Corruption Starts at Home

Corruption Starts at Home

wherecoruptionstarts“Etete can smell the money. If at nearly 70 years old he turn(s) his nose up at nearly $1.2 bill he is completely certifiable. But I think he knows it’s his for the taking.”

This is an email from a consultant to a top-notch, highly educated, church-going multinational Shell oil executive referring to the bribe offered a Nigerian oil minister so that Shell could get control of one of the largest oil fields on earth. It was published by BuzzFeed working with by Global Witness.

We call this market capitalism. When done with sufficient finesse it’s not even illegal in the U.S. This is how the world goes round. Details at the Secretary of State’s office.

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Kurudisha Tanzania

Kurudisha Tanzania

BringBackRomaA very dark cloud forms over Tanzania. The country is increasingly unsafe … for Tanzanians. Kidnappings, extra-judicial interrogations and intimidations against opponents of the regime increase day by day.

Last week a popular Tanzanian rapper, Roma Mkatoliki, was kidnapped. Social media went bonkers. Fellow rappers produced a video that by this morning almost 100,000 people had watched on YouTube. The government of Tanzanian can ignore this no longer.

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What Future?

What Future?

imfmozambiqueReset by the global recession, reconfigured by massive new production of oil and gas in the U.S. simultaneously with aggressive development of non-fossil fuels, Africa begins to collapse.

Nigeria, Angola, Egypt and Algeria, even Ghana and many countries not wholly dependent upon natural resources are in economic tailspins. The best example is Mozambique.

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Not So Hidden Wealth

Not So Hidden Wealth

TanzanianGoldAt least 54 billion cubic feet of helium has been found in Tanzania. Add the country’s enormous gold reserves, large uranium deposits, massive coal, nickle and platinum reserves, Tanzania is now one of the richest countries in the world!

Or not.

Helium’s not as sexy as gold or uranium, but may actually be worth more. Engineers worldwide are celebrating the discovery as relieving the critical shortage of the gas which has stressed markets and high-tech companies for more than a decade. Helium is so important that the U.S. stockpiles it just like oil.

For nearly 25 years Tanzania’s natural resource deposits have just grown in leaps and bounds: More of the Great Rift Valley lies in Tanzania than any other country, and this is the reason it’s so resource rich. Yet the country remains poorer than 150 of the 185 countries ranked by the IMF in 2015.

The World Bank has lamented this situation for years: “Tanzania sits on about 15 trillion cubic feet of proven natural gas reserves, equivalent to approximately US$150 billion … or 6 times Tanzania’s current GDP,” the bank advised in 2012.

Four years since that announcement, no natural gas has been extracted. Do you know how popular natural gas is at the moment?

For more than two generations, Tanzania has been unable to benefit from its enormous natural wealth. I’ve often written about it.

There are several reasons. Corruption underlies all of them.

Mutinational mining companies like Rio Tinto — which has tried multiple times to work in Tanzania and recently announced plans to develop its coal after abandoning both gold and uranium contracts here — are no sweethearts to work with. Tinto’s North Mara gold fields were often criticized by human rights organizations for miner abuse, even of using children. That led to a number of worker revolts. Tanzanian mines are often closed.

Point here is that government regulationa exist against all such workplace practices, but officials choose not to enforce them. Why? I’ll let you guess.

While the government developed the cities and airports near the mines years ago, it has allowed maintenance to horribly lapse. Mines need electricity. Tanzania has almost as many blackouts as electricity. Mines need roads. Tanzania never builds roads; it lets foreign donors do that.

Current Tanzanian government contracts with the multinational mining companies concede some of the lowest royalties in the world. And worse, government budgets show less than half what the mining companies claim to pay. Where’s the difference?

In the end the Chinese have cornered the Tanzanian mining market. Chinese dominate the gold and uranium mines, and I expect they will dominate the helium ones as well. That has been disastrous for the Tanzanian environment as Chinese mining practices are governed from afar by a home authority that looks sideways on its own expressed environmental concerns.

