Time for joined-up justice on oil-related corruption cases involving Angola

23. October 2008

In France the Angolagate trial investigating illicit arms sales to Angola during the late 1990s, funded by oil revenues and allegedly involving the payment of illegal commissions, is currently underway. Two of the key defendants, businessmen Pierre Falcone and Arcadi Gaydamak, are also central figures in a case pending in Switzerland, which relates to the diversion of Angola oil revenues via similar offshore mechanisms but which has made no progress since 2005. In light of this, the Berne Declaration and Aktion Finanzplatz Schweiz are calling on the Geneva Public Prosecutor to fully investigate this case. The Swiss Agency for Development and Cooperation (SDC), for its part, must rethink its agreement to a demining deal that forms part of the restitution of US$21 million in Angolan public funds blocked in connection with the case.

Switzerland had preliminarily seized the funds as part of an investigation into the diversion of Angolan oil revenues supposedly destined to repay the country’s debt with Russia. The Swiss and Angolan governments concluded an agreement on 1 November 2005 for the repatriation of the US$21 million plus interest for use in humanitarian projects. One such project that the Angolan government proposed was a contract for the sale of demining machines already concluded with Swiss armaments producer RUAG. However, this contract does not meet the requirements of a humanitarian demining programme in accordance with the stipulations of the 2005 agreement.

The contract was also agreed with no transparency. According to information received by the Berne Declaration and Aktion Finanzplatz Schweiz, there were two contracts signed between RUAG and the Angolan government on the same date before 1 November 2005, and covering very similar material (demining machines as well as military equipment), but with different contract prices. In addition, the contracts allow for RUAG to collect a commission, as the company has to subcontract to a third party, German company MineWolf, for the production of the machines.
An expert opinion commissioned by the Swiss Agency for Development and Cooperation (SDC) had recommended that the SDC not give the green light to either contract. A professional training project which is also to be financed out of the US$ 21 million funds was subject to a public tender and it is incomprehensible why the same procedure has not been followed in the case of the demining deal.

In light of these concerns, the Berne Declaration and Aktion Finanzplatz Schweiz call on the Swiss Agency for Development and Cooperation to:

  • Rethink its agreement to the demining project.
  • Together with the Angolan government, call for proposals by Angolan civil society organisations for demining projects that meet the requirements of the 2005 agreement.
  • Publish the text of the agreement between Switzerland and Angola of 1 November 2005, in accordance with the spirit of the Swiss Law on the Transparency of public administration of 24 May 2006.

In December 2006, a group of Angolan citizens called on Prosecutor Zappelli to reopen the criminal investigation still pending in Geneva into the Angolan corruption case. In July 2007, a legal memo outlining in detail why the case should be reopened was also deposed. The case concerns US$774 million in public Angolan funds intended to repay Angola’s debt with Russia which passed through an account in UBS Geneva managed by a shell company set up by Pierre Falcone and Arcadi Gaydamak called Abalone Investment Ltd.

According to the 2004 Global Witness report Time for Transparency, of the total US$774 million received into the account, around US$600 million was subsequently transferred to accounts belonging to Falcone, Gaydamak and a series of obscure companies, with millions ending up in accounts in the name of high-ranking Angolan officials, including President Dos Santos. Genevan Public Prosecutor Daniel Zappelli must fully investigate this case and thereby do justice to the Angolan population.