Copyright

William Collins

An imprint of HarperCollinsPublishers

1 London Bridge Street,

London SE1 9GF

WilliamCollinsBooks.com

This eBook first published in Great Britain by William Collins in 2015

Copyright © Tom Burgis 2015

Tom Burgis asserts the moral right to be identified as the author of this work.

A catalogue record for this book is available from the British Library.

Map © John Gilkes

All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the non-exclusive, non-transferable right to access and read the text of this e-book on-screen. No part of this text may be reproduced, transmitted, down-loaded, decompiled, reverse engineered, or stored in or introduced into any information storage and retrieval system, in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of HarperCollins.

Source ISBN: 9780007523108

Ebook Edition © April 2016 ISBN: 9780007523115

Version: 2016-02-29

Dedication

FOR MY MOTHER AND FATHER,

FAND THEIR KITCHEN TABLE

Author’s Note

IN LATE 2010 I started to feel sick. At first I put the constant nausea down to a bout of malaria and a stomach bug I’d picked up during a trip a few months earlier to cover an election in Guinea, but the sickness persisted. I went back to the UK for what was meant to be a week’s break before wrapping up in Lagos, the Nigerian megacity where I was based as the Financial Times’s west Africa correspondent. A doctor put a camera down my throat and found nothing. I stopped sleeping. I jumped at noises and found myself bursting into tears. At the end of the week I was walking to a shop to buy a newspaper for the train ride to the airport when my legs gave way. I postponed my flight and went to another doctor, who sent me to a psychiatrist. In the psychiatrist’s office I started to explain that I was exhausted and bewildered, and I was soon sobbing uncontrollably. The psychiatrist told me I had severe depression and that I should be admitted to a psychiatric ward immediately. There I was put on diazepam, a drug for anxiety, and antidepressants. After a few days in the hospital it became apparent that there was something else tormenting me in tandem with depression.

Eighteen months earlier I had travelled from Lagos to Jos, a city on the fault line between Nigeria’s predominantly Muslim north and largely Christian south, to cover an outbreak of communal violence. I arrived in a village on the outskirts not long after a mob had set fire to houses and their occupants, among them children and a baby. I took photographs, counted bodies, and filed my story. After a few days trying to understand the causes of the slaughter, I set off for the next assignment. Over the months that followed, when images of the corpses flashed before my mind’s eye, I would instinctively force them out, unable to look at them.

The ghosts of Jos appeared at the end of my hospital bed. The women who had been stuffed down a well. The old man with the broken neck. The baby – always the baby. Once the ghosts had arrived, they stayed. The psychiatrist and a therapist who had worked with the army – both of them wise and kind – set about treating what was diagnosed as post-traumatic stress disorder (PTSD). A friend of mine, who has seen his share of horrors, devised a metaphor through which to better understand PTSD. He compares the brain to one of those portable golf holes with which golfers practise their putting. Normally the balls drop smoothly into the hole, one experience after another processed and consigned to memory. But then something traumatic happens – a car crash, an assault, an atrocity – and that ball does not drop into the hole. It rattles around the brain, causing damage. Anxiety builds until it is all-consuming. Vivid and visceral, the memory blazes into view, sometimes unbidden, sometimes triggered by an association – in my case, a violent film or anything that had been burned.

Steadfast family and friends kept me afloat. Mercifully, there were moments of bleak humour during my six weeks on the ward. When the BBC presenter welcoming viewers to coverage of the wedding of Prince William and Kate Middleton declared, ‘You will remember where you were on this day for the rest of your life,’ the audience of addicts and depressives in the patients’ lounge broke into a chorus of sardonic laughter and colourful insults aimed at the screen.

The treatment for PTSD is as simple as it is brutal. Like an arachnophobe who is shown a drawing of a spider, then a video of one, then gradually exposed to the real thing until he is capable of fondling a tarantula, I tried to face the memories from Jos. Armed only with some comforting aromas – chamomile and an old, sand-spattered tube of sunscreen, both evocative of happy childhood days – I wrote down my recollections of what I had seen, weeping onto the paper as my therapist gently urged me on. Then, day after day, I read what I had written aloud, again and again and again and again.

Slowly my terror eased. What it left behind was guilt. I felt I ought to suffer as those who died had – if not in the same way, then somehow to the same degree. The fact that I was alive became an unpayable debt to the dead. Only after months had passed came a day when I realized that I had to choose: if I were on trial for the slaughter at Jos, would a jury of my peers – rather than the stern judge of my imaginings – find me guilty? I chose peace, to let the ghosts rest.

It was not, however, a complete exoneration. I had reported that ‘ethnic rivalries’ had triggered the massacres in Jos, as indeed they had. But rivalries over what? Nigeria’s 170 million people are mostly extremely poor, but their nation is, in one respect at least, fabulously wealthy: exports of Nigerian crude oil generate revenues of tens of billions of dollars each year.

I started to see the thread that connects a massacre in a remote African village with the pleasures and comforts that we in the richer parts of the world enjoy. It weaves through the globalized economy, from war zones to the pinnacles of power and wealth in New York, Hong Kong and London. This book is my attempt to follow that thread.

A frozen moment when everyone sees what is on the end of every fork.

—WILLIAM BURROUGHS, Naked Lunch

Contents

Cover

Title Page

Copyright

Dedication

Map

Author’s Note

Epigraph

Introduction: A Curse of Riches

1. Futungo, Inc.

2. ‘It Is Forbidden to Piss in the Park’

3. Incubators of Poverty

4. Guanxi

5. When Elephants Fight, the Grass Gets Trampled

6. A Bridge to Beijing

7. Finance and Cyanide

8. God Has Nothing to Do with It

9. Black Gold

10. The New Money Kings

Epilogue: Complicity

Afterword

Picture Section

Footnote

Notes

List of Illustrations

Index

Acknowledgments

About the Publisher

INTRODUCTION
A Curse of Riches

OPPOSITE THE New York Stock Exchange, at what the tourist information sign calls the ‘financial crossroads of the world’, the stately stone façade of 23 Wall Street evokes the might of the man whose bank it was built to house in 1913: J. P. Morgan, America’s capitalist titan. The exterior is popular with Hollywood – it doubled as the Gotham City stock exchange in the 2012 film The Dark Knight Rises – but when I visited in late 2013 the red carpet lay grubby and sodden in the drizzle blowing in off the Atlantic. Through the smeared glass in the shuttered metal gates, all that was visible in the gutted interior where once a vast chandelier glittered were a few strip lights, stairways covered in plywood, and a glowing red ‘EXIT’ sign.

Despite its disrepair, 23 Wall Street remains an emblem of the elite, a trophy in the changing game of global commerce. The address of its current owners is an office on the tenth floor of a Hong Kong skyscraper. Formerly the site of a British army barracks, 88 Queensway has been transformed into the mirrored towers of Pacific Place, blazing reflected sunlight onto the financial district. The sumptuous mall at street level, air-conditioned against the dripping humidity outside, is lined with designer boutiques: Armani, Prada, Chanel, Dior. The Shangri La hotel, which occupies the top floors of the second of Pacific Place’s seven towers, offers suites at $10,000 a night.

The office on the tenth floor is much more discreet. So is the small band of men and women who use it as the registered address for themselves and their network of companies. To those who have sought to track their evolution, they are known, unofficially, as ‘the Queensway Group’.¹ Their interests, held through a web of complex corporate structure and secretive offshore vehicles, lie in Moscow and Manhattan, North Korea and Indonesia. Their business partners include Chinese state-owned corporations; BP, Total, and other Western oil companies; and Glencore, the giant commodity trading house based in a Swiss town. Chiefly, though, the Queensway Group’s fortune and influence flow from the natural resources that lie beneath the soils of Africa.

Roughly equidistant – about seven thousand miles from each – between 23 Wall Street in New York and 88 Queensway in Hong Kong another skyscraper rises. The golden edifice in the centre of Angola’s capital, Luanda, climbs to twenty-five storeys, looking out over the bay where the Atlantic laps at southern Africa’s shores. It is called CIF Luanda One, but it is known to the locals as the Tom and Jerry Building because of the cartoons that were beamed onto its outer walls as it took shape in 2008. Inside there is a ballroom, a cigar bar, and the offices of foreign oil companies that tap the prodigious reservoirs of crude oil under the seabed.

