Does Ethiopia’s War, Mask an Even Deeper Crisis?

theelephant.info/features/2021/08/20/does-ethiopias-war-mask-an-even-deeper-crisis

August 20, 2021

Politics
9 min read.
The real story of the conflict in Ethiopia is not about the atrocities and the damage to the
Ethiopian peoples and state as a whole. It is about the consequences of the Meles Zenawi-
TPLF fall from power.

Published

3 hours ago
on

August 20, 2021

By

Kalundi Serumaga

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The war in the northern Ethiopian region of Tigray that began officially in November
2020 masks more than it reveals. The natural and necessary tendency of most
commentators has been to focus on the very tragic atrocities being inflicted on the civilian
population.

However, it is a story that effectively begins in 1991, with the American-instigated

sabotage by then leader Meles Zenawi, of the transition from the high centralisation of the
Mengistu government he was replacing, to something more democratic and
representative of the actual make-up of the country.

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Up until 1991, Ethiopia was what it always had been: an empire fighting to hold itself
tighter together. The clue was in the title of the head of state: “Emperor”, from Menelik II
(1889-1913) who expanded northern Abyssinia southwards, to Haile Selassie (1930-1974),
who sought to consolidate it there.

Even after 1974, when Emperor Selassie was deposed by Col. Mengistu Haile Mariam, the
empire state—now stripped of its pomp—and the elevated place of its Orthodox Christian
religion, remained culturally Amharic and governed strictly from the centre.

That was supposed to have changed after 12 May 1991, when an assortment of armed
groups, fighting in the names of the various nationalities that had been conquered during
the formation of the empire, drove out Mengistu’s war-battered government.

Instead, in stepped the new Tigray People’s Liberation Front regime, headed by Meles
Zenawi, and wrapped in a package of other political formations collectively called the
Ethiopian People’s Revolutionary Democratic Front (EPRDF).

It is the dynamics of replacing the leadership of this Front, following the death of Meles
Zenawi in August 2012, which birthed this new phase of the eternal crisis of the Ethiopian
empire state. In choosing Abiy Ahmed, the leadership of the Front set themselves on a
collision course with the TPLF element of the regime who took every subsequent change,
firing or redeployment of their well-embedded cadres in the state machinery as
marginalisation and victimisation.

They may not have been entirely wrong. However, as is often said, to a person in a
position of privilege, equality often feels like oppression.

Where TPLF was right, was in opposing now Prime Minister Abiy’s gambit to
systematically do away with even what little federation and regional autonomy there had
been under Meles. They saw themselves as the potential principal victims of Abiy’s move
to dissolve the EPDRF and replace it with his Prosperity Party (PP), replete with the
language of empire, nostalgia, and notions of centralism.

The rest were details. Prime Minister Abiy, now as PP, intended to postpone the elections
scheduled for late 2020 that were supposed to have marked the end of the interim period
of the post-Meles regime. TPLF, now reduced to its home region, insisted that Abiy had
no mandate to do that and went ahead to organise the elections for Tigray alone. Abiy
declared this illegal. TPLF claimed election victory for Tigray. Abiy sought to re-impose
Addis authority over the region by sending in his own hand-picked Tigrayan
administration and to take control of the very large Ethiopian federal military garrison
that the Meles administration had “wisely” previously relocated to the Tigrayan capital
city of Mekelle. Fighting then broke out, as TPLF resisted this.

So far, the forces fighting on the side of Tigray have prevailed, albeit in a very qualified
way.

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First, they avoided annihilation, given the much larger resources available to the
Ethiopian state as a whole, versus an army drawn from a population making up less than
7 per cent of the total Ethiopian population. This was achieved by the TPLF decision to
abandon an initial plan to defend their urban spaces conventionally, and withdraw to the
less physically accessible parts of the region, and then undertake widespread
mobilisation.

Second, they then managed to disable, immobilise and take prisoner large numbers of
soldiers—including their commanders—from the Ethiopian state army. This enabled them
to re-take the places they had previously abandoned, including their capital.

So far, the forces fighting on the side of Tigray have prevailed, albeit in a very qualified
way.

By these means, they bought themselves vital breathing space, but the destruction and
loss of human life, as well as injury to ordinary bystanders has been colossal. What is
more, neighbours with issues, such as Eritrea still, and the Republic of Sudan, have taken
advantage of the conflict to physically reclaim areas of Ethiopia they believe are theirs.

The question nevertheless remains, where does everyone involved go from here?

The obvious is being done. The Tigrayan forces are seeking to take advantage of their
recent success to consolidate their position. They seek to re-take territories that they lost
in the initial Ethiopian/Eritrean onslaught, as well as build military pacts with groups
opposed to not just the Ethiopian regime, but also the regime’s military allies like the
government of Eritrea to the north. This means more fighting.

Thirdly, they perhaps see a value in taking the fight outside Tigray, if only to ease the
pressure on their own people. This may point to a conviction that their situation will not
end until Ethiopia, either as a whole, or in the form of the current government, ceases to
exist. This could mean a lot more fighting.

Despite the setback—to put it mildly—of having lost a significant portion of soldiers,
equipment and territory from this initial encounter, the Addis Ababa government of
Prime Minister Abiy Ahmed is also not giving up. Addis Ababa remains defiant. They
insist that history is on their side, and that going to war in Tigray was a justified “law and
order” policing operation.

The government has resorted to forced recruitment of youth from the southern regions
and the countryside to augment the already very enthusiastic militia mobilisation in the
Amhara region from which Prime Minister Abiy draws perhaps the bulk of his political
support, primarily for his willingness to abandon the multinational-federalist constitution
of 1995 in favour of re-centralisation, a matter very dear within Amhara nationalism and
shared with the urban elite who serve the state. This means more fighting. Their first
move seems to be to revive another Mengistu-era tactic of denying relief aid to the region
to force it to submit.

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As for the politics, the elected but then displaced regional government of Tigray now seeks
to invoke the current constitution of the country in a bid to begin laying out a political
argument to the rest of the country and the wider world. This may turn out to be the more
difficult part as the TPLF, Tigray’s historical political leadership—the overwhelmingly
dominant factor in the current resistance—itself has more questions to answer to the rest
of the Ethiopian population, especially on the very points (human rights, democracy,
national/ethnic identity) that may be the only arguments that can serve it now.

