Al Jazeera is carrying a superb investigation of the thoroughly rotten world of offshore corporate service providers. For this investigation Zimbabwean journalist Stanley Kwenda and Ghanaian undercover journalist Anas Aremeyaw Anas went under cover, pretending to be a corrupt Zimbabwean official who had made some big money in a major mining deal, and his lawyer. The video here, and the transcript I’ve written up below, is not for the fainthearted. This has got to be one of the best and most dramatic undercover offshore investigations I’ve seen.
Here’s Aljazeera’s brief summary of the piece:
“It just so happens that the pair’s enquiries take place in the Seychelles but, as they discover to their horror, they could just as easily be in any one of a number of offshore locations (or even in the major cities of Europe and the US) where anonymous companies can be set up for the express purpose of secretly moving money and keeping its origins hidden from prying eyes.”
The piece, aptly entitled How to Rob Africa, starts by showing us a huge Zimbabwean diamond mine, and it interviews Tenda Biti, Zimbabwe’s finance minister, who is asked for evidence of where all the money from the mine is. The answer could not be clearer.
“The only evidence I have is that we are not getting the money. We have evidence of the quantities that are being mined and exported – but nothing is coming into the fiscus. I don’t know where it is going. It is not coming to us. That means some person is getting it. They are not getting it legally. So he or she is a thief.”
OK, not exactly a surprise, but when they get to the Seychelles, they meet two officials working for a company called Zen Offshore: one with an Eastern European accent, the other apparently Australian:
Journalist: “. . . you can appreciate why I am saying this. Because my client is from Zimbabwe and he’s the liaison officer between the Zimbabwean government and the rich diamond mines.”
Zen: “Yep, we don’t want to know that (giggle, giggle all round.) That is the sort of thing we can’t have knowledge of. If we have knowledge of that, we have to put it forwards. So I haven’t heard a word you said in the last couple of minutes.
And they get into details of how easy this is to do:
“You can put a company inside a company inside a company if you want to.
. . .
You buy this company, “Kind International Consulting”; you may register another company in Dominica, say, owned by this company. You put the shareholder of this company as the Dominican company. Then you buy a Belize company, you put the shareholder of the Dominican company as the Belize company. So you can actually fit a structure. First they’ve got to go to Belize. Then they’ve got to go to Dominica. Then they’ve got to come to Seychelles. It’s just impossible. No-one is going to try to chase that sort of information.
. . .
You can have layers of any amount. . . and this is something that the head office company does a lot of. They do really complex structures.”
The bare faced, bald faced, corruption of all this. If the world’s richest countries seriously wanted to crack down on this stuff, they easily could. They could cut jurisdictions like Seychelles out of the global financial system, and put corporate service providers (not to mention a slew of accountants, bankers and lawyers) in jail. They could do so much more. But they don’t. Kwenda summarises:
“This made me feel that the whole offshore system is basically designed to help people evade the law. What I can’t understand is why the West, with all its power, is allowing this distorted system to exist?
The whole experience has left me shell shocked.”
Then they went to another company, Premier Offshore Ltd. This man also explained how to disguise transfers of corrupt money, via a consultancy company:
“you organise for payment to be deposited in that company’s account, for payment of your fees and charges. And as such, finally, you get your money, quietly.
. . .
Or, otherwise we can create another company. You see, this issue of having International Business Companies, Offshore Companies, you can make one to complement the other, depending on your needs and your use for it.”
Journalist: “the meeting was quickly turning into a crash course in money laundering. To think that we had only been in Seychelles a couple of days, and were finding it this easy to meet professionals willing to help us, it is no wonder that Africa loses.
. . .
Only God knows how many more corrupt people he has assisted.”
And they end up by confronting the official, in quite a dramatic scene, and they get someone from the Seychelles authorities whose reply is, predictably, that these are just a few bad apples. (He does, though, correctly point to U.S. and U.K. hypocrisy on all this.)
If you have 25 minutes to spare, and want to understand more about why the world’s poorest people and countries are so poor, then this is highly recommended.