Angola: US investigation threatens financing, investment – consultancy

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Angola: US investigation threatens financing, investment – consultancy

7:27 CAT | 17 Feb 2021

File photo: Plataforma Media

A report by consultancy Pangea Risk said that several Angolan leaders, including the president, João Lourenço, are being investigated in the United States, which may compromise multilateral funding and debt restructuring in the Portuguese-language country.

The document, seen by Lusa, and quoted by the newspaper “Expresso”, dated 15 February, said that the new US president, Joe Biden, will give new impetus to the investigations, which involve João Lourenço, his wife, Ana Dias Lourenço, and several business partners and companies.

According to Pangea Risk (ex-EXX Africa, a consultancy specialising in risk management analysis in Africa and the Middle East), US prosecutors have collected several pieces of evidence of violations of US laws and regulations over the past year.

Since coming to power in 2017, Lourenço has launched an intense anti-corruption campaign that many believe is aimed at the family of his predecessor, José Eduardo dos Santos, particularly his daughter, Isabel dos Santos, who is the target of several lawsuits in Portugal and Angola.

The consultancy said that this positioning helped Angola benefit from a boost to its aid programme from the International Monetary Fund (IMF) and credit facilities and support from several international partners.

Angola has also become eligible to receive over $2.6 billion (€2.14 billion) in debt service relief outlined in the Debt Service Suspension Initiative (DSSI), which the country negotiated with international creditors, which represents 4.3% of Angola’s gross domestic product (GDP) and a third of the relief for Africa.

“This goodwill, which Angola’s international partners have demonstrated over the last three years, could quickly fade as new allegations of state corruption and fraud involving the current government come to light,” the document said.

Pangea said that the US is investigating Lourenço and his family members for a series of alleged violations of the Foreign Corrupt Practices Act (FCPA), illegal banking transactions, bank fraud for buying property in the US and an attempt to defraud the US Justice Department.

In the report, the consultancy said that the alleged fraud, corruption, and embezzlement practices might impact foreign investors in Angola and frustrate the country’s relations with donors and creditors in the coming months.

Among the ongoing investigations are allegations of payments of bribes and illegal commissions paid by Brazil’s Odebrecht to companies owned by João Lourenço, his wife and close business partners, as well as alleged suspicious and fraudulent transactions made by other companies controlled by the president, such as Simportex, linked to the Ministry of Defence, banks and construction companies.

Pangea Risk also pointed to involvement with the lobbying and public relations company Squire Patton Boggs, to whom $1.042 billion (€856 million) was reportedly paid, part of which was directed to Malta-based ERME Capital, managed by Pedro Pinto Ferreira and Maria Mergner, friends of former president Manuel Vicente, who the consultancy says is a close ally of President Lourenço and political and business rival of Isabel dos Santos.

Pangea claims that if these allegations, revealed by the Associated Press, are proven to be true, the Angolan government would be violating US rules on hiring lobbyists.

Other alleged violations under investigation involve suspicious travel to the US, irregular lobbying and unexplained wealth.

“If the United States has jurisdiction, the implications for President Lourenço, his family members and associates will be broader and more serious, including potential freezing of assets, travel bans, suspension of bank accounts and other sanctions,” the report said.

According to Pangea, the network that is allegedly involved in the misappropriation of Angolan state funds for the benefit of its private companies, as well as financing the electoral campaign of the Popular Movement for the Liberation of Angola (MPLA, ruling party) includes companies such as Gefi (Financial Management and Participation), long implicated in opaque contracts with the state.

Lourenço’s network includes a close circle of family members, including his wife Ana Dias Lourenço – who controls the Orion communications agency, which helps finance the party and enriches the family – daughters, nephews and nieces, brothers and sisters, the report said.

A second circle includes prominent business people, ministers and public officials, and the most trusted advisers such as former vice-president Manuel Vicente, implicated in several scandals in Angola and internationally.

The investigations also focus on companies such as the Omatapalo construction company, which Pangea says is linked to João Lourenço and won three contracts with the state in 2019, exceeding $450 million (€370 million).

The US investigation focuses on awarding of opaque contracts worth $500 million (€410 million) in 2020, and goes back to the time when João Lourenço was defence minister (2014 -2017), has approved, through SIMPORTEX, a contract worth $450 million with Privinvest – the company at the centre of the hidden debt scandal revealed in Mozambique.

The opaque military contracts also involve ALL2IT, a company controlled by his nephews, in a deal financed by Banco Angolano de Investimentos, which has Lourenço and Vicente among its shareholders.

Special Report: US administration steps up #investigation into #Angola president and business partners | More @ https://t.co/rGFtMSfKEr – https://t.co/HJgG4cKCwo #USDOJ #FCPA #FARA pic.twitter.com/8okONPLbf6

— PANGEA-RISK (@PangeaRisk) February 15, 2021

A lawsuit involving the company Aenergy and Minister of Energy and Water João Batpista Borges is also underway in the US courts.

The investigations also involve the Brazilian-Japanese businessman Minoru Dondo, who has won contracts worth millions of dollars since 2004 and is also being investigated by the French and Brazilian authorities.

The deals involved other advisers, such as current chief of staff Edeltrudes Costa and Manuel Vicente and family members and João Lourenço, who allegedly benefited from the contracts.

The alleged unexplained fortune is managed by banks controlled by Lourenço’s network, such as BAI and SOL.

Contracts signed with Angoprojetos, Sotal and Engetech, in which the president and the minister of construction and public works, Manuel Tavares de Almeida, have stakes, are also in the sights of the US authorities.

Pangea warned of the reputational risk to investors of contracts signed with companies which Pangea hides, their owners such as JALC – Consultores e Prestação de Serviços Limitada, Comeng – Engenharia e Construção Civil, Azury and associate Atenium – Serviços de Consultoria that will “face greater scrutiny” and will be the focus of investigations.

A central point of the investigations is the property that João Lourenço and family own in Bethesda, in the US state of Maryland bought in 2013. According to Pangea, the family also has houses in Washington DC, Virginia and Texas, which adds that the source of this income is being investigated.

The consultancy noted that these investigations might represent a turning point in relations between the US and Angola, which had improved in recent years when the Angolan government sought support from the IMF and multilateral donors in the face of Chinese disinterest.

Pangea said that for the new Biden administration it is increasingly clear that the anti-corruption campaign targeting the dos Santos family has only covered up creating a new network of patronage and misappropriation of public funds.

He also points to the reputational damage of anti-government demonstrations and consequent police repression that also contribute to the loss of popularity.

Source: Lusa