The reality is that the 27 years of TPLF rule over all of Ethiopia that ended in 2012, was
simply a bad experience. The bitter truth is that not many people in Ethiopia who are not
Tigrayans have reasons to like the TPLF. And the Tigrayan people as a whole are the
victims of this.

It began with deception, and then deceptions within that deception, then a lot of
gaslighting, and ended with outright betrayal.

The war against the previous regime of Col. Mengistu Haile Mariam had been
exceptionally vicious. Mengistu, despite having displaced the monarchy, had been
determined to hold together and further homogenise the Ethiopian state. He had not even
been prepared to listen to arguments from Eritrean nationalists, despite that region
having been forcefully brought into the empire by the very monarch he had deposed.

Against this were the various nationalities of Ethiopia who had been scheduled to be
homogenised into a single Amharic-speaking “Ethiopian” identity. With rebellions
stewing from as far back as the 1960s, constant war became a permanent feature of the
Mengistu period.

This is why the 1991 victory against Mengistu was of enormous political significance. It
was not just the end of a dictatorship, but also potentially the end of the empire state, and
the politics that created it.

For the first time, a person not claiming to be Amhara was in charge of government. It
was, in effect, Independence Day for the conquered nations of the south, and also for
Eritrea.

What happened instead was that the Meles Zenawi faction of the TPLF leadership got into
an American-backed conspiracy to prevent a loosening or even possible breakup of what
the Americans consider to be a Christian-based anchor state surrounded by Muslim-
dominated countries and communities.

It began with deception, and then deceptions within that deception, then a lot of gaslighting,
and ended with outright betrayal.

Through the usual diplomatic-politico-military manoeuvrings that accompany such

transitions (think South Africa’s Boer-ANC 1991 dealings), the West enabled Meles to end
up with the largest armed group in the rebellion, in order to control the TPLF and to

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diplomatically outmanoeuvre the other authentic fighting groups by replacing them with
concocted “PDOs” (People’s Democratic Organizations) of his own making, which in turn
enabled TPLF to control the EPDRF.

Federation was offered with one hand, then taken away with the other. The soldiers of the
other fighting groups were encamped waiting to be integrated into a new national
Ethiopian “federal” army, whereupon many were then massacred by TPLF cadres. At one
point, the TPLF regime even resorted to confiscating farm implements from southern
farmers, out of fear that they might launch a peasant revolt in protest at these measures.

New, essentially TPLF-invented, political parties sprung up claiming to also represent the
oppressed nationalities, and were promptly integrated into the new Front to substitute
the original ones.

Most critically, TPLF cut a deal with the rebel Eritrea People’s Liberation Front to grant
Eritrea independence in return for the Eritreans dropping their historical support to all
the groups that had been fighting Mengistu with them.

It was a comprehensive betrayal.

I suspect that those political voices coming from outside Tigray that have condemned the
war and the atrocities committed against the Tigrayan population have probably done so
out of high principle (and through gritted teeth). Despite having been victims of TPLF
abuses while it was in power, they are politically and culturally obliged to stick to their
own principles and condemn the Abiy regime for doing to the Tigrayan population what
the TPLF did to them while in power.

In early June the Ethiopian government declared a ceasefire (to encourage “deep
reflection” apparently), and claimed to have voluntarily removed its troops from the
Tigrayan capital. The Tigrayan forces demanded a restoration of communications
(telephone, internet, etc.), an investigation into human rights violations, and negotiations
based on the key tenets of the 1995 constitution. This last point would mean respect for
federation based on nationality, respect for demarcated regional boundaries, and freedom
of speech and assembly. But the moment to seriously consider such a negotiated ceasefire
has now passed.

Federation was offered with one hand, then taken away with the other.

The irony here is that none of those things were guaranteed nor respected while the
Meles-faction-within-TPLF-within-EPDRF-make-up-of-made-up-parties was in power.

On top of the bad behaviour described above, the TPLF regime was well known for
shooting demonstrators with live bullets, suppressing gatherings, turning off the
telephone and internet networks during periods of unrest, abducting regime opponents,
rigging elections and territorial boundary-setting processes and generally trampling
constitutional provisions at will. But since it was also a darling of the United States
Department of State, none of any of that mattered (except to the victims).

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The real story here is therefore—and tragically—not the atrocities, waste and attendant
damage to the Ethiopian peoples and state as a whole as a result of this conflict. This is
because there has probably not been a moment in the entire history of this empire state
since its formation, where it has not been in conflict with either a neighbour, or its own
population, or both. If Death-from-war were a country, it would probably be called
Ethiopia.

The real story is about the consequences of the Meles Zenawi-TPLF fall from power, and
the resultant mess in which he has left his people. And the real story behind that is the
tragedy of how Meles passed up an opportunity to allow the great people of this country to
finally take a different direction, and opted instead to become a cynical, opportunistic,
American-pleasing Machiavelli.

This is unwittingly confirmed by the formerly retired General Tsadkan Gebretensae, who
came out of retirement at 68 years to help provide leadership to the Tigrayan forces, and
is credited as the mastermind behind their remarkable change in fortune. In an early June
interview, he explained, “When this started, it was very clear that the most senior, the
most highly experienced commanders are from Tigray, which has been the backbone of
the Ethiopian armed forces for the last thirty years.”

Gebretensae made this statement without any sense of irony, or at least a recognition that
others may find it odd that persons from one of the much smaller regions of the country
(comprising 6 or 7 per cent of the population, or about seven million people, as noted
earlier) would somehow have managed to remain the military “backbone” of a country
comprising over 110 million people, and with other nationalities numbering more than
twenty and even forty million.

Even if one were willing to buy the story promoted since 1991 that the TPLF had done the
bulk of the fighting against the Mengistu regime, the question still remains as to why, in
the three decades they were in power, they were unable to then reorganise the Ethiopian
national armed forces to better reflect the demographics of the country.

