Ghana's Oil, Will the People Benefit?

Much has been said about Ghana's oil and the revenue that is supposed to flow into her coffers by 2010. The politicians and their associates are excited that Ghana will soon be swimming in oil money. But the people are not enthused as they know the history of oil rich countries in Africa. They are also not excited because years of gold, diamond, cocoa, timber and other mineral exports has not brought any benefit to them rather they are still wallowing in chronic poverty with no access to water, healthcare, education, electricity with transport and other infrastructures crumbling. The question is will the people benefit from the oil if they could not benefit from gold and other minerals? Is there any guarantee that the people will benefit from the oil proceeds when it begins to flow in 2010?

For decades several billions dollars has been realised from the sale of gold, diamond, cocoa, timber, bauxite and many more but Ghanaians still wallow in deep poverty without electricity, water, proper housing infrastructure, sanitation. The only people who seem to have benefited from the revenue from these valuable assets are the corrupt politicians, their associates and the multinational corporations and they are the very people who are likely to benefit from the oil. The only 'benefit' the people will have as is the case of gold and diamond, will be paying for the cost of environmental degradation, pollution of soil, rivers, wells, creeks that will render many farmers and fishermen jobless.

Already effort by the government to get Ghanaians to participate in forums to discuss how the proceeds from oil should be used to help the poor has been hijacked by the politicians and the so called elite with the people reduced to mere spectators.

What makes the situation troubling is the fact that Ghana is not the first country in Africa to produce oil or gas. Nigeria, Angola, Gabon, Equatorial Guinea, Libya and Algeria have been oil producing and exporting nations for decades. The reality is that none of these countries has been able to use the huge oil revenue to better the lives of their peoples with poverty and corruption sitting deep in those countries.

How will Ghana be different from her neighbours is still unclear but her own history of corruption in the mineral, timber, cocoa sectors and the history of her neighbours give an idea as to where she might go.

In Nigeria for example 80 million people or even more still live on less than a dollar a day despite nation receiving over $400 billion from the sale of oil. All that Nigerian leaders can show for the billions they have received are the deep poverty, violence crimes, kidnappings, instability in oil producing areas, massive official corruption seen at all levels of government both federal and state as well as environmental degradation and pollution of rivers, wells, creeks and the soil which has rendered millions of farmers and fishermen jobless. The events in Nigeria in the last 40 years since oil was discovered leave much to be desired. There have been more military rulers in that country than civilians with only one transfer of power from civilian to civilian in her 49 years of independence. The stories of Sani Abacha and that of the evil genius Babangida and how they amassed wealth at the expense of the country still resonate around the globe anytime corruption is mentioned.

The oil producing and exporting countries of Angola, Gabon, Algeria, Libya and Equatorial Guinea are not any better. Millions of people in those countries live in abject poverty and in squalor conditions while the leaders live in opulence with luxury villas and numerous fat bank accounts in France, Switzerland, United States, Britain and their colonies of save haven centres in Caymans Islands, Jersey and the rest.

The opulence among the leadership and the unparallel levels of poverty among the population in those countries, prompted a French judge to investigate how these leaders came to acquire the properties that they and families enjoy. The investigation follows lawsuits by the French branch of anti-corruption group Transparency International and rights lobby Sherpa Association. The presidents’ families and their associates have been accused of using government funds to buy luxury homes in Paris and luxury car models such as Bugatti Veyron, Ferrari and Maserati.

They also hold fat bank accounts in France suspected to be theft proceeds, mainly from oil resources. Mr Bongo of Gabon who died yesterday, “the king of bling”, and Mr Obiang of Equatorial Guinea are believed to have used their countries’ huge oil resources to enrich themselves, their families and friends. Sherpa claims the three leaders are using relatives as nominees to hide valuable real estate and cars in France as well as offshore bank accounts with huge volumes of loot.

President Bongo is suspected to be hiding 59 apartments, 70 bank accounts and nine luxury cars while Mr Denis Sassou-Nguesso of Congo is believed to be concealing 18 apartments and holding 112 bank accounts and several luxury vehicles all bought from money stolen from the oil revenues. Police investigations in 2007 revealed that Mr Obiang Nguema of Equatorial Guinea has an apartment and eight luxury cars in France. Only God knows how much money sits in those accounts. A US Senate investigation in 1997 found the spending habit of these corrupt leaders to be very astonishing. The report established that Mr Bongo and his family spend £55million a year, mainly from oil proceeds.

The Independent Newspaper writes of Angola: “As the threat of starvation sweeps across war-ravaged Angola, its secretive government is coming under pressure to explain how billions of pounds in oil revenues have gone missing. A fresh humanitarian crisis has hit Angola since fighting with UNITA rebels ended. Three million people are on the edge of famine. Angola's President, Eduardo dos Santos, has appealed for international help, pleading that his government is broke. But a swelling chorus of diplomats, campaigners and angry Angolans is asking why he is unable to pay his way out of trouble when his government earns billions of pounds from a burgeoning oil exploration business that will soon rival that of Nigeria as Africa's largest. And while only a tiny amount is spent on helping suffering Angolans, every year a large chunk of the profits – between 20 and 35 per cent – mysteriously disappears. Last year, for example, the International Monetary Fund estimated the oil revenues at £2bn, of which £750m simply vanished. Campaigners such as the UK advocacy group Global Witness call it wholesale state robbery. They say that Angola's vast oil profits are disappearing into the pockets of the Futungo – a secret, powerful élite linked to President Dos Santos – on a scale similar to the excesses of the notorious kleptocrat Mobutu Sese Seko of Zaire.” Source: the independent.co.uk

According to the Sunday Times, quoting a police probe report, the Bongos bought a mansion worth 18.8 million euros in Paris in 2007. The 21,528-square-foot home is in Rue de la Baume, near the Elysée Palace, the home of French president Nicolas Sarkozy. A Luxembourg-based company that bought the home is owned by two of Bongo’s children, Omar, 13, and Yacine, 16, and his late wife Edith.

