The UK and Corruption in Ghana 53


THE BRITISH GOVERNMENT ARE THE BIGGEST HYPOCRITES

British High Commissioner Nick Westcott is not afraid to step in to controversy. Having boldly told us that Vodafone did nothing wrong in their acquisition of Ghana Telecom, he now lectures Ghana that incoming governments must respect contracts entered into by the outgoing government.

Of course, that is true. As a general point, it is a simple statement of the legal position.

But we all know that Dr Westcott did not mean it as a general point. He meant that investigations into contracts including Kosmos and Vodafone must be stopped. Otherwise, he warned, investor confidence would be damaged ?” a warning that foreigners would take their dollars elsewhere.

But what is the logic of this position? No government may question any contract entered into by a predecessor, no matter how corruptly? That if you are a dreadfully corrupt foreign businessman, who has bribed a minister, you only have to hang on until the government changes, and then you cannot be investigated? Plainly this is a nonsense.

The fact is that, as detailed in a series of articles in the Financial Times of London, there are a whole number of questions about the Kosmos deal which give experienced observers great cause for concern.

One which particularly worries me is how, on the best oilfield in Ghana, Kosmos were able to get a royalty rate of only 5%, when the average on other fields is over 11%. There are suggestions that partners from EO were active on the Ghanaian government side of the negotiation.

There are also credible stories of Kosmos handing EO millions of dollars in cash notes for “marketing and publicity”.

Is Ghana forbidden from investigation because the government has changed? No, and they must not be bullied out of it by the British, Americans, IMF or World Bank. Those will always back wealthy Western companies against a developing African nation.

The Vodafone deal suffered ?” at the very least ?” from a lack of transparency and a lack of a level playing field for others ?” including France Telecom ?” who wished to compete. The final sales price was definitely too cheap.

I would like to know how Ghana Airways’ invaluable routes were awarded to GIA – a bunch of obscure and inexperienced investors who came only fourth in the official assessment of bids. The result has been the almost total disappearance of Ghana’s whole aviation industry.

I would like to know how industrial development funds were given to a network of companies the ultimate ownership of which traced back to the Minister of

Industry.

The British High Commissioner has the problem entirely backwards. It is not that the government is not honouring existing contracts. I am Chairman of several companies, including Atholl Energy. Atholl had a contract with the NPP government which has been honoured by the NDC government, because we carry our our work diligently and honestly.

The problem is that where contracts are not honest, action has not been fast enough or decisive enough to root out corruption.

Two of the worst examples are in the energy sector. Let us look at the case of another British company, Zakhem International Ltd. They are building the Kpone Power Project for VRA.

VRA bought the turbines from the manufacturer, Alsthom for US $70 million. They then paid Zakhem US $80 million upfront to install them and provide the ancillary equipment.

After three years, what do Ghanaian taxpayers have to show for their US $150 million? Absolutely nothing. An empty field at Kpone, surrounded by Ghana’s longest concrete wall so the Ghanaian public cannot see that their money has been stolen.

What is happening about it? Nothing, because Zakhem and their Ghanaian partners have stolen enough money to bribe all the officials involved. They are now claiming around town that the new government is also “In their pocket”.

Most of the $80 million has vanished forever, while the $70 million turbines are now badly damaged by disuse.

Or look at Balkan Energy. They claimed to have spent US $100 million on refurbishing the Osagyefo barge, at a time when they had really spent less than US10 million.

Under an astonishingly corrupt contract, Balkan are to lease the barge for $10 million per year, from the government of Ghana, but then charge Ghana over $40 million per year for its use as a “Capacity charge”. They will in addition charge the government of Ghana for the fuel, and make a profit on that too.

It is as if I rented your car from you for 100 Ghana cedis a month, then rented it back to you for 500 Ghana cedis a month plus charging you a premium on all the petrol you use.

Balkan stand to make a total of about $1.5 billion dollars in profit from the people of Ghana from this terrible deal. It is the most corrupt contract I have ever seen. It is astonishing that a country like Ghana would enter into a contract with Balkan, whose owner, Gene E Phillips, has stood trial as a gangster in the United States.

These are not crimes without a victim. Everyone who pays any VAT or other tax in Ghana is putting money into the pockets of these disgraceful conmen. Most of the taxpayers of Ghana are very poor, and the money is being taken by people who are very rich.

That is why I am speaking out. I am not supporting any political party. I am supporting the ordinary people of Ghana.

I first spoke out about corruption in Ghana back in 1999, when I was Deputy High Commissioner there. It caused a sensation in the Ghanaian media at the time. But people do not know that I was nearly sacked by the British government as a result.