The moment to seriously consider such a negotiated ceasefire has now passed.

In fact, even this period of war still reflects the essentially self-serving and self-absorbed
culture of the Tigrayan political leadership. The fact is that in being invaded and
persecuted by the Abiy regime, Tigrayans are actually being made victims of all the
repressive state machinery, and disregard for laws and constitutionalism that the TPLF
either created or took advantage of while in power.

However, the TPLF now seeks to exploit and become the first beneficiaries of the
movement and culture of democracy and respect for human rights that actually came into
being, championed by oppressed Oromo youth, because of TPLF’s own excesses while in
power.

This is so, to the extent that even when making their political arguments today—and
receiving support even from some of their previous victims—few, if any, in the TPLF
leadership running the Tigray side of the war, have publicly and genuinely acknowledged

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the suffering, loss and hurt their 1991 betrayal and all that followed caused others, let
alone made any apology for it. This is essentially narcissistic.

As mentioned earlier, not many Ethiopians have any love for the TPLF for reasons such as
these, and many others. Theirs was a self-serving, oppressive, discriminatory and
arrogant regime.

The real challenge, therefore, will lay in constructing a national dialogue in which all the
current and historical grievances of all the peoples that are, or once were, Ethiopians, are
finally aired, atoned for and corrected.

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By Kalundi Serumaga
Kalundi Serumaga is a social and political commentator based in Kampala.

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Politics

BP Millions Promised to Offshore Firm Run by Angolan Tycoon

Accused of Corruption
The investigation was based on hundreds of pages of confidential files provided by
Jonathan Taylor, a former SBM lawyer turned whistle-blower. The documents include
emails, contracts, legal advice and corporate intelligence reports. Journalists also had
access to hours of secret audio recordings of SBM crisis meetings.

Published

4 hours ago
on

August 20, 2021

By

7/24
Simon Bowers and Martin Bright

British oil major BP paid $100 million to cancel a shipyard construction project in Angola
only for a third of the money to be promised to a Panamanian company run by a powerful
and allegedly corrupt Angolan official, according to whistle-blower documents seen by
Finance Uncovered.

The documents shine new light on the enormous influence of oil executives at the top of
Angola’s state-owned oil company Sonangol, who have for decades acted as gatekeepers to
Sub-Saharan Africa’s second largest hydrocarbon reserves.

After cancelling an order for floating oil platforms from the Paenal shipyard in Angola, BP
wired its cancellation fee in November 2011 to SBM Offshore N.V., a specialist
construction company that had been developing the yard and preparing to lead the build.

Two months later, SBM signed a contract agreeing that, after deducting certain costs, the
remaining $70.3 million would be shared, on an equal basis, between it and a secretive
Panamanian company called Sonangol International Inc (SII).

There is no suggestion this agreement was reached with BP’s knowledge or consent.

The 50-50 split had been verbally requested by Baptista Sumbe, who was then a top
executive at Sonangol, according to SBM documents. Sumbe was also president, chief
executive, secretary and treasurer of SII, as well as being the sole signatory for at least one
of its bank accounts, according to filings on the Panama corporate register.

More concerning still — and initially unbeknown to SBM’s newly promoted chief
executive Bruno Chabas — SBM had been quietly paying millions of dollars in
“commissions” to a second Panamanian company run by Sumbe, called Mardrill Inc,
without anything in return. This shocking revelation, which later featured in multiple
court cases, was discovered by SBM’s lawyers conducting an internal investigation in early
2012 following an unrelated tip off.

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This history of bribes to Mardrill had for years been kept a closely held secret, known only
to former SBM chief executives and few, if any, others inside SBM, papers in a Swiss court
case would later explain. In January 2012, Chabas (left) did not know about it when he
signed the agreement to pay $35 million to SII — though he found out days later.

At that point, having learned that Sumbe was suspected of corruption, the SBM boss
could have halted the payment and torn up the contract with SII.

Finance Uncovered asked SBM whether, despite its concerning discoveries, it still went
ahead and paid $35 million to SII in 2012. The company declined to answer.

In a statement, SBM said Finance Uncovered was asking about “dated issues… the
company has long put behind it”. It added: “[Our] legacy issues have been widely reported
on for years and have been resolved with multiple authorities around the globe. In 2012 a
complete new management team took over.”

The trail of money and promises, leading from BP to Panama, was unearthed in a
collaborative investigation involving: Finance Uncovered, De Telegraaf in the
Netherlands, Expresso in Portugal and The Telegraph in the United Kingdom.

The investigation was based on hundreds of pages of confidential files provided by

Jonathan Taylor, a former SBM lawyer turned whistle-blower. The documents include
emails, contracts, legal advice and corporate intelligence reports. Journalists also had
access to hours of secret audio recordings of SBM crisis meetings.

Taylor has separately passed documents to the Serious Fraud Office and has said he is
willing to share the same files with prosecutors in other countries.

Together, these files provide a front-row view of SBM’s tortuous deliberations as it was
forced, on the one hand, to face up to a past built on bribes, while, on the other hand,
seeking to remain in favour with some of the most corrupt regimes in the world.

Sumbe’s request that SBM share half the money received from BP sounded simple
enough, but it sent the $3.3 billion construction company, listed on the Amsterdam stock
exchange, into a spin. Without a written contract that entitled Sonangol or SII to those
funds, Chabas and the SBM legal team feared such a payment could look like a bribe.

Justifying the payment

SBM decided it needed to come up with a justification before handing over the funds — a
rationale that could be set out in a formal contract.

Whistleblower documents reveal executives explored multiple proposals, consulting with

three law firms and hiring corporate intelligence firm Kroll to carry out background
checks. Finally, a summary of the planned payment was sent to non-executives on SBM’s
audit committee for sign off.

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The result was a January 2012 contract, signed by Sumbe and Chabas, which, at first
glance, appeared to be one of the most polished and scrutinised agreements SBM had
contemplated in years.

But investigations by Finance Uncovered and its media partners have cast the agreement
in a different light.