So far there is nothing to show that the 1.4 million Gabonese have benefited from the oil. In fact they have become worse off as the following 2008 Human Rights Report by US State Department shows: “The country's human rights record remained poor. The following human rights problems were reported: limited ability of citizens to change their government; use of excessive force, including torture toward prisoners and detainees; harsh prison conditions; arbitrary arrest and detention; an inefficient judiciary susceptible to government influence; restrictions on the right to privacy; restrictions on freedom of speech, press, association, and movement; harassment of refugees; widespread government corruption; violence and societal discrimination against women, persons with HIV/AIDS, and noncitizen Africans; trafficking in persons, particularly children; and forced labour and child labour.”

The same poor human rights were recorded in the report for Angola, Equatorial Guinea and Nigeria with citizens subjected to torture, killings and inhumane treatment by the leaders. The fear is that like her neighbours in the region there is a high probability that the flow of oil money into Ghana may encourage unscrupulous army officers and unelected Ghanaian leaders to take over the administration of the nation by force and suppress all dissents as happened during gold and diamond discoveries where army officers seized power overnight, stole as much as they could and mismanaged what remained of their loot with Ghanaians and the economy ultimately paying for their reckless corrupt actions. This is what has sadly happened in Equatorial Guinea, Gabon, Angola, Libya and Congo which are all been ruled by corrupt dictators with over 150 years of reign between the five of them.

Apart from corruption, there is the added danger that the flow of oil revenue will lead to the collapse of other vital sectors of the economy such as agriculture and tourism due to over dependence on oil revenue. Nigeria for example used to be major cocoa and other cash crop producing hub but the discovery of oil has led to the collapse of that vital industry. Such a dependence as in Gabon has had very devastating consequences in terms of food prices, jobs and revenue losses. What is more, these countries remain crude oil producers with little diversification, a practice that makes them more vulnerable to the shocks that are associated with the oil market and explains why they continue to remain poor despite years of oil export.

Worst of it all, it is the role of multinational corporations who exploit the oil in these poor countries that leave much to be desired. These corporations acting in their own selfish interest have a history of paying bribes to corrupt leaders to secure concessions. They also have a history of helping the corrupt leaders to steal and hide their loot in foreign banks. In 2003 Elf executives admitted paying Omar Bongo $50 million a year through Swiss banks in order to win concessions. The Elf executives, who were themselves tried for corruption, also admitted paying huge bribes to Cameroon’s Paul Biya and his counterparts in Congo, Angola and Equatorial Guinea. In 2004 Royal Dutch Shell of Netherlands admitted fuelling corruption, poverty and violence in Nigeria and toady June 9, 2009 has agreed to pay $15.5 million to the family of Ken Saro-Wiwa and the Ogoni eight for her complicity in their execution by the corrupt Abacha regime. http://www.guardian.co.uk/world/2009/jun/08/nigeria-usa. Their secretive and non-transparent dealings with corrupt governments are no secrete. In Angola, Western oil companies such as BP, Shell, ExxonMobil and Chevron stand accused of refusing to reveal their annual payments to the Angolan government a charge similar to those in Nigeria, Gabon, Congo, Algeria and E. Guinea.

What is worrying is that these are the very companies that are lining up to exploit Ghana’s oil and nothing shows that they will operate differently in the country.

Also the lasting environmental damage the corporations will cause Ghana and the ultimate price Ghanaians will pay for the destruction of the ecosystem and the pollution of their soils, wells, lakes, lagoons, rivers as well as the destruction of fish stock that have made environmentalists to worry and as a result gearing up for a long battle. Already the global environmental destruction caused by these corporations is estimated at $1.8 trillion with oil and mining countries in Africa sharing about a third of that. In Nigeria as is in many other places Shell has refused to clean up oil spills that have polluted rivers, lakes, lagoons and soil with the people enduring the health hazards posed by it. Anyone who visits the Niger Delta Region will find it hard to come to terms with the poverty, deprivation, collapsed infrastructures, environmental destruction and the billions of dollars Shell and her counterparts make in that country annually. The only thing that has kept millions of poverty stricken people surviving is a belief in God and a hope of a better life after death.

This has been the history of oil rich countries in Africa and guided by its own history of corruption in the mineral, cocoa and timber sectors there is no doubt that without a strong monitoring and strong accountability system backed by fiscal prudence, Ghana will join her neighbours in the chorus of poverty, violence, pollution and corruption. Already the Ghana National Petroleum Corporation has been embroiled in corruption and mismanagement allegations with its former head Tsatsu Tsikata who was sent to jail on the grounds of corruption and mismanagement.

However, Ghana can avoid the calamities of her neighbours by learning from the Gulf States notably Bahrain, Qatar, United Arab Emirates, Saudi Arabia where revenue from oil has changed the once barren and poverty stricken nations into prosperous ones. Even though there is a huge gap between the rulers and the people and corruption, nepotism and tyrants exist, during the last three decades these countries have been able to use revenue from oil to build their infrastructures, develop their industries and diversify their economies by focussing on technology, agriculture, tourism and financial products that is banking with success. More can also be learnt from Norway where sound fiscal management coupled with sound environmental practices has made her an icon in the world of oil production.

Instead of embezzling it or using it for white elephant projects, government of Ghana should use the proceeds to build durable roads, schools, hospitals, irrigation, sanitation, high speed train network linking all parts of the country, provide housing for low income groups and invest heavily in technology and agriculture so as to avoid being over dependence on oil revenue.

Ghana should put in place proper laws that will make the exploitation of the oil sustainable, environmentally and eco-friendly. Therefore environmental impact assessment should be conducted for every project linked to the oil operation.

The laws must also seek to ensure that oil money will not line up the pockets of the elite to the detriment of the people and the economy. Therefore, the utilisation of the proceeds must be transparent and democratic. The best way to do this is to actively involve all stakeholders including the people, the government, opposition parties, NGOs, CBOs, Church and all interest groups. Record must be kept by every institution that receives oil money and the release of those records to anyone with a genuine interest must be made mandatory.

All oil companies directly or indirectly involved in the drilling, marketing, distribution or export of oil must be made by law to publish what they pay. They must also indicate whether they have paid bribe to officials within or outside the country. Every ministry or department which receives oil money for project must publish in detail how it utilised it. The law must propose for stiffer penalties for officials and companies who will misconduct themselves.

