The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth. Tom Burgis
team. The foyer of the ultramodern tower in central Luanda that houses its headquarters is lined with marble, with comfortable seats for the droves of emissaries from West and East who come to seek crude and contracts. Few gain access to the highest floors of a company likened by one foreigner who has worked with it to ‘the Kremlin without the smiles’. In 2011 Sonangol’s $34 billion in revenues rivalled those of Amazon and Coca-Cola.
Oil accounts for 98 per cent of Angola’s exports and about three-quarters of the government’s income. It is also the lifeblood of the Futungo. When the International Monetary Fund examined Angola’s national accounts in 2011, it found that between 2007 and 2010 $32 billion had gone missing, a sum greater than the gross domestic product of each of forty-three African countries and equivalent to one in every four dollars that the Angolan economy generates annually.5 Most of the missing money could be traced to off-the-books spending by Sonangol; $4.2 billion was completely unaccounted for.
Having expanded the Futungo’s looting machine, Manuel Vicente graduated to the inner sanctum. Already a member of the MPLA’s politburo, he briefly served in a special post in charge of economic coordination before his appointment as dos Santos’s vice president, all the while retaining his role as Angola’s Mr Oil. He left Sonangol’s downtown headquarters for the acacia-shaded villas of the cidade alta, the hilltop enclave built by Portuguese colonizers that serves today as the nerve centre of the Futungo.
Like its Chinese counterparts, the Futungo embraced capitalism without relaxing its grip on political power. It was not until 2012, after thirty-three years as president, that dos Santos won a mandate from the electorate – and only then after stacking the polls in his favour. Critics and protesters have been jailed, beaten, tortured and executed.6 Although Angola is not a police state, the fear is palpable. An intelligence chief is purged, an airplane malfunctions, some activists are ambushed, and everyone realizes that they are potential targets. Security agents stand on corners, letting it be known that they are watching. No one wants to speak on the phone because they assume others are listening.
On the morning of Friday, 10 February 2012, the oil industry was buzzing with excitement. Cobalt International Energy, a Texan exploration company, had announced a sensational set of drilling results. At a depth beneath the Angolan seabed equivalent to half the height of Mount Everest, Cobalt had struck what it called a ‘world-class’ reservoir of oil. The find had opened up one of the most promising new oil frontiers, with Cobalt perfectly placed either to pump the crude itself or sell up to one of the majors and earn a handsome profit for its owners. When the New York stock market opened, Cobalt’s shares rocketed. At one stage they were up 38 per cent, a huge movement in a market where stocks rarely move by more than a couple of percentage points. By the end of the day the company’s market value stood at $13.3 billion, $4 billion more than the previous evening.
For Joe Bryant, Cobalt’s founding chairman and chief executive, a punt based on prehistoric geology appeared to have paid off spectacularly. A hundred million years ago, before tectonic shifts tore them apart, the Americas and Africa had been a single landmass – the two shores of the southern Atlantic resemble one another closely. In 2006 oil companies had pierced the thick layer of salt under the Brazilian seabed and found a load of crude. An analogous salt layer stretched out from Angola. Bryant and his geologists wondered whether the same treasure might lie beneath the Angolan salt layer.
Bryant had worked as the head of BP’s lucrative operations in Angola, where he cultivated the Futungo. ‘Joe Bryant made himself an inner-circle oilman very quickly,’ a well-connected Angola expert told me. French executives were known to be ‘haughty’, but Bryant made friends in Luanda. ‘He knows how to get on with them, how to speak with them,’ the expert said. In 2005 Bryant decided to strike out on his own and founded Cobalt, taking BP’s head of exploration with him and setting up an office in Houston, the capital of the US oil industry. ‘We were literally going from my garage to competing with the biggest companies in the world,’ Bryant recalled.7
Bryant needed backers with deep pockets. He found them on Wall Street. Traders at Goldman Sachs had long played the commodities markets; Goldman’s razor-sharp bankers oversaw mergers and acquisitions between resources groups. Now, in Cobalt, it would have its own oil company. Goldman and two of the wealthiest US private equity funds, Carlyle and Riverstone, together put up $500 million to launch Cobalt.
