The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth

Vicente’s position was essentially the same as Cobalt’s: if there was anything untoward in the oil deal, they were ignorant of it. Vicente told me that he knew Joe Bryant ‘very well’. Their relationship had stretched back years beyond the formation of Cobalt to when Bryant worked for Amoco, an American oil company that merged with BP in 1998. That relationship, it seemed to me, might have provided a simple way to check whether Vicente and his friends secretly owned stakes in Nazaki. Bryant could just have asked Vicente whether the rumours were true. I asked Vicente: Did you and Bryant ever discuss the matter? ‘No,’ he said.

Alongside their personal stakes in the oil business, the members of the Futungo ensure that the oil revenues that accrue to the Angolan state are deployed to serve the regime’s purposes. Angola’s 2013 budget allocated 18 per cent of public spending to defence and public order, 5 per cent to health, and 8 per cent to education. That means the government spent 1.4 times as much on defence as it did on health and schools combined. By comparison, the UK spent four times as much on health and education as on defence. Angola spends a greater share of its budget on the military than South Africa’s apartheid government did during the 1980s, when it was seeking to crush mounting resistance at home and was fomenting conflict in its neighbours.19

Generous fuel subsidies are portrayed as a salve for the poor, but in truth they mainly benefit only those wealthy enough to afford a car and politically connected enough to win a fuel-import licence. Angola’s government has ploughed petrodollars into contracts for roads, housing, railways and bridges at a rate of $15 billion a year in the decade to 2012, a huge sum for a country of 20 million people. Roads are getting better, railways are slowly snaking into the interior, but the construction blitz has also proved a bonanza for embezzlers: kickbacks are estimated to account for more than a quarter of the final costs of government construction contracts.20 And much of the funding is in the form of oil-backed credit from China, much of which is marshalled by a special office that General Kopelipa has run for years. ‘The country is getting a new face,’ says Elias Isaac, one of Angola’s most prominent anticorruption campaigners. ‘But is it getting a new soul?’21

Manuel Vicente was keen to correct the impression that Angola’s rulers have abdicated their duties toward their citizens. ‘Just to assure you, the government is really serious, engaged in combating, in fighting the poverty,’ he told me.22 ‘We are serious people, we know very well our job, and we know very well our responsibility.’ Talking with him, I had no doubt that there was some part of Vicente that wanted to better the lot of his compatriots, or at least to be seen to be trying to do so. ‘I’m a Christian guy,’ he said. ‘It doesn’t work if you are okay and the people around have nothing to eat. You don’t feel comfortable.’

There are two solutions to that problem: share some food or dump the hungry out of sight. The Futungo’s record suggests it favours the latter.

António Tomás Ana has lived in Chicala since 1977, before new arrivals fleeing the civil war in the interior turned what had been a sleepy fishing settlement into the profusion of humanity it is today, sandwiched between the ocean and the slopes rising up to the presidential complex. Better known as Etona, he is one of Angola’s foremost artists. At an open-air workshop walled with breezeblocks, his assistants chip away at acacia trunks with chisels and mallets. One of his trademark sinewy wooden sculptures graces the lobby at Sonangol headquarters.

Among Etona’s sixty-five thousand neighbours in Chicala are military officers and a professional photographer who brings in $5,000 a month, which does not go far in ultra-costly Luanda but has allowed him to build up the corrugated-iron shack he bought twenty-five years ago into the angular but solid edifice around which his grandchildren gallivant today. In June 2012 that house, like Etona’s workshop and the community library he is building, were, along with the rest of Chicala, scheduled to be flattened – and not, this time, by the ocean.

Given the choice, few people would choose to live with Chicala’s meagre amenities and opportunities. The ruling party promised electricity during the 2008 election campaign, but little arrived, and not much had come of the latest pledge, made in the run-up to the 2012 polls, to provide piped water. But places like Chicala are communities, with their own ways and their own comradeship. An estimated three in every four of Luanda’s inhabitants, out of a total population of between 5 and 8 million, live in slums known as musseques. Although conditions in some, like the precarious settlement on top of a rubbish dump, are dire, Chicala and other central musseques have their advantages. Work, formal or informal, is close at hand in Luanda’s commercial districts.