Therefore, the law must take care of how the oil should be managed; how contracts should be awarded, how the proceeds should be utilised and how the environment should be protected. A fund could be created where all proceeds from the oil could go into with parliament given the sole power to determine and certify how money could be drawn from the fund. Therefore the proceeds should be removed at all cost from the control of the executive branch of government.

A financial court should be created to investigate and prosecute entities who may try to enrich themselves overnight. Government must hire experienced tax experts and fraud detectives to scrutinise activities of multinational corporations who may want to import their shady deals of theft, tax evasion, bribery and false accounting into the country. Government must do this as a necessity even if that means hiring foreign experts.

The media should play its role as the fourth organ of government any law that will hinder their operation should be repealed. More investigative journalists should be employed by the media houses and their capacities build up to reflect the challenges of the upcoming battle. The position of independent democratic and anti-corruption watchdogs such as Serious Fraud Office, Commission on Human Rights and Administrative Justice should be strengthened and provided with all the resources they need to function effectively.

With this Ghana could be praised again for leading the continent in the right direction as her democratic credential shows.

By Lord Aikins Adusei

*The Author is a political activist, anti-corruption campaigner and a columnist for American Chronicle. He blogs at www.ghanapundit.blogspot.com

Should Europe and North America tear down their Corrupt Financial Infrastructures?

By Lord Aikins Adusei

Anytime Transparency International (TI) releases what it calls corruption perception index (CPI) showing which country is more corrupt and which ones are not the top 10% of most corrupt nations always come from the developing world with most of the so called advanced countries given a clean sheet. TI index always show that countries like Switzerland, Britain, France, Luxembourg, Liechtenstein, USA, Canada, Australia, New Zealand and most of the so called developed nations are less corrupt while those of the developing world are.http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table

However a critical look at what goes on in the world of business and politics show that these so called clean countries and their corporations are more corrupt and do not deserve the accolades that TI gives them.   Countries like Somali, Sudan, Zimbabwe, Nigeria, Bangladesh, Philippines, Haiti, Kenya and Guinea among others feature among the top 10% of most corrupt countries in the world. What TI fails to tell the world is where most of the monies and assets stolen are kept. To tell the citizens of these poor countries that their countries are corrupt and not telling them where the looted funds are, is a great injustice and disservice because these poor people are not interested in how corrupt their countries are, they just want to know where the money has gone.

If TI should concentrate on the origin and destination of looted assets, all the so called clean countries who preach accountability and justice will score nothing but zero. The fact is that most of the monies and assets stolen do not remain in the poor countries where they are stolen; they find their way in western countries and save haven Islands controlled by the West. Western Banks, Car Makers and Real Estate companies have been major recipient of all the stolen assets belonging to the world’s poor.  Bonds, stocks and other assets bought with the money are also kept in western countries.

 Besides TI report does not tell the world how these politicians got corrupted. It is on record that multinational corporations with headquarters in Europe, North America and Japan have established flush funds and using them to bribe third world leaders in order to win contracts.

 For example on 17th September 2002 a Canadian Engineering company called Acres International was convicted by a High Court in Lesotho for paying $260,000 bribe to secure an $8-billion dam contract. Achair Partners a Swiss company and Progresso an Italian company have been accused of bribing Somalia Transitional Government officials to secure contracts to deposit highly toxic industrial waste in the waters of Somalia. 

In 2002 Halliburton a US company, was accused of establishing $180m flush fund and of using it to bribe Nigeria officials in order to secure a $10-billion Liquefied Gas Plant contract. In response to the accusation the company fired Mr. Albert Jack Stanley. Mr. Stanley a former executive of Halliburton (KBR) pleaded guilty for orchestrating the $180m flush fund. Such corrupt practices by western companies seeking contracts in Africa are not uncommon.

Apart from directly bribing the politicians and those in authority to win contracts, these companies also help them to launder the proceeds of their ill-gotten gains in Europe and America.

Global Financial Integrity says, “$900-billion is secreted each year from underdeveloped economies, with an estimated $11.5 trillion currently stashed in havens. More than one quarter of these hubs belong to the UK, while Switzerland washes one-third of global capital flight”. Out of this $900b that is secreted away with the help of Western Banks and companies, $150-billion comes from Africa. 

TI annual report always gives a clean sheet to Switzerland and most of the western nations but Richard Murphy, director of Tax Research LLP says: “The idea that Switzerland has a clean economy is a joke; it is a dirt-driven economy”. But it is not only Switzerland that does not have a clean economy. Britain, France, Germany, Luxembourg, Spain all of which have their own secrecy laws can be described as vampires. Their economies are dirt-driven because most of their financial institutions (a vital sector of their economies) have been implicated in a number of corruption scandals involving corrupt third world leaders and their associates. The Swiss Bankers Association claims that four-fifths of the nation supports banking secrecy laws. This law is the foundation of all the corruption, embezzlement, tax evasions and all the criminal enterprises that we see in the world.

The fact is that those who steal must find a way to hide their loot and the infrastructures and secrecy laws in Switzerland, Luxembourg, Britain, Germany and France make them attractive to criminals and corrupt politicians around the world. Former Iraqi Prime Minister Dr. Iyad Allawi said the late Iraqi dictator Saddam Hussein confessed to stealing $40-billion of Iraqi money and invested it in Switzerland, Germany and Japan.

Switzerland and British economies were the main recipients and beneficiaries of Sani Abacha’s $5-billion embezzlement. When it was discovered that Abacha used the crook banks in these countries to steal the money, Switzerland and Britain wanted to distance themselves from the criminal enterprises run by their banks but in the end had no choice but repatriate over $700-million to the Nigeria government after five years of foot dragging. Only heaven knows how much of Abacha’s loot still remain in these countries.

After 18 years of legal wrangling Switzerland agreed to let the people of Philippines receive the $700m looted by Ferdinand Marcos and kept by her banks. Switzerland kept $700m while children were starving to death and hospitals were closing down for lack of medicines. In the same way Kazakhstan received $84m from Switzerland after her banks had kept the stolen money from this oil rich but economically impoverished country.

