Dodgy Gold dealings in Australia, page-4

A bit more about the **on, the Elf Story and the French story from the Tax Justice Network.  The full affair is well really worth reading...A gripping and very sobering story.  I always wondered how they could afford all those expensive homes in Paris and surrounds...nearly as good as Leopold II in the Congo....

The biggest secret in Africa?


Once again the latest chapter in one of the biggest, and most fascinating, stories about Africa's international relations has been almost entirely neglected by the English-speaking media. The French Secretary of State for Co-operation, Jean-Marie Bockel,has challenged his own president, Nicolas Sarkozy, to fulfil earlier promises of a “rupture” with the bad old ways of “Françafrique.” As he said:

This "rupture" is taking its time to arrive. There are still too many private interests; too many intermediaries without clear utility; too many parallel networks to allow a clean, uncomplicated partnership of equals. The moment has come to . . . kill off these moribund practices and renew our ways of dialogue with Africans. The President will be in Africa at the end of February: that will be a good moment to do it.

If you don’t know much about this, bear with us, because it is important.

Bockel’s comments provide the clearest indication yet that (numerous) reports in recent years of the turning of a new page in France's relations with Africa are wide of the mark. It concerns what (one might argue) was, for decades, perhaps the biggest, dirtiest secret in all of Africa. It is hard even to believe this kind of thing could happen.

The word Françafrique is a mixture of “France” and “Afrique” (Africa) but it also sounds like France à fric (France on the take,) which gives a clue as to other meanings, which are deep, and layered like the rings of an onion. The word came into popular use after the publication of a 1998 book of this name by the late François-Xavier Verschave, describing a sprawling, baroque incestuous edifice of corruption underpinning the relations between France and its former African colonies, with much of the murky goings-on being routed through – you guessed it – tax havens: Switzerland, Liechtenstein, Monaco, and so on. African presidents were toppled, rebellions were financed, and whole governments were corrupted on behalf of the system.

Near the heart of Françafrique (but it was more than this, too) lay the giant, brooding “Elf system,” starring the former French state oil company Elf Aquitaine (since merged into Total, with much of the old management purged.) And the Elf system, since the 1960s, had at its heart the tiny, oil-rich African emirate of **on, and it was also plugged into the oil industries of Congo-Brazzaville, Angola and Cameroon. The two master-puppeteers of this international edifice were the mysterious French master-manipulator Jacques Foccart, on the one hand, and **on’s president Omar Bongo Ondimba, now Africa’s longest-serving leader. Bongo was always protected by secret defence accords with France, and several hundred French troops in his capital Libreville, stationed in an encampment connected to one of his palaces by underground tunnels.

Elf-**on was the pumping heart of the Elf system, and its operations acted as giant, secret, oil-fed offshore cash pump-cum-slush fund, available for the secret financing of all the main French political parties, as well as the French intelligence services, and as a source of secret bribe money to back French diplomatic, political and economic objectives all around the globe, in a wide web of countries ranging from Venezuela to Germany to Taiwan. The octopus-like structure was also plugged into African secret societies, freemasonry circuits, presidencies, European refineries, international arms dealers, western banks, tax havens (of course), and even international media organisations.

A few highlights from the system have emerged in English-language media, and is described in detail in the book Poisoned Wells, by Nicholas Shaxson (who is a consultant to TJN and author of today’s blog), which covers this affair over several chapters, starting with an offer of help on a visit to **on from a mysterious Frenchman, Alain Autogue.

Looking back, Mr. Autogue’s invitation reminds me of the science fiction film The Matrix, when the main character is presented with a blue pill, a route back to normal life, or a red pill, offering an alternative reality, a chance to “see how deep the rabbit hole goes.” I asked him: What did he have in mind? An emphatic message came back from Paris.“Someone will pick you up at the airport. Don’t worry. Bon Voyage.” I accepted Mr. Autogue’s invitation.

(See the book reviewed in, for example, the London Review of Books. If you read French, there are plenty of books to choose from; you might start with Xavier Harel’s recent Afrique: Pillage à Huis Clos or the book Françafrique itself.)