Etona spends a lot of time thinking about the betterment of a slum he could easily have afforded to leave. ‘Regeneration is not about roads and sidewalks – it’s in the mind,’ he told me when we met at his workshop, his red shirt pristine despite the afternoon heat.23 ‘This,’ he said, waving an arm at the bustling slum, where nearby youngsters were furiously duelling at table football, ‘this is also part of the culture, part of the country.’ But Chicala’s days were numbered. Its inhabitants were to be relocated, whether they liked it or not, to new settlements on the outskirts of Luanda. A new luxury hotel and the gleaming offices of an American oil company had risen on the fringes of Chicala, harbingers of what was to take the neighbourhood’s place. A beach that once buzzed with fish restaurants and bars had been fenced off, ready for the developers.

The Chicala residents I spoke to regarded the authorities’ promises of a better life elsewhere with deep suspicion. About three thousand had already been shipped off, some rounded up by police and packed with their belongings into trucks, any objections ignored. The government has been willing to use force to cleanse the slums, deploying troops by helicopter to conduct dawn evictions.24 But Etona, for one, intended to resist when his turn came. ‘If we don’t speak out, we will be carried off to Zango.’

Zango lies just over 20 kilometres south of central Luanda, where the capital’s sprawl thins out, giving way to the ochre scrub of the bush. Like a matching settlement to the north, it is supposed to represent a new beginning for Angola’s slum-dwellers. To listen to officials, Zango is the promised land. ‘We are moving them to more dignified accommodation,’ Rosa Palavera, the head of the poverty reduction unit in the presidency, told me.25 ‘There are no basic services [in Chicala]. There is crime.’

Even if one overlooks the official neglect that lies behind the lack of amenities in Chicala, Zango is hardly preferable. Those who moved to Zango were lucky if they found basic services merely on a par with those they had left behind.26 Sometimes the new houses were even smaller than the old ones. In aerial photographs the new settlements looked like prison camps, with their squat dwellings arranged in unvarying rows. Shacks that were far more rickety than anything in Chicala had sprung up too. Those who tried to make a go of it by commuting back from Zango into the city each departed well before dawn and returned at midnight, scarcely leaving enough time to sleep, let alone see their children. Other new arrivals simply went straight back to Chicala, a daring move given that the slum lies within the purview of the military bureau run by General Kopelipa, the feared security chief.

On the drive from Zango back toward the centre of Luanda, the road crosses the invisible frontier that separates the majority of Angolans from the enclave of plenty that the petro-economy has created.

The gleaming new settlement at Kilamba was constructed from scratch by a Chinese company at a cost of $3.5 billion. The guards on duty at the gates adopted an intimidating strut as we drove toward them down the long, curving driveway. They let my companions and me through in exchange for the price of a bottle of water. Inside the atmosphere was eerie, reminiscent of one of those disaster movies in which some catastrophe has removed all trace of life. Nothing stirred in the dry heat. Row after parallel row of gleaming, pastel-coloured apartment blocks between five and ten storeys high stretched to a vanishing point at the horizon, tracked by manicured grass verges and pylons carrying electricity lines. The roads were like silk, the best in Angola. Outside the most affluent parts of South Africa, particularly the gated communities known to their more poetic detractors as ‘yuppie kennels’, I had seen nothing in Africa that looked anything like Kilamba.

The newly completed units were for sale for between $120,000 and $300,000 apiece to those rich enough to escape the crush of central Luanda. The first residents of Kilamba’s twenty thousand apartments were said to have moved in, but there was no sign of them. About half of Angola’s population live below the international poverty line of $1.25 a day; it would take them each about 260 years to earn enough to buy the cheapest flat in Kilamba.27 The prices came down after an official visit by the president, but nonetheless only the wealthiest Angolans could afford to live there.

