October 18, 2017

AFRICA: Panama Papers: Africa's Elite Are Plundering Their Countries. Africa Loses More Money To illicit Financial Flows Than It Receives In Foreign Aid. Reason For Chronic Poverty. :(

Deutsche Welle (DW) News, Germany
written by Kate Hairsine
Wednesday October 18, 2017

A new report based on the Panama Papers reveals how Africa's politicians, generals and business leaders are systematically siphoning off billions of dollars and parking the money offshore.

The investigative report, "The Plunder Route to Panama", highlights how Africa's leaders are doing more than accepting bribes from foreign companies or evading tax. Rather, they are systematically setting up power structures run by favored friends or family members to steal billions of dollars and store the loot outside of their countries, the report finds. This cuts budgets, hinders development and keeps people impoverished.

The investigation by a consortium of African journalists was inspired by the Panama Papers, a massive leak of documents of offshore accounts and companies that included the names of numerous African politicians. This new report attempts to follow the trail back to Africa to see where the money came from.

"We often point fingers at foreign multinationals that come to make a fortune here in Africa," Maxime Domegni, a Togo journalist involved in the investigation, told DW. "But this investigation shows the extent to which African oligarchs are complicit in plundering the continent."

Carried out by the African Investigative Publishing Collective, Africa Uncensored and Zam magazine, the report takes a detailed look at seven African countries: Togo, Mozambique, Democratic Republic of Congo (DRC), Rwanda, Burundi, South Africa and Botswana.

Togo's shadowy dealings in phosphates

Togo, for example, is home to vast reserves of phosphate directly managed from the offices of president Faure Gnassinge, whose family have ruled the West African country for 50 years. Togo earns 40 percent of its export earnings from the mineral, which is crucial for making fertilizers. The investigation found that phosphate would generate more wealth if it weren't being sold for two thirds of the going rate to a "shady" shipping family called Gupta. (The consortium behind the report is researching if this Gupta family is connected to South Africa's Guptas - more about them below.)

"We are critical of the total lack of transparency in the management of the phosphate industry in Togo," said journalist Domegni. In a country where more than 80 percent of the population live under the poverty line, "those benefiting from [phosphate] are those who manage the country with the complicity of their friends," he said.

Mozambique's mining licenses reserved for generals

The report found a similar situation in Mozambique, where half of the world's rubies are mined. Dozens of generals, ministers and high-ranking party members hold ruby licenses. Villagers in the mining areas have been forcibly removed from their traditional lands, and even beaten and killed. Mozambique's powerful ruling elite aren't content with profiting directly from rubies, though. Despite a UK company paying Mozambique's government millions in ruby royalties, a percentage of which is supposed to flow back to these impoverished communities, there is no record of this money ever arriving.

The dark side of Botswana's tourism

In Botwswana, tourism is the preferred method of plundering the country's coffers. Botswana's reputation for high-quality, low impact tourism attracts the likes of UK's Prince Harry and US talkshow queen Oprah Winfrey. The report says President Ian Khama, along with his relatives and friends, virtually control Botswana's tourism industry through interests in major agencies, channeling profits offshore.

Tax – a foreign word for DR Congo's presidential family

In DR Congo, it's an open secret that the Kabila family control almost all sectors of the economy through a veritable empire of more than eighty companies inside and outside the country, from telecommunications to mining. It is difficult to estimate the assets of the Congolese presidential family, said Jason Stearns, Director of the US-based Congo Research Group, because their commercial network is "completely opaque."

"We don't know whether the Kabila family pays taxes at all. We do not know the value of the different companies in the family. We don't even know where these companies are located or where they are registered," Stearns told DW.

Growing sick of corruption, nepotism and cronyism

"The Plunder Route to Panama" report sounds a small note of optimism, noting that protests against kleptocratic governments have flared up in a number of African countries from Togo to Kenya and DR Congo.