A solid-looking guard keeps watch at the entrance, above which flutter three flags. One is Angola’s. The second is that of China, the rising power that has lavished roads, bridges and railways on Angola, which has in turn come to supply one in every seven barrels of the oil China imports to fire its breakneck economic growth. The yellow star of Communism adorns both flags, but these days the socialist credentials of each nation’s rulers sit uneasily with their fabulous wealth.

The third flag does not belong to a nation but instead to the company that built the tower. On a white background, it carries three grey letters: CIF, which stands for China International Fund, one of the more visible arms of the Queensway Group’s mysterious multinational network. Combined, the three flags are ensigns of a new kind of empire.

In 2008 I took a job as a correspondent for the Financial Times in Johannesburg. These were boom times – or, at least, they had been. Prices for the commodities that South Africa and its neighbours possess in abundance had risen inexorably since the turn of the millennium as China, India and other fast-growing economies developed a voracious hunger for resources. Through the 1990s the average price for an ounce of platinum had been $470.² A tonne of copper went for $2,600, a barrel of crude oil for $22. By 2008 the platinum price had tripled to $1,500, and copper was two and a half times more expensive, at $6,800. Oil had more than quadrupled to $95, and on one day in July 2008 hit $147 a barrel. Then the American banking system blew itself up. The shockwaves rippled through the global economy, and prices for raw commodities plunged. Executives, ministers and laid-off miners looked on aghast as the recklessness of far-off bankers imperilled the resource revenues that were Africa’s economic lifeblood. But China and the rest went on growing. Within a couple of years commodity prices were back to their pre-crisis levels. The boom resumed.

I traversed southern Africa for a year, covering elections, coups and corruption trials, efforts to alleviate poverty and the fortunes of the giant mining companies based in Johannesburg. In 2009 I moved to Lagos to spend two years covering west Africa’s tinderbox of nations.

There are plenty of theories as to the causes of the continent’s penury and strife, many of which treat the 900 million people and forty-eight countries of black Africa, the region south of the Sahara desert, as a homogenous lump.³ Colonizers had ruined Africa, some of the theorists contended, its suffering compounded by the diktats of the World Bank and the International Monetary Fund; others considered Africans incapable of governing themselves, excessively ‘tribal’ and innately given to corruption and violence. Then there were those who thought Africa was largely doing just fine but that journalists seeking sensational stories and charities looking to tug at donors’ heartstrings distorted its image. The prescriptions were as various and contradictory as the diagnoses: slash government spending to allow private businesses to flourish; concentrate on reforming the military, promoting ‘good governance’ or empowering women; bombard the continent with aid; or force open African markets to drag the continent into the global economy.

As the rich world struggled with recession, pundits, investors and development experts began to declare that Africa, by contrast, was on the rise. Commercial indicators suggested that, thanks to an economic revolution driven by the commodity boom, a burgeoning middle class was replacing Africa’s propensity for conflict with rampant consumption of mobile phones and expensive whisky. But such cheery analysis was justified only in pockets of the continent. As I travelled in the Niger Delta, the crude-slicked home of Nigeria’s oil industry, or the mineral-rich battlefields of eastern Congo, I came to believe that Africa’s troves of natural resources were not going to be its salvation; instead, they were its curse.

For more than two decades economists have tried to work out what it is about natural resources that sows havoc. ‘Paradoxically,’ wrote Macartan Humphreys, Jeffrey Sachs and Joseph Stiglitz of Columbia University in 2007, ‘despite the prospects of wealth and opportunity that accompany the discovery and extraction of oil and other natural resources, such endowments all too often impede rather than further balanced and sustainable development.’⁴ Analysts at the consultancy McKinsey have calculated that 69 per cent of people in extreme poverty live in countries where oil, gas and minerals play a dominant role in the economy and that average incomes in those countries are overwhelmingly below the global average.⁵ The sheer number of people living in what are some of the planet’s richest states, as measured by natural resources, is staggering. According to the World Bank, the proportion of the population in extreme poverty, calculated as those living on $1.25 a day and adjusted for what that wretched sum will buy in each country, is 68 per cent in Nigeria and 43 per cent in Angola, respectively Africa’s first and second-biggest oil and gas producers. In Zambia and Congo, whose shared border bisects Africa’s copperbelt, the extreme poverty rate is 75 per cent and 88 per cent, respectively. By way of comparison, 33 per cent of Indians live in extreme poverty, 12 per cent of Chinese, 0.7 per cent of Mexicans, and 0.1 per cent of Poles.

The phenomenon that economists call the ‘resource curse’ does not, of course, offer a universal explanation for the existence of war or hunger, in Africa or anywhere else: corruption and ethnic violence have also befallen African countries where the resource industries are a relatively insignificant part of the economy, such as Kenya. Nor is every resource-rich country doomed: just look at Norway. But more often than not, some unpleasant things happen in countries where the extractive industries, as the oil and mining businesses are known, dominate the economy. The rest of the economy becomes distorted, as dollars pour in to buy resources. The revenue that governments receive from their nations’ resources is unearned: states simply license foreign companies to pump crude or dig up ores. This kind of income is called ‘economic rent’ and does not make for good management. It creates a pot of money at the disposal of those who control the state. At extreme levels the contract between rulers and the ruled breaks down because the ruling class does not need to tax the people to fund the government – so it has no need of their consent.

Unbeholden to the people, a resource-fuelled regime tends to spend the national income on things that benefit its own interests: education spending falls as military budgets swell.⁶ The resource industry is hardwired for corruption. Kleptocracy, or government by theft, thrives. Once in power, there is little incentive to depart. An economy based on a central pot of resource revenue is a recipe for ‘big man’ politics. The world’s fourlongest-serving rulers – Teodoro Obiang Nguema of Equatorial Guinea, José Eduardo dos Santos of Angola, Robert Mugabe of Zimbabwe, and Paul Biya of Cameroon – each preside over an African state rich in oil or minerals. Between them they have ruled for 136 years.

From Russia’s oil-fired oligarchs to the conquistadores who plundered Latin America’s silver and gold centuries ago, resource rents concentrate wealth and power in the hands of the few. They engender what Said Djinnit, an Algerian politician who, as the UN’s top official in west Africa, has served as a mediator in a succession of coups, calls ‘a struggle for survival at the highest level’.⁷ Survival means capturing that pot of rent. Often it means others must die.

The resource curse is not unique to Africa, but it is at its most virulent on the continent that is at once the world’s poorest and, arguably, its richest.

Africa accounts for 13 per cent of the world’s population and just 2 per cent of its cumulative gross domestic product, but it is the repository of 15 per cent of the planet’s crude oil reserves, 40 per cent of its gold and 80 per cent of its platinum – and that is probably an underestimate, given that the continent has been less thoroughly prospected than others.⁸ The richest diamond mines are in Africa, as are significant deposits of uranium, copper, iron ore, bauxite (the ore used to make aluminium), and practically every other fruit of volcanic geology. By one calculation Africa holds about a third of the world’s hydrocarbon and mineral resources.⁹

Outsiders often think of Africa as a great drain of philanthropy, a continent that guzzles aid to no avail and contributes little to the global economy in return. But look more closely at the resource industry, and the relationship between Africa and the rest of the world looks rather different. In 2010 fuel and mineral exports from Africa were worth $333 billion, more than seven times the value of the aid that went in the opposite direction (and that is before you factor in the vast sums spirited out of the continent through corruption and tax fiddles).¹⁰ Yet the disparity between life in the places where those resources are found and the places where they are consumed gives an indication of where the benefits of the oil and mining trade accrue – and why most Africans still barely scrape by. For every woman who dies in childbirth in France, a hundred die in the desert nation of Niger, a prime source of the uranium that fuels France’s nuclear-powered economy. The average Finn or South Korean can expect to live to eighty, nurtured by economies among whose most valuable companies are, respectively, Nokia and Samsung, the world’s top two mobile phone manufacturers. By contrast, if you happen to be born in the Democratic Republic of Congo, home to some of the planet’s richest deposits of the minerals that are crucial to the manufacture of mobile phone batteries, you’ll be lucky to make it past fifty.