Teams of Chinese labourers in blue overalls and hard hats trundled into view in pickup trucks. Like other Chinese construction projects in Africa, Kilamba was built with Chinese finance and Chinese labour, and it formed part of a bigger bargain that ensured Chinese access to natural resources – in this case, Angola’s oil. The Chinese and Angolan flags fluttered above Kilamba’s entrance. This was a flagship project for China’s undertaking in Africa: Xi Jinping toured the site while it was under construction in 2010, three years before he ascended from the Chinese vice presidency to the presidency. A vast billboard proclaimed that Citic, the Chinese state-owned conglomerate whose operations span banking, resources and construction, had built the new town. Oversight of the construction had been assigned to Sonangol, which subcontracted the management of the sales of apartments to a company called Delta Imobiliária. Delta was said to belong to the private business empire of Manuel Vicente and General Kopelipa. Both men were perfectly placed to use the power of the public office to dispense personal gain for themselves, just as they had been assigned concealed stakes in Cobalt’s oil venture. Kilamba was, in the words of the Angolan campaigner Rafael Marques de Morais, ‘a veritable model for African corruption’.28

Hexplosivo Mental raps with intensity – brow furrowed, left hand gripping the microphone, right hand chopping through the air. Like Public Enemy and other exponents of protest rap before him, he makes it his business to attack the abuses of the mighty. A rangy figure in a hoodie, he gives loud and lyrical voice to dissent in Angola that had long been mostly whispered, exhorting a counterpunch against the ruling class’s monopoly on wealth and power with tracks like ‘How It Feels to Be Poor’, ‘Reaction of the Masses’, and ‘Be Free’.

One Tuesday in May 2012 a group of ten young Angolans gathered at the Luanda home of one of a new generation of politically conscious rappers. Hexplosivo Mental was among them. They had been involved in organizing the small but concerted demonstrations that had rattled the regime. In the vanguard of protest against the Futungo’s power, the group had had brushes with the authorities before, notably when the police dispersed their demos.

This was not the first time the house had been raided. But the band of fifteen men who turned up at just after ten that night wanted to teach the dissidents a more serious lesson.29 Elections at which dos Santos planned to ensure a thumping victory were three months away, and the deployment of oil money alone would not be enough to neutralize public displays of opposition to his rule. Bursting through the door, the men bore down upon their victims with iron bars and machetes, breaking arms, fracturing skulls and spilling blood. Their work done, they zoomed away in Land Cruisers. One account of the attack alleged that the vehicles belonged to the police – evidence that the assailants were part of one of the pro-regime militias whose task was to instil fear ahead of the polls.

No one died that night, but when I spoke to Hexplosivo Mental weeks later, his badly injured arm was still being treated. We arranged to meet discreetly at a busy roundabout in Luanda. I waited thirty minutes or so before he called to say he had had to go back to the hospital. When he spoke later by phone the young rapper put it simply: ‘Before, we did not know how to protest. Now we are growing.’

There were some serious anti-government demonstrations in the run-up to the elections, but if Hexplosivo Mental and his comrades hoped to mount a challenge to an entrenched regime on the scale of the Arab Spring revolutions that had erupted far to the north, they did so in vain. The amount of official funding available to political parties was slashed from $1.2 million in the legislative elections of 2008 to $97,000. Meanwhile, the MPLA was said to have spent $75 million on its campaign.30

The MPLA has genuine support, especially in the coastal cities that were its bastion during the war and among those Angolans so traumatized by the conflict that they see a vote for any incumbent, no matter how venal, as the option that carries the smallest risk of a return to hostilities. The regime leaves little to chance, dominating the media, appointing its stooges to run the institutions that conduct elections, co-opting opposition politicians, and intimidating opponents. Kopelipa presided over an electoral apparatus that left 3.6 million people unable to cast their ballots – almost as many votes as the MPLA received.31 The MPLA’s share of the vote fell nine points compared with the 2008 election, but it still recorded a landslide victory, with 72 per cent. Under a new system the first name on the winning party’s list would become president. More than three decades after he took power, dos Santos could claim he had a mandate to rule, despite the findings of a reputable opinion poll that showed he enjoyed the approval of just 16 per cent of Angolans.32

In August 2014, three years after the US authorities had begun their corruption investigation into its Angolan deal, Cobalt issued a statement revealing that the Securities and Exchange Commission had given notice that it might launch a civil case against the company.33 ‘The company has fully co-operated with the SEC in this matter and intends to continue to do so,’ Cobalt announced. Joe Bryant called the SEC’s decision ‘erroneous’ and said Cobalt would continue to develop its Angolan prospects. At the time of writing no proceedings have been brought, and Cobalt continues to deny wrongdoing, as it has throughout. Cobalt’s share price, which took a billion-dollar hit after news of its secret Angolan partners emerged and declined even further after some mediocre drilling results, fell another 10 per cent when the SEC’s warning emerged.

