a number of cases are cited where banks - including HSBC - flagged up concerns about the movement of such large amounts and closed the accounts, the report also points to instances where the checks on identity and the source of the funds were less rigorous than many of us face when trading in two-figure sums at high street branches.
The report also says that a number of US professionals - lawyers, lobbyists, and estate agents - were used "to funnel millions of dollars in illicit money into the United States". It adds, in remarkably forthright language for an official report, that "politically powerful foreign officials, and those close to them, have found ways to use the US financial system to protect and enhance their ill-gotten gains".
One of the report's most startling examples is that of Teodoro Obiang, 40, now the subject of a US criminal investigation. His salary, as minister of agriculture and forestry, is $60,000 a year. Yet, between 2004 and 2008, according to the senate report, he moved "more than $100m in suspect funds through US bank accounts, including $30m to purchase a residence in Malibu and $38.5m to purchase an aircraft". The home was the sixth most expensive home bought in the US that year, and Mr Obiang's spending did not stop there.
Two US lawyers set up shell companies for Mr Obiang, and the report lists some transactions through an account for one of them, called Beautiful Vision, at Bank of America. In one four-week period in late 2004, cheques made out included: $82,900 to Naurelle Furniture; $137,312 to Ferrari of Beverly Hills; a further $332,243 to Ferrari; $80,287 to Gucci; $59,850 to "Soofer Gallery Rugs"; and a total of $338, 523 to Lamborghini Beverly Hills. Further cheques in the first half of 2005 were: $55,193 to Dolce & Gabbana, and $58,500 for the installation of a Bang & Olufsen home cinema system.
Back in West Africa, many of his countrymen have rather more pressing concerns than which home entertainment system to choose. Despite Equatorial Guinea being sub-Saharan Africa's third biggest oil producer, life expectancy for men is only a fraction more than 50 years, and the infant mortality rate is 12 times worse than in the US. Political arrangements in the country make it unlikely that Mr Obiang or his father will suffer electorally for the contrast between their lifestyles and that of their people. At the last election, President Obiang achieved 95 per cent of the vote.
And then there is President Bongo of Gabon, the man with $1m in his suitcase. Once on US soil, the cash was deposited by his daughter, Yamilee Bongo-Astier, in a safe deposit box at a New York bank. The bank closed her account soon afterwards. But, the report says, between 2000 and 2007, other accounts controlled by this unemployed student were the conduit for considerable sums of money.
Omar Bongo died in 2009 and his place was taken by his son, Ali. Both men, says the report, "amassed substantial wealth while in office, amid the extreme poverty of its citizens". US investigators discovered that Ali Bongo's wife, Inge Lynn Collins Bongo, formed a US trust in her maiden name, opened accounts in its name in California and used them to receive "multiple large offshore wire transfers... and used the funds to support a lavish lifestyle and move money along a network of bank and securities accounts benefiting her and her husband".
The report also names Jennifer Douglas, a US citizen and fourth wife of Atiku Abubakar, former Nigerian vice-president, who "helped her husband bring more than $40m in suspect funds into the United States from 2000 to 2008". In 2008, the US Securities and Exchange Commission claimed that she received bribes of more than $2m from the German company Siemens AG. She denies this, but Siemens has pleaded guilty to criminal charges relating to the payments, which it said were sent to one of her US accounts.
And the report says that Pierre Falcone, an Angolan arms dealer now serving a six-year sentence in a French jail for charges arising out of illegal arms dealing, money laundering and tax fraud, "had open access to more than 30 US bank accounts in Arizona for 18 years". Mr Falcone's home in Paradise Valley, Arizona, is now for sale with an asking price of $14.5m. The reports says that Bank of America kept 30 accounts for him and his relatives, and did not consider these to be high risk "even after learning in 2005 that he was an arms dealer and had been imprisoned in the past". Two years later, the bank closed his accounts, and "expressed regret for providing him with banking services".
The leaders involved...
Teodoro Obiang
The son of the President of Equatorial Guinea is alleged by the report to have received $110m of suspect funds, transferred illicitly through the US banking system. Mr Obiang reportedly used US proxies acting as escrow agents to buy a US-manufactured Gulfstream Jet costing $38.5m. The report identified deficiencies in US law which exempt escrow agents from money-laundering controls. The Equatorial Guinea embassy in London could not be reached for comment.
Omar Bongo
The late president of Gabon is alleged to have wired $18m to a trust controlled by his insider lobbyist as part of the effort to acquire military hardware. The report suggests that Bongo used his daughter, Yamilee Bongo-Astier, to receive millions of dollars in illicit funds. She had bank accounts closed twice, once after she received a $183,500 wire from Gabon and the other after her bank found that she had $1m in her safe deposit box. Gabon's ambassador could not be reached for comment.
Pierre Falcone
Convicted arms dealer Pierre Falcone was found by the Senate to have used family and shell accounts to import millions of dollars in illicit funds into the US. Bank of America allegedly held about 30 accounts for Falcone between 1989 and 2007 but failed to recognise him as a "politically exposed person", meaning that he was not subjected to the correct controls. BoA continued to deal with him until a Senate inquiry in 2007 and his accounts were finally suspended.
