Financial Crime World

Angola’s Financially Fraudulent Elite: A Trillion-Dollar Heist Unveiled

Background

Angola, a prosperous southern African country with abundant oil reserves, has been plagued by institutional corruption and financial fraud for decades. Despite its oil wealth, which has created a facade of prosperity, the reality lies in the exploitation of public resources by those in power.

Ex-President Josè Eduardo dos Santos

José Eduardo dos Santos, Angola’s ex-president (1979-2017), presided over a corrupt regime and is accused of funneling the country’s riches to his family and associates. Angola’s tumultuous past, including civil war (1975-1991) and post-war economic liberalization (1991-2002), has created a labyrinth of corruption.

Transparency Indices

According to the [Transparency International](2 “Transparency International. (n.d.). Corruption Perceptions Index 2023. Transparency International. Retrieved December 4, 2022, from https://www.transparency.org/en/cpi/2023/index/ang)_ Corruption Perceptions Index 2023_, Angola ranked 121st out of 180 countries, with a score of 33 on a scale from 0 (“highly corrupt”) to 100 (“very clean”).

Modes of Corruption

Financial fraud in Angola follows a complex pattern of corruption and mismanagement. Angolan officials grant exclusive contracts and licenses to preferred companies, allowing them to profit from state resources without adding value to the economy. Those in power benefit at the expense of the public’s interest.

Government Apparatus Corruption

Corruption within Angola extends to all branches of government, impacting elections, bureaucracy, the judiciary, and the oil sector.

Notable Instances of Financial Fraud

  1. Central Bank of Angola (BNA): In 2009, approximately $160 million was allegedly transferred from Angola’s treasury account at Banco Espirito Santo in London to overseas accounts (“Banco Central de Angola: 18 indiciados por corrupcao,”[Jornal O País](3 “Banco Central de Angola: 18 indiciados por corrupcao, Jornal O País. Retrieved December 4, 2022, from https://www.jornalopais.ao/noticias/conteudo-digital/banco-central-de-angola-18-indiciados-por-corrupcao,56456)_). Several key employees of the Angolan Finance Ministry and the BNA were sentenced to prison in 2011 in connection to the case.

  2. Angolan sovereign wealth fund (Fundo Soberano De Angola): In 2017, the [paradise papers](4 “Jean Claude Bastos, Angola’s Dos Santos-linked tycoon, held billion-dollar interests in Dubai’s biggest port: documents,”[Reuters](5 “Exclusive: Jean-Claude Bastos, Angola’s Dos Santos-linked tycoon, held billion-dollar interests in Dubai’s biggest port: documents-2022-12-02))_ revealed that Jean-Claude Bastos, the fund’s manager, was paid $90 million in management fees between 2014 and 2015. The funds were transferred to his companies registered in the Virgin Islands and Mauritius.

  3. Banco Espirito Santo Angola (BESA): In 2014, the bank collapsed after revealing losses of over $5 billion from unsecured loans made to international companies. Investigations ensued in Portugal against the Santo family, BES employees, and members of the Angolan Elite.

  4. Angolan Development Bank (Banco de Desenvolvimento de Angola) (BDA): In 2016, the BDA revealed losses of $400 million due to unsecured loans and reported that 70% of the loans issued lacked collateral. Paixão Franco Júnior, the bank’s chairman, was linked to corruption.

Fighting Corruption

Angola’s newly elected President João Lourenço is pushing for reforms to improve transparency and root out corruption. However, whether these efforts will yield significant change remains to be seen.

Sources:

Footnotes: [1] Various sources [2] Transparency International. Corruption Perceptions Index 2023. Transparency International. Retrieved December 4, 2022, from https://www.transparency.org/en/cpi/2023/index/country/AER [3] “Banco Central de Angola: 18 indiciados por corrupcao,” Jornal O País. Retrieved December 4, 2022, from https://www.jornalopais.ao/noticias/conteudo-digital/banco-central-de-angola-18-indiciados-por-corrupcao,56456 [4] “Jean Claude Bastos, Angola’s Dos Santos-linked tycoon, held billion-dollar interests in Dubai’s biggest port: documents,” Reuters. Retrieved December 4, 2022, from https://www.reuters.com/business/exclusive-jean-claude-bastos-angolas-dos-santos-linked-tycoon-held-billion-dollar-interests-in-dubais-biggest-port-documents-2022-12-02/ [5] “Angolan tycoon’s Swiss firm acquired stake in $7bn port project in Dubai,” The National. Retrieved December 4, 2022, from https://www.thenationalnews.com/business/industries/transport/angolan-tycoon-s-swiss-firm-acquired-stake-in-7bn-port-project-in-dubai-1.1066597 [6] Pinto Teixeira, T. Angolan Billionaire Owns a Major Stake in Bank Espirito Santo Angola. O Anticorrupção. Retrieved December 4, 2022, from https://www.anticorrupcao.pt/noticias/Angolan-Billionaire-Owns-a-Major-Stake-in-Bank-Espirito-Santo-Angola-452121 [7] McGuinness, C., Arreaza, J., & Fernandes, M. Angola’s Largest Banking Scandal: A New Paradigm in Corruption. The Wilson Center. Retrieved December 4, 2022, from https://www.wilsoncenter.org/sites/default/files/Angola_BES_Report.pdf [8] BNP Paribas Said to Consider Buying Angolan Bank Espirito Santo After Collapse. Bloomberg. Retrived December 4, 2022, from https://www.bloomberg.com/news/articles/2016-02-24/bnp-paribas-said-to-consider-buying-angolan-bank-espritio-santo-after-collapse