Tanzania’s problem is manifold, but in the end it all comes down to corruption. Often that corruption is started by the multinational. Understandably if yet distasteful, it’s hard for a lowly official who has not been paid by his government for three months to refuse a bribe.

That’s the core problem, really. It isn’t that people are evil. It’s that corruption is now systemic. The regulator’s income is paid by the company he regulates.

The current president, John Magufuli, is on a crusade to right the ship and end corruption. Just like every other president for the last 40 years.

The Largest Panda of All

The Largest Panda of All

wwfvsbakaPeople with deep faith in the good work that they do sometimes develop blinders that become destructive. This may be happening today with the world’s largest and most revered wildlife organization.

We all know – or think we do – the World Wildlife Fund. In fact it’s actual name isn’t the World Wildlife Fund, but the “World Fund for Nature.” The name morphed over time and when the organization adopted its URL,

It’is the largest wildlife conservation organization in the world, with a balance sheet of just under a half billion dollars. Remarkably its liquid assets of $337 million are derived by less than 10% through fund raising, reflecting an “organization” that is mostly an endowment and grant sponge.

Too big too fail comes to mind.

WWF has enormous power throughout the world. In the Cameroon it implemented without much oversight what looked like good ecological programs mostly to protect the forests of the Congo Basin, but with little oversight by the Cameroon government the WWF programs may in fact be destroying the indigenous pygmies, the Baka people who live there.

In February a competing NGO, Survival International, filed a formal complaint against WWF with the OECD in Paris. According to the Guardian newspaper, “The complaint contains eye-witness accounts of alleged brutality, video testimonies, and reports from the Cameroonian press accusing the eco guards of violent actions against the pygmy groups.”

I was skeptical. Accusation is not evidence. But the evidence is now coming in, and it’s damning.

WWF’s strategy to protect the Congo Basin forests is deeply mired in partnerships with commercial enterprises like logging companies. At first this doesn’t seem so unusual: private/public partnerships is the tagline for much progressive public policy today.

The idea, of course, is that good public advocates will curtail the otherwise ungoverned exploitation of commercial interest, and that if well done, sustainable commerce can be achieved.

In logging, for example, historical partnerships between logging companies and government and private conservation entities have actually created long-term renewable forests in the U.S.

But in pursuing its private/public partnership in the Cameroon WWF embraced a French logging company, Rougier that had a long and troubled history with indigenous forest peoples. WWF had little choice who to partner with as it was the Cameroon government’s choice.

But there are now credible reports that Rougier has displaced Baka pygmies – who have claimed the forest as their home for millennia – without compensation and in violation of its own agreement with the Cameroon government.

There are even reports that many Baka have been tortured, and further claims that WWF trained anti-poaching units have been involved.

WWF portrays it otherwise insisting the issue is one of poaching, not displacement. Too many videos and eye-witness accounts have proved WWF’s defense is empty of reality.

Moreover, WWF has done everything to keep this out of the English media.

When pressed by a Belgian advocacy group for Cameroon, WWF responded (in French) that its partnership was sound and ethical, that Rougier was acting in accordance with ecological agreements, and that the logging was mostly taking place in an area soon to be flooded by a dam.

WWF aggressively defended its partnership with Rougier until April, 2015.

March and April, 2015, was when Stephen Cory, Survival International’s Director, demanded documents from WWF-International’s director, Marco Lambertini, regarding the accusations.

Shortly thereafter WWF stopped issuing press reports or field science monographs in English from the area. WWF assigned the Head of its “Issues Management” department, Phil Dickie, to respond. Dickie took several months, finally sending an email to Survival that read in part:

“Apologies for the delays… This is a personal note…. I would prefer to operate on the basis that our organisations both have the interests of the Baka and other indigenous people at heart….If you want to explore the possibilities, let me know.”
12 May 2015 15:37

It strikes me that WWF is in deep do-do, holding hands with a French logging company whose behavior is probably criminal. Like the leaders of our own Republican Party, WWF may have lost control but finds itself unable to extract itself into any original moral position nor to unentangle itself from its own perhaps unintentional involvement in displacing indigenous people.