In South Africa, the demonstrations have even shown some signs of success, with banks closing the accounts of the Gupta family, close friends of President Jacob Zuma linked to money laundering and fraud. Although Zuma is still clinging to power, people are growing sick of the vast tentacles of corruption and embezzlement that have sucked wealth out of South Africa and into offshore companies.

"The Gupta-Zuma system exemplifies other corrupt models in Africa, such as in Burundi or DR Congo," Jean-Claude Mputu, an anti-corruption activist from Congo, told DW.

He points out that unlike many countries in Africa, South Africa benefits from having a democratic regime with a free, critical press.

"Many South Africans are now demanding severe consequences: they want the Guptas and Zuma to be held responsible for their machinations," he said.

Additional reporting by Eric Topona
The International Consortium of Investigative Journalists (ICIJ.org)
👉The Panama Papers👈
written by Will Fitzgibbon
July 25, 2016

New revelations published today by the International Consortium of Investigative Journalists (ICIJ), in collaboration with more than a dozen news organizations in Africa, expose fresh details about the misuse of corporate secrecy and hidden wealth in Africa, the world’s poorest continent.

Released nearly four months after ICIJ and more than 100 media partners first published what is now known as the Panama Papers, 11. 5 million files from the Panama-based law firm, Mossack Fonseca, today’s investigations include new details about the middleman at the center of a probe into hundreds of millions of dollars in suspected bribes paid for oil and gas contracts awarded in Algeria.

The files also reveal the offshore assets, including a luxury yacht and jet, of a Nigerian aviation and oil magnate who is reportedly close to a former oil minister and has recently had some of his assets seized as part of a $1.8 billion probe into oil sales.

The revelations published by ICIJ and media partners include investigations from countries that are being examined for the first time, including Tanzania, Burkina Faso, Ghana, Mozambique and Togo.

Businesses in 52 of Africa’s 54 countries used offshore companies created by Mossack Fonseca, a law firm that specializes in creating companies often sold and used for anonymity or lower taxes. In 44 countries, offshore companies were used to assist oil, gas and mining deals and exports, concerning advocates and governments in a continent where many nations rely on revenue from natural resources. In total, the Panama Papers include more than 1,400 companies whose names alone indicate activity in the extractive industries. Although many of these companies do legitimate business, ICIJ identified 37 companies within the Panama Papers that have been named in court actions or government investigations involving natural resources in Africa.

In the oil-rich North African country of Algeria, for example, investigations continue into nearly $275 million in alleged bribes paid through a cluster of offshore companies to secure energy contracts. Twelve of the 17 offshore companies listed by Italian prosecutors as belonging to the alleged middleman, Farid Bedjaoui, were set up by Mossack Fonseca. Italian investigators described one of those companies, Minkle Consultants S.A., as a “crossroads of illicit financial flows” that channeled millions of dollars from subcontractors to an array of recipients whose identities are still being untangled.

In a written response to ICIJ, Mossack Fonseca said it follows “both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.”

The release of today’s investigations is a major collaboration of media organizations in Africa that range from traditional newspapers in Namibia, to popular radio stations in Ghana and to innovative start-up websites in Morocco. The reporting partners include journalists who have previously published stories as part of Panama Papers as well as journalists from Ghana, Tanzania, Niger, Mozambique, Mauritius Burkina Faso and Togo who are publishing stories for the first time. Many of the journalists worked in collaboration, exchanging contact information and court documents and with the editorial assistance of the African Network of Centers for Investigative Reporting, an ICIJ partner.

ICIJ, in partnership with the Pulitzer Center on Crisis Reporting, has also published an interactive quiz game in conjunction with the new series of investigations. Continent of Secrets highlights the widespread use of offshore companies by a variety of businesses across Africa, and challenges players to use their knowledge of the continent to discover more about the impact of offshore financial secrecy.
Quartz News
written by Lily Kuo
April 4, 2016

A huge trove of leaked documents from a Panamanian law firm that’s a major player in offshore tax havens has revealed the secret companies controlled by members of the African elite, from Kenya’s deputy chief of justice and Rwanda’s former intelligence chief to the son of former United Nations general secretary Kofi Annan.