Physical cargoes of African oil and ore go hither and thither, mainly to North America, Europe and, increasingly, China, but by and large the continent’s natural resources flow to a global market in which traders based in London, New York and Hong Kong set prices. If South Africa exports less gold, Nigeria less oil, or Congo less copper, the price goes up for everyone. Trade routes change: the increasing production of shale gas in the United States has reduced imports of Nigerian oil in recent years, for example, with the crude heading to Asia instead. But based on the proportion of total worldwide supply it accounts for, if you fill up your car fourteen times, one of those tanks will have been refined from African crude.¹¹ Likewise, there is a sliver of tantalum from the badlands of eastern Congo in one in five mobile phones.

Africa is not only disproportionately rich in natural resources; it is also disproportionately dependent on them. The International Monetary Fund defines a ‘resource-rich’ country – a country that is at risk of succumbing to the resource curse – as one that depends on natural resources for more than a quarter of its exports. At least twenty African countries fall into this category.¹² Resources account for 11 per cent of European exports, 12 per cent of Asia’s, 15 per cent of North America’s, 42 per cent of Latin America’s, and 66 per cent of Africa’s – slightly more than in the former Soviet states and slightly less than the Middle East.¹³ Oil and gas account for 97 per cent of Nigeria’s exports and 98 per cent of Angola’s, where diamonds make up much of the remainder.¹⁴ When, in the second half of 2014, commodity prices started to fall, Africa’s resource states were reminded of that dependency: the boom had led to a splurge of spending and borrowing, and the prospect of a sharp fall in resource rents made the budgets of Nigeria, Angola and elsewhere look decidedly precarious.

The resource curse is not merely some unfortunate economic phenomenon, the product of an intangible force; rather, what is happening in Africa’s resource states is systematic looting. Like its victims, its beneficiaries have names. The plunder of southern Africa began in the nineteenth century, when expeditions of frontiersmen, imperial envoys, miners, merchants and mercenaries pushed from the coast into the interior, their appetite for mineral riches whetted by the diamonds and gold around the outpost they had founded at Johannesburg. Along Africa’s Atlantic seaboard traders were already departing with slaves, gold and palm oil. By the middle of the twentieth century crude oil was flowing from Nigeria. As European colonialists departed and African states won their sovereignty, the corporate behemoths of the resource industry retained their interests. For all the technological advances that have defined the start of the new millennium – and despite the dawning realization of the damage that fossil fuels are inflicting on the planet – the basic commodities that lie in abundance in Africa remain the primary ingredients of the global economy.

The captains of the oil and mining industries, which comprise many of the richest multinational corporations, do not like to think of themselves as part of the problem. Some consider themselves part of the solution. ‘Half the world’s GDP is underpinned by resources,’ Andrew Mackenzie, the chief executive of the world’s biggest mining company, BHP Billiton, told a dinner for five hundred luminaries of the industry at Lord’s cricket ground in London in 2013. ‘I would argue: all of it is,’ he went on. ‘That is the noble purpose of our trade: to supply the economic growth that helps lift millions, if not billions, out of poverty.’¹⁵

To mine is not necessarily to loot; there are miners, oilmen and entire companies whose ethos and conduct run counter to the looters’. Many of the hundreds of resource executives, geologists and financiers I have met believe they are indeed serving a noble cause – and plenty of them can make a justifiable case that, without their efforts, things would be much worse. The same goes for those African politicians and civil servants striving to harness natural resources to lift their compatriots from destitution. Yet the machinery that is looting Africa is more powerful than all of them.

That looting machine has been modernized. Where once treaties signed at gunpoint dispossessed Africa’s inhabitants of their land, gold and diamonds, today phalanxes of lawyers representing oil and mineral companies with annual revenues in the hundreds of billions of dollars impose miserly terms on African governments and employ tax dodges to bleed profit from destitute nations. In the place of the old empires are hidden networks of multinationals, middlemen and African potentates. These networks fuse state and corporate power. They are aligned to no nation and belong instead to the transnational elites that have flourished in the era of globalization. Above all, they serve their own enrichment.

1
Futungo, Inc.

LITTLE BUT FEAR and sewage flows down the precipitous slope that separates Angola’s presidential complex from the waterside slum below. Swelled by refugees who fled a civil war that raged on and off for three decades in the interior, Chicala sprawls out from the main coast road in Luanda, the capital. Periodically the ocean sends a storm tearing through the rickety dwellings. Boatmen ply the inlets, their passengers inured to the stench emanating from the waters.

This is not the face that Angola prefers to present to the world. Since the end of the civil war in 2002 this nation of 20 million people has notched up some of the fastest rates of economic growth recorded anywhere, at times even outstripping China. Minefields have given way to new roads and railways, part of a multibillion-dollar endeavour to rebuild a country that one of the worst proxy conflicts of the Cold War had shattered. Today Angola boasts sub-Saharan Africa’s third-biggest economy, after Nigeria and South Africa. Luanda consistently ranks at the top of surveys of the world’s most expensive cities for expatriates, ahead of Singapore, Tokyo and Zurich. In glistening five-star hotels like the one beside Chicala, an unspectacular sandwich costs $30. The monthly rent for a top-end unfurnished three-bedroom house is $15,000.¹ Luxury car dealerships do a brisk trade servicing the SUVs of those whose income has risen faster than the potholes of the clogged thoroughfares can be filled. At Ilha de Luanda, the glamorous beachside strip of bars and restaurants a short boat-ride from Chicala, the elite’s offspring go ashore from their yachts to replenish their stocks of $2,000-a-bottle Dom Pérignon.

The railways, the hotels, the growth rates and the champagne all flow from the oil that lies under Angola’s soils and seabed. So does the fear.

In 1966 Gulf Oil, a US oil company that ranked among the so-called seven sisters that then dominated the industry, discovered prodigious reserves of crude in Cabinda, an enclave separated from the rest of Angola by a sliver of its neighbour, Congo. When civil war broke out following independence from Portugal in 1975, oil revenues sustained the Communist government of the ruling Movimento Popular de Libertação de Angola (the People’s Movement for the Liberation of Angola, or MPLA) against the Western-backed rebels of Unita. Vast new oil finds off the coast in the 1990s raised the stakes both for the warring factions and their foreign allies. Although the Berlin Wall fell in 1989, peace came to Angola only in 2002, with the death of Jonas Savimbi, Unita’s leader. By then some five hundred thousand people had died.

The MPLA found that the oil-fired machine it had built to power its war effort could be put to other uses. ‘When the MPLA dropped its Marxist garb at the beginning of the 1990s,’ writes Ricardo Soares de Oliveira, an authority on Angola, ‘the ruling elite enthusiastically converted to crony capitalism.’² The court of the president – a few hundred families known as the Futungo, after Futungo de Belas, the old presidential palace – embarked on ‘the privatization of power’.

Melding political and economic power like many a postcolonial elite, generals, MPLA bigwigs and the family of José Eduardo dos Santos, the party’s Soviet-trained leader who assumed the presidency in 1979, took personal ownership of Angola’s riches. Isabel dos Santos, the president’s daughter, amassed interests from banking to television in Angola and Portugal. In January 2013 Forbes magazine named her Africa’s first female billionaire.

