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AC Vol 42 No 3 www.africa-confidential.com 9 February 2001 Vol 42 No 3 AFRICA CONFIDENTIAL AFRICA/FRANCE 2 AFRICA/FRANCE I How high the summit? Winners and losers in Angolagate Politicians, soldiers and corporations are reeling in Luanda and President Jacques Chirac is getting ambivalent about Africa. The Paris but some wily operators are capitalising on the scandal unwinding of the Angolagate The political cost of the arms-for-oil scandal is growing fast in Luanda and Paris. It reaches right across scandal has hit two of his former aides, Michel Roussin and Charles the power elite in two countries. In Angola, it has put under scrutiny the financial affairs of the presidency Pasqua, and is damaging his and President’s family at Futungo de Belas, and their relations with a circle of foreign and local business chances in the 2002 elections. people. Also in the spotlight are Angola’s military elite, particularly Generals Manuel Van Helder Vieira ‘Kopelipa’, the National Security Advisor, and Fernando Miala, the Director of Military C.A.R. 3 Intelligence, whose unorthodox methods of arms procurement find frequent mention in French police documents. The two principals in the affair are Franco-Angolans - Pierre Falcone, in French police Saved by the cash custody since 1 December, and Arkady Gaydamak, based in Israel since the French authorities issued an international warrant for his arrest on 6 December. Less than a year after the UN Gaydamak insists Angolagate is a political plot by supporters of French Premier Lionel Jospin, the withdrew its MINURCA observer mission, there is a new crisis. probable Parti Socialiste contender in the 2002 presidential election against the incumbent Jacques President Patassé’s government Chirac of the Rassemblement pour la République. Nevertheless, the scandal touches several PS notables. owes state workers arrears of up The most high profile of these is Jean-Christophe Mitterrand, son of the late President, who cultivated to two years’ salary and the his African networks as assiduously as Chirac’s friend, the late Jacques Foccart, and, until now, with resulting unrest has prompted UN more commercial success. Nor can ‘les Anglo-Saxons’ stand smugly aloof. The French police Secretary General Kofi Annan to describe the situation as explosive. investigation has tripped over a number of British and American intermediaries in some of the more bizarre financing arrangements of Angolan arms purchases. Two of the key figures in the French probe have been running businesses out of London and remarkably, one of them, Gaydamak, has indefinite MAURITANIA 5 leave to remain in Britain (AC Vol 42 No 2). Go north, ould Holding companies to account Taya! Once more, questions are being asked about the accountability of oil majors and diamond mining Colonel Ould Taya’s assertive companies operating in Angola: how the funds they generate are used to buy arms - with or without their foreign policy, based on closer ties assistance. Three companies - Pro Dev, Falcon Oil and Naphta - which have signed up for equity to the West - notably the USA and positions in two of Angola’s most promising deepwater oil exploration blocks are under investigation by its key ally Israel - and to Maghreb neighbours, shows a ruler who major oil companies, journalists and now the French police. The scandals date back to Angola’s 1992 feels comfortable at home in the elections, when both the ruling Movimento Popular de Libertação de Angola and the rebel União face of considerable opposition. Nacional para a Independência Total de Angola had signed up to the Bicesse peace accord. This included a United Nations’ ban on arms sales to both sides, the handing over of existing matériel to a new national army and the integration of both sides’ armed forces into that new army under UN supervision. So when SOUTH AFRICA 6 UNITA leader Jonas Savimbi rejected the result of the October 1992 elections and launched a highly Arms for oblivion effective ‘war of the cities’, the MPLA could mount little effective defence. The economy was in a downturn, party funds had been spent on a slick election campaign, military morale was low and the The row over alleged corruption in government armoury was depleted. the government’s 43 billion Rand (US$5.4bn.) arms deal is damaging Enter Falcone and his former Soviet partner Gaydamak, with plan. They would source the necessary the ANC. And as some of the weapons from Russia, Ukraine and Bulgaria and, in a triangular deal, raise finance through France, their Western arms companies and their business headquarters at the time, for the transhipment and purchase of arms to Angola (AC Vol 41 No agents involved in the deal have 24). The problem was that French law, in accordance with the UN resolution, prohibited the sale of arms been linked to commission to either side in Angola. However, a deal was struck under which ZTS-Osos, based in Czechoslovakia, payments and sanctions-busting in Asia and elsewhere in Africa, supplied US$135 million of