One of the main justifications SBM put forward for its decision to pay SII was that the
Panamanian company was being reimbursed for money wasted on developing the Paenal
yard in preparation for BP’s oil platform order. But whistleblower documents show SII
did not incur any meaningful expenses at the shipyard; much of the costs were instead
financed by a loan from SBM.

SBM also argued that the money from BP ought to be evenly shared with SII because the
Dutch construction firm had regularly split joint venture income with Sonangol
companies in this manner since the 1990s. However, the Paenal yard was not a 50-50
joint venture. SBM and SII each had only one-third stakes in the holding company that
controlled Paenal. The remaining one-third was owned by Korean company Daewoo
Shipbuilding and Marine Engineering Co.

A spokesperson for DSME told Finance Uncovered she was unable to find evidence that
the Korean company knew of the $100 million from BP, or SBM’s plans to split it with SII.

As well as putting forward seemingly misleading justifications for the planned £35m
payments to SII, SBM appeared not to have heeded warnings contained in early legal
advice. For example, lawyers from Berwin Leighton Paisner, now part of Bryan Cave
Leighton Paisner, recommended SBM should take steps to ensure funds not reach
Sonangol or its executives.

One BLP lawyer wrote: “From the materials we have reviewed, it is not clear what (if any)
financial or other risk Sonangol itself has taken in connection with Paenal Yard which
would justify its receipt of any portion of the [BP cancellation fee].”

He added: “Absent a clear, contractual entitlement to these funds, any payment made to
Sonangol itself would risk being perceived (at best) as an unjustified ‘windfall’ and (at
worst) as a payment which may have some corrupt intent given the recipient, the power it
wields in Angola and the risk that these ‘windfall’ funds could be paid onwards to
government officials.”

Confronting the past

Days after Chabas signed the agreement to pay SII, SBM received news that plunged the
company into crisis. One of its customers, the U.S. gas company Noble Energy, had found
emails on a laptop suggesting that a former SBM sales executive, who had left years
earlier to set up a consultancy firm, knew about suspicious gifts which could amount to
bribes — and could be linked to SBM.

10/24
Worse still, discreet investigations by SBM’s legal department, codenamed “Project
Pandora”, quickly found that concerns raised by Noble were the tip of an iceberg. Bribery
at SBM was widespread. And one of the hotspots was Angola, where the inquiries
suggested SBM had channeled millions of dollars in bribes to Mardrill, one of the
Panamanian companies run by Sumbe.

Despite these revelations, however, Chabas appeared to see no reason to tear up SBM’s
contract with SII and break its promise to pay $35 million.

Secret audio recordings reveal how he pressed SBM’s general counsel and head of
compliance Jay Printz to ensure the money was swiftly wired to SII. During the fractious
meeting, Chabas said: “I thought this [the agreed payment to SII] was signed off … We
need to progress. I’m concerned about the relationship with Sonangol, so that’s something
we need to progress quickly.”

Printz, who taped the meeting, would quit SBM the following month.

On the recording, he is heard telling his boss: “I’m worried, you know, to be blunt, that …
you’re going to have a hard time doing the right thing, which could involve shutting down
a lot of business in Angola.

“I mean, these guys are going to have to stop being paid bribes, and they’re not going to
like that,” he said. In a later U.S. settlement with prosecutors, SBM would later admit it
had bribed at least nine Sonangol executives. Printz added: “And I know perfectly well
what’s going to unfold here.”

Three weeks later, the troubled lawyer drafted a resignation letter to Chabas in which he
complained of the “inappropriate resistance” he had encountered while leading Project
Pandora. “SBM is unlikely to comprehensively remediate its widespread bribery
practices,” he wrote. “I remain concerned that further offences are likely to be
committed.”

Finance Uncovered was unable to reach Printz or confirm that the draft resignation letter
was sent. After he left SBM, Chabas asked another member of the legal team, Jonathan
Taylor, to take over Project Pandora. Taylor also grew concerned and resigned two
months after Printz.

SBM’s payments to Mardrill would later feature in the settlement of criminal cases in the
United States and the Netherlands, which together cost the company $478 million. They
were also used as key evidence in the Swiss prosecution of Didier Keller, one of Chabas’s
predecessors as SBM chief executive.

By contrast, Chabas’s decision to authorise a $35 million SBM payment to SII has never
featured in a criminal case. In fact, prosecutors have mostly praised Chabas for his
cooperation and for the steps he took to clean up SBM’s culture of corruption.

SBM would later boast that remedial measures taken by the company in 2012 left it “the
white swan in a pitch-black pond.”

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When asked a series of questions about SBM’s dealings with Sumbe, and about payments
to the Panamanian companies he operated, Mardrill and SII, the Dutch construction
company declined to give specific answers.

Finance Uncovered and its media partners identified several similarities between SII and
Mardrill that might have given SBM cause for concern: both were registered to the same
address in Panama, though neither had operations in the country; both used accounts at a
bank in Portugal where Sonangol was the largest shareholder; and the two companies had
two directors in common.

Another warning sign that might have troubled SBM was the fact that the exact ownership
of both Mardrill and SII was shrouded in mystery. Though both companies presented as
part of the Sonangol empire, neither were named on a list of subsidiaries companies
published in Sonagol’s 2012 annual report. Meanwhile, filings at the Panama corporate
registry showed both were set up in the late 1990s with “bearer shares”.

Companies that issue bearer shares are popular with people looking to hide their control
of bank accounts and other assets. Such firms do not keep a register of shareholders,
instead granting ownership rights to the person — the “bearer” — in physical possession
of share certificates. The use of bearer shares has been restricted or outlawed in many
countries in recent years.

SBM said it had carried out additional inquiries into SII’s ownership in 2012 and was
eventually satisfied that it was owned by Sonangol. It did not respond to questions about
the ownership of Mardrill.

Sonangol also told Finance Uncovered that it is the owner of SII. This is confirmed in
Sonangol’s recent annual reports, where the Panamanian company is now listed as a
subsidiary company.

BP thrives in Angola

The trail of evidence running through the whistleblower documents raises questions not
just about decisions at SBM, but also about BP’s anti-graft efforts in notoriously corrupt
Angola, Africa’s second largest oil producer.