The task of turning Angola’s oil industry from a war chest into a machine for enriching Angola’s elite in peacetime fell to a stout, full-faced man with a winning grin and a neat moustache called Manuel Vicente. Blessed with what one associate calls ‘a head like a computer for numbers’, as a young man he had tutored schoolchildren to supplement his meagre income and support his family. After a stint as an apprentice fitter, he studied electrical engineering. Though he had been raised by a lowly Luanda shoemaker and his washerwoman wife, Vicente ended up in the fold of dos Santos’s sister, thereby securing a family tie to the president. While other MPLA cadres studied in Baku or Moscow and returned to Angola to fight the bush war against Unita, Vicente honed his English and his knowledge of the oil industry at Imperial College in London. Back home he began his rise through the oil hierarchy. In 1999, as the war entered its endgame, dos Santos appointed him to run Sonangol, the Angolan state oil company that serves, in the words of Paula Cristina Roque, an Angola expert, as the ‘chief economic motor’ of a ‘shadow government controlled and manipulated by the presidency’.³

Vicente built Sonangol into a formidable operation. He drove hard bargains with the oil majors that have spent tens of billions of dollars developing Angola’s offshore oilfields, among them BP of the UK and Chevron and ExxonMobil of the United States. Despite the tough negotiations, Angola dazzled the majors and their executives respected Vicente. ‘Angola is for us a land of success,’ said Jacques Marraud des Grottes, head of African exploration and production for Total of France, which pumped more of the country’s crude than anyone else.⁴

On Vicente’s watch oil production almost tripled, approaching 2 million barrels a day – more than one in every fifty barrels pumped worldwide. Angola vied with Nigeria for the crown of Africa’s top oil exporter and became China’s second-biggest supplier, after Saudi Arabia, while also shipping significant quantities to Europe and the United States. Sonangol awarded itself stakes in oil ventures operated by foreign companies and used the revenues to push its tentacles into every corner of the domestic economy: property, health care, banking, aviation. It even has a professional football 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 resource states, capturing some of the rent that resource companies pay the state in exchange for lucrative territory – or capturing a position as a gatekeeper to that territory – is by far the most direct route to riches.

Delivering a suitcase stuffed with cash is only the simplest way to enrich local officials via oil and mining ventures run by foreign companies. A more sophisticated technique involves local companies, often with scant background in the resource industries. These companies are awarded a stake at the beginning of an oil and or mining project alongside the foreign corporations that will do the digging and the drilling. Sometimes genuine local businessmen own such companies. Sometimes, though, they are merely front companies whose owners are the very officials who influence or control the granting of rights to oil and mining prospects and who are seeking to turn that influence into a share of the profits. In the latter case the foreign oil or mining company risks falling foul of anticorruption laws at home. But often front companies’ ultimate owners are concealed behind layers of corporate secrecy. One reason why foreign resources companies conduct what is known as ‘due diligence’ before embarking on investments abroad is to seek to establish who really owns their local partners. In some cases due diligence investigations amount, in the words of a former top banker, to ‘manufacturing deniability’. In others the due diligence work raises so many red flags about a prospective deal that a company will simply abandon it. Frequently the evidence that a due diligence investigation amasses about corruption risks is inconclusive. Then it is up to the company to decide whether to proceed.

In 2007, as its Angolan ambitions started to take shape, Cobalt retained Vinson & Elkins and O’Melveny & Myers, two venerable American law firms, to conduct its due diligence. Corporate records are not easy to obtain in Angola, even though any company is supposed to be allowed access to its partners’ records. I was able to get hold of Nazaki’s registration documents, and its influential trio of owners appear nowhere on them. But there were some clues. One document names a man called José Domingos Manuel as one of Nazaki’s seven shareholders and the company’s designated manager. His name also appears alongside those of Vicente, Kopelipa and Dino on the shareholder list for a separate oil venture.¹³ That might have raised a red flag for any company considering going into business with Nazaki: it demonstrated a clear link between one Nazaki shareholder and three of the most powerful men in the Futungo. (José Domingos Manuel, I was told by two people who know the Futungo well, had been a senior officer in the military and was a known associate of Kopelipa.) There was another red flag: six of Nazaki’s seven shareholders were named individuals, but the seventh was a company called Grupo Aquattro Internacional. Aquattro’s own registration documents do not name its own shareholders. But they are Vicente, Kopelipa and Dino.

In 2010, two years after the Angolan authorities had first told Cobalt that they wanted it to make Nazaki its partner, a crusading Angolan anticorruption activist called Rafael Marques de Morais published a report claiming that Vicente, Kopelipa and Dino were the true owners of Aquattro and, thus, of Nazaki.¹⁴ ‘Their dealings acknowledge no distinction between public and private affairs,’ he wrote. Nazaki was just one cog in a system of plunder, which meant that ‘the spoils of power in Angola are shared by the few, while the many remain poor.’¹⁵

At least one due-diligence investigator was aware of what Cobalt says it was unable to establish. In the first half of 2010 an investigator – we shall call him Jones – exchanged a series of memos with Control Risks, one of the biggest companies in corporate intelligence. Control Risks, the correspondence shows, had launched ‘Project Benihana’, an endeavour apparently codenamed after a Florida-based chain of Japanese restaurants, to look into Nazaki. Jones, a seasoned Angola hand, warned his contact at Control Risks that oil concessions in Angola were only ever granted if the MPLA and the business elite stood to benefit. He went on to name Kopelipa as one of the men behind Nazaki. No client is named in the correspondence. (In most such cases the freelance investigators are not told on whose behalf they are ultimately working.) Both Cobalt and Control Risks refused to say whether the Texan group was the client in this case. But what is clear is that the warnings were there to be found. At least one other due-diligence investigation I am aware of also got wind of Nazaki’s Futungo connections.¹⁶

By its own account Cobalt went ahead with a deal in a country that was, in 2010, ranked at 168 out of 178 countries in Transparency International’s annual corruption perceptions index, without knowing the true identity of its partner, a company with no track record in the industry and registered to an address on a Luanda backstreet that I found impossible to locate when I went looking for it in 2012.

When US authorities informed Cobalt that they had launched a formal investigation into its Angolan operations, the company maintained that everything was above board. With none of the fanfare that accompanied its cork-popping announcement of its big discovery earlier the same month off the Atlantic coast, Cobalt disclosed the investigation in its annual statement to shareholders. ‘Nazaki has repeatedly denied the allegations in writing,’ Cobalt told its shareholders, going on to say that it had ‘conducted an extensive investigation into these allegations and believe that our activities in Angola have complied with all laws, including the FCPA.’ Two months later, when I wrote to Joe Bryant to ask him about the allegations, Cobalt’s lawyer replied and went further: Cobalt’s ‘extensive and ongoing’ due diligence ‘has not found any credible support for [the] central allegation that Angolan government officials, and specifically [Vicente, Kopelipa and Dino] … have any ownership in Nazaki.’ Referring to its massive discovery a few weeks earlier, Cobalt’s lawyer added, ‘Success naturally brings with it many challenges. One of those challenges is responding to unfounded allegations.’

The problem for Cobalt was that the allegations were not unfounded. I had also written to Vicente, Kopelipa and Dino, laying out the evidence that they owned stakes in Nazaki, which I had gathered from documents and interviews. Vicente and Kopelipa wrote near-identical letters back, confirming that they and Dino did indeed own Aquattro and thus held secret stakes in Nazaki but insisting that there was nothing wrong with that. They had held their Nazaki stakes, ‘always respecting all Angolan legislation applicable to such activities, not having committed any crime of abuse of power and/or trafficking of influence to obtain illicit shareholder advantages’. The holdings had, in any case, been ‘recently dissolved’. If US law led Cobalt to pull out of Angola, Kopelipa and Vicente went on, others would be keen to take its place.¹⁷

In Manuel Vicente’s offices in Luanda’s hilltop presidential complex the only sound was the purr of the air-conditioning unit that kept the rooms at a comfortable 70 degrees Fahrenheit and the taps of a hammer as labourers conducted some early-morning maintenance outside. A Mercedes and a Land Cruiser stood ready to part the traffic if the minister needed to venture beyond the tall red-brown wall surrounding the compound. The sole adornment on the beige walls was a portrait of dos Santos in a gold frame.

Vicente swept in, wearing a smart suit and looking fresh from his morning jog. If he was annoyed that I had named him as the beneficiary of a questionable oil deal two months earlier, he didn’t show it. Indeed, as Vicente styled it, there was nothing to be embarrassed about. If, while he was the head of Sonangol, he had knowingly owned a stake in the company assigned to be a foreign group’s local partner, that would have been ‘a conflict of interests’, he acknowledged.¹⁸ But Vicente, a man with a reputation for ruthless competence and a commanding knowledge of Angola’s oil industry, claimed he had not known that Aquattro, the investment company he shared with Kopelipa and Dino, had owned a stake in Nazaki, Cobalt’s local partner. When ‘all this news came,’ revealing that he did indeed own a stake in Nazaki, ‘we decided to quit,’ he said. His interest in Nazaki had been ‘liquidated’ the previous year, he said. ‘Today I’m not director and direct beneficiary of Nazaki.’

