After Dos Santos: More of the Same?
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In Angola’s only open and free election in 1992, the question on the minds of most voters was: Should I vote for the “Killers” or the “Thieves?” The former rebel movement UNITA of today bears no resemblance to the killers of old, but the ruling MPLA has taken stealing to a new and unprecedented level. Once MPLA leaders got a green light and carte blanches from their boss that they could steal with impunity, they plundered the national treasury without fear of punishment.
President José Eduardo dos Santos made a famous speech in 2009 in which he said that he would have “zero tolerance for corruption!” The fact that no senior MPLA leader has been prosecuted suggests that either dos Santos’ campaign was successful in shutting down crime altogether or he has an acute case of myopia and is not able to see anything below his nose. The fact that graft today is at an all-time high suggests that the President is content to make senior MPLA and military leaders happy at home and in their barracks instead of plotting against him. This helps to explain dos Santo’s longevity of 36 years in power.
The MPLA is going to have a very difficult time convincing voters in 2017 that they can trust anybody in the party not to continue looting the national treasury. Dos Santos has emerged on numerous lists as the richest president in Africa – at $20 billion, which is 8 times greater than the 2nd richest African President, King Mohammed VI of Morocco, who “only” has $2.5 billion .
The number of $20 billion, even if speculative, is beyond most people’s comprehension so one way to look at it is the following: If one divides $20 billion by the half of the country’s people who make $2/day or less then each man, woman, and child would each get the equivalent of 5 ½ years’ worth of labor!
Now that he is coming to the end of his reign, Dos Santos faces a major dilemma with regard to his succession. He must pick a successor who will not expose his crimes. He must guarantee that he will not suffer the same fate as his Zambian colleague, Fredrick Chiluba, whose handpicked successor, Levy Mwanawasa, turned on him in February 2003, and charged him with 60 counts of theft and abuse of office.
Few inside or outside Angola would dispute the fact that the two most powerful highly placed individuals who are closest to the President are General Manuel Hélder Vieira Dias, better known as Kopelipa, and Vice President Manuel Vicente.
MPLA rally: Gen. Kopelipa stands behind Dos Santos, mixing his roles in the party and in the army.
Prior to becoming Vice President, Vicente headed the large omnipotent State Oil Company Sonangol for a dozen years. As the head of Sonangol – often described as a State within a State – he amassed a huge fortune, often in partnership with General Kopelipa. The General (correctly) considers himself to be above all other Generals, including the Chief of Staff of the Angolan Armed Forces. It was not surprising to see that these two powerful men would form a business partnership that, according to Maka Angola, has consisted of over 40 companies all of which were initially registered at the same address: Rua Luis Mota Feo 3-2, Apartamento 5, Ingombota, Luanda. In their business deals they are often joined by a third partner General Nascimento who goes by the name Dino – who is Kopelipa’s assistant in the President’s office.
There is no space to examine all 40 companies but one will suffice to illustrate the scope and the depth of corruption at the very top in Angola. A closer look at other notorious companies such as Cochan SA, Pumangol, and DTS Holdings owned by the same troika, worth hundreds of millions of dollars, will be discussed at another time.
COBALT and the Privatization of State Power
Cobalt International Energy was established a decade ago with the financial backing of two giant American corporations: Goldman Sachs and the Carlyle Group. Their primary target was Angola and the CEO, Joseph Bryant, had previously headed British Petroleum’s operations in Angola for six years where he established excellent relations with Manuel Vicente, when he was the CEO of Sonangol.
The standard Sonangol practice for new concessions is to hold an open round of bidding that is available to all interested companies. The winner of the new exploration block must also pay what is euphemistically called a “signature bonus” – i.e. thank you for letting me sign and with it I give you the amount demanded. These signature bonuses can be enormous; for example the signature bonuses for blocs 31 – 33 were $300 million each.
It is with this background that eyebrows were raised when in 2008 Cobalt appeared on the scene. They were awarded three exploration blocs (9, 20, & 21) without an open biding competition and they paid no signature bonuses. Instead, the Government and Sonangol insisted that Cobalt take on (i.e. “carry”) two shell Angolan companies –Nazaki Oil & Gas and Alper Petroleum as non-paying partners, ostensibly to give Angolans more experience in the petroleum sector. Cobalt agreed to these prearranged conditions.
Later, under investigation for potential bribes by the US Security & Exchange Commission (SEC), the Colbalt CEO, Joseph Bryant, claimed that at the time these arrangements were made “the Government” demanded that they take on these two Angolan partners. Bryant insisted that he had no idea who comprised these two companies. If the SEC would have probed deeper, they would have discovered that Bryant had excellent relations with Vicente and there is no way that Bryant would not have known that Vicente owned 1/3 of Nazaki Oil & Gas — according to Maka Angola, at one time they once even shared the same office.
The answer to the question why there was no competitive bidding or signature bonus was crystal clear when it was revealed that the Vicente’s two partners in Nazaki Oil & Gas were none other than General Kopelipa, and General Dino Nascimento. The only person missing from the troika is the President himself. Vicente, who headed Sonangol for a dozen years, knew the petroleum industry in Angola as well if not better than any Angolan. He certainly did not need to be included as part of Nazaki to “gain more experience in the petroleum sector” which was “the Government’s rational for including the two Angolan companies with a free ride!
Once the three partners in Nazaki were revealed to the public, things looked bad for Cobalt and Bryant. On August 4, 2014, Cobalt received notice from the US Security and Exchange Commission (SEC) stating that a preliminary determination was to recommend that the SEC to institute an enforcement action against the Company, alleging violations of certain federal securities laws under the Federal Corrupt Practices Act – for bribing members of a foreign government.
Bryant and Cobalt hoped that this problem would go away when they announced that the three Nazaki partners (Kopelipa, Vicente, and Nascimento) sold their shares back to Sonangol for an alleged $50 to $100 million each for the three partners. This must be one of the clearest cases of bribing members of a foreign government that has ever come before the SEC’s Foreign Corrupt Practices Act.
One obvious conclusion here is that the MPLA is going to have a nearly impossible task in 2017 to convince Angolan voters that they can be trusted not to steal even more of the people’s money thereby exacerbating the plight of the Angolan people.