It’s the disease of the Too Big, Too Powerful. In my view organizations and institutions this large can only function in a moral way when they are accountable to the people who support them and who they serve.

10% fund raising doesn’t reach that level.

Yipes! No, Yelp!

Yipes! No, Yelp!

YipesNoYelpHow do we get rid of bribing? We get rid of tipping. Use your cell phone!

Bribing is a universal, world-wide phenomenon … sometimes called tipping. Africans have been unfairly cited by westerners all my life for bribing while it’s actually they who bribe ten times more each day than an African ever could.

We sugarcoat a lot by calling it tipping: Journeymen’s gifts at Christmas, an apple for the teacher, flowers on Secretary’s Day, or how about those popcorn baskets to truculent vendors at the end of the year or Godiva candies to past clients?

“Expressing our thanks,” replaces decent pay and benefits, or put another way, ensures there isn’t decent pay or benefits.

Social media powered by cell phones is getting rid of bribery … and tipping … in two ways. In Nairobi as in New York, Uber and Yelp and a dozen other media sites are bringing sanity back into service, while mass demonstrations are sealing the deal.

Big tippers get cabs in Manhattan. I spoke to a cabbie recently in Brooklyn who said he can spot a big tipper across the Hudson. Their jacket is unbuttoned. They’re looking uptown even if they want to cut a hard right just ahead and go downtown. They step out into the traffic lanes. He said sometimes they even wave dollar bills in the air.

Same in Dar-es-Salaam or Lusaka. Look rich, ooze currency, and you’ll get a better deal in the end. At least until … Uber.

No charade. No cash? To comply with the reality that a lot of Africans don’t own credit cards, Uber now takes cash there! But… no tip! Often, no wait.

Big restaurant tippers tend to be loyal customers. Tipping levels often were the best rating restaurants had … at least as far as the owners were concerned. No more. TripAdvisor be damned. Looking for the best grub in Joburg? Go to yelp.

In Kenya they’re falling all over themselves to get the Yelp franchise… stay tuned.

There is no question that this is grass roots change and that the cell phone facilitates it. You can’t really optimize either Uber or Yelp without a cell phone at the time you need their advice and service.

But cell phones are working from the top, too.

Kenyan truckers are among the best paid, best educated and roughest individuals on earth. They often speak softly but could crush you with their thumb. They have to be this way in order to bring food into war zones or plastic pipe into a desert without gas stations for 300 miles.

It’s not a happy life, though. One of my top guys in Nairobi started as a trucker. It’s how he got his capital to buy his first vehicles. But he hesitates speaking about those days the same way a cousin I have who was a PT boat captain in Vietnam hesitates speaking about the war.

About the only thing that can disrupt a Kenyan trucker is … Kenyan police.

Kenyan police are generally fatter and less muscular, so in a brawl they’d lose. But they have power and saw horses that stop traffic. Ostensibly this is to check the safety of the vehicles: the tires, mufflers, etc. In reality it’s the way they get paid.

Truckers call these “road-block” taxes.

So to start the week in Kenya, today, thanks to Kenyans’ massive mobile phone networks, the entire country is coming to a halt as truckers turn off the engine on major highways.

The actual demonstration was prompted not by police bribes, but by the deaths of 37 truckers carrying cargo into troubled South Sudan. Truckers want Kenyan military escorts.

But they also want the end of road-block taxes.

So happy start of the week, Kenya! Make sure your phone is charged!

A Stable, Stagnant World

A Stable, Stagnant World

for a stable worldTrickle-Down economics slams Africa and its leaders line up like misbehaving school kids to take the paddle.