The British government did not object at all to my attacking corruption in Ghana. The reason I was nearly sacked was because I said “Sadly some British companies have been involved in this corruption”. I was carpeted by the British government and told I must never mention British companies’ corruption.

At the time I was thinking of the British company International Generics Ltd and their involvement in scams over the La Palm and Coco Palm hotels.

The hypocrisy of the British government in defending corrupt British companies was most famously seen when Tony Blair ordered an end to a prosecution of the arms company BAE over massive bribes they had paid in Saudi Arabia. Blair declared that prosecuting BAE was not “In the national interest”.

Last week BAE again escaped criminal prosecution and were allowed to pay a fine instead, for corruption in Africa including Tanzania.

So Nick Westcott is only continuing a British hypocritical tradition of condemning corruption, unless it is British corruption.

The truth is that sadly there was a major increase in corruption in Ghana especially in 2007 and 2008. That was a major reason why the Ghanaian people voted to change their government. But so far there is little indication that the new government has done much to root out the corruption.

The danger in this is that ordinary people will become disillusioned with the political process.

Ghanaians are not stupid. People know who stole money, and they see them swanning around town in their fancy cars, unashamedly living the highlife. This can corrupt society. Young people can easily draw the conclusion that the way to make money is to be a corrupt politician or a drugs dealer.

The further danger is that, just like in Nigeria, they conclude that all the politicians of all the parties are into the corruption, and that is why everyone gets away with it.

I did not used to think that was true in Ghana, but I really am beginning to wonder, unless we see some effective action soon.

So rather than protecting the corrupt, the British High Commissioner should be offering help and assistance actively to attack corruption. That includes corruption by British companies.

He should also remember that, with oil revenues within touching distance, Ghana will soon have her own investment funds and no longer be so dependent on foreign investors. It is not for the colonial master to kick Ghana. The boot will soon be on the other foot.


53 thoughts on “The UK and Corruption in Ghana

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  • mary

    Craig. You are fearless in exposing yet more slithering slimy things under the stone. I am full of admiration for you.

  • Ruth

    Well perhaps the British government protects those companies because they have a relationship or are owned by the Establishment/permanent government. My research suggests intelligence operatives set up and run companies and very often these companies are involved in fraud and scams. There are usually telltell signs such as directors,nominee directors, firms of accountants where they’re registered etc.

  • Mark Golding - Children of Iraq

    “Blair declared that prosecuting BAE was not “In the national interest”.

    Last week BAE again escaped criminal prosecution and were allowed to pay a fine instead, for corruption in Africa including Tanzania.”

    In this case I applaud the diligence and perseverance of the Serious Fraud Office investigation into BAE’s dealings with the Saudi’s.

    Last week BAE again escaped criminal prosecution and were allowed to pay a fine instead, for corruption in Africa including Tanzania.

    I apologise to the board for my previous posting off topic, but I am livid, fuming and frustrated by the blatant double standards that I believe have occurred in the Ali Dizaei trial.

  • Roderick Russell

    Excellent article (The Independent) on corruption by 3rd world politicians posted above by someone at ” February 8, 2010 8:04 PM”. But is it just politicians in the 3rd world who are taking a corrupt slice of the money?

    A few years ago I read in the press that most Cabinet Ministers in the former Blair government had confidential offshore bank accounts. Of course these accounts can be perfectly legitimate, but they can also be used to disguise the source of deposits and it was hard for me to understand, that knowing this, as they must, why the Ministers involved did not disclose the details of the transactions that went through their offshore accounts. I wonder how systemic corruption really is? I despise the corrupt and totally agree with Craig’s sentiments, but I wonder if the High Commissioner is not being more of a realist than a hypocrit.

  • Gerard McCormick

    Craig

    Thank you for a brilliant article.

    I am much better informed.

    Is there no remedy through the Commonwealth Institutions?

  • Alastair Ross

    Craig, just how ‘British’ (and, by extension, worthy of your concern)is the Zakhem company? The Zakhem construction firm was founded by a Lebanese – born, US citizen (and purchaser of an Ambassadorship) called Sam Zakhem.

  • Craig

    Alastair,

    all these crooks are international, but the company is registered at 1 Hyde Park Gate London for the Ghana contract.

  • Alastair Ross

    Thank you for your reply, Craig.

    Perhaps corruption in Ghana is tolerated by the majority of that country’s citizenry simply because of a variation of intellectual honesty, so to speak, which goes like this :

    “I am an ordinary Ghanaian and I know, in my little heart of hearts, that were I in a position to enrich myself and my family through bribe – taking, I most certainly would do so – therefore any criticism, by me, of such time – honoured African practices would lack credibility and smack of hypocrisy”.

  • Roderick Russell

    Alistair Ross

    There are always two sides to political corruption ?” the bribe offerer, and the bribe taker, and the former is usually from the 1st world. Yes, I suspect that corruption is endemic throughout much of Africa, but who taught them and who offers the bribes? And anyway you are surely not suggesting that corruption is uniquely African?

    Would you, for example, regard Glasgow’s long time ruling Labour Party to be strictly honest and incorruptible? And I can certainly attest to the fact that elements in the London establishment are as crooked as a stick.

    The truth is that Africa has had a very hard time from Europeans. 350 years of the slave trade, their land taken from them for plantations, followed by 10 million deaths in the Congo just 100 years ago to enrich a greedy Belgian King would warp any society. There are areas of colonialism that we can be proud of, but Africa is not one of them. It is hardly surprising that Africa has some problems; we taught them only too well.

  • Frazer

    Alastair.

    Actually not quite true, but again quite true. Corruption in developing nations in Africa is endemic. A legacy from years ago and the rise of dictators such as Mobutu and Mugabe. I work in Africa, and have done so for many years in numerous countries, including Ghana.

    To get anything done, even to get past immigration or customs at an airport, a bribe of some kind is required. Again, this depends on the country in question, as some are more corrupt than others. I personally simply refuse to pay one red cent to any Govt minister, police officer,immigration official that even hints that giving them ‘a small coffee’ would smooth the way past them. Because of this attitude, I have had my luggage ripped to pieces at airports, had my perfectly valid visas refused, spent several nights in holding cells for trumped up immigration charges, have had a fully loaded pistol held to my head and been threatened with physical violence.

    I must say that when I had managed to contact my Embassy or Consulate in the countries in question they have been 100% fucking useless. Frankly I am not surprised in Craig’s assessment of Ghana today and the role of the now High Comissioner and the involvement in foreign companies ripping off the people of Ghana. Any expat new to ghana that needs to know whom to pay off only needs to go to Ryans Irish Pub on the last Friday of every month to the businessman’s get together and they will know who and where within an hour.

    I worked for Craig in Ghana and we built a multi million dollar power station that produces electricity for the Ghannain national grid. Did we pay a single Cedi in bribes, no way, Craig’s attitude is the same as mine, zero tolerence to smirking politicos that request a small coffee to smooth the way. Pity we cannot say that about a vast majority of companies currently operating today in Ghana.

  • writerman

    Different cultures have a strong tendency to condemn the corruption they encounter outside their own culture, whilst defining their own corrupt practices as “normal” and in many cases so ingrained that they become invisible.

    It reminds me of attitudes to certain forms of sexual behaviour, or drug use. It’s never ones own practices that are “perverse” or “dangerous”, as one swills down the forth or fifth wiskey, but those terrible people snorting cocaine!

  • writerman

    Perhaps I don’t have any real principles? I’ve travelled a lot, and I just like to get around as quicly and smoothly as possible, so I prefer to pay what’s the local custom when I have to. It’s a bit like tipping and ensuring better service in a cafe, only leaving some money for the maid in a hotel. Perhaps I’m too pragmatic?

    Corruption is part of what might call the unofficial economy, or the black economy, or the illegal economy. This kind of parallel economy has probably always existed, and is arguably necessary, injecting “flexibility” into what would otherwise be a very rigid system.

  • Frazer

    writerman.

    I agree with leaving a tip for waiters or hotel staff etc. I am notoriously generous in regard to this in dozens of countries. However, I do object to bribing an immigration or customs official whom get paid by thier Govt to do thier job. What would the reaction be if say, you landed at Heathrow and the immigration official asked you for 10 quid to process your passport? Same thing methinks.

  • Ruth

    I rember a Roumanian aquiantance of mine telling me that a very good friend of hers was in mortal danger one day and needed an operation to save her life. The surgeon refused until a bribe was paid.

  • Roderick Russell

    I too have bribed my way through African airports and immigration, to smooth the way and avoid the problems that Frazer has had. I also agree with Frazer that UK Embassies and Consulates in Africa and elsewhere are generally regarded by expats as “fucking useless” though some other countries do have consulates that appear to work. But I do think we have to recognize the very nasty contribution that Europeans made to much of Africa (not all of it).

    Take the Congo. 100 years ago the Belgian King ran this as a private fiefdom. To profit from a boom in wild rubber he turned much of the Congo into a slave state, and a very nasty one at that. For example, people were ordered into the jungle to collect a quota of rubber for nothing and if they did not achieve quota, it was not uncommon for one of their children’s hands to be cut off, or much worse. This sort of behavior was systemic throughout the Congo and well documented at the time. It has been estimated that as many as 10 million people died in the Congo as a result (more death than in the holocaust). And then there is the effect of 350 years of the slave trade, of the forced confiscation of people’s land, ect. Now when a society has gone through a trauma like this it is hardly surprising that it does not perform normally.

    Now the parallel with Malaysia and Singapore is not really relevant, as this sort of trauma did not happen to their people. A better parallel in the Far East might be Cambodia.

  • Alastair Ross

    Making mention of the horrors of the Belgian Congo is not really relevant when the discussion is about Ghana, a former British territory run, during colonial times, by the same sort of people who ran places like Singapore and Malaysia.

  • Kofi

    I find your comments very insightful. Thank you for bringing up the issue of Ghana Airways. I still cannot believe that Ghana’s flagbearer is dead. Nkrumah will weep in his grave.

  • Ben Adu

    I was a member of the Vodafone Review Committee that investigated Vodafone’s acquisition of Ghana Telecom. I have documentary evidence of the corrupt role of the British Government and wish to share them with you. The documents shows that The British Government, represented by Mena Rawlings, the then Deputy High Commissioner and James Cribb, Head of UK Trade and Investment, colluded with the Kufuor government to ignore the public bidding process so that the British government’s choice, Vodafone, could acquire Ghana Telecom.

    How do I send the documents to you?

  • Faisal

    Ben Adu

    I am interested in getting that documents on GT/Vodafone Sale. If you can email it to me [email protected] ,i would very much appreciate it.

    If you were on that committee, how far do you the government would go with it? It seems nothing is happening. Is it also true the committee findings were completely campaign messages.

    Why did the vice-president and minister of communication(who was the ranking member in parliament at the time of the deal) launch VODAFONE in Ghana.

    Is it true some monies have exchanged hands to keep this matter under the carpet?

    Could the appointment of the Minister of Communication to the Chairman of Governing Council of the biggest Telecommunication Group in the world be a decoy?

  • Presidential Thinker

    Exellent piece of writing and straight to the point.

    But it seems the writer is passionate for a good reason or bad reason.

    I pray its for a good reason

  • Guy mmoasem

    Craig,

    You did not address my analysis of the elections you managed for CIA and MI6 to put Kuffuor,a Mobutu rogue, in power in Ghana sent you last year via Univ. of Dundee.You were part of the machinery

    that messed up Ghana and one questions your SINCERITY after the fact. The US and Britain mauntain neo-colonialist grip on Ghana and the Kuffuor era was the worst in annals of Ghana’s history.

    You aided a bunch of NATION WRECKERS to aid the loot of Ghana!!

    As for the Vodaphone Committee Report,

    Mr.Adu should not take the indescent liberty of giving you one.Do get a copy under the Freedom of Information Act.Yes

    the criminals must arrested and prosecuted plus shot DEAD in public for acts of treason.Kufour must be arrested and prosecuted without mercy.

    You see the outcome of the mess you helped created in Ghana from 1999 using $10M to aid NPP-CIA narco thugs.Ghana-ians will know the TRUTH and will enforce their JUSTICE by any means necessary.

    As a colonizer who rejects its own criminal conduct,I will appreciate you you join British progressive forces that

    have the capacity to prosecute and punish rogue Tony Blair too.

  • Frazer

    @Guy.Well you are an angry man.You obviously have not read one word Craig has written in his book The Catholic Orangemen Of Togo.It seems you were quite happy under Rawlings. Normal people in Ghana are highly unlikely to suddenly change into groups of looting and killing mobs as you suggest.Or maybe you were profiting very nicely thank you under the Rawlings regieme ?As far as a democratic election bieng manipulated by MI6 and the CIA, the usual bad boys, deluded people like you always blame, well it speaks for itself.Even if this deluded scenario was true, don’t you think they would have moved heaven and earth to keep Mr Kofuor in power. He lost by the way.Oh and a final point, note the name, you seem not to know how to know the correct spelling of the surname of the man whom was running Ghana. Are you actually from Ghana or maybe Larry from St Louis in another persona.I think we should be told !

  • Sarpei NUNOO

    Thank you, Mr. Murray, for a great article! Very refreshing to have honest and brave people who are not afraid to reveal the truth.

    Knowledge is power, especially when it is applied. Your article has empowered me. It is now up to me to …….

  • Mahmud

    Thank you so very much for your concern about my country Ghana and the world at large.Infact i was one of the fellows who disagree with your stands during the election of 2000 but you have prove me and many Ghanaians wrong please keep on exposing corrupt act in Ghana even though my party is in power they seems not to know what to do.It looks like they have been out of Government for a very long time before coming back

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