Another central part of the mystery was a curious little bank, part-owned by Elf and Bongo, called the French Intercontinental Bank (Fiba,) housed in an innocuous-looking building next to the Elf headquarters in Libreville:

Like a trick bookcase in a haunted house, Fiba spun Elf’s cash back to front and upside down, then snaked it out through tax havens. Orders were transmitted verbally, then documentation was destroyed. African leaders got 20 to 60 cents of each barrel that Elf produced in their countries; other flows went to the intelligence services for covert operations, a bit like the Iran-Contra affair in the 1980s (and the two affairs shared some participants). Fiba’s president said in court that financial flows were conceived so that the Africans were only aware of the official lending, but were ignorant of the whole system—which Elf rendered deliberately opaque.

This “Elf System” was an open secret in the most élite circles in France and its former colonies; but the world's media all but ignored it: many in the French media were deeply compromised, and the tax haven secrecy that suffused the whole system made it hard to get a grip on what was happening. It is astonishing that while many English-speaking news organisations did cover the trials and a few other elements, they have barely scratched the surface of this remarkable affair.

The Elf system was first opened up to public scrutiny in 1994 by the investigating magistrate Eva Joly (a good friend of TJN) whose brave work, along with efforts of other magistrates, culminated in a series of trials and convictions of Elf officials in November 2003. (As the former head of Elf explained, however, the really big fish escaped justice.) French and African politicians, captains of industry, and others have since fallen over themselves to declare this baroque, confusing affair dead and buried. Sarkozy promised the French electorate that his presidency would involve a “rupture” with the bad old ways of the past -- and Françafrique was widely presumed to be part of that grand bargain.

So in this context, Jean-Marie Bockel’s words this week are interesting. As reported by Le Monde and the French-African publication Jeune Afrique:

I want to sign the death warrant of Françafrique . . . I want to turn the page on behaviour from another age, on an ambiguous and complacent form of relationships which some people – here as well as there (in Africa) use to their advantage, to the detriment of the wider interest and of development . . . I have been in this job for six months; I have had time to look around, to diagnose for myself, to listen to African society – and not just its leaders – and I am now waiting for him (Sarkozy) to confirm this opinion, and to allow us to act.

Strong, and surprising, words. It is interesting to note that on the day of French President Nicolas Sarkozy’s victory in presidential elections in France in May 2007, he spoke to just one foreign leader: Omar Bongo of **on. As Bongo himself said:

Sarkozy, I know him well. I’ve already said that he’s a boy whom I like a lot. After his victory, he called me to say: Omar, thankyou. I congratulated him for having listened to me. In return, he thanked me for certain parts of my advice.

Bongo did not say what that advice was. Perhaps he was recommending a design for Sarkozy's curtains in the Élysée Palace. Perhaps. And what of the several hundred French troops in Libreville? They remain there today. The page has clearly not yet turned, although **on's reaction to Bockel's words certainly indicate some new tensions: **on said those in France calling for a break with the past in Paris' relations with Africa should first "break with the arrogance that have often marked their links with Africa".

Before you (if you are an English speaker) scoff at all this as "typically French" corruption, stop. The Elf system was by no means the only transnational system of this kind, linking an oil industry in a producer country, via tax havens, to political systems in consuming countries, underpinnned by transnational military arrangements, and corrupting democracies around the world. Think Britain, the United States, and Saudi Arabia (see this, for example, or this.) There are several others. The great virtue of the "Elf Affair" is that for once, the forces of law and order broke it open. It is thus of immense value as a resource for helping us understand what is really going on behind the façades, in our globalised world.
Eva Joly, the investigating magistrate who broke open the Elf Affair, is now back home in her native Norway, battered from her experiences in Paris. (You might try her book "Justice Under Siege" or, if you read French, two short memoirs: "Notre Affaire à Tous" and "Est-ce dans ce monde-là que nous voulons vivre?"

We like this quote about tax havens, from the first of those two French books.

The magistrates are like sheriffs in the spaghetti westerns who watch the bandits celebrate on the other side of the Rio Grande. They taunt us — and there is nothing we can do.

Recently, Joly (who has been a winner of Transparency International’s Integrity Award and been named ‘European of the Year’ by Reader's Digest magazine) gave an interview with the Norwegian development journal Development Today. The fight against tax havens, she concluded, must now be “Phase Two” in the global fight against corruption. Quite right too. The tax haven angle on stories like this allows us to see the world differently, and put some of the world's most highly-praised corruption initiatives into perspective. Read more about what corruption really is, join us, and get involved in the emerging debate.