Cobalt’s founders have already turned a tidy profit. Between February 2012, when Cobalt revealed that it was under formal investigation, and that April, when Kopelipa and Vicente confirmed to me that they and Dino held stakes in Nazaki, Joe Bryant sold 860,000 of his shares in the company for $24 million. Between the start of the corruption investigation and the end of 2013 – during which period Cobalt also struck oil in the Gulf of Mexico – Goldman Sachs, a joint Riverstone-Carlyle fund, and First Reserve, another big American private equity firm, each made sales of Cobalt stock worth a net $1 billion.34

I tried to find out who had taken over the stake in Nazaki that, according to Vicente, he, Kopelipa, and Dino had ‘liquidated’ as well as whether their business associates were still shareholders, but neither the trio nor the company itself would tell me. In February 2013 Nazaki transferred half its interest to Sonangol, the state oil company. The official journal did not disclose the size of any fee that Sonangol paid for the stake, but bankers’ valuations indicated it was worth about $1.3 billion, at least fourteen times the amount Nazaki would have been expected to pay in development costs up to that point.35 If any fee was paid, it represented a transfer of funds from the coffers of a state where the vast majority live in penury to a private company linked to the Futungo. Then, in 2014, three weeks after Cobalt disclosed that it was facing possible proceedings by the SEC, the company announced it had severed ties with Nazaki and with Alper, whose ownership remains undisclosed. Both companies transferred their stakes in Cobalt’s venture to Sonangol. Again, none of the parties involved revealed what, if any, fees were paid.36

Cobalt is just one among dozens of companies vying for Angolan crude, and Nazaki was but a single cog in the Futungo’s machine for turning its control over the state into private gain.

Just before Christmas 2011, as Manuel Vicente was preparing to hand over the reins of Sonangol to his successor and with the expenses of the following year’s election looming, seven international oil companies snapped up operating rights to eleven new blocks in the Atlantic. The acreage was in the ‘presalt’ zone, where Cobalt was already exploring. As in previous bidding rounds in Angola and elsewhere, the companies agreed to pay signature bonuses. These are upfront payments that oil companies make to governments when they win rights to explore a block, often through auctions. The payments are perfectly legal, though frequently the amounts paid are not disclosed. If they were delivered on the sly to officials, such payments would be called bribes; instead, they are deposited in the leaky treasuries of oil states.

Any Angolans curious to know how much their government had brought in from the auction would be disappointed. Mindful that in 2001 BP had been threatened with ejection after it announced plans to publish some details of its Angolan contracts, the oil companies kept the terms of the bonuses safely shrouded. Norway’s Statoil made something resembling a disclosure. It said its total ‘financial commitment’ for two oil blocks, where it would be the operator of the project, and working interests in three other blocks came to $1.4 billion, ‘including signature bonuses and a minimum work commitment’. The regime’s overall take from the whole bidding round would have been a multiple of that figure.

Both the Futungo’s business ventures and the state institutions’ activities are kept within a fortress of secrecy, so much so that Edward George, an Angola specialist who has studied dos Santos’s rule for many years, calls the regime a ‘cryptocracy’ – a system of government in which the levers of power are hidden.

When I met Isaías Samakuva at a London hotel one afternoon in early 2014 he had been the leader of Unita, today Angola’s main opposition political party, for more than a decade. Samakuva has spent his life fighting a losing battle, but he remains eloquent and composed. He had been posted in London as Unita’s representative in the 1980s and had come back to see family and try to lobby against what he saw as Western powers’ readiness to cosy up to dos Santos in order to safeguard their companies’ access to Angolan oil. ‘The international community itself protects these guys,’ Samakuva told me, sipping a cup of tea.37 ‘Their money is not actually in Angola. They deal with the banks in Portugal, in Britain, in Brazil, the United States. The only explanation that we can find is that they have the blessing of the international community.’

The eruptions of the Arab Spring were giving dos Santos the pretext to tighten security still further, Samakuva went on. ‘Dos Santos is so entrenched in power that he won’t allow what happened in Egypt.’ Samakuva added, ‘We have to have real peace, not just for them and their interests.’

Samakuva does not doubt that the key to the Futungo’s survival lies in the shadowy structures of the oil industry. ‘There’s no separation between private and state,’ he said. ‘There’s no transparency. No one knows what is the property of Mr dos Santos and his family.’ I asked him about one particular company. ‘I think it is the key to all the support that is given to Mr dos Santos, to his rule.’ How can one company provide such vital support, I asked. ‘We can only speculate. Everything is in the dark.’

The company Samakuva was talking about operates from the golden Luanda One tower. It is the sister company to China International Fund, whose flag flies above the entrance and which has raised billions for infrastructure projects under undisclosed terms, among them an expansion of Kilamba.38 Cobalt, Nazaki and other oil groups have offices on the lower levels, but the top floors are reserved for the company that Samakuva had in mind – China Sonangol. Since 2004 China Sonangol has amassed stakes in a dozen Angolan oil ventures, including some of the most prolific, as well as a slice of the country’s richest diamond mine. Sonangol, the state oil company that is the Futungo’s financial engine, owns 30 per cent of China Sonangol. The remainder belongs to the band of Hong Kong-based investors that is known as the Queensway Group and is fronted by a bearded, bespectacled Chinese man called Sam Pa.

2

‘It Is Forbidden to Piss in the Park’

IT IS HARD to imagine a place more beautiful than the east of the Democratic Republic of Congo. The valleys are a higher order of green, dense with the generous, curving leaves of banana plants and the smaller, jagged ones of cassava shrubs. The hillsides are a vertiginous patchwork of plots. Just before dusk each day the valleys fill with a spectral mist, as though Earth itself had exhaled. The slopes drop down to Lake Kivu, one of the smaller of central Africa’s great lakes but still large enough to cover Luxembourg. On some days the waters lap serenely; on others, when the wind gets up, the lake turns slate-grey and froths. At the northern shore stand the Virunga, Lake Kivu’s crown of volcanoes.

Beneath the beauty there is danger. From time to time the volcanoes tip lava onto the towns below. Cholera bacteria lie in wait in Lake Kivu’s shallows. Deeper and more menacing still are the methane and carbon dioxide dissolved in the water, enough to send an asphyxiating cloud over the heavily populated settlements on the shores should a tectonic spasm upset the lake’s chemical balance.

But there is something else that lies under eastern Congo: minerals as rich as the hillsides are lush. Here there are ores bearing gold, tin and tungsten – and another known as columbite-tantalite, or coltan for short. Coltan contains a metal whose name tantalum is derived from that of the Greek mythological figure Tantalus. Although the Greek gods favoured him, he was ‘not able to digest his great prosperity, and for his greed he gained overpowering ruin’.1 His eternal punishment was to stand up to his chin in water that, when he tried to drink, receded, and beneath trees whose branches would be blown out of reach when he tried to pluck their fruit. His story is a parable not just for the East but for the whole of a country the size of western Europe that groans with natural riches but whose people are tormented by penury. The Congolese are consistently rated as the planet’s poorest people, significantly worse off than other destitute Africans. In the decade from 2000, the Congolese were the only nationality whose gross domestic product per capita, a rough measure of average incomes, was less than a dollar a day.2

Tantalum’s extremely high melting point and conductivity mean that electronic components made from it can be much smaller than those made from other metals. It is because tantalum capacitors can be small that the designers of electronic gadgets have been able to make them ever more compact and, over the past couple of decades, ubiquitous.

Congo is not the only repository of tantalum-bearing ores. Campaigners and reporters perennially declare that eastern Congo holds 80 per cent of known stocks, but the figure is without foundation. Based on what sketchy data there are, Michael Nest, the author of a study of coltan, calculates that Congo and surrounding countries have about 10 per cent of known reserves of tantalum-bearing ores.3 The real figures might be much higher, given that reserves elsewhere have been much more comprehensively assessed. Nonetheless, Congo still ranks as the second-most important producer of tantalum ores, after Australia, accounting for what Nest estimates to be 20 per cent of annual supplies. Depending on the vagaries of supply chains, if you have a PlayStation or a pacemaker, an iPod, a laptop or a mobile phone, there is roughly a one-in-five chance that a tiny piece of eastern Congo is pulsing within it.