Vicente’s position was essentially the same as Cobalt’s: if there was anything untoward in the oil deal, they were ignorant of it. Vicente told me that he knew Joe Bryant ‘very well’. Their relationship had stretched back years beyond the formation of Cobalt to when Bryant worked for Amoco, an American oil company that merged with BP in 1998. That relationship, it seemed to me, might have provided a simple way to check whether Vicente and his friends secretly owned stakes in Nazaki. Bryant could just have asked Vicente whether the rumours were true. I asked Vicente: Did you and Bryant ever discuss the matter? ‘No,’ he said.

Alongside their personal stakes in the oil business, the members of the Futungo ensure that the oil revenues that accrue to the Angolan state are deployed to serve the regime’s purposes. Angola’s 2013 budget allocated 18 per cent of public spending to defence and public order, 5 per cent to health, and 8 per cent to education. That means the government spent 1.4 times as much on defence as it did on health and schools combined. By comparison, the UK spent four times as much on health and education as on defence. Angola spends a greater share of its budget on the military than South Africa’s apartheid government did during the 1980s, when it was seeking to crush mounting resistance at home and was fomenting conflict in its neighbours.¹⁹

Generous fuel subsidies are portrayed as a salve for the poor, but in truth they mainly benefit only those wealthy enough to afford a car and politically connected enough to win a fuel-import licence. Angola’s government has ploughed petrodollars into contracts for roads, housing, railways and bridges at a rate of $15 billion a year in the decade to 2012, a huge sum for a country of 20 million people. Roads are getting better, railways are slowly snaking into the interior, but the construction blitz has also proved a bonanza for embezzlers: kickbacks are estimated to account for more than a quarter of the final costs of government construction contracts.²⁰ And much of the funding is in the form of oil-backed credit from China, much of which is marshalled by a special office that General Kopelipa has run for years. ‘The country is getting a new face,’ says Elias Isaac, one of Angola’s most prominent anticorruption campaigners. ‘But is it getting a new soul?’²¹

Manuel Vicente was keen to correct the impression that Angola’s rulers have abdicated their duties toward their citizens. ‘Just to assure you, the government is really serious, engaged in combating, in fighting the poverty,’ he told me.²² ‘We are serious people, we know very well our job, and we know very well our responsibility.’ Talking with him, I had no doubt that there was some part of Vicente that wanted to better the lot of his compatriots, or at least to be seen to be trying to do so. ‘I’m a Christian guy,’ he said. ‘It doesn’t work if you are okay and the people around have nothing to eat. You don’t feel comfortable.’

There are two solutions to that problem: share some food or dump the hungry out of sight. The Futungo’s record suggests it favours the latter.

António Tomás Ana has lived in Chicala since 1977, before new arrivals fleeing the civil war in the interior turned what had been a sleepy fishing settlement into the profusion of humanity it is today, sandwiched between the ocean and the slopes rising up to the presidential complex. Better known as Etona, he is one of Angola’s foremost artists. At an open-air workshop walled with breezeblocks, his assistants chip away at acacia trunks with chisels and mallets. One of his trademark sinewy wooden sculptures graces the lobby at Sonangol headquarters.

Among Etona’s sixty-five thousand neighbours in Chicala are military officers and a professional photographer who brings in $5,000 a month, which does not go far in ultra-costly Luanda but has allowed him to build up the corrugated-iron shack he bought twenty-five years ago into the angular but solid edifice around which his grandchildren gallivant today. In June 2012 that house, like Etona’s workshop and the community library he is building, were, along with the rest of Chicala, scheduled to be flattened – and not, this time, by the ocean.

Given the choice, few people would choose to live with Chicala’s meagre amenities and opportunities. The ruling party promised electricity during the 2008 election campaign, but little arrived, and not much had come of the latest pledge, made in the run-up to the 2012 polls, to provide piped water. But places like Chicala are communities, with their own ways and their own comradeship. An estimated three in every four of Luanda’s inhabitants, out of a total population of between 5 and 8 million, live in slums known as musseques. Although conditions in some, like the precarious settlement on top of a rubbish dump, are dire, Chicala and other central musseques have their advantages. Work, formal or informal, is close at hand in Luanda’s commercial districts.

Etona spends a lot of time thinking about the betterment of a slum he could easily have afforded to leave. ‘Regeneration is not about roads and sidewalks – it’s in the mind,’ he told me when we met at his workshop, his red shirt pristine despite the afternoon heat.²³ ‘This,’ he said, waving an arm at the bustling slum, where nearby youngsters were furiously duelling at table football, ‘this is also part of the culture, part of the country.’ But Chicala’s days were numbered. Its inhabitants were to be relocated, whether they liked it or not, to new settlements on the outskirts of Luanda. A new luxury hotel and the gleaming offices of an American oil company had risen on the fringes of Chicala, harbingers of what was to take the neighbourhood’s place. A beach that once buzzed with fish restaurants and bars had been fenced off, ready for the developers.

The Chicala residents I spoke to regarded the authorities’ promises of a better life elsewhere with deep suspicion. About three thousand had already been shipped off, some rounded up by police and packed with their belongings into trucks, any objections ignored. The government has been willing to use force to cleanse the slums, deploying troops by helicopter to conduct dawn evictions.²⁴ But Etona, for one, intended to resist when his turn came. ‘If we don’t speak out, we will be carried off to Zango.’

Zango lies just over 20 kilometres south of central Luanda, where the capital’s sprawl thins out, giving way to the ochre scrub of the bush. Like a matching settlement to the north, it is supposed to represent a new beginning for Angola’s slum-dwellers. To listen to officials, Zango is the promised land. ‘We are moving them to more dignified accommodation,’ Rosa Palavera, the head of the poverty reduction unit in the presidency, told me.²⁵ ‘There are no basic services [in Chicala]. There is crime.’

Even if one overlooks the official neglect that lies behind the lack of amenities in Chicala, Zango is hardly preferable. Those who moved to Zango were lucky if they found basic services merely on a par with those they had left behind.²⁶ Sometimes the new houses were even smaller than the old ones. In aerial photographs the new settlements looked like prison camps, with their squat dwellings arranged in unvarying rows. Shacks that were far more rickety than anything in Chicala had sprung up too. Those who tried to make a go of it by commuting back from Zango into the city each departed well before dawn and returned at midnight, scarcely leaving enough time to sleep, let alone see their children. Other new arrivals simply went straight back to Chicala, a daring move given that the slum lies within the purview of the military bureau run by General Kopelipa, the feared security chief.

On the drive from Zango back toward the centre of Luanda, the road crosses the invisible frontier that separates the majority of Angolans from the enclave of plenty that the petro-economy has created.

The gleaming new settlement at Kilamba was constructed from scratch by a Chinese company at a cost of $3.5 billion. The guards on duty at the gates adopted an intimidating strut as we drove toward them down the long, curving driveway. They let my companions and me through in exchange for the price of a bottle of water. Inside the atmosphere was eerie, reminiscent of one of those disaster movies in which some catastrophe has removed all trace of life. Nothing stirred in the dry heat. Row after parallel row of gleaming, pastel-coloured apartment blocks between five and ten storeys high stretched to a vanishing point at the horizon, tracked by manicured grass verges and pylons carrying electricity lines. The roads were like silk, the best in Angola. Outside the most affluent parts of South Africa, particularly the gated communities known to their more poetic detractors as ‘yuppie kennels’, I had seen nothing in Africa that looked anything like Kilamba.

The newly completed units were for sale for between $120,000 and $300,000 apiece to those rich enough to escape the crush of central Luanda. The first residents of Kilamba’s twenty thousand apartments were said to have moved in, but there was no sign of them. About half of Angola’s population live below the international poverty line of $1.25 a day; it would take them each about 260 years to earn enough to buy the cheapest flat in Kilamba.²⁷ The prices came down after an official visit by the president, but nonetheless only the wealthiest Angolans could afford to live there.

