World watches as Angola lances its boil
Publish date: 20 February 2020
Issue Number: 697
Diary: Legalbrief Forensic
Category: Corruption
Angola served as a Cold War battleground for the superpowers and their allies – including SA – for 27 years. When the civil war ended following the assassination of Unita leader Jonas Savimbi 18 years ago, this week, the country was able to capitalise on its vast mineral and petroleum reserves which has seen its economy among the fastest-growing in the world. Legalbrief reports that the US, China and Russia are still keeping a close eye on developments there as well as Luanda’s efforts to address the scourge of corruption which has seen billions of dollars in state funds siphoned abroad.
In the latest development, the country’s ex-President has defended his son and a former Central Bank Governor who are accused of embezzling $500m from the country's sovereign wealth fund, court documents have revealed. Jose Eduardo dos Santos' family is in the spotlight after his billionaire daughter was indicted in Angola last month for a host of high-level financial crimes in the oil-rich nation. A report on the News24 site notes that Jose Filomeno dos Santos is accused of embezzling the funds during his tenure as head of Angola's sovereign fund. He has been charged along with the former governor of the national bank of Angola, Valter Filipe da Silva, and two others. The defendants are accused of transferring the funds to a Swiss bank. However, Dos Santos who lives in Spain, said the transfer was meant to guarantee a $30bn investment into Angola to ‘improve the life of the population’. The report notes that he confirmed that he authorised the transfer of the $500m in a written response to questions sent to him by judges. ‘The actions were carried out for the country's economic situation ... not in the personal interest of the people who executed it,’ he added.
Isabel dos Santos took advantage of a US secrecy jurisdiction to transfer illicit funds offshore. That’s according to Fergus Shiel, Luanda Leaks project manager at the International Consortium of Investigative Journalists. Al Jazeera reports that he said the Luanda Leaks documents show that she used a Delaware company to buy property in Portugal. ‘Delaware is one of the easiest places to create a low-taxed, secretive company,’ he said. A new report from the Tax Justice Network reveals that the US is the world's most complicit country in helping individuals hide money from the rule of law. In the Financial Secrecy Index, TJN ranks nations by how much their financial systems allow people to hide and launder money extracted from other countries. The 2020 index found that the US increased its financial secrecy by 15% and overtook Switzerland as one of the top destinations for people looking to hide money.
Portugal last week ordered a freeze on bank accounts held in the country by Isabel dos Santos who has been living in Europe since President Joao Lourenco fired her as head of the state oil company Sonangol in 2017. A report on the Al Jazeera site notes that she has been indicted by Angolan prosecutors for a host of top-level financial crimes, including money laundering and forging documents. Dos Santos and her associates have huge stakes in several Portuguese firms as well as bank accounts in the country.
US Secretary of State Mike Pompeo, who has just concluded a trip to Angola, has lauded Lourenco's anti-corruption drive. ‘During his first two-and-half years in office President Lourenco has done great work to make it (corruption) a ghost of the past,’ Pompeo told a news conference during a one-day visit to Luanda where he held talks with Lourenco. ‘He has increased transparency, he has helped financial institutions clean up their books and he has pursued bad actors,’ he said. A report on the News24 site notes that Pompeo added that graft has ‘stunted this nation's vast potential for far too long’, pledging US support to help the oil-rich country curb corruption. The East African reports that Pompeo said several American firms will invest more than $2bn in Angolan oil and natural gas projects. Speaking at a meeting organised by the US Angola Chamber of Commerce, Pompeo said 'we want to help hold responsible all who have embezzled Angolan money as we do in other countries'.
The Luanda Leaks are an opportunity to reflect on how to improve anti-corruption initiatives. In a Mail & Guardian analysis, Aharon de Grassi notes that two areas stand out: understanding corruption’s relations with other development challenges, and ensuring anti-corruption work symbiotically bolsters global justice, equality and participatory democracy. ‘On the first point, commentators must clearly situate corruption in relation to Angola’s overwhelming long history of globalised armed conflict, rather than use it to overshadow that history. Various articles, as well as International Consortium of Investigative Journalists’ key summary and timeline, could be read as incorrectly suggesting that Angola’s poverty is largely a result of Dos Santos’ corruption.’ De Grassi notes that poverty in Angola is overwhelmingly rural and it is caused by multiple interconnected factors that include, but are not limited to, elite corruption. ‘The others are the complex legacies of colonialism and war, patriarchy, economic exploitation, mismanagement and undemocratic practices. To address these fundamental problems, and for valuable work like the Luanda Leaks to not risk being counterproductive, reporters and scholars need support for more in-depth research and need to commit to making more than just quick trips to Luanda to pluck out vivid decontextualised anecdotes about kleptocrats, consultants and victims.’