HSBC
HSBC's US operation is identified by the Senate report as having failed to spot and report some suspicious transactions and customer profiles. While the report acknowledges that some of the suspect accounts were "inherited" from legacy banks taken over by the London-based giant, certain HSBC compliance practices are singled out for criticism. HSBC is rebuked for continuing to provide services for the African Investment Bank and offshore accounts to the Angolan Central Bank.
| | TI welcomes multilateral banks' commitment to fight corruption April 12, 2010
Accra, April 12, GNA - Transparency International (TI), the global coalition against corruption, has welcomed an agreement by the World Bank and four major regional development banks to join forces to fight corruption by debarring firms and individuals found guilty of fraud and corruption in development projects.
"Fraud in development projects disadvantages the most vulnerable. This agreement is an important signal that the development banks are making a concerted effort to sanction corruption around the world," said Huguette Labelle, Chair of Transparency International (TI).
A statement copied to the GNA in Accra said the agreement meant that a company or individual debarred for more than one year by one bank may now be debarred from doing business with all five development banks.
The inclusion of individuals in the joint sanction accord is very important, since many corruption schemes are arranged by agents or individual consultants, the statement added.
It noted that debarment could be an effective tool to deter corruption as it affected future revenues and credibility of the firms involved.
To further strengthen its enforcement, TI has called on the banks to publish their agreement in full and to vigorously ensure the cross-debarment of delinquent entities.
In addition, the banks should make every effort to prevent illicit practices by requiring all contractors on bank-financed projects to have effective anti-corruption compliance programmes.
"Coordinated worldwide efforts are needed against corruption. The development banks are ahead of governments, which lag behind in terms of exchange of information and coordinated enforcement against contractors and officials involved in cases that have resulted in debarment," the statement said.
The agreement includes the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and the World Bank Group. GNA
Don`t downplay Craig’s accusation
A former British deputy High Commissioner to Ghana, Mr. Craig Murray, who is well remembered for his spectacular act of entering the strong-room of the Electoral Commission during the 2000 elections, to prevent, what he alleged, to be a planned rigging of the election results by the then National Democratic Congress (NDC) under President Rawlings, is back in the news again. This time, he is accusing the Kufuor administration of awarding fraudulent contracts to some international companies. In an article published on his website, which has since been reproduced by some Ghanaian newspapers, Craig alleged that a British company, Zakhem International Limited, was contracted by the then New Patriotic Party (NPP) government to build the Kpone Power Project for the Volta River Authority (VRA). According to him, the VRA bought the turbines from the manufacturer, Alsthom, for US$70 million, and is alleged to have paid Zakhem US$80 million upfront to install them and provide the ancillary equipment. “After three years, what do Ghanaian taxpayers have to show for their US$150 million? - absolutely nothing. An empty field at Kpone, surrounded by Ghana's longest concrete wall, so the Ghanaian public cannot see that their money has been stolen,” he said. Craig claimed that because Zakhem and their Ghanaian partners had stolen enough money to bribe all the officials involved, they were now claiming around town that the new government was also “in their pocket”. The former British deputy High Commissioner also contended that most of the $80 million had vanished forever, while the $70 million turbines were now badly damaged by disuse. He also took on another British company, Balkan Energy, which he claimed spent US$100 million on refurbishing the Osagyefo barge, at a time when they had really spent less than US$10 million. “Under an astonishingly corrupt contract, Balkan are to lease the barge for $10 million per year from the government of Ghana, but then charge Ghana over $40 million per year for its use, as a ‘capacity charge’. “Balkan will in addition charge the government of Ghana for the fuel, from which they would generate profit as well. “It is as if I rented your car for 100 Ghana cedis a month, then rented it back to you for 500 Ghana cedis a month, plus charging you a premium on all the petrol you use,” he stated on his website. Our sources in National Security have hinted us that the government will soon invite Mr. Craig Murray to Ghana to assist with investigations into the allegations he has made. But before this could materialise, a report, which borders on the moral conduct of the ‘whistleblower’ has emerged. The Chronicle does not have any proof to support the allegations leveled against both Balkan and Zakhem on one side, and the government of Ghana on the other hand. This notwithstanding, we think it would be wrong for the people of Ghana to ignore the substance of the allegations, and concentrate on the moral life of the accuser. The government, on behalf of the people who elected it into power, has the responsibility to ensure that in-depth investigations are carried out to establish the truth or otherwise. The allegation of conflict of interest being made against Mr. Craig Murray, who told Joy FM yesterday that he was prepared to fly down to Ghana to assist with investigations, should he be invited by the government, must also be investigated to ascertain whether he made those allegations out of sheer jealousy. Africa has the potential to become one of the developed continents in the world, looking at the vast natural resources at its disposal, but the continent is still wallowing in abject poverty, due to the ability of some of these foreign companies to bribe our leaders to perpetuate a raw deal on the people. This is not to say Balkan and Zakhem did commit those economic crimes they are being accused of, but as we noted earlier, it would be a serious blunder if we fail to investigate them.
Source: The Chronicle
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