Again it took Switzerland 12 years to return $74m of the $110m stolen by Raul Salinas to the government of Mexico. Switzerland still has in her possession the money looted by the dictator ‘Baby Doc’ Duvalier 24 years after he was chased away by the poor people of Haiti.

When Mobutu died in 1997 Swiss newspapers reported that the country may be home to at least $4-billion of Mobutu’s stolen assets. The whole world was shocked when Swiss authorities announced that Mobutu’s stolen assets amounted to just under $8m. The shock sent a chill down the spine of DR. Congo’s president. He has still not recovered and has refused to show any interest in pursuing the money.

So far Switzerland has repatriated $1.6-billion of the money criminally accepted by her banks to its rightful owners but only heaven knows how much still remain in that country. For all their fine words about combating money laundering, corruption, fraud and racketeering, nothing seems to have changed in Europe and America. Omar Bongo, the world’s longest serving head of state, has been implicated for using Swiss and French banks to stash millions if not billions of dollars from his oil rich country including tens of millions of dollars illegally paid by Elf Oil Company.

While Europe and American politicians preach against corruption in the third world they also enact laws which facilitate and promote corruption and embezzlement in the third world.

US Senator Carl Levin says, “America cannot have it both ways. We cannot condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks making fortunes off that corruption.” Unfortunately that is exactly what is happening today which is a clear case of double standards. 

“Transparency International brought a case calling on the French justice system to examine how the leaders of Gabon, Congo Brazzaville and Equatorial Guinea and their families could afford to acquire assets worth tens of millions of euros.
The assets include scores of vast apartments and villas and dozens of French bank accounts and cars ranging from Ferraris and Maseratis to Rolls-Royce Phantom.
On Tuesday May 5^th 2009, in a landmark decision a preliminary investigation was launched by an independent French financial magistrate to look into the corruption allegations but French state prosecutors, overseen by the government of Nicolas Sarkozy quickly launched an appeal to prevent the case from being opened arguing that Transparency International has no right to lodge a complaint because it is not a direct victim of any wrongdoing.

The public prosecutor has twice previously ruled that the complaint by the anti-corruption activists was inadmissible. The fact is that France has important economic and strategic interests in the three oil and gas-producing countries and fears the case may harm relations with her former colonies hence the appeal. In the last five decades France has supported corrupt regimes and dictators to embezzle billions of dollars belonging to most of her poor former colonies.

For example a French police report has revealed that Omar Bongo and his close relatives own 33 luxury properties in France but newspapers put the figure at 59. Bongo and his family also have 70 French bank accounts and at least nine luxury cars, including Ferraris and Mercedes worth a total of €1.5m (£1.3m).

Denis Sassou Nguesso and his family have 112 French bank accounts, 13 luxury cars in France and 24 properties. Sassou-Nguesso's daughter Edith – who was Bongo's late wife, bought a mansion in the rich eighth arrondissement of Paris for 18.9-million euros. Only God knows how much money has been stolen and placed in these bank accounts.

Teodoro Obiang Nguema of Equatorial Guinea, along with family members, he has eight luxury cars, worth a total of €4.2m, in France. His son, a government minister, owns an apartment in an exclusive area of the capital. Source: Gurdian.co.uk.

In a separate French investigation into corruption at the former oil giant
Elf Aquitaine, an executive testified that it paid £40m a year to Bongo via
Swiss bank accounts in exchange for permission to exploit his country’s
oil reserves. In February of 2009 a court in France had nine of Bongo’s bank accounts containing several millions of Euros frozen. Can  French economy be described as clean or dirt-driven?

 A damning report by Global Witness accuses Western banks of facilitating corruption and denying some of the world’s poorest people the chance to escape poverty. The banks included HSBC, Citigroup, Banco Santanderand Barclays.
Among its allegations are claims that Barclays kept open an account for the son of the dictator of oil-rich Equatorial Guinea, despite evidence that his family had looted the country's oil revenues. Global Witness also accused HSBC and Santander, Abbey's Spanish owner, of frustrating US efforts to investigate the looting and laundering of Equatorial Guinea's oil revenues by hiding behind bank secrecy laws in Luxembourg and Spain. 

Global Witness also accused Citi Bank for helping Charles Taylor, to loot timber revenues in Sierra Leone and Liberia. Gavin Hayman, Campaign Director for Global Witness, says: "The same lax regulation that created the credit crunch has let some of the world's biggest banks to facilitate the looting of natural resource wealth from poor countries and concludes that
"If resources like oil and timber are to truly help lift Africa and other poor regions out of poverty, then banks must be made to stop doing business with corrupt dictators and their families."

The world seven most industrialised nations (G7) have been making a lot noise about the poverty situation in the third world especially in Africa. They have spearheaded the UN Millennium Development Goals that has set targets to reduce poverty by 2015 but it is clear these same G7 nations are the very countries causing the poverty. They enact secrecy laws that establish corrupt financial infrastructures; their multinational corporations bribe third world leaders, assist them to hide their loots in Western Banks; politicians intervene when cases are filed against corrupt leaders in Africa and who suffers in all these?

US Senator Richard Lugar says: "Corruption thwarts development efforts in many ways. Bribes can influence important bank decisions on projects and on contractors. Misuse of funds can inflate project costs, deny needed assistance to the poor, and cause projects to fail. Stolen money may prop up dictatorships and finance human rights abuses. Moreover, when developing countries lose development bank funds through corruption, the taxpayers in those poor countries are still obligated to repay the development banks. So, not only are the impoverished cheated out of development benefits, they are left to repay the resulting debts to the banks.”

And Dr. Susan Hawley agrees with him and says: “Multinational corporations’ corrupt practices affect the South (i.e. Africa, Asia and Latin America) in many ways. They undermine development and exacerbate inequality and poverty. They disadvantage smaller domestic firms and transfer money that could be put towards poverty eradication into the hands of the rich. They distort decision-making in favour of projects that benefit the few rather than the many. They also increase debt that benefit the company, not the country; bypass local democratic processes; damage the environment; circumvent legislation; and promote weapons sales. Bribes put up the prices of projects. When these projects are paid for with money borrowed internationally, bribery adds to a country's external debt. Ordinary people end up paying this back through cuts in spending on health, education and public services. Often they also have to pay by shouldering the long-term burdens of projects that do not benefit them and which they never requested”. Source: The Corner House, June 2000.