arms to Angola’s Simportex, the state-owned arms procurement company. suspicion is mounting that there At the core of the French police investigation is the allegation that the finance for this and subsequent might be something to hide. arms deals was raised illicitly through French institutions such as the government export agency, Sofremi, which handles sales of security equipment to Africa. The investigating magistrate, Philippe Courroye, is examining claims that the 1993 arms purchases from ZTS-Osos were disguised as police and security POINTERS 8 equipment, which would have been exempt from the UN and French arms embargoes. If so, it would have Djibouti, Ghana, been a remarkable deal: two arms traders raise finance through a French government export credit agency to break French law. More interesting, Falcone and Gaydamak were given Angolan citizenship, which Mozambique & DRC enabled them to sign the credit agreement to purchase the arms consignment in 1993. 9 February 2001 Africa Confidential Vol 42 No 3 After a raid on the sumptuous offices of Falcone’s firm Brenco at 64 London without interference from the British authorities. Avenue Kléber in Paris and on the residence of Falcone’s assistant, Perhaps the biggest questions will be raised by Gaydamak’s business Isabelle Delubac, French police widened the investigation to cover a partners. His important new partner in Africa-Israel Investments is series of arms deals between 1993 and mid-2000 involving the triangle Lev Leviev. Gaydamak has a 10.8 per cent stake in this Tel Aviv- of Russia (or Eastern Europe)-France-Angola. Initially, arrest warrants registered holding company; Leviev holds 47.25 per cent. Leviev also were issued for Falcone himself, Gaydamak and Jean-Christophe holds Gaydamak in the highest esteem, asking British journalists last Mitterrand. Falcone and Gaydamak face the prospect of charges of year to check his own business credentials by speaking to Arkady illegal arms trading and money laundering, while Mitterrand faces Gaydamak. Commercial rivals are less generous to them both. Chief possible charges of trafficking in influence and receiving embezzled among these is South Africa’s De Beers, incensed by Leviev’s company funds. All three strenuously deny wrongdoing, although success in sewing up diamond mining contracts in Congo-Kinshasa Gaydamak, from Israel, speaks of a political plot and seems in no hurry and Angola and securing exclusive diamond buying and marketing to discuss the issue with the French investigators. Mitterrand finally rights in the Ascorp joint venture with the Angolan government. was given bail in January after an anonymous benefactor produced the Leviev, 44, whose personal fortune is reckoned at more than $500 required $700,000 surety. mn., has presided over the meteoric rise to prominence of Leviev When a press report indicated that the police had found documents International Diamonds, which after its African successes, is bidding in Falcone’s office that showed an association with former Interior to displace De Beers in Russia. Leviev is said to have helped Russian Minister Charles Pasqua and his political ally Jean-Charles President Vladimir Putin in his battles with oligarch Vladimir Marchiani, another politician - Philippe de Villiers - went to help the Gusinsky; this helps the Leviev-Gaydamak partnership build on police investigation. De Villiers, who co-founded the right-wing Gaydamak’s already strong ties with Russian securocrats. Eurosceptic Rassemblement pour la France (RPF) with Pasqua in The Leviev-Gaydamak partnership in Africa-Israel is expanding 1999, told journalists that he could ‘confirm explicitly that the into the oil sector. Their Africa-Energy company recently purchased Mitterrand-Pasqua affair is a serious scandal, a state scandal with all TotalFina’s assets in the United States, a $400 mn. deal that intercontinental ramifications’. After an interview with the Paris included an oil refinery in Texas and a franchise for 1,700 filling investigation team, Pasqua pronounced: ‘The RPF has never received stations. This Russian-Israeli alliance is attracting attention. If a centime from Dos Santos, from Falcone or from God knows who!’ Leviev and Gaydamak use their combination of business acumen and political connections in the oil business as effectively as they have in Probing the arms triangle the diamond business, some of the oil majors operating in Angola may However, the investigations into the arms triangle have gathered pace. be taking a closer look at this newcomer. Or indeed they may seek to There are three parallel French investigations into Gaydamak’s business. capitalise on Gaydamak’s troubles with the French police. Firstly, by the Direction de la Surveillance du Territoire (DST) into the unlicensed sale of telecommunications surveillance equipment to Angola. The equipment enables Luanda’s intelligence agency to listen AFRICA/FRANCE II in to GSM cell-phones and to track down the coordinates of satellite telephones.
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