Teams of Chinese labourers in blue overalls and hard hats trundled into view in pickup trucks. Like other Chinese construction projects in Africa, Kilamba was built with Chinese finance and Chinese labour, and it formed part of a bigger bargain that ensured Chinese access to natural resources – in this case, Angola’s oil. The Chinese and Angolan flags fluttered above Kilamba’s entrance. This was a flagship project for China’s undertaking in Africa: Xi Jinping toured the site while it was under construction in 2010, three years before he ascended from the Chinese vice presidency to the presidency. A vast billboard proclaimed that Citic, the Chinese state-owned conglomerate whose operations span banking, resources and construction, had built the new town. Oversight of the construction had been assigned to Sonangol, which subcontracted the management of the sales of apartments to a company called Delta Imobiliária. Delta was said to belong to the private business empire of Manuel Vicente and General Kopelipa. Both men were perfectly placed to use the power of the public office to dispense personal gain for themselves, just as they had been assigned concealed stakes in Cobalt’s oil venture. Kilamba was, in the words of the Angolan campaigner Rafael Marques de Morais, ‘a veritable model for African corruption’.²⁸

Hexplosivo Mental raps with intensity – brow furrowed, left hand gripping the microphone, right hand chopping through the air. Like Public Enemy and other exponents of protest rap before him, he makes it his business to attack the abuses of the mighty. A rangy figure in a hoodie, he gives loud and lyrical voice to dissent in Angola that had long been mostly whispered, exhorting a counterpunch against the ruling class’s monopoly on wealth and power with tracks like ‘How It Feels to Be Poor’, ‘Reaction of the Masses’, and ‘Be Free’.

One Tuesday in May 2012 a group of ten young Angolans gathered at the Luanda home of one of a new generation of politically conscious rappers. Hexplosivo Mental was among them. They had been involved in organizing the small but concerted demonstrations that had rattled the regime. In the vanguard of protest against the Futungo’s power, the group had had brushes with the authorities before, notably when the police dispersed their demos.

This was not the first time the house had been raided. But the band of fifteen men who turned up at just after ten that night wanted to teach the dissidents a more serious lesson.²⁹ Elections at which dos Santos planned to ensure a thumping victory were three months away, and the deployment of oil money alone would not be enough to neutralize public displays of opposition to his rule. Bursting through the door, the men bore down upon their victims with iron bars and machetes, breaking arms, fracturing skulls and spilling blood. Their work done, they zoomed away in Land Cruisers. One account of the attack alleged that the vehicles belonged to the police – evidence that the assailants were part of one of the pro-regime militias whose task was to instil fear ahead of the polls.

No one died that night, but when I spoke to Hexplosivo Mental weeks later, his badly injured arm was still being treated. We arranged to meet discreetly at a busy roundabout in Luanda. I waited thirty minutes or so before he called to say he had had to go back to the hospital. When he spoke later by phone the young rapper put it simply: ‘Before, we did not know how to protest. Now we are growing.’

There were some serious anti-government demonstrations in the run-up to the elections, but if Hexplosivo Mental and his comrades hoped to mount a challenge to an entrenched regime on the scale of the Arab Spring revolutions that had erupted far to the north, they did so in vain. The amount of official funding available to political parties was slashed from $1.2 million in the legislative elections of 2008 to $97,000. Meanwhile, the MPLA was said to have spent $75 million on its campaign.³⁰

The MPLA has genuine support, especially in the coastal cities that were its bastion during the war and among those Angolans so traumatized by the conflict that they see a vote for any incumbent, no matter how venal, as the option that carries the smallest risk of a return to hostilities. The regime leaves little to chance, dominating the media, appointing its stooges to run the institutions that conduct elections, co-opting opposition politicians, and intimidating opponents. Kopelipa presided over an electoral apparatus that left 3.6 million people unable to cast their ballots – almost as many votes as the MPLA received.³¹ The MPLA’s share of the vote fell nine points compared with the 2008 election, but it still recorded a landslide victory, with 72 per cent. Under a new system the first name on the winning party’s list would become president. More than three decades after he took power, dos Santos could claim he had a mandate to rule, despite the findings of a reputable opinion poll that showed he enjoyed the approval of just 16 per cent of Angolans.³²

In August 2014, three years after the US authorities had begun their corruption investigation into its Angolan deal, Cobalt issued a statement revealing that the Securities and Exchange Commission had given notice that it might launch a civil case against the company.³³ ‘The company has fully co-operated with the SEC in this matter and intends to continue to do so,’ Cobalt announced. Joe Bryant called the SEC’s decision ‘erroneous’ and said Cobalt would continue to develop its Angolan prospects. At the time of writing no proceedings have been brought, and Cobalt continues to deny wrongdoing, as it has throughout. Cobalt’s share price, which took a billion-dollar hit after news of its secret Angolan partners emerged and declined even further after some mediocre drilling results, fell another 10 per cent when the SEC’s warning emerged.

Cobalt’s founders have already turned a tidy profit. Between February 2012, when Cobalt revealed that it was under formal investigation, and that April, when Kopelipa and Vicente confirmed to me that they and Dino held stakes in Nazaki, Joe Bryant sold 860,000 of his shares in the company for $24 million. Between the start of the corruption investigation and the end of 2013 – during which period Cobalt also struck oil in the Gulf of Mexico – Goldman Sachs, a joint Riverstone-Carlyle fund, and First Reserve, another big American private equity firm, each made sales of Cobalt stock worth a net $1 billion.³⁴

I tried to find out who had taken over the stake in Nazaki that, according to Vicente, he, Kopelipa, and Dino had ‘liquidated’ as well as whether their business associates were still shareholders, but neither the trio nor the company itself would tell me. In February 2013 Nazaki transferred half its interest to Sonangol, the state oil company. The official journal did not disclose the size of any fee that Sonangol paid for the stake, but bankers’ valuations indicated it was worth about $1.3 billion, at least fourteen times the amount Nazaki would have been expected to pay in development costs up to that point.³⁵ If any fee was paid, it represented a transfer of funds from the coffers of a state where the vast majority live in penury to a private company linked to the Futungo. Then, in 2014, three weeks after Cobalt disclosed that it was facing possible proceedings by the SEC, the company announced it had severed ties with Nazaki and with Alper, whose ownership remains undisclosed. Both companies transferred their stakes in Cobalt’s venture to Sonangol. Again, none of the parties involved revealed what, if any, fees were paid.³⁶

Cobalt is just one among dozens of companies vying for Angolan crude, and Nazaki was but a single cog in the Futungo’s machine for turning its control over the state into private gain.

Just before Christmas 2011, as Manuel Vicente was preparing to hand over the reins of Sonangol to his successor and with the expenses of the following year’s election looming, seven international oil companies snapped up operating rights to eleven new blocks in the Atlantic. The acreage was in the ‘presalt’ zone, where Cobalt was already exploring. As in previous bidding rounds in Angola and elsewhere, the companies agreed to pay signature bonuses. These are upfront payments that oil companies make to governments when they win rights to explore a block, often through auctions. The payments are perfectly legal, though frequently the amounts paid are not disclosed. If they were delivered on the sly to officials, such payments would be called bribes; instead, they are deposited in the leaky treasuries of oil states.

Any Angolans curious to know how much their government had brought in from the auction would be disappointed. Mindful that in 2001 BP had been threatened with ejection after it announced plans to publish some details of its Angolan contracts, the oil companies kept the terms of the bonuses safely shrouded. Norway’s Statoil made something resembling a disclosure. It said its total ‘financial commitment’ for two oil blocks, where it would be the operator of the project, and working interests in three other blocks came to $1.4 billion, ‘including signature bonuses and a minimum work commitment’. The regime’s overall take from the whole bidding round would have been a multiple of that figure.

Both the Futungo’s business ventures and the state institutions’ activities are kept within a fortress of secrecy, so much so that Edward George, an Angola specialist who has studied dos Santos’s rule for many years, calls the regime a ‘cryptocracy’ – a system of government in which the levers of power are hidden.