A UN report of October 2002 accused 85 European and U.S. multinational corporations – including Anglo American, Barclays Bank, Bayer, De Beers and Cabot Corporation of violating the Organization for Economic Cooperation and Development's ethical guidelines on conflict zones. The guidelines they were accused of violating relate to arming Rwanda, Uganda and Congolese rebels and profiting from their illegal looting of Congo's minerals.

British Aerospace was accused of paying bribes to Tanzania officials to look the other way while a device with ageing technology was sold to the country. Former Prime Minister Tony Blair was accused of helping BAE to seal the deal. “The UK sold a useless air traffic control system to Tanzania in 2001 in a scandalous and squalid deal, the House of Commons was told.” Clare Short an MP said, “The deal was useless and hostile to the interests of Tanzania”. She said, “Barclays Bank had colluded with the government by loaning Tanzania the money, but lying to the World Bank about the type and size of the loan.”  Shadow international development secretary Andrew Mitchell said “BAE had used ageing technology and said the system was not adequate and too expensive.” Source: BBCNEWS, Wednesday, 31 January 2007. Corruption investigation concerning arms sales to Saudi Arabia by this same BAE was stopped by the same Tony Blair in December 2006.

It is on record that multinational corporations declare about 40% of their profits in African countries where they operate and siphon the rest into their save haven accounts in Europe, the Pacific and Caribbean with the full knowledge of their governments.

Elf for instance operated as an arm of the French state supporting dictators, looting third world resources and establishing flush fund which was used to bribe African leaders so they will look the other way while Elf loots Africa's oil and gas. Andre Tarallo the real boss of Elf-Afrique “told the court in June 2003 that annual cash transfers totalling about £10m were made to Omar Bongo, Gabon's president, while other huge sums were paid to leaders in Angola, Cameroon and Congo-Brazzaville”. Source: Guardian, Nov. 2003.

The real deal is that Elf, Shell, BP and their counterparts in Europe and America pay bribes to African leaders to induce them to look the other way why they plunder the resources. 

Nicholas Shaxson, author of Poisoned Wells, wrote of the subject: “Magistrates discovered the money from Elf's African operations supplied bribes to support French commercial, military and diplomatic goals around the world. In exchange, French troops protected compliant African dictators.” This is how African politicians and civil servants have been corrupted by multinational corporations assisted by the big banks in Europe and America but we often do not hear much about them.

Switzerland, Britain, United States, Luxembourg, Liechtenstein and France are the most culprits of all and can be said to be the most corrupt countries in the world because they have created the international financial infrastructures that allow corrupt politicians, business elite and criminals to hide their ill-gotten wealth and to escape prosecution. Switzerland in particular has come under heavy criticism because of her relationship with dictators and criminals around the world. There has not been a single corrupt dictator or criminal who has not had links with British, Swiss or French governments or their institutions. From Saddam Hussein all down to Mobutu, Abacha, Lansana Conte, Ferdinand Marcos, Baby Doc Duvalier, Omar Bongo, Nguema, Sassou Nguesso, Campore, Dos Santos all have connections with one or more of these countries yet their economies are always given a clean sheet by anti corruption watchdogs.

Dr. Susan Hawley, author of “Exporting Corruption” says: Private banking services and offshore financial centres are the major conduits and repositories for bribes and corrupt gains. An estimated US$40 billion from poor and former communist economies finds its way into US or European banks every year, much of it illegitimately gained. Some $30 billion of Western aid "used as part of the Cold War game of winning friends" has ended up in Swiss bank accounts alone. Leaders from some African countries have collectively had up to $20 billion on deposit in Switzerland's banks. Haiti's "Baby Doc" Duvalier is known to have kept $300-900 million in offshore banks, while Philippine President Marcos salted away well over $2 billion in Western banks.

How could corrupt dictators and their associates succeed in looting and hiding their ill-gotten wealth without the collusion, connivance and support of western political and business establishments and its corrupt financial infrastructures? How was Abacha able to hide over five billion dollars in Switzerland and Britain? How was Mobutu able to hide about $10-billion in Europe?

A US Senate inquiry in 1999 revealed that the giant Citibank held private accounts for many corrupt Third World leaders. These included Gabonese president Omar Bongo (who transferred US$100 million, allegedly including bribes from French firm Elf-Aquitaine, through his three accounts), Benazir Bhutto's husband Asif Ali Zardari ($40 million, including $10 million allegedly from kickbacks on a gold importing contract), the three sons of Sani Abacha ($110 million in accounts, plus $39 million lent to them to deposit in Swiss accounts after the new Nigerian government began investigations) and Raul Salinas, brother of one-time Mexican President Carlos Salinas ($80-$100 million in alleged drug money).

This day light robbery by third world leaders and the protection offered them by countries like France, Switzerland, Britain, United States and Spain are the result of the chronic poverty seen everywhere in Africa, Haiti, Philippines, Bangladesh, Pakistan, Kazakhstan and most of the developing world. While criminal international financial institutions aid and abet these dictators to plunder the treasuries of their countries, millions of Africans who live in abject poverty continue to cry for basic necessities of life such as water and food. In the name of economic interest, European and North American countries are causing millions to die by protecting these corrupt politicians and their associates.

The fact is that Europe, North America, their financial colonies in the Pacific and the Caribbean Islands and their multinational institutions are so attractive to corrupt politicians and criminals of all sorts due to the existence of corrupt banking and real estate infrastructures; the secrecy laws (omerta) that protect these corrupt financial entities; a weak justice system that make mockery of the law to fight financial crimes, international fraud and tax havens; and a complete absence of due diligence checks which allow anyone including the multinational corporations to do anything for money be it legal or illegal. The current global crisis caused by these greedy criminals attest to this fact. The crisis negative effect worldwide is a strong message to the governments in Europe and America that no one is safe, not even their political career.

