How Fortunes are Made: Meet & Bribe Insiders
|October 25, 2013||Posted by Staff under Corruption|
by Patrick Radden Keefe
Guinean officials granted exploration permits for half of its iron deposit to Beny Steinmetz Group Resources. Yet B.S.G.R. had no experience exporting iron ore.
Beny Steinmetz, who made his name in the diamond trade, is, by some estimates, the richest man in Israel; according to Bloomberg, his personal fortune amounts to some nine billion dollars. The corporate structures of his various enterprises are so convoluted that it is difficult to assess the extent of his holdings.
Well-connected foreigners often purchase lucrative assets in Africa at prices far below market value, by offering inducements to predatory local élites. “Africa’s resource wealth has bypassed the vast majority of African people and built vast fortunes for a privileged few.”
The government in Conakry had a Potemkin quality: a profusion of bureaucrats showed up for work at crumbling administrative buildings, but there was little genuine institutional capacity. “The central bank, they were printing counterfeit money,” President Condé said.
“I can’t task my gendarmerie to do the investigation,” President Condé observed. “They’ll come up with members of their own families.”
B.S.G.R.’s agent, Cilins, became friendly with the staff in the business center of the main Guinea hotel, and persuaded them to hand him copies of all incoming and outgoing faxes. In this manner, he learned details about the regime’s frustration with competitors.
Each time that Cilins flew from France to Guinea, he brought gifts—MP3 players, cell phones, perfumes—which he disbursed among his contacts. They came to think of him as “Father Christmas.”
Cilins hired a brother-in-law of the President, then secured an introduction to one of his wives. Not long afterward, Cilins and several associates from the company obtained an audience with the President. At this meeting, they gave General Conté a watch that was inlaid with Steinmetz diamonds. At another meeting, they presented the Minister of Mines with a model of a Formula 1 race car that was similarly encrusted with Steinmetz bling.
Many countries aggressively prosecute domestic corruption but are much more permissive when it comes to bribes paid abroad. Until fairly recently, French firms that gave bribes in order to secure business in foreign countries could declare them as deductible business expenses.
When you disembark from a plane in Conakry, the corruption hits you almost as quickly as the heat. At the airport, a uniformed officer will stop you, raising no specific objections but making it clear, with his body, that your exit from the situation will be transactional. Out on the rubble-strewn streets, which are perfumed by the garbage that clogs the city’s open sewers, at night insouciant young soldiers position themselves at intersections, holding submachine guns; they lean into passing cars and come away with cash.
A high official, Thiam, would meet a B.S.G.R. corporate jet at Conakry airport, unload suitcases full of cash, then distribute bribes to the junta’s leaders. Before he left office, in 2011, he bought an apartment on the Upper East Side of Manhattan, for $1.5 million, and an estate in Dutchess County, for $3.75 million. He paid for both properties with cash.
There are often three parties to a corrupt deal: the briber, the bribed, and the lawyers and financial facilitators who enable the secret transaction. The result is “a web of corporate opacity” that is spun largely by wealthy professionals in financial capitals like London and New York. The easiest country in which to establish an untraceable shell company is not a tropical banking haven but the United States.
Asher Avidan, the head of B.S.G.R.’s Guinea operations, and a former member of Israel’s internal security service, Shin Bet, signed contracts with a wife of President Conté. An American lawyer involved in the case said, “I’ve been involved in corporate corruption work for thirty years, and I’ve never seen anything like this. A contract for bribery that’s actually signed by a senior executive? With corporate seals?”
Steinmetz alleged that George Soros had perpetuated the rumor that Steinmetz tried to have President Condé killed, by backing the mortar attack on his residence in 2011. B.S.G.R. maintains that this rumor is entirely unfounded. B.S.G.R.’s lawsuit against PR firms that quit working for them was recently settled out of court, with no admission of wrongdoing by Malloch-Brown or F.T.I.