Angolan Central Bank US $500 Million Swindle Foiled
The latest episode in the long-running saga of the alleged plunder of Angola’s public coffers has just come to light. Thanks to the diligence of British financial watchdogs and a change of regime in Angola, what is alleged to have been an attempt by the former President’s son to divert US $500 million, with his father’s blessing, looks to have been halted at the eleventh hour.
Full details of the alleged fraud have yet to be revealed, but information confirmed by separate sources indicates that the new Angolan President João Lourenço has taken steps to reclaim the funds which have been frozen pending the outcome of an international investigation. A spokesman for the UK’s National Crime Agency told us: “We can confirm that the NCA’s International Corruption Unit is investigating a case of potential fraud against the Angolan government.”
The NCA spokesman said they could not provide any further details at this time – which implies the investigation is active and ongoing. However, a source familiar with the information supplied by the British to Angola’s Unidade de Informação Financeira (UIF – the Financial Intelligence Unit) has revealed that it involves the transfer of US $500 million from the Banco Nacional de Angola (BNA – the National Bank of Angola), personally approved by former President José Eduardo dos Santos, to the account of a beneficiary named as ‘Mais Financial Services’ at the London branch of Crédit Suisse.
José Filomeno dos Santos, known as Zenú, was his father’s appointee to head Angola’s sovereign wealth fund (the Fundo Soberano de Angola, FSDEA). The FSDEA, launched in 2011 with an initial capital of five billion US dollars, with annual injections of income from Angolan oil revenues, was to be invested in economic diversification for the good of the country. Instead the principal beneficiaries appear to have been the (former) presidential family and their business associates.
As Chairman of the Board, José Filomeno dos Santos, known as ‘Zenú’ entrusted the administration of the FSDEA investments to his associate, Jean-Claude Bastos de Morais, a Swiss-based financier with dual Swiss and Angolan nationality… and a previous conviction for financial crime.
This sent up an immediate red flag – after all, it is not often that a convicted felon is appointed to oversee a billion-dollar sovereign wealth fund. And, as time went by, evidence emerged that Mr Bastos de Morais was using this lucrative source of capital to enrich himself. Along with the revelations from the Paradise Papers, evidence emerged that the FSDEA funds were being consistently invested in an array of recently-registered new companies, which to no-one’s surprise were either directly owned by Mr Bastos de Morais or whose nominal owners were associates of his.
International corruption watchdogs and investigators swiftly concluded that the FSDEA was being used for personal enrichment. With Angola branded as one of the most corrupt countries in the world by Transparency International, and with every branch of the state institutions filled with party members beholden to the ruling MPLA and its President, José Eduardo dos Santos, there was zero possibility of an internal investigation into what was, on the face of it, another instance of a greedy presidential family robbing the public purse.
President Dos Santos’s 38-year misrule was, however, about to end.
Having bled the Angolan Sovereign Wealth Fund dry, José Filomeno dos Santos turned to another “honey pot”: the Angolan Central Bank (BNA).
Last roll of the dice
In the final weeks of his presidency José Eduardo dos Santos summoned the then Governor of the National Bank of Angola (BNA), Valter Filipe, and the Finance Minister, Archer Mangueira, to MPLA headquarters. The President had just chaired a session of the ruling party’s Political Bureau beforehand.
Behind closed doors, the President gave each man a dossier to read there and then, and waited while they read through it. The dossier purported to be a proposal to put together an international credit line for Angola, worth some 30 billion US dollars – quite an astonishing turn of events given the financial crisis affecting the country at the time. A flurry of reports suggested the government was finding it increasingly difficult to convince their usual backers to lend them any more money and that the precipitous drop in oil revenues was already making it difficult to service their existing external debt, totalling somewhere between 37 and 43 billion dollars.
The President then called his son, José Filomeno dos Santos, ‘Zenú’ into the room and ordered both the Finance Minister and the BNA Governor to accompany ‘Zenú’ to London aboard a privately-chartered aircraft that very night to begin immediate negotiations to secure the credit.
Accompanying them aboard the chartered jet was Zenú’s childhood friend and business partner, Jorge Gaudens Pontes Sebastião, Chairman of the Board of the Banco Pungo Andongo and also head of the National Council for Quality Control. Zenú and Jorge Sebastião already co-owned a business named Inpal (Investimentos e Participações Lda), which in turn held a 49% stake in Standard Bank Angola. At this stage they had not declared any link to the credit cartel.
Meeting in London with with the representatives of the cartel behind the credit proposal, operating as ‘Mais Financial Services’, Angolan sources say they were taken aback to find that both Zenú and Jorge Sebastião were acting as “members of the foreign team”, leaving the Angolan Minister and Bank Governor isolated as the sole representatives of the Angolan State.
The identities of the other participants at this meeting have not yet been revealed but a Portuguese weekly newspaper (Expresso) is reporting that three Brazilians were involved and two “are already in the hands of the British authorities“. According to ‘Expresso‘ the Brazilians were acting on behalf of a company named as ‘Perfect Brint’.