When I met Isaías Samakuva at a London hotel one afternoon in early 2014 he had been the leader of Unita, today Angola’s main opposition political party, for more than a decade. Samakuva has spent his life fighting a losing battle, but he remains eloquent and composed. He had been posted in London as Unita’s representative in the 1980s and had come back to see family and try to lobby against what he saw as Western powers’ readiness to cosy up to dos Santos in order to safeguard their companies’ access to Angolan oil. ‘The international community itself protects these guys,’ Samakuva told me, sipping a cup of tea.³⁷ ‘Their money is not actually in Angola. They deal with the banks in Portugal, in Britain, in Brazil, the United States. The only explanation that we can find is that they have the blessing of the international community.’

The eruptions of the Arab Spring were giving dos Santos the pretext to tighten security still further, Samakuva went on. ‘Dos Santos is so entrenched in power that he won’t allow what happened in Egypt.’ Samakuva added, ‘We have to have real peace, not just for them and their interests.’

Samakuva does not doubt that the key to the Futungo’s survival lies in the shadowy structures of the oil industry. ‘There’s no separation between private and state,’ he said. ‘There’s no transparency. No one knows what is the property of Mr dos Santos and his family.’ I asked him about one particular company. ‘I think it is the key to all the support that is given to Mr dos Santos, to his rule.’ How can one company provide such vital support, I asked. ‘We can only speculate. Everything is in the dark.’

The company Samakuva was talking about operates from the golden Luanda One tower. It is the sister company to China International Fund, whose flag flies above the entrance and which has raised billions for infrastructure projects under undisclosed terms, among them an expansion of Kilamba.³⁸ Cobalt, Nazaki and other oil groups have offices on the lower levels, but the top floors are reserved for the company that Samakuva had in mind – China Sonangol. Since 2004 China Sonangol has amassed stakes in a dozen Angolan oil ventures, including some of the most prolific, as well as a slice of the country’s richest diamond mine. Sonangol, the state oil company that is the Futungo’s financial engine, owns 30 per cent of China Sonangol. The remainder belongs to the band of Hong Kong-based investors that is known as the Queensway Group and is fronted by a bearded, bespectacled Chinese man called Sam Pa.

2
‘It Is Forbidden to Piss in the Park’

IT IS HARD to imagine a place more beautiful than the east of the Democratic Republic of Congo. The valleys are a higher order of green, dense with the generous, curving leaves of banana plants and the smaller, jagged ones of cassava shrubs. The hillsides are a vertiginous patchwork of plots. Just before dusk each day the valleys fill with a spectral mist, as though Earth itself had exhaled. The slopes drop down to Lake Kivu, one of the smaller of central Africa’s great lakes but still large enough to cover Luxembourg. On some days the waters lap serenely; on others, when the wind gets up, the lake turns slate-grey and froths. At the northern shore stand the Virunga, Lake Kivu’s crown of volcanoes.

Beneath the beauty there is danger. From time to time the volcanoes tip lava onto the towns below. Cholera bacteria lie in wait in Lake Kivu’s shallows. Deeper and more menacing still are the methane and carbon dioxide dissolved in the water, enough to send an asphyxiating cloud over the heavily populated settlements on the shores should a tectonic spasm upset the lake’s chemical balance.

But there is something else that lies under eastern Congo: minerals as rich as the hillsides are lush. Here there are ores bearing gold, tin and tungsten – and another known as columbite-tantalite, or coltan for short. Coltan contains a metal whose name tantalum is derived from that of the Greek mythological figure Tantalus. Although the Greek gods favoured him, he was ‘not able to digest his great prosperity, and for his greed he gained overpowering ruin’.¹ His eternal punishment was to stand up to his chin in water that, when he tried to drink, receded, and beneath trees whose branches would be blown out of reach when he tried to pluck their fruit. His story is a parable not just for the East but for the whole of a country the size of western Europe that groans with natural riches but whose people are tormented by penury. The Congolese are consistently rated as the planet’s poorest people, significantly worse off than other destitute Africans. In the decade from 2000, the Congolese were the only nationality whose gross domestic product per capita, a rough measure of average incomes, was less than a dollar a day.²

Tantalum’s extremely high melting point and conductivity mean that electronic components made from it can be much smaller than those made from other metals. It is because tantalum capacitors can be small that the designers of electronic gadgets have been able to make them ever more compact and, over the past couple of decades, ubiquitous.

Congo is not the only repository of tantalum-bearing ores. Campaigners and reporters perennially declare that eastern Congo holds 80 per cent of known stocks, but the figure is without foundation. Based on what sketchy data there are, Michael Nest, the author of a study of coltan, calculates that Congo and surrounding countries have about 10 per cent of known reserves of tantalum-bearing ores.³ The real figures might be much higher, given that reserves elsewhere have been much more comprehensively assessed. Nonetheless, Congo still ranks as the second-most important producer of tantalum ores, after Australia, accounting for what Nest estimates to be 20 per cent of annual supplies. Depending on the vagaries of supply chains, if you have a PlayStation or a pacemaker, an iPod, a laptop or a mobile phone, there is roughly a one-in-five chance that a tiny piece of eastern Congo is pulsing within it.

The insatiable demand for consumer electronics has exacted a terrible price. The coltan trade has helped fund local militias and foreign armies that have terrorized eastern Congo for two decades, turning what should be a paradise into a crucible of war.

Edouard Mwangachuchu Hizi avoided the brutal end that befell many of his fellow Congolese Tutsi as the aftermath of the Rwandan genocide of 1994 spilled across the border, but he suffered nonetheless. The son of a well-to-do cattle farmer, Mwangachuchu was in his early forties and working as a financial adviser to the local government in Goma, the lakeside capital of eastern Congo’s North Kivu province, when extremist Hutus on the other side of the water in Rwanda embarked on what is reckoned to be the fastest mass extermination in history, butchering eight hundred thousand Tutsi and moderate Hutus in one hundred days. Two million people fled, many of them into eastern Congo, where analogous ethnic tensions were already simmering.

On his way to work one day in 1995 a mob dragged Mwangachuchu from his jeep.⁴ He was choked with his tie and stripped. The mob dumped him at the border with Rwanda, where Tutsi rebels had seized control from the Hutu-led government following the genocide. His herds slaughtered, Mwangachuchu found himself among the flotsam of war, albeit more fortunate than those consigned to the squalid refugee camps beside Lake Kivu. He was granted asylum in the United States in 1996, along with his wife and six children.

Mwangachuchu watched from afar as the Hutu génocidaires licked their wounds in eastern Congo and began to launch raids against the new Tutsi-led authorities in Rwanda. He looked on from Maryland as Paul Kagame, the steely guerrilla who had become Rwanda’s leader, and his regional allies plucked an obscure Congolese Marxist rebel called Laurent-Désiré Kabila from exile in Tanzania to head a rebel alliance that swept through eastern Congo. The rebels perpetrated revenge massacres against Rwandan Hutu refugees and génocidaires as they went and then pushed on westward across a country the size of western Europe, all the way to Kinshasa, Congo’s capital. They toppled Mobutu Sese Seko, the decrepit kleptocrat, and installed Kabila as president in 1997. But Kabila barely had time to change the country’s name from Zaïre to the Democratic Republic of Congo before his alliance with his most powerful backer, Rwanda, started to fray. A little over a year after he took power, after Kabila had begun to enlist Hutu génocidaires to counter what he perceived as a Tutsi threat to his incipient rule, the alliance snapped. Half a dozen African armies and a score of rebel groups plunged Congo into five more years of war, during which millions died.

When Mwangachuchu went home in 1998, the dynamics of eastern Congo were shifting once again. Anti-Kabila rebels supported by Rwanda’s Tutsi-led government had taken control of the East. No one in this ethnic cauldron is ever safe, but the latest realignment favoured Congolese Tutsis like Mwangachuchu. He set about reclaiming his ancestral lands at Bibatama, 50 kilometres northwest of Goma. Mwangachuchu knew that the territory contained something still more precious than fertile pastures for grazing cattle – the rocks beneath were rich with coltan.⁵

Investors from Congo’s old colonial master, Belgium, had mined the area around Mwangachuchu’s lands, but their joint venture with the government had collapsed in the mid-1990s. Invading Rwandan forces and their allies looted thousands of tons of coltan and cassiterite, the tin-bearing ore, from the company’s stockpiles, UN investigators found.⁶ When Mwangachuchu arrived home, artisanal miners around his mountain hometown were hacking away at the rock with picks and shovels. The cassiterite would fetch a few dollars per kilo. But far-off developments in global markets were about to spur the coltan trade – and pour cash into eastern Congo’s war.