Finance Uncovered asked BP whether it knew that part of the cancellation fee it paid to
SBM was later promised to a secretive Panamanian company run by allegedly corrupt
Angolan official Sumbe. BP declined to answer directly, but hinted that it took no interest
in what SBM did with the money.

In a statement, it said: “BP paid the contractually required sum to settle the … liability to
SBM under the terms of the contract. It did not have any intention for, or control over, the
future use of the [cancellation fee] in the hands of the payee.” BP said the cost of paying
the fee was shared with co-investors in its Angolan operations.

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BP’s code of conduct suggests the company is committed to a more pro-active approach to
combating corruption. It says: “We do not tolerate bribery and corruption in any of its
forms in our business …. [W]e work to ensure our business partners share our
commitment.” As part of anti-corruption efforts, the code says, BP follows “counterparty
due diligence procedures,” though what these entail is not specified.

The fineprint of BP’s original contract with SBM contained clauses giving the British oil
giant the right to inspect SBM’s books and records if it became concerned that payments
had been used to fund bribes. Asked if it had exercised these inspection rights, BP
declined to answer. It said: “BP completely rejects any suggestion that it acted improperly
in the payment of the [cancellation] fee to SBM.”

Asked why, in 2011, it chose to abandon plans to build oil platforms at the Paenal yard, BP
said it had “encountered various technical and commercial challenges” at three deep
water reservoirs in Block 31, many miles out into the Atlantic Ocean, directly westwards of
the mouth of the Congo River.

It said the decision was taken collectively, with its consortium partners, and the cost of
cancellation was shared. BP said it had wanted to delay construction work at the Paenal
yard rather than cancel it, but SBM refused to grant a contract extension.

Not everything went badly for BP’s Angolan operations in 2011. In December that year,
BP signed a new deal with Sonangol that dramatically expanded its interests in Angola,
providing access to five new deep water exploration and production blocks covering
24,200 square kilometres. Soon after, BP described Angola as one of its four target
countries for investment and growth.

Finance Uncovered has seen is no evidence to suggest a connection between BP’s $100
million cancellation fee payment and the oil major’s transformative deal with Sonangol a
month later. For the avoidance of doubt, BP confirmed in a statement that no such
connection existed.

In 2012, BP began pumping oil from other Block 31 reservoirs, using a oil platform built
in Singapore by Modec, a competitor to SBM.

Sumbe’s Texas mansion

Records disclosed last year as part of the Swiss prosecution of former SBM chief executive
Didier Keller show, in detail, what happened to some of the corrupt payments the Dutch
oil platform company made to Mardrill.

Prosecutors described how, during a two and a half year period spanning 2006 to mid-
2008, $4.7 million was paid from an SBM bank account in London to an account owned
by Mardrill at Banco Comercial Português, now called Millennium BCP, in Lisbon,
Portugal.

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And during the same period, Mardrill made 45 transfers, totalling $2.9 million, from its
account at Millennium BCP to accounts controlled by Baptista Sumbe and his wife Rosa
Sumbe. Prosecutors said the couple made extensive personal use of this money.

Four years later, in May 2012, SBM whistleblower documents show, SII, like Mardrill,
requested money be sent to an account at Portuguese bank Millennium BCP.

Sumbe knew this bank especially well. Not only did the two Panamanian companies run
by him own accounts there, but Sonangol was the bank’s largest shareholder, with a stake
of 11 percent at the end of 2011.

In February 2012, Sumbe secured a seat on one of the Portuguese bank’s board
committees and by the end of the same year Sonangol had increased its stake in
Millennium BCP to more than 19 percent — welcome support for a bank struggling in the
face of the sovereign debt crisis gripping many European countries at the time.

Millennium BCP told Finance Uncovered it could not comment on specific customers, but
added: “In all cases, regardless of the bank’s possible relationship with the parties
involved in a transaction, Millennium BCP carries out its duties of analysis and reporting
of all entities and transactions with the same rigor.”

Another Sonangol executive who once sat on a Millennium BCP board committee was
Sumbe’s boss, Manuel Vicente, who served as president of Sonangol unitil January 2012.
Vicente was also a director of SII until 2014.

According to Swiss court documents, Vicente is alleged to have played an early role in
encouraging SBM to make payments to Mardrill. According to Keller’s evidence to Swiss
prosecutors, the SBM boss had initially attempted to resist pressure from Sumbe to start
paying Mardrill in 2001. Keller told prosecutors he thought it suspicious that Sumbe
wanted “commission” payments wired to a company set up in Panmana, so he queried the
scheme with Vicente. But Keller’s questioning was not well received, according to Swiss
court documents, and Vicente criticised him for not trusting Sumbe, his right-hand man.

After this uncomfortable episode, the Swiss court found, Keller knew the commission
payments were very likely bribes but authorised them nonetheless. The judge later gave
Keller credit for his admissions of guilt, and for cooperation with ongoing criminal
investigations, handing him a fine and a two-year suspended jail sentence.

Finance Uncovered’s efforts to contact Sumbe, who no longer works for Sonangol, were
unsuccessful. Similarly, Rosa Sumbe could not be reached. For many years, the couple
lived with their children at a $1.3 million mansion within the Royal Oaks Country Club
gated community in Houston, Texas. The large house has a swimming pool and views
over the 16th hole of the club’s golf course. In January this year, Rosa posted a picture on
Facebook which appears to show her and her husband at the Houston mansion,
suggesting the couple may still live in the area.

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Despite the Sumbes and Vicente being named in court proceedings in Switzerland, there
is no record of them ever being arrested or charged in relation to Mardrill payments. Nor
is there evidence that they personally benefited from funds belonging to SII.

Although the U.S. Justice Department has extensive powers to prosecute companies and
individuals responsible for paying bribes, there is currently no specific offence of
benefitting from corrupt payments. President Joe Biden’s administration is currently
looking to strengthen U.S. law in this area.

Vicente stepped down from Sonangol in January 2012 to start a political career, soon after
becoming Angola’s vice-president, a role he held until 2017. Though he remained a
director of SII until 2014, a spokesperson for Vicente said he had nothing to do with
activity at the company after moving into politics.