 It is time to abolish all the banking secrecy laws; close down all the save haven centres; eliminate all the infrastructures that promote fraud, tax evasion, corruption, embezzlement and dictatorships; and rein in on the corrupt banking and real estate industries and those who illegally patronise their services.   Unless the system and its supporting infrastructures are destroyed, there will be no immediate end to poverty and the attainment of the millennium development goals set by the United Nations will be a mirage. Poverty, malnutrition, hunger, starvation, diseases, and political instabilities will continue to dominate the regions where these assets are stolen from and the spill over effect will be the increased influx of illegal immigrants that Europeans are at the moment struggling to cope with.

By Lord Aikins Adusei

Political Activist and Anti-Corruption Campaigner

Should Europe and North America tear down their Corrupt Financial Infrastructures?

Anytime Transparency International (TI) releases what it calls corruption perception index (CPI) showing which country is more corrupt and which ones are not the top 10% of most corrupt nations always come from the developing world with most of the so called advanced countries given a clean sheet. TI index always show that countries like Switzerland, Britain, France, Luxembourg, Liechtenstein, USA, Canada, Australia, New Zealand and most of the so called developed nations are less corrupt while those of the developing world are.http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table

However a critical look at what goes on in the world of business and politics show that these so called clean countries and their corporations are more corrupt and do not deserve the accolades that TI gives them.   Countries like Somali, Sudan, Zimbabwe, Nigeria, Bangladesh, Philippines, Haiti, Kenya and Guinea among others feature among the top 10% of most corrupt countries in the world. What TI fails to tell the world is where most of the monies and assets stolen are kept. To tell the citizens of these poor countries that their countries are corrupt and not telling them where the looted funds are, is a great injustice and disservice because these poor people are not interested in how corrupt their countries are, they just want to know where the money has gone.

If TI should concentrate on the origin and destination of looted assets, all the so called clean countries who preach accountability and justice will score nothing but zero. The fact is that most of the monies and assets stolen do not remain in the poor countries where they are stolen; they find their way in western countries and save haven Islands controlled by the West. Western Banks, Car Makers and Real Estate companies have been major recipient of all the stolen assets belonging to the world’s poor.  Bonds, stocks and other assets bought with the money are also kept in western countries.

 Besides TI report does not tell the world how these politicians got corrupted. It is on record that multinational corporations with headquarters in Europe, North America and Japan have established flush funds and using them to bribe third world leaders in order to win contracts.

 For example on 17th September 2002 a Canadian Engineering company called Acres International was convicted by a High Court in Lesotho for paying $260,000 bribe to secure an $8-billion dam contract. Achair Partners a Swiss company and Progresso an Italian company have been accused of bribing Somalia Transitional Government officials to secure contracts to deposit highly toxic industrial waste in the waters of Somalia. 

In 2002 Halliburton a US company, was accused of establishing $180m flush fund and of using it to bribe Nigeria officials in order to secure a $10-billion Liquefied Gas Plant contract. In response to the accusation the company fired Mr. Albert Jack Stanley. Mr. Stanley a former executive of Halliburton (KBR) pleaded guilty for orchestrating the $180m flush fund. Such corrupt practices by western companies seeking contracts in Africa are not uncommon.

Apart from directly bribing the politicians and those in authority to win contracts, these companies also help them to launder the proceeds of their ill-gotten gains in Europe and America.

Global Financial Integrity says, “$900-billion is secreted each year from underdeveloped economies, with an estimated $11.5 trillion currently stashed in havens. More than one quarter of these hubs belong to the UK, while Switzerland washes one-third of global capital flight”. Out of this $900b that is secreted away with the help of Western Banks and companies, $150-billion comes from Africa. 

TI annual report always gives a clean sheet to Switzerland and most of the western nations but Richard Murphy, director of Tax Research LLP says: “The idea that Switzerland has a clean economy is a joke; it is a dirt-driven economy”. But it is not only Switzerland that does not have a clean economy. Britain, France, Germany, Luxembourg, Spain all of which have their own secrecy laws can be described as vampires. Their economies are dirt-driven because most of their financial institutions (a vital sector of their economies) have been implicated in a number of corruption scandals involving corrupt third world leaders and their associates. The Swiss Bankers Association claims that four-fifths of the nation supports banking secrecy laws. This law is the foundation of all the corruption, embezzlement, tax evasions and all the criminal enterprises that we see in the world.

The fact is that those who steal must find a way to hide their loot and the infrastructures and secrecy laws in Switzerland, Luxembourg, Britain, Germany and France make them attractive to criminals and corrupt politicians around the world. Former Iraqi Prime Minister Dr. Iyad Allawi said the late Iraqi dictator Saddam Hussein confessed to stealing $40-billion of Iraqi money and invested it in Switzerland, Germany and Japan.

Switzerland and British economies were the main recipients and beneficiaries of Sani Abacha’s $5-billion embezzlement. When it was discovered that Abacha used the crook banks in these countries to steal the money, Switzerland and Britain wanted to distance themselves from the criminal enterprises run by their banks but in the end had no choice but repatriate over $700-million to the Nigeria government after five years of foot dragging. Only heaven knows how much of Abacha’s loot still remain in these countries.

After 18 years of legal wrangling Switzerland agreed to let the people of Philippines receive the $700m looted by Ferdinand Marcos and kept by her banks. Switzerland kept $700m while children were starving to death and hospitals were closing down for lack of medicines. In the same way Kazakhstan received $84m from Switzerland after her banks had kept the stolen money from this oil rich but economically impoverished country.

Again it took Switzerland 12 years to return $74m of the $110m stolen by Raul Salinas to the government of Mexico. Switzerland still has in her possession the money looted by the dictator ‘Baby Doc’ Duvalier 24 years after he was chased away by the poor people of Haiti.

When Mobutu died in 1997 Swiss newspapers reported that the country may be home to at least $4-billion of Mobutu’s stolen assets. The whole world was shocked when Swiss authorities announced that Mobutu’s stolen assets amounted to just under $8m. The shock sent a chill down the spine of DR. Congo’s president. He has still not recovered and has refused to show any interest in pursuing the money.