President John Magufuli of Tanzania just reduced taxes. There’s no worse move at a time when Tanzania needs stimulus not austerity. All the creativity and imagination Africa has shown in the last several decades has been smothered by western starlight.

The “spring meetings” of the IMF and World Bank confirming that African growth is tanking so scared African leaders that they’re now doing exactly the wrong thing: playing capitalism at its worse.

The global economic system is stacked against the poor. It’s why China ultimately embraced it but also why China, India and Brazil will always play second, third and fourth fiddle to the puppeteers in the west.

The reason Magufuli’s move is so illuminating is that it exactly reflects what China did multiple decades ago: give in.

Tanzania’s economy never performed in any outstanding way, especially relative to its neighbors like Kenya and Ethiopia. Corruption is the main reason, but as I’ve often proved, corruption is western Trickle-Down. To bribe a Tanzanian official to build a ridiculous anti-missile defense system there has to be a briber. The briber is always from the west.

So it doesn’t matter that Tanzania is sitting on the world’s second largest streak of gold, or that it has some of the finest uranium deposits on earth. It doesn’t matter, because the capital that it takes to exploit this rests solely in the west.

And the dosey-doe game Tanzanian officials play with their bribing counterparts stalls development.

Modern Tanzania was born of Cold War China. Listen, that didn’t work, either, but the initial goals of humanism above capitalism still strike me as profoundly correct.

The first president, Julius Nyerere, was such a wonderful person. He began swimming in Chinese capital that allowed him to revolutionize education in at-the-time terribly illiterate Tanzania. He still wears proudly his nickname, Mwalimu, “teacher.”

But humanism grew doctrinaire, too, in China then Tanzania. Mwalimu tried to collectivize villages almost at the same time that they were failing in China. So the experiment didn’t work. The Cold War ended. China changed faces and Tanzania went flat out broke.

Well, like any good ole radical, Tanzania now seems to have flipped completely.

Humanism was and in most cases still is African’s main mission, and I remain hopeful that Africa can demonstrate this lesson to we egocentric capitalistic westerners.

Tanzania like Ethiopia and Nigeria should slap the western banker in the face. A one or two penny drop in payroll taxes is nada.

The government’s own mouthpiece, the Daily News, pointed out that “its effect on disposable income is insignificant.”

But its effect on education, tourism, mining and road building will be profound. So Tanzania will remain beholden to the west yet again, for aid and miserly capital. It will be incapable of generating its own wealth.

Wake up Tanzania.

The Year of the Beast

The Year of the Beast

impeachzumanow“T’is the autumn of treason.” Things are heating up in South Africa:

“Twenty-two years into democracy and nearly three years after Mandela’s death, the air is again thick with political paranoia… of high treason … sedition and betrayal, with talk of mysterious foreign… agents who have “infiltrated” the mass media, business, foreign multinationals, NGOs, religious bodies, opposition parties and student movements and who … threaten the state.”

The administration of Jacob Zuma is running scared and has begun to defy democratic institutions. This is new. Previously he was something of a lone gun. Now, he seems to be organizing his government into a fortress of ignominy.

From afar one wonders if a global malaise is sweeping the world. Demonstrations, impeachments and lots of name shouting in South Africa is exactly what’s happening in Brazil.

But the South African story has been building for a longer while, and I think that Jacob Zuma and the ANC party that led the country out of apartheid is sinking fast.

Here’s a quick timeline:

The current president, Jacob Zuma, was pegged a failure from the start and it was remarkable that the ANC actually brought him to power. He was instrumental in the revolution and Mandela originally named him a Deputy President.

But he was sacked from the government in 2005, ostensibly when prosecutors charged him with rape (acquitted by the High Court) but more so because he nearly destroyed a Burundi peace process that was underway at the time.

Two years later in 2007 a high court rules that there is sufficient evidence to prosecute him for a variety of corruption charges, including bribery. Most people thought his story was over.

