Geneva Prosecutor must revive Angola Oil Corruption Probe

Basel, Lausanne und London, 13.02.2008 - Anti-corruption organizations Action Place financière Suisse (AFP), Berne Declaration and Global Witness today called on the Public Prosecutor and the Investigating Judge of Geneva to take action in a criminal investigation pending since 2000 into alleged corruption that involves significant public funds and key political figures in Angola, one of Africa’s major oil producers.

The case concerns hundreds of millions of dollars of suspicious transactions through a bank account in Geneva at the end of the 1990s. The funds in question were Angolan oil revenues destined to repay the country’s debt with Russia. There is sufficient evidence of the crimes of corruption of foreign public officials and money laundering for an investigation to be carried out. Despite this, a criminal complaint into this case was shut down by the Public Prosecutor of Geneva, Daniel Zappelli, at the end of 2004.

On 22 December 2006, a group of Angolan citizens called on Prosecutor Zappelli to reopen the case. In July 2007, a legal memo outlining in detail why the case should be reopened was also deposed with the Prosecutor and with the investigating judge in charge of the case, Vincent Fournier. To date, there has been no further action on the part of the authorities.

In a letter of 12 February, the three advocacy groups called on the Genevan Prosecutor and Investigating judge to proactively pursue the Abalone investigation. According to André Rothenbühler of AFP “the Swiss judicial authorities, particularly those in Geneva, must prioritize the fight against corruption and money laundering. Otherwise their behaviour seriously calls into question the credibility of Switzerland’s international anti-corruption commitments.”

From 1997 to 2001, US$ 774 million of Angolan oil revenues were paid into an account at UBS Geneva belonging to Abalone Investment Limited, a shell company run by businessman Pierre Falcone and his associate Arcadi Gaydamak. This sum was intended to repay Angola’s bilateral debt with Russia, but only US$ 161 millions were transferred from Abalone to an account marked Russian Ministry of Finance. Around $600 million was transferred to accounts belonging to Falcone, Gaydamak and a series of obscure companies, with millions ending up in the private accounts of high-ranking Angolan officials, including President Dos Santos, according to a memo reproduced in the French newspaper Le Canard Enchaîné and documents seen by Global Witness.1 Falcone was investigated for ‘money laundering, support for a criminal organisation’ and ‘corruption of foreign public officials’ in the Swiss enquiry closed by Zapelli. Gaydamak was never formally charged. Both men deny any misappropriation of funds.

Falcone is due to stand trial in France later this year in criminal proceedings arising from the ‘Angolagate’ scandal, which involved alleged illegal arms trafficking to Angola during the civil war. He has already been given an four-year prison sentence for tax fraud and sentenced to a further year by French courts for receiving commissions in a case involving misappropriation of public funds via Sofremi, a company which promoted the sale of security material.2

Anne-Kathrin Glatz of the Berne Declaration commented: “With the first democratic elections taking place in Angola this year, Angolan citizens must know the truth about any involvement of their authorities in alleged misappropriation of public assets. Their oil revenues must be managed transparently and go towards poverty reduction.” Angola’s annual earnings from oil are around $US 15 billion. Despite this wealth, three quarters of its citizens live below the poverty line.3

1) See ‘Time for Transparency’, Global Witness, March 2004, pp. 41-45.

2) See Le Monde ‘Pierre Falcone condamné à quatre ans de prison ferme pour fraude fiscale’, 18 January 2008 and AFP ‘Prison ferme pour le fils Pasqua et Pierre Falcone dans le dossier Sofremi’, 11 December 2007.

3) See ‘IMF Executive Board Concludes 2006 Article IV Consultation with Angola’, FMI, 15 November 2006 and ‘ANGOLA: Poor marks for progress on MDG’, IRIN, 23 October 2006