Curiously, there is no British-registered company named ‘Mais Financial Services’ registered with Companies House in the UK, but there is a ‘Mais Financial Services, Lda.’ registered in Luanda, Angola at the same address as ‘Investimentos e Participações, Lda.’, whose owners are the aforementioned President’s son, José Filomeno dos Santos (with 75%) and his lifelong buddy and business partner, José Gaudens Pontes Sebastião (with 25%).
To his credit, Archer Mangueira was unconvinced that ‘Mais Financial Services’ could possibly have sufficient clout to pull together a thirty-billion-dollar credit package from foreign investors. The amount was greater than Angola’s “pillar” of solvency – its current reserves.
For his part, Valter Filipe commented that he would refer the proposal for technical analysis before forming an opinion to convey to José Eduardo dos Santos.
On their return to Luanda, the Minister and Governor were supposed to draw up a report expressing their joint opinion on the proposal. However, Archer Mangueira prepared his individual opinion before calling on the BNA Governor to add his imprimature to it. Valter Filipe refused. His justification was that Mangueira had not called for a technical analysis but merely expressed a negative opinion.
The BNA Governor went on to arrange a meeting between the Bank’s technical analysts and José Filomeno dos Santos at BNA headquarters. Together they drew up their technical opinion which turned out to be in favor of the proposal.
Both opinions were sent to the President, who approved the document drawn up by his son and the BNA governor.
Archer Mangueira was said to have “lost the President’s ear”. His rival, Valter Filipe, gleefully claiming ascendancy, was ordered by the President to take charge of coordinating a commission to negotiate the line of credit. At this point the “British party”, i.e. ‘Mais Financial Services’, demanded as a financial guarantee that the BNA transfer US $500 million into their account.
This “financial guarantee” request was forwarded to President dos Santos for approval and he gave the green light. The BNA then proceeded with the transfer and Valter Filipe promptly sent the confirmation proof to the President.
On August 23, 2017, João Lourenço was elected as the new Angolan President. A month later, President Dos Santos stepped down as head of state but remains president of the ruling MPLA. The country was relieved to see a peaceful transition of power, albeit within the same ruling party, with President Lourenço offering hope of a crackdown on the endemic corruption impoverishing the nation.
In his first meeting with the new President shortly after he was sworn in, Finance Minister Archer Mangueira briefed João Lourenço on the precarious state of the public finances, including the negotiations underway to obtain that US $30 billion, overseen by Zenú and Valter Filipe. Mangueira admitted he had been sidelined from the negotiations because of his lack of faith in the proposal.
João Lourenço summoned Valter Filipe and after questioning him, ordered that the dossier be handed over to Archer Mangueira. In the interim, the supposed international credit cartel brokers had issued another invitation to the Angolan delegation to meet in London to continue negotiations, the first such meeting since the US $500 million transfer.
When they discovered that it would be Archer Mangueira heading the government team, and not Valter Filipe, the credit brokers protested. They had been counting on José Filomeno dos Santos retaining the powers granted him by his father when he was in charge. They were to be disappointed.
On October 23, 2017, the parties gathered for the London meeting. On the Angolan side were Archer Mangueira, Valter Filipe, two Finance Ministry advisers and two BNA experts. As on the previous occasion, José Filomeno dos Santos and Jorge Gaudens Pontes Sebastião took positions for the foreign team.
However, by then, Archer Mangueira had a trump card up his sleeve. He alone was privy to an alert from the British financial authorities. A notification had been sent to Angola’s Financial Information Unit (Unidade de Informação Financeira, UIF), which although it receives an operating budget from the BNA, reports directly to the Finance Ministry.
The British were politely inquiring about the legitimacy of the US $500 million transfer from the BNA to ‘Mais Financial Services’, given some procedural anomalies that had sent up a red flag.
Archer Mangueira kicked off the meeting by talking about the new President’s scrupulous regard for the rules and then left it to the Ministry’s financial experts to dissect the proposal and demonstrate how the credit agreement would not be to Angola’s benefit. The BNA Governor made a last-ditch attempt to salvage the deal, brandishing confirmation of the money transfer and recommending that they go ahead and fulfill the agreement.
The Finance Minister demurred, saying that he could not recommend to President João Lourenço any continuation of the negotiations. The very next day, October 24, Archer Mangueira conveyed this opinion to the President who summoned the BNA Governor to an audience on October 25.
At that meeting, João Lourenço gave three quick commands to the central bank governor before wishing him luck. First: abort the operation, on the grounds of the lack of credibility of the foreign parties; Second: take immediate steps to have the US $500 million returned to Angola; Third: submit his resignation by October 27.
In disbelief, Valter Filipe (who in addition to his position as BNA governor was also a member of the MPLA central committee) tried to contact his party leader for instructions as to how to proceed – José Eduardo dos Santos. Clearly it was to no avail as Valter Filipe’s resignation was announced on October 27.
On November 10 João Lourenço removed Jorge Gaudens Pontes Sebastião, from his position as Executive Secretary of the National Council for Quality Control (Conselho Nacional do Sistema de Controlo e Qualidade).
Two months later, on January 10, 2018, João Lourenço relieved José Filomeno dos Santos of his duties as President of the Angolan Sovereign Wealth Fund.
To date, no criminal investigations have been launched in Angola into the alleged conspirators, chief among them former president José Eduardo dos Santos. The US $500 million remain frozen in the United Kingdom.