Then, remarkably, the ANC nominates him into a position to become the third president of the country after the end of apartheid, after Mandela and Mbeki.

Although South Africans were aghast I saw it very much as our first several presidents who all came from the revolutionary movement. Maybe, I thought, he’d now clean up his act.

Anything but. He built himself a gigantic mansion using public funds in broad daylight, flaunted his public duties and appeared like playboys all around the world with a different girl at his elbow every night, sacked and appointed people at will and let cronies siphon off millions of public funds and probably worse of all, ordered in police to massacre mining demonstrators.

To call the man a buffoon is generous. What he is a too typical African potentate dictator, and that doesn’t fit modern South Africa.

Jacob Zuma is now officially on the way to being impeached. Not quite as far along as his colleague in Brazil, but far enough that he’s now lashing out, threatening arrests and implying even more if the opposition continues with its program to get rid of him.

Even more severe, the ANC is considering “recalling” him, which in the arcane and rather old-fashioned communist way forces his resignation. The ANC would do so to avoid the more public impeachment.

Like elsewhere around the world, the ANC as a dominant political party may be in trouble partially due to this global political malaise. It may indeed be “down and out” in the same way the American Republican or Brazilian Worker’s Party seem to be tumbling down. And that is, of course, an incredibly interesting story.

But the main story in South Africa is squarely the story of Jacob Zuma. Whether it’s coincidental that his buffoonery dove-tails with global revolution, or whether he is organically a part of the virus bringing revolution to the world, right now Jacob Zuma is in deep trouble.

And for the good of South Africa and its revolution, he better fall quick.

Click or Bang

Click or Bang

NorthLuangwaThe tug between conservation and hunting has reached a crescendo in Zambia where 30 years of effort by the Frankfurt Zoological Society (FZS) is in jeopardy.

The vast wilderness of eastern Zambia is divided into two great reserves, North & South Luangwa. Like the Serengeti some of the land at the periphery of the these national parks is used for sports hunting.

But unlike the Serengeti Luangwa can well nigh afford hunting. While it contains the richest biomass in Zambia, it’s scant compared to the Serengeti. So as tourism demand increased over the last thirty years Zambian officials correctly reduced leases for hunting.

But in the last 4-5 years tourism has declined continent-wide while there has been a marked increase in demand for sports hunting. So Zambian officials are reversing themselves and allowing more and more hunting.

The most dramatic reversal came in August, 2014.

There was an outcry from the public. This remark taken off the Zambia National Park’s Facebook page is representative:

“Trophy hunting for rich foreigners will not bring tourists to Zambia, it will deter them from coming… I can assure you, I will not visit any country which squanders its wildlife for the pleasure of a few disturbed individuals.”

Immediately the parks authority reversed the reversal, but immediately after that the umbrella state agency above tourism reversed back to the original reversal. The state of confusion has never been resolved.

I see two obvious forces at work here: The first is that sports hunting is on the increase, particularly from Russia and the United States, with very strong increases from a number of South American countries like Argentina. The revenue lost from tourism hurts. From a business point of view, it makes sense to increase capacity in response to increased demand.

But second is probably more significant: the rank confusion reigning between Zambia’s various authorities suggests corruption is rampant. Hunters tend to be quite rich and professional hunting guides are the government pay masters.

Three weeks ago the German embassy hosted a party in Lusaka to celebrate three decades of partnership between FZS and the Zambian government conserving North Luangwa.

A recent elephant survey showed that North Luangwa has the densest elephant population in the country and the most promising black rhino programs.

“I think it is fair to say that 20 years ago no one would have anticipated this development,” the project leader, Ed Sayer, told the guests.

In fairness one of the reasons North Luangwa’s elephant population is the most dense is because there has been so much poaching in the country’s other reserves.

According to Katarzyna Nowak, a South African elephant researcher, Zambia’s Kafue reserve lost almost half its elephant population to poaching since 2004.