Sumbe’s controversial boss

Vicente is no stranger to corruption allegations. In 2010, Angolan anti-corruption

campaigner and journalist Rafael de Morais published a report alleging that a U.S. oil
exploration company called Cobalt International Energy had gone into partnership with a
front company secretly owned by Vicente and two other top Angolan officials. U.S.
authorities began investigating the matter in 2011, and the following year Vicente
confirmed his involvement to the Financial Times newspaper. Cobalt and Vicente denied
wrongdoing but the front company nevertheless ended its partnership with Cobalt. U.S.
investigations into the matter petered out.

Vicente was again linked to bribery allegations in 2017, this time in Portugal. The former
Sonangol boss was charged with corruption and money laundering after allegedly paying
€760,000 ($810,000) to a prosecutor for dropping an investigation into his dealings in
Portugal. After the investigation shut down in 2012, Vicente, who sat on the board of
Millennium BCP, allegedly asked a colleague at the Portuguese bank to offer the
prosecutor job, which he did.

In 2018, the former prosecutor was convicted of bribery offences and sentenced to six
years and eight months in jail. Vicente denied the charges, which were thrown out by an
appeal court after the Angolan government successfully intervened in court proceedings
and argued that the case against the country’s former vice-president should be referred to
prosecutors in Luanda.

Anti-corruption campaigners at Transparency International have expressed concern that

Angolan prosecutors may never take up the case against Vicente.

Under president João Lourenço, who came to power in 2017, Angola has been
aggressively pursuing allegations of past corruption linked to certain former Sonangol
executives — most notably Isabel dos Santos, daughter of former president José Eduardo
dos Santos. Some media articles allege that Vicente has enjoyed a more favorable
relationship with Lourenço, reportedly acting as one of the president’s advisers.

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In March this year, Dos Santos filed papers in a London court case alleging Lourenço is
pursuing a “personal vendetta” against her. The allegations are based on secret recordings
of Angola’s business and political establishment, including Vicente, which were made by
Israeli intelligence firm Black Cube, according to the court filing.

Black Cube is well known for deploying undercover private detectives to inveigle their way
into the confidences of unsuspecting individuals before secretly taping conversations. Its
most famous client was the former Hollywood film producer Harvey Weinstein, who hired
Black Cube as part of an unsuccessful effort to fight off accusations that he had used his
position to launch multiple sex attacks on women.

Taylor in limbo

Jonathan Taylor, the SBM whistleblower, is currently fighting extradition from Croatia.
He had travelled there on what was supposed to be a family holiday 10 months ago, but
has been prevented from leaving because of an extradition request from Monaco. He is
wanted for questioning over allegations of extortion in Monaco, where SBM’s head office
was formerly located. Taylor denies any wrongdoing.

* Written following a research collaboration with Edwin van der Schoot and Micael
Pereira

This article was first published by Finance Uncovered.

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Kenya: Institutionalised Theft and the High Cost of ‘Budgeted

Corruption’
Leaked data exposes loopholes in Kenya’s procurement process, enabling graft.

Published

1 week ago
on

August 13, 2021

By

Purity Mukami, Juliet Atellah, Kira Zalan and John-Allan Namu

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In June, Kenya’s President Uhuru Kenyatta announced a lofty goal: vaccinating the entire
adult population of 27 million against COVID-19 by the end of the year. But a long-time
problem –– the lack of functioning medical facilities throughout the country –– left many
skeptical.

The lack of clinics is not for want of spending.

In 2016, Kenya’s Ministry of Health paid over US$10 million to private companies to
deliver and install shipping containers repurposed as portable clinics, to improve
healthcare access for marginalised populations in the urban centers of Nairobi, Mombasa,
and Kisumu. For the next four years, the 100 containers sat near the Mombasa port while
government agencies investigated how an obscure Kenyan company won a hyper-inflated
contract to supply them.

Some time last year, the container clinics were moved from their storage place. Yet
journalists could only locate a handful of them, and not one is operational.

Kenyans are used to seeing procurement scandals in the news, stories about billions in
public funds paid to ghost companies for goods and services that never materialize. But
they rarely learn who is behind the schemes, or why they’re so common.

When OCCRP member center Africa Uncensored acquired a leak of 25,727 public
procurement records that spanned nearly four years and eight government agencies,
reporters set about digging through the data. They identified companies linked to public
officials, while seeking to understand the systemic loopholes that enable endemic fraud
and embezzlement in Kenya.

Procurement contracts are now “commonly referred to in Kenya as ‘budgeted

corruption,’” according to John Githongo, an anti-corruption activist and whistleblower,
who added that there have been no consequences for the political elite involved in the
plunder.

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“Unfortunately it has been a defining characteristic of the Jubilee (Party) regime, and very
sadly the health sector has been predated upon more than others,” he said.

The Jubilee Party did not respond to a request for comment on this story in time for
publication.

Public Officials Prosper

While Kenya’s Ethics and Anti-Corruption Commission has been pursuing the case of the
hyper-inflated, non-operational portable clinics for five years now, police have made no
arrests and no one in power has been officially implicated in the $10 million scheme.

“It is totally out of the question that they would get the contract without the involvement
or assistance of a public official. It just doesn’t work like that in Kenya,” said Githongo,
who blew the whistle on another public procurement embezzlement scheme in 2002,
which is still under investigation.

In the leaked data, reporters found previously undisclosed business links between the
obscure company that supplied the clinics, Estama Investment Limited, and public
officials, including a charity headed by Kenyan First Lady Margaret Kenyatta called
Beyond Zero. They also discovered two former members of parliament in the company
network, and a current lawmaker who is under investigation for money laundering in a
separate embezzlement scheme.

The director of Estama and Beyond Zero both declined to comment on the investigation.
The Ministry of Health did not respond to questions.

This isn’t the only suspect procurement process exposed in the leak.

An earlier investigation revealed that board members of a government corporation were

awarded tenders worth millions of Kenyan shillings related to the construction of two
dams, intended for one of Kenya’s most water-stressed regions. Reporters showed that
their companies continued to benefit even after being outed by Kenya’s Department of
Criminal Investigations.