The boom in mobile phones as well as in the rest of consumer electronics and games consoles caused voracious demand for tantalum. The two biggest companies that processed tantalum, Cabot of the United States and H. C. Starck of Germany, foresaw prolonged high demand. They signed long-term contracts, locking in their supply of tantalum ores.⁷ That created a shortage on the open market and sparked a scramble to find new supply sources. In the course of 2000, prices for tantalum ores rose tenfold. Congo was ripe for the picking.

Thousands of eastern Congolese rushed into coltan mining. Many exchanged a farmer’s machete for a miner’s pick. Militias press-ganged others into mining. Livestock had long been the East’s most prized commodity, but now, suddenly, it was coltan. In 1999 North Kivu officially exported five tonnes of coltan; in 2001 it exported ninety tonnes. Even after the flood of Congolese supply brought the world price back down, coltan remained more lucrative than other ores.

Coltan was not the sole catalyst of the conflict – far from it. Congo was seething before the boom and would have seethed even if coltan had never been found. But the surging coltan trade magnified eastern Congo’s minerals’ potential to sustain the myriad factions that were using the hostilities to make money. ‘Thanks to economic networks that had been established in 1998 and 1999 during the first years of the Congo war, minerals traders and military officials were perfectly placed to funnel [coltan] out of the country,’ writes Nest.⁸

Mwangachuchu started mining his land in 2001, employing about a thousand men. An amiable man with an oval face and soft features, he breaks bread with his workers and sometimes even works the mines himself, people who know him told me. Mwangachuchu Hizi International (MHI), the business he founded with his partner, a doctor from Baltimore named Robert Sussman, swiftly came to account for a large chunk of North Kivu’s coltan output. ‘We are proud of what we are doing in Congo,’ Sussman said at the time. ‘We want the world to understand that if it’s done right, coltan can be good for this country.’⁹ But UN investigators and western campaigners were starting to draw attention to the role Congo’s mineral trade played in funding the war. The airline that had been transporting MHI’s ore to Europe severed ties with the company. ‘We don’t understand why they are doing this,’ Mwangachuchu told a reporter. ‘The Congolese have a right to make business in their own country.’¹⁰

Other foreign businesspeople were less concerned about doing business in a war zone, which is what eastern Congo remained even after the formal end of hostilities in 2003. Estimates I have heard of the proportion of Congolese mineral production that is smuggled out of the country range from 30 to 80 per cent. Perhaps half of the coltan that for years Rwanda exported as its own was actually Congolese.¹¹

Militias and the Congolese army directly control some mining operations and extract taxes and protection money from others. Corrupt officials facilitate the trade. The comptoirs, or trading houses, of Goma on the border with Rwanda orchestrate the flow of both officially declared mineral exports and smuggled cargoes. Other illicit routes run directly from mines across the Rwandan and Ugandan borders. UN investigators have documented European and Asian companies purchasing pillaged Congolese minerals. Once the ores are out of the country, it is a simple step to refine them and then sell the gold, tin, or tantalum to manufacturers. The road may be circuitous, but it leads from the heart of Congo’s war to anywhere mobile phones and laptops can be found.

In the absence of anything resembling a functioning state, an ever-shifting array of armed groups continues to profit from lawlessness, burrowing for minerals and preying on a population that, like Tantalus, is condemned to suffer in the midst of plenty. In 2007 Mwangachuchu fell out with Robert Sussman, the co-founder of his mining business, a dispute that would lead a Maryland court to order the Congolese to pay the American $2 million. Mwangachuchu pressed on alone. His lands went on yielding up their precious ore. And he began to cultivate a new partner: the Congrès National pour la Défense du Peuple (National Congress for the Defence of the People), a militia that largely does the opposite of what its name suggests.

The relentless conflict in eastern Congo has prevented the development of large-scale industrial mining there. Almost all mining is done by hand. The East’s minerals have fuelled the war, but the value of its output is tiny compared with the immense mines to the south.

Congo’s Katanga province, sandwiched between Angola and Zambia, holds about half of the world’s stocks of cobalt.¹² The metal is mostly used to make the ultra-strong superalloys that are integral to turbines and jet engines. It is mined as a by-product of copper, a crucial ingredient of human civilization, from its first uses in ancient coins to the wiring in electricity networks. The African copperbelt stretches from northern Zambia into Katanga and holds some of the planet’s richest copper stocks. In Katanga vast whorls of red earth and rock have been cut into the forest, open pit mines that descend in steps like amphitheatres.

Katanga has endured secessionist conflict and suffered heavy fighting during the war. But, lying much further from the border with Rwanda, the principal foreign protagonist in the rolling conflicts, Katanga has known more stability than the East. Mining multinationals from Canada, the United States, Europe, Australia, South Africa and China have operations in Katanga; the region’s mining output dwarfs the rest of Congo’s economy. Congo’s rulers have built a shadow state on the foundations of Katanga’s minerals, resembling the one that Angola’s Futungo has fashioned from crude oil.

Augustin Katumba Mwanke grew up in Katanga idolizing the executives who ran Gécamines, the national copper-mining company. As Congo crumbled in the dying years of Mobutu’s rule, a combination of fierce intelligence, luck and determination carried him to South Africa, then brimming with possibility after the end of apartheid. He worked for mining companies before landing a job at a subsidiary of HSBC. In April 1997, when Laurent Kabila’s forces captured Katanga on their advance across Congo, the bank grew nervous that the rebels might not honour a loan it had made to Gécamines. A delegation was dispatched to Congo for talks with the rebels. Katumba was added to the party in the hope that a Congolese face might help the bank’s cause.¹³

‘When they came I saw a young man who looked very bright,’ Mawapanga Mwana Nanga, then the rebels’ finance chief, told me years later.¹⁴ An agronomist who had trained in Kentucky, Mawapanga was on the lookout for talented recruits as he prepared to inherit a ransacked treasury. He took a shine to Katumba. ‘I told him, “You should come back. The country needs people like you.” We were just joking. I said, “I can give you a job, but I can’t pay you yet.”’ The lighthearted exchange contained a serious offer. Mawapanga exhorted Katumba to have the bank second him to what was about to become Congo’s new government. Katumba craved influence but had foreseen a career in international business, not the chaos of Congolese government. Nonetheless, aged thirty-three, he headed home to take up Mawapanga’s invitation. His transformation into one of Africa’s most powerful men had begun.

As the rebels struggled to start governing after deposing Mobutu, Katumba impressed as an adviser in the finance ministry. He had been back in Congo less than a year when his phone rang. ‘Hello, may I speak with Katumba?’ said the voice on the line.

‘Yes, this is he.’

‘This is Kabila.’

Katumba had a friend with the same name and asked him what he wanted.

‘No,’ said the voice. ‘This is Laurent-Désiré Kabila.’¹⁵

The president, a fellow Katangan, told Katumba he wanted to meet him. A few weeks later Katumba stood before the corpulent guerrilla at the presidential palace. Following some brisk questioning about the young man’s background, the president said, ‘I want to name you governor of Katanga.’ According to his memoir, a stunned Katumba protested that he was utterly unqualified for what was one of the most influential positions in Congolese politics. But he could hardly refuse. The appointment was made public that evening. ‘Katanga is as big as France,’ Mawapanga, the finance minister, told his protégé. ‘If you can manage that, the sky’s the limit.’ He might have added that Katumba was being handed the keys to one of the world’s greatest vaults of minerals.

Kabila’s rebels-turned-rulers needed to generate money from Congo’s dilapidated mining industry for the twin purposes of resisting an invasion by their erstwhile Rwandan backers and making sure that they used what might prove a brief stint in power to