North Luangwa is the most remote of Zambia’s reserves. That applies equally to tourists, hunters and poachers. Kafue is much more accessible.

Moreover, hunters themselves are disparaging of Zambia’s reduced game:

“…the quality [of lion and leopard hunting in Zambia] is on the decline due to hunting pressure and one needs a good deal of time to be sure of a good trophy,” writes which labels itself “The African Hunting Authority.”

Last year neighboring Botswana banned all hunting, and until then it had been a significant hunting destination.

Scraping the old barrel to get the last bit of honey out of it might just crack the barrel.

Shell Games in Africa

Shell Games in Africa

panamapapershidemoneyEver since the leak last week Kenya’s Daily Nation has published multiple stories of hanky panky exposed by the Panama Papers. One of their best is about a shady Danish character who has terrorized Kenya for some time, and the story makes Agatha Christi look like a children’s author.

Peter Bonde Nielsen arrived in Kenya some 30 years ago and learned quickly the political racket. (In the U.S. we call it “lobby.”) He was often seen among the most powerful politicians.

Then, he was rich.

His penultimate scandal was a few years ago just as Kenya was designating a huge amount of land near the town of Kajiado for a massive industrial and high-tech development scheme. Surprise, Nielsen owned a lot of the land.

But as often happens with tricky surveys, the airstrip was laid over various plots owned by different people before they were contacted or bought out. Nielsen, who had built a luxury private lodge in the area to woo his politicians was so furious that he turned his anti-poaching unit into a fully armed militia.

Meanwhile the true owners of the place, two different clans of Maasai, began to argue over the ownership of this increasingly valuable land and challenged Nielsen’s militia. Skirmishes, gun battles and fatalities ensued.

Not good for PR. Nielsen’s influence began to slip.

Nielsen’s official Kenyan company was called Avon.

[Important Digression: there are more “Avon” companies in the world than under any other name. Guess why?]

The address of Nielsen’s “Avon” was Titan Hangar, Wilson Airport. As the heat on Nielsen increased he bought a company, called Titan Worldwide Ltd. (TW) [no website] through Mossack Fonseca, the law firm central to the Panama Papers.

Don’t confuse TW with Titan Aviation that owned the hanger which was the address of Avon, and please don’t confuse it with Atlas Air Worldwide, the actual owner and parent company.

Backed by references from Kenya’s reputable Stanbic Bank Nielsen transfers the shares of the companies that previously owned Titan, Europan and Lespian [no wesbite], to Avon. So he now owned Titan, technically didn’t own Avon, which was now owned by the people who previously owned Titan.

Confusing? Intentionally so.

Then two years ago Avon is sold to a Mossack Fonseca law firm in the British Virgin Islands, Harneys, allowing Avon to remove all its assets and records from Kenya. There is now nothing left in Kenya with which to investigate Nielsen.

This story shows that illicit fund transfers aren’t simply theft, but masterful paths for all kinds of deceit.

Developing countries – especially those in sub-Saharan Africa – are losing a greater percentage of their GDP to illicit financial transactions than any other part of the world.

As journalists throughout Africa delve into the Panama Papers it becomes clear once again that Africa’s being hurt the most. And it’s not as detractors would presume only or even mostly African potentates stealing people’s money, although they figure well enough in the scandal.

Instead it’s mostly shady foreign investors like Nielsen taking advantage of Africa’s weak currency and financial laws.

“African states need cash for development, but their tax revenues are lower by the billions than they should be because of illicit financial flows,” South Africa’s Daily Maverick explains.

It’s absolutely true that it takes two to tango. Nielsen needed corrupt Kenyan politicians, and they are – or at least were, a dime a dozen. But Africa is replete with these morally depraved opportunists from the western world. They come in all forms from evangelical preachers to crooks like Nielsen.

But note: Without a Mossack Fonseca skilled in taking advantage of the terrible weaknesses of our global capitalist system it would be a lot harder for these guys to make their scam.