In another, reporters identified two obscure companies belonging to a niece of a powerful

MP, Rachael Nyamai, who had oversight of the health ministry’s spending at the time the
contracts were awarded. The companies, which had no history of delivering medical
supplies, appear to have been paid $240,000 to do just that. One of the companies, Tira
Southshore, was also awarded a mysterious $43 million agreement to supply hand
sanitizer, according to the government’s procurement system. Reporters were unable to
confirm whether the money had been paid, and Nyamai declined to answer questions.

A separate investigation showed numerous contracts belonging to companies owned by

Frank Mithika Linturi, a controversial senator from Kenya’s Meru County (more on this
below).

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Kenya’s legal anti-corruption framework doesn’t ban public officials from doing business,
and has very broad standards for what could be considered conflict of interest when it
comes to public tenders. For example, a public official can hold shares in a company that
wins a government contract, but cannot have a controlling interest.

“They played around with the law quite interestingly,” said Harriet Wachira, a program
coordinator at Transparency International-Kenya, referring to the loopholes enshrined in
the 2013 Leadership and Integrity Act.

There are several efforts now underway that would strengthen the legal framework
around conflict of interest and other corrupt practices. Last year, Kenyan authorities
started collecting beneficial ownership information, which will be accessible to law
enforcement agencies. Senator Farhiya Ali Haji recently introduced lifestyle audit
legislation that would target unexplained wealth. And the Attorney General’s office is
actively reviewing a draft bill that would significantly strengthen conflict of interest
standards, according to a 2019 version seen by Transparency International-Kenya.

“If all these laws come together the anti-corruption landscape would change completely,”
said Wachira. “It would make very serious strides in sealing the loopholes.”

Middleman Money

A peculiar phenomenon of Kenya’s procurement system is the awarding of contracts to

companies that don’t produce the goods they promise to deliver, and have no track record
of providing the services required. Inexplicably, they are paid by government agencies to
procure goods and services from other companies.

This was the case with Estama, which purchased the shipping containers from a Chinese
company, as well as the two companies owned by Nyamai’s niece, neither of which
produce the medical supplies they were paid for.

It was also a red flag in the controversial $630 million Managed Equipment Service
government project that was meant to get much-needed medical equipment to Kenya’s 47
counties. Using the leaked data, Africa Uncensored revealed that the government paid
obscure Kenyan companies to procure the medical equipment from foreign suppliers.

Linturi, the controversial senator, is linked to at least 14 companies, whose services range
from insurance to pharmaceuticals to furniture supply. One of his companies, Atticon
Limited, which started as a construction firm, was awarded a $1.1 million contract by the
Office of the Deputy President in 2016 to supply honorary medals.

Former employees told reporters that the senator’s company received the inflated
contract and then procured the medals from Dubai. They also said the senator employed
fraudulent tactics to win the tender, using multiple companies he owned to bid against
each other, creating an illusion of competition.

Linturi, who did not respond to questions from reporters, was briefly detained, reportedly
on fraud charges, three weeks after the Africa Uncensored investigation was published.

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The issue of middleman companies winning public tenders “for things that they’re not
remotely qualified for, or have the capacity to supply” is “something that we have seen
over and over again,” said TI-Kenya’s Wachira, citing various procurement scandals,
including recent headline-grabbing stories about COVID-19 supplies fraud.

Current regulations require the awarding agency to do due diligence on the companies
bidding for tenders, but there is no independent oversight or enforcement, according to
Wachira.

In the case of the honorary medals, Linturi used multiple companies to bid on a tender
from an office where his romantic partner was the chief of staff. Mariane Kittany told
reporters that it’s possible he used their relationship to influence the tender.

“If you really want to award the work to a friend of yours there is no law that they can
come after you with, to say that this person has no capacity,” said Wachira. “Legally there
is no penalty for not conducting due diligence.”

‘Blanket’ Purchasing Powers

The majority of questionable contracts reporters identified in the leaked data were so-
called “blanket purchase agreements,” which are typically reserved for trusted vendors
who provide recurring supplies such as newspapers and tea, or services such as office
cleaning.

But blanket purchase agreements in Kenya appear to provide fast and vague transactions,
with minimal scrutiny.

“A blanket agreement is something which should be exceptional, in my view,” said

Kenya’s former Auditor-General, Edward Ouko.

The leaked data lists more than 2,000 such agreements, however, committing about $1.7
billion to non-competed, single-supplier contracts in the span of 42 months. Among these
were the contracts awarded to Nyamai’s niece, and the inflated contract to Estama for
portable clinics.

“Procurement laws require that BPAs [blanket purchase agreements] be used in very
selective circumstances,” said Kwame Owino, a Kenyan policy expert. “These contracts are
kept out of the public space so we can’t see whether the price is reasonable.”

Leaked data analysis indicates that the Ministry of Health has issued more blanket
purchase agreements during public health emergencies, such as the Ebola outbreak in
2015.

An audit of contracts awarded during the 2020 COVID-19 pandemic also concluded that
the Kenyan Health Ministry’s procurement agency engaged in multiple irregular
procurement methods, including issuing retrospective single-source contracts, and
choosing companies with no history or qualifications.

Steering the Software

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In July, Kenya’s Auditor General Nancy Gathungu and Controller of Budget Margaret
Nyakang’o appeared before the senate to confirm yet again what has been flagged by
watchdogs for years: The government’s procurement software system is prone to “fraud,
error and non-disclosure of revenue.”

Gathungu went further, alleging that the Integrated Financial Management System
(IFMIS) is manipulated “deliberately to hide information” from auditors at the close of
the financial year.

Nearly two decades after IFMIS was implemented in Kenya to improve efficiency and
reduce corruption in public procurement, the system that was championed by President
Kenyatta in his previous position as head of Treasury, as well as the World Bank, has
become an efficient vehicle for the theft of public funds.

Red flags raised by a previous auditor general identified numerous problems with the
system that could be exploited by unscrupulous procurement employees and ministry
officials. As early as 2016, auditors found duplicates of the same vendor, each potentially
with a different bank account, duplicate and ghost login IDs, and remote access for some
system users.