So far Switzerland has repatriated $1.6-billion of the money criminally accepted by her banks to its rightful owners but only heaven knows how much still remain in that country. For all their fine words about combating money laundering, corruption, fraud and racketeering, nothing seems to have changed in Europe and America. Omar Bongo, the world’s longest serving head of state, has been implicated for using Swiss and French banks to stash millions if not billions of dollars from his oil rich country including tens of millions of dollars illegally paid by Elf Oil Company.

While Europe and American politicians preach against corruption in the third world they also enact laws which facilitate and promote corruption and embezzlement in the third world.

US Senator Carl Levin says, “America cannot have it both ways. We cannot condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks making fortunes off that corruption.” Unfortunately that is exactly what is happening today which is a clear case of double standards. 

“Transparency International brought a case calling on the French justice system to examine how the leaders of Gabon, Congo Brazzaville and Equatorial Guinea and their families could afford to acquire assets worth tens of millions of euros.
The assets include scores of vast apartments and villas and dozens of French bank accounts and cars ranging from Ferraris and Maseratis to Rolls-Royce Phantom.
On Tuesday May 5^th 2009, in a landmark decision a preliminary investigation was launched by an independent French financial magistrate to look into the corruption allegations but French state prosecutors, overseen by the government of Nicolas Sarkozy quickly launched an appeal to prevent the case from being opened arguing that Transparency International has no right to lodge a complaint because it is not a direct victim of any wrongdoing.

The public prosecutor has twice previously ruled that the complaint by the anti-corruption activists was inadmissible. The fact is that France has important economic and strategic interests in the three oil and gas-producing countries and fears the case may harm relations with her former colonies hence the appeal. In the last five decades France has supported corrupt regimes and dictators to embezzle billions of dollars belonging to most of her poor former colonies.

For example a French police report has revealed that Omar Bongo and his close relatives own 33 luxury properties in France but newspapers put the figure at 59. Bongo and his family also have 70 French bank accounts and at least nine luxury cars, including Ferraris and Mercedes worth a total of €1.5m (£1.3m).

Denis Sassou Nguesso and his family have 112 French bank accounts, 13 luxury cars in France and 24 properties. Sassou-Nguesso's daughter Edith – who was Bongo's late wife, bought a mansion in the rich eighth arrondissement of Paris for 18.9-million euros. Only God knows how much money has been stolen and placed in these bank accounts.

Teodoro Obiang Nguema of Equatorial Guinea, along with family members, he has eight luxury cars, worth a total of €4.2m, in France. His son, a government minister, owns an apartment in an exclusive area of the capital. Source: Gurdian.co.uk.

In a separate French investigation into corruption at the former oil giant
Elf Aquitaine, an executive testified that it paid £40m a year to Bongo via
Swiss bank accounts in exchange for permission to exploit his country’s
oil reserves. In February of 2009 a court in France had nine of Bongo’s bank accounts containing several millions of Euros frozen. Can  French economy be described as clean or dirt-driven?

 A damning report by Global Witness accuses Western banks of facilitating corruption and denying some of the world’s poorest people the chance to escape poverty. The banks included HSBC, Citigroup, Banco Santanderand Barclays.
Among its allegations are claims that Barclays kept open an account for the son of the dictator of oil-rich Equatorial Guinea, despite evidence that his family had looted the country's oil revenues. Global Witness also accused HSBC and Santander, Abbey's Spanish owner, of frustrating US efforts to investigate the looting and laundering of Equatorial Guinea's oil revenues by hiding behind bank secrecy laws in Luxembourg and Spain. 

Global Witness also accused Citi Bank for helping Charles Taylor, to loot timber revenues in Sierra Leone and Liberia. Gavin Hayman, Campaign Director for Global Witness, says: "The same lax regulation that created the credit crunch has let some of the world's biggest banks to facilitate the looting of natural resource wealth from poor countries and concludes that
"If resources like oil and timber are to truly help lift Africa and other poor regions out of poverty, then banks must be made to stop doing business with corrupt dictators and their families."

The world seven most industrialised nations (G7) have been making a lot noise about the poverty situation in the third world especially in Africa. They have spearheaded the UN Millennium Development Goals that has set targets to reduce poverty by 2015 but it is clear these same G7 nations are the very countries causing the poverty. They enact secrecy laws that establish corrupt financial infrastructures; their multinational corporations bribe third world leaders, assist them to hide their loots in Western Banks; politicians intervene when cases are filed against corrupt leaders in Africa and who suffers in all these?

US Senator Richard Lugar says: "Corruption thwarts development efforts in many ways. Bribes can influence important bank decisions on projects and on contractors. Misuse of funds can inflate project costs, deny needed assistance to the poor, and cause projects to fail. Stolen money may prop up dictatorships and finance human rights abuses. Moreover, when developing countries lose development bank funds through corruption, the taxpayers in those poor countries are still obligated to repay the development banks. So, not only are the impoverished cheated out of development benefits, they are left to repay the resulting debts to the banks.”

And Dr. Susan Hawley agrees with him and says: “Multinational corporations’ corrupt practices affect the South (i.e. Africa, Asia and Latin America) in many ways. They undermine development and exacerbate inequality and poverty. They disadvantage smaller domestic firms and transfer money that could be put towards poverty eradication into the hands of the rich. They distort decision-making in favour of projects that benefit the few rather than the many. They also increase debt that benefit the company, not the country; bypass local democratic processes; damage the environment; circumvent legislation; and promote weapons sales. Bribes put up the prices of projects. When these projects are paid for with money borrowed internationally, bribery adds to a country's external debt. Ordinary people end up paying this back through cuts in spending on health, education and public services. Often they also have to pay by shouldering the long-term burdens of projects that do not benefit them and which they never requested”. Source: The Corner House, June 2000.

A UN report of October 2002 accused 85 European and U.S. multinational corporations – including Anglo American, Barclays Bank, Bayer, De Beers and Cabot Corporation of violating the Organization for Economic Cooperation and Development's ethical guidelines on conflict zones. The guidelines they were accused of violating relate to arming Rwanda, Uganda and Congolese rebels and profiting from their illegal looting of Congo's minerals.