Every year, Africa loses between $30 and $60 billion to illicit financial flows (pdf, p. 34), according to the United Nations Economic Commission for Africa (UNECA). A “major enabler” of these flows, UNECA says, are offshore tax havens like Panama, the British Virgin Islands, Seychelles, and other jurisdictions that happen to feature prominently in the “Panama Papers” leak.

There are legitimate uses for privacy-shielding offshore companies, and the firm from which the leak sprung, Mossack Fonseca, says it has operated “beyond reproach in our home country and in other jurisdictions where we have operations.”

Africa’s losses to illegal financial flows negate the impact of economic growth on the continent. (Indeed, these illicit activities appear to rise in lock-step with economic growth.) They also cancel out the amount of foreign aid the continent receives—the OECD estimates that illicit financial flows from Africa are three times the amount of official development assistance it receives. The Tax Justice Network, an activist research group, says these flows are 10 times the amount of aid (pdf, p. 64).
For the past year, journalists led by the International Consortium of Investigative Journalists, acting on the leak first received by the German newspaper Süddeutsche Zeitung, have been analyzing millions of documents from Mossack Fonseca that link 72 current and former heads of state to shell companies and other obscure offshore vehicles. Here are a some of the noteworthy African names:

The son of Kofi Annan

Kojo Annan, the son of Kofi Annan, used a company registered in Niue, a tiny Pacific island, to buy an apartment in London for more than $500,000. He is also a joint shareholder and director of two companies listed in the British Virgin Islands. His lawyers say there is nothing untoward about Annan’s offshore holdings. He “pays taxes in the jurisdictions in which taxes are due to be paid. In other words, any entity and account held by Mr. Annan has been opened solely for normal, legal purposes of managing family and business matters,” according to the ICIJ.

Joseph Kabila’s twin sister

Jaynet Désirée Kabila Kyungu is the twin sister of Congolese president Joseph Kabila as well as a member of parliament. She is the co-director of Keratsu Holding Limited, which was incorporated in Niue a few months after her brother became president of the Democratic Republic of Congo. She is also the owner of a media conglomerate in the country, Digital Congo.
Kenya’s deputy chief justice

Kalpana Rawal has been linked to 11 offshore companies. According to the files, Rawal and her husband used various offshore companies to buy and sell real estate in and around London. Rawal has responded to the report by defending the registrations as a “perfectly legal and legitimate corporate practice in the UK,” according to the Kenyan daily, the Nation.

Kagame’s former doctor-cum-intelligence chief

Emmanuel Ndahiro, a close confidant of Rwandan president Paul Kagame, is known for his harsh stance on corruption. He served as the president’s physician, security advisor, and spokesperson. According to the Panama leaks he was the director of an offshore company, Debden Investments, registered in the Virgin Islands and owned by Hatari Sekoko, a wealthy Rwandan businessman. The company was shuttered in 2010.

Hosni Mubarak’s son

Alaa Mubarak, the son of ousted Egyptian president Hosni Mubarak, owned the Virgin Islands-registered firm Pan World Investments. When his father stepped down in 2011 amid the Arab Spring, local authorities acted on an EU order and froze the company’s assets. Mossack Fonseca was fined $37,500 in 2013 for not vetting Mubarak carefully enough. Alaa and his brother were convicted last year of embezzling state funds and await trial on charges of insider trading.

The son of Ghana’s former president

John Addo Kufuor hired Mossack Fonseca to manage his trust, the Excel 2000 Trust, in 2001, after his father, John Agyekum Kufuor, took office. The trust controlled a bank account in Panama containing $75,000, of which his mother was also a beneficiary. The younger Kufuor was linked to two other offshore companies also registered during his father’s term that are now inactive.

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