Reporters’ analysis of the leaked data also revealed problematic patterns, like people
accessing the system outside of working hours, as well as hundreds of duplicate
transactions.

Last year, the government quietly moved to overhaul IFMIS, according to TI-Kenya’s
Wachira, who follows the developments on the civil society side. Advocates say there’s
been a notable shift at the National Treasury on anti-corruption efforts since 2019, when
its former leadership was dismissed in connection with a procurement scandal.

It’s unclear when the overhaul will be completed, and the results of a re-engineered
procurement portal remain to be seen. Ironically, the tender awarded to a consortium of
companies for technical work on IFMIS is being challenged as an unqualified supplier.

As always in Kenya, a lot will depend on political will –– the “soft system” as the World
Bank calls it –– to use the software without corrupt intentions.

“There is a human element to the system,” Kenya’s previous top auditor Ouku told
reporters. “If the human element is also not working as expected then the system cannot
be perfect.”

This article was originally published by the Organised Crime and Corruption Reporting
Project (OCCRP)

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Tigray Conflict: What Happened to Ethiopia?
The ongoing displacement and killings of minorities and the ongoing war in Tigray—
labeled by the federal government as enforcing law and order—are disturbing. It can’t go
on.

Published

1 week ago
on

August 13, 2021

By

Serawit Bekele Debele

The recent goings-on in Ethiopia, particularly those of the last few months, have left many
puzzled as to what exactly happened to the Ethiopia of 2018—an Ethiopia that promised
major political transformations and even took a handful of steps to that effect.

Both the ongoing displacement and killings of minorities in regions such as Oromia,
Amhara, and Beneshangul-Gumuz and the ongoing war in Tigray—labeled by the federal
government as enforcing law and order—are disturbing. Toward the end of 2020, the
federal government started waging what it startlingly called a “law enforcement
operation” in the Tigray region, branding the Tigray People’s Liberation Front (TPLF), the
leading partner in the ruling Ethiopian People’s Revolutionary Democratic Front
(EPRDF) between 1988 and 2018, as “a criminal organization and vowing to destroy it.”

From media coverage of the events, we have learned that some veterans of TPLF were
caught and brought to court while others were killed. The hunt and its accompanying
promise to bring the perpetrators to justice continues today; both the war and the legal
procedures of those who have been caught are still ongoing at the writing of this post. The

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humanitarian crisis and the danger of famine in Tigray have become alarming to the
international community, while the Ethiopian government seems to turn a deaf ear to
humanitarian pleas and pressure.

One wonders where we got it wrong while actually trying to right the sociopolitical ills
that the country has inherited from a troubled federal experiment and authoritarian rule
since 1991, and a violent imperial history that preceded it.

If we take a closer look at Ethiopia’s political history, particularly in its moments of

transition, a familiar pattern of relying on the criminal justice system to solve political
problems can easily be detected. For instance, in November 1974, upon seizing power, the
Derg (then provisional military government) ordered the killing of 60 high-ranking
officials who served in the monarchy. They justified this action by labeling the individuals
as criminals as attested to by a statement from the provisional military council.

“The executions,” the council said, “were a political decision taken to mete out justice to
those officials of the previous government who had thrived on corruption,
maladministration and a “divide and rule” policy.” The Derg also decreed that the rest of
the detainees would be tried in a military tribunal. A new government, led by the
TPLF/EPRDF, came to power after ousting the Derg in 1991. Again, the regime resorted
to the language of law. The first step the EPRDF took was to hunt the perpetrators and
bring them to court. These events, which journalist John Ryle described as “the first large-
scale human rights trial of recent times,” unfolded on a grand scale: the entire former
leadership of the country was under indictment for genocide and crimes against
humanity.

On both the discursive and practical levels, there is continuity between these three events.
The criminalization of political problems and the attempt to solve them through the court
system is a consistent trait of these moments of transition. All three mobilize the law; with
a particular commitment to preserving a preexisting law. They believe in the courtroom—
which, ironically, they control—to deliver justice. By this account, justice for victims partly
depends on the removal of those who are now defined as perpetrators from the political
realm, because they are reduced to being criminals, not political actors with
constituencies. Only the victors are legitimate political actors; they claim to mete out
justice and are thereby absolved of any responsibility for partaking in the violence. All
three regimes in post-imperial Ethiopia, sideline the main issue—that is, the unresolved
political problems—while relying on the seeming universality and neutrality of the law.

Resorting to the criminal justice system instead of seeking political solutions through the
intricacies of the political process justifies further violent actions in the interest of
maintaining law and order. As a result, the political goes unscrutinized and the victors
simply operate within the existing structure instead of introducing more profound
change.

This simply shows that—as Mahmood Mamdani cautions in his new book, Neither Settler
nor Native: The Making and Unmaking of Permanent Minorities—a “Nuremberg Trial”
inspired approach to solving politically driven violence is inadequate. The courtroom in

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fact reinforces the vicious cycle of violence by dichotomizing political communities as
either victims or perpetrators, thereby defining new enemies. Most of the sociopolitical
and economic problems that necessitated the change, such as the quest for democracy,
equality, freedom, respect of human rights, and economic development, remain largely
unaddressed.

Unless Ethiopia is willing to give a new way of resolving political differences a chance, the
vicious cycle of violence will continue unabated. As Mamdani suggests, there has to be
room and preparedness to change rules and to be open to new political orders. Relying on
the courtroom to solve political problems only serves the interests of those in power, and
helps them maintain their position by creating enemies around which they can galvanize
popular support. For instance, TPLF has now become the new criminal group; it makes
perfect sense, then, for the government and its supporters to withdraw protection from
civilians in Tigray and elsewhere who have been victimized in the name of restoring law
and order. Collateral damage is the language used to explain atrocities on civilians.
Conducting performative politics such as elections elsewhere in the country while framing
the conflict in Tigray as a “law and order” issue will not address the deep seated problems
Ethiopia is confronted with.

This post is from a partnership between Africa Is a Country and The Elephant. We will
be publishing a series of posts from their site once a week.

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