British Aerospace was accused of paying bribes to Tanzania officials to look the other way while a device with ageing technology was sold to the country. Former Prime Minister Tony Blair was accused of helping BAE to seal the deal. “The UK sold a useless air traffic control system to Tanzania in 2001 in a scandalous and squalid deal, the House of Commons was told.” Clare Short an MP said, “The deal was useless and hostile to the interests of Tanzania”. She said, “Barclays Bank had colluded with the government by loaning Tanzania the money, but lying to the World Bank about the type and size of the loan.”  Shadow international development secretary Andrew Mitchell said “BAE had used ageing technology and said the system was not adequate and too expensive.” Source: BBCNEWS, Wednesday, 31 January 2007. Corruption investigation concerning arms sales to Saudi Arabia by this same BAE was stopped by the same Tony Blair in December 2006.

It is on record that multinational corporations declare about 40% of their profits in African countries where they operate and siphon the rest into their save haven accounts in Europe, the Pacific and Caribbean with the full knowledge of their governments.

Elf for instance operated as an arm of the French state supporting dictators, looting third world resources and establishing flush fund which was used to bribe African leaders so they will look the other way while Elf loots Africa's oil and gas. Andre Tarallo the real boss of Elf-Afrique “told the court in June 2003 that annual cash transfers totalling about £10m were made to Omar Bongo, Gabon's president, while other huge sums were paid to leaders in Angola, Cameroon and Congo-Brazzaville”. Source: Guardian, Nov. 2003.

The real deal is that Elf, Shell, BP and their counterparts in Europe and America pay bribes to African leaders to induce them to look the other way why they plunder the resources. 

Nicholas Shaxson, author of Poisoned Wells, wrote of the subject: “Magistrates discovered the money from Elf's African operations supplied bribes to support French commercial, military and diplomatic goals around the world. In exchange, French troops protected compliant African dictators.” This is how African politicians and civil servants have been corrupted by multinational corporations assisted by the big banks in Europe and America but we often do not hear much about them.

Switzerland, Britain, United States, Luxembourg, Liechtenstein and France are the most culprits of all and can be said to be the most corrupt countries in the world because they have created the international financial infrastructures that allow corrupt politicians, business elite and criminals to hide their ill-gotten wealth and to escape prosecution. Switzerland in particular has come under heavy criticism because of her relationship with dictators and criminals around the world. There has not been a single corrupt dictator or criminal who has not had links with British, Swiss or French governments or their institutions. From Saddam Hussein all down to Mobutu, Abacha, Lansana Conte, Ferdinand Marcos, Baby Doc Duvalier, Omar Bongo, Nguema, Sassou Nguesso, Campore, Dos Santos all have connections with one or more of these countries yet their economies are always given a clean sheet by anti corruption watchdogs.

Dr. Susan Hawley, author of “Exporting Corruption” says: Private banking services and offshore financial centres are the major conduits and repositories for bribes and corrupt gains. An estimated US$40 billion from poor and former communist economies finds its way into US or European banks every year, much of it illegitimately gained. Some $30 billion of Western aid "used as part of the Cold War game of winning friends" has ended up in Swiss bank accounts alone. Leaders from some African countries have collectively had up to $20 billion on deposit in Switzerland's banks. Haiti's "Baby Doc" Duvalier is known to have kept $300-900 million in offshore banks, while Philippine President Marcos salted away well over $2 billion in Western banks.

How could corrupt dictators and their associates succeed in looting and hiding their ill-gotten wealth without the collusion, connivance and support of western political and business establishments and its corrupt financial infrastructures? How was Abacha able to hide over five billion dollars in Switzerland and Britain? How was Mobutu able to hide about $10-billion in Europe?

A US Senate inquiry in 1999 revealed that the giant Citibank held private accounts for many corrupt Third World leaders. These included Gabonese president Omar Bongo (who transferred US$100 million, allegedly including bribes from French firm Elf-Aquitaine, through his three accounts), Benazir Bhutto's husband Asif Ali Zardari ($40 million, including $10 million allegedly from kickbacks on a gold importing contract), the three sons of Sani Abacha ($110 million in accounts, plus $39 million lent to them to deposit in Swiss accounts after the new Nigerian government began investigations) and Raul Salinas, brother of one-time Mexican President Carlos Salinas ($80-$100 million in alleged drug money).

This day light robbery by third world leaders and the protection offered them by countries like France, Switzerland, Britain, United States and Spain are the result of the chronic poverty seen everywhere in Africa, Haiti, Philippines, Bangladesh, Pakistan, Kazakhstan and most of the developing world. While criminal international financial institutions aid and abet these dictators to plunder the treasuries of their countries, millions of Africans who live in abject poverty continue to cry for basic necessities of life such as water and food. In the name of economic interest, European and North American countries are causing millions to die by protecting these corrupt politicians and their associates.

The fact is that Europe, North America, their financial colonies in the Pacific and the Caribbean Islands and their multinational institutions are so attractive to corrupt politicians and criminals of all sorts due to the existence of corrupt banking and real estate infrastructures; the secrecy laws (omerta) that protect these corrupt financial entities; a weak justice system that make mockery of the law to fight financial crimes, international fraud and tax havens; and a complete absence of due diligence checks which allow anyone including the multinational corporations to do anything for money be it legal or illegal. The current global crisis caused by these greedy criminals attest to this fact. The crisis negative effect worldwide is a strong message to the governments in Europe and America that no one is safe, not even their political career.

 It is time to abolish all the banking secrecy laws; close down all the save haven centres; eliminate all the infrastructures that promote fraud, tax evasion, corruption, embezzlement and dictatorships; and rein in on the corrupt banking and real estate industries and those who illegally patronise their services.   Unless the system and its supporting infrastructures are destroyed, there will be no immediate end to poverty and the attainment of the millennium development goals set by the United Nations will be a mirage. Poverty, malnutrition, hunger, starvation, diseases, and political instabilities will continue to dominate the regions where these assets are stolen from and the spill over effect will be the increased influx of illegal immigrants that Europeans are at the moment struggling to cope with.

By Lord Aikins Adusei

Political Activist and Anti-Corruption Campaigner