In July 2008, as Cobalt was negotiating exploration rights to put its theory about the potential of Angola’s ‘presalt’ oil frontier to the test, the Angolans made a stipulation. Cobalt would have to take two little-known local companies as junior partners in the venture, each with a minority stake. Ostensibly the demand was part of the regime’s avowed goal of helping Angolans to gain a foothold in an industry that provides just 1 per cent of jobs despite generating almost all the country’s export revenue. Accordingly, in 2010 Cobalt signed a contract in which it held a 40 per cent stake in the venture and would be the operator. Sonangol, the state oil company, had 20 per cent. The two local private companies, Nazaki Oil and Gáz and Alper Oil, were given 30 per cent and 10 per cent respectively. Exploration began in earnest. Even before the jaw-dropping find Cobalt’s geologists had christened their Angolan prospect ‘Gold Dust’.8 At the height of the rally in Cobalt stock after it unveiled its Angolan find, Goldman Sachs’s shares in the company were worth $2.7 billion. Cobalt moved across Houston to shimmering new headquarters close to the majors’ offices. One visitor to Joe Bryant’s office at the Cobalt Center noted the stunning view over the city. ‘Cobalt,’ remarked a local realtor, ‘is going to be a huge Houston success story.’9
There was just one snag. What Cobalt had not revealed – indeed, what the company maintains it did not know – was that three of the most powerful men in Angola owned secret stakes in its partner, Nazaki Oil and Gáz. One of them was Manuel Vicente. As the boss of Sonangol at the time of Cobalt’s deal, he oversaw the award of oil concessions and the terms of the contracts. The other two concealed owners of Nazaki were scarcely less influential. Leopoldino Fragoso do Nascimento, a former general known as Dino, has interests from telecoms to oil trading. In 2010 he was appointed adviser to Nazaki’s third powerful owner, General Manuel Hélder Vieira Dias Júnior, better known as Kopelipa. One veteran of Futungo politics who has clashed with Kopelipa told me that, should the day of Kopelipa’s downfall ever come, ‘the people in the streets will tear him to pieces for what he has done in the past’. As the head of the military bureau in the presidency, he presides over security services that keep the Futungo protected by whatever means necessary. Some even dare to call him ‘o chefe do boss’ – the boss of the boss.10 During the war he served as intelligence chief and coordinated the MPLA’s arms purchases.11 More recently he has emerged as the foremost of the ‘business generals’, the senior figures in the security establishment who have translated their influence into stakes in diamonds, oil, and any other sector that looks lucrative. Between them this trio formed the core of the Futungo’s commercial enterprise.
A long-neglected 1977 statute prohibits American companies from participating in the privatization of power in far-off lands. Updated in 1998, the Foreign Corrupt Practices Act makes it a crime for a company that has operations in the United States to pay or offer money or anything of value to foreign officials to win business. It covers both companies themselves and their officers. For years after it was passed the FCPA was more of a laudable ideal than a law with teeth. However, from the late 2000s the agencies that were supposed to enforce it – the Department of Justice, which brings criminal cases, and the Securities and Exchange Commission, the stock market regulator, which handles civil cases – started to do so with gusto. They went after some big names, including BAE Systems, Royal Dutch Shell, and a former subsidiary of Halliburton called Kellogg Brown & Root. All three admitted FCPA or FCPA-related infringements, and the cases resulted in fines and profit disgorgements totalling more than a billion dollars – though such amounts scarcely dent the profits of companies this big.
Oil and mining companies have been the subject of more cases under the FCPA and similar laws passed elsewhere than any other sector.12 Indeed, the Halliburton and Shell settlements both concerned bribery in Nigeria. Companies want rights to specific geographical areas under the most favourable terms possible. For the inhabitants of sub-Saharan Africa’s