Deloitte Angola: Auditing and Conflict of Interest

Elections in Angola are only three months away. More attention needs to be given to how they will be carried out, if the processes of voting and counting are to respect the will of the people. In order for citizens to be better informed, the electoral process deserves a deeper and more independent discussion, one which goes beyond official statements and the claims of the opposition.

The most recent and significant event in the run-up to elections has to do with the Territorial Administration Ministry’s (MAT) handing over of the Electoral Register Central Database (FICRE) to the National Electoral Commission (CNE) on 15 May. FICRE contains the details of more than 9.7 million voters.

According to the Law on General Elections, the transfer of custody and management of FICRE, which contains all the data related to the electoral process, “is preceded by an audit to be performed by an independent specialised entity contracted by the National Electoral Commission”.

At a press conference, the Minister of Territorial Administration took great delight in having complied with the law, stating that “we did not want to miss this deadline and we complied with this legal requirement”.

Meanwhile, despite the formalities, the MAT is still continuing to work on the electoral register database because, according to sources at the CNE, there are two million voters whose data needs updating, including deceased voters requiring deletion. Other necessary work relates to the closing of several dozen voting stations where the number of registered voters is less than 100, and the transfer of these voters to other nearby stations.

Therefore, even if the minister met the deadline to hand over the database to the CNE on May 15, the audit did not take place as legally required before the handover. It was only on May 2, less than two weeks before the formal handover ceremony, that the CNE plenary “defined the requirements for the company that will be contracted to carry out the audit” of FICRE. Speaking to the press after that meeting, the CNE’s spokeswoman, Júlia Ferreira, spoke ambiguously of the “pressure of time” surrounding the selection of the firm to carry out the audit, which would then have to present the auditor’s report by May 12.

However, the law requires that the CNE, like any public institution, put all its business contracts to public tender. According to information received by Maka Angola from members of the CNE plenary, “there was no public tender for choosing the auditing company, and the CNE commissioners were unaware of the contracting process”.

Another source confirms that at the CNE’s fifth ordinary session on May 3, the then president of the CNE, Suzana Inglês, informed that she had taken the initiative of identifying five firms to carry out the audit, and read out their names: Deloitte, Ernst & Young, KPMG, PWC and Tawer.

To the commissioners’ surprise, Suzana Inglês then told them that she had chosen Deloitte to carry out the audit. By law, this decision ought to have been taken in a collegial manner and put to a vote by the commissioners, following a public tender process that in fact never occurred.

The CNE spokeswoman justified this decision by telling the press that Deloitte had been chosen on the basis of having presented “a more favorable budget”, adding that “we have done well to appoint a company that had recognition, that had some renown and credibility, not only at a national but also at an international level”. She also stated that the other companies that had been contacted had been shown to be incapable of carrying out the audit.

The way in which the executive and the CNE blatantly broke the laws governing the preparation for elections adds to suspicions generated by the lack of transparency in the process. The choice of Deloitte in turn reveals insider connections that threaten the credibility of this international company, as the rest of this article will show.

What is Deloitte?

Deloitte & Touche has operated in Angola since 1997, as an affiliate of the Portuguese-based Deloitte & Associados, S.A., which in turn is part of the multinational Deloitte Touche Tohmatsu Limited, based in the United Kingdom.

Last year Deloitte created the Sirius prizes to honor best management practices in Angola. As chairman of the jury for the prize, Deloitte appointed Manuel Nunes Júnior, the secretary for economic affairs of the MPLA’s Political Bureau and a member of parliament. Also appointed to the jury were the chairman of the board of the Institute for Public Sector Business, Henda Inglês, and the former vice-governor of the National Bank of Angola and adviser to the current vice-governor, Laura Alcântara Monteiro. The latter’s involvement does not bother Deloitte, which supplies auditing services to the bank.

At a ceremony on December 2, 2011, Deloitte, acting on the jury’s decision, awarded the first of its prizes, the “Best Manager of the Year” award, to Manuel Vicente, who at the time was chairman of the board of the Angolan state oil company, Sonangol, and who is also a colleague of Manuel Júnior in the MPLA Political Bureau. Manuel Vicente is currently Minister of State for Economic Co-ordination and held prime responsibility for the diversion of US$32 billion in state petroleum revenues, something that the executive is still trying to justify. He is also high on the MPLA’s candidate list for the next elections, and there is speculation that he might be Angola’s next vice-president.

Without prior announcement, Deloitte also awarded a special honorary prize to the President of the Republic and of the MPLA, José Eduardo dos Santos, “for what he has done in support of peace and of the country’s development.” Two months earlier, on 12 October 2011, President dos Santos had granted an audience to the chairman of Deloitte-Angola, Rui Santos Silva. According to the state news agency Angop, the meeting was to discuss “matters related to the company’s operations in the country”. As a matter of protocol, Dos Santos does not normally receive, with media coverage, foreign business leaders who do not have great interests in or businesses with the Angolan state. Even stranger is that when he came out of the meeting, Rui Silva also took on the role of presidential spokesman, telling the press what the Head of State had said to him.

It is a matter of public record that the President of the Republic insisted on keeping Suzana Inglês in the position of president of the CNE until 17 May when the Supreme Court responded to a case brought by UNITA and ruled that Inglês must stand down. The law requires that a serving magistrate be nominated to the post, so as to ensure independence. Official documents showed that Suzana Inglês is not a serving magistrate but a lawyer registered with the appropriate professional body, and a member of the national committee of the MPLA’s women’s organisation, OMA.

Given its links to the MPLA, Deloitte is involved in a serious conflict of interest in becoming involved in the auditing of the electoral records. Moreover, it began the audit in a secretive manner, outside the legally stipulated deadline for the delivery of the records. The CNE commissioners, with the exception of Suzana Inglês, still do not know the terms of the contract that was signed or the budget allocated for the audit. How can such a well-reputed company become involved in dealings that go against basic norms of transparency?

For years, the MPLA and the government violated the Constitution by refusing to allow the process of electoral registration to be conducted by the CNE. The Constitution bestows upon the CNE the powers to organise, execute, co-ordinate and conduct the electoral processes, including logistics, in an independent manner. The fact that the government and MPLA became involved in this process contributed greatly to the MPLA’s crushing victory in the last elections in 2008, in which it got more than 81 per cent of the votes. Neither the opposition nor observers had access to the rooms where the results were calculated. This explains why in some places, such as Kwanza-Norte, 100 per cent of registered voters appear to have voted.

The Supreme Court Ruling

Now that the Supreme Court has annulled Suzana Inglês’s appointment as president of the CNE, administrative measures taken by Inglês must be revoked as illegal, including the contract with Deloitte. The company must immediately give up the auditing of the electoral register because of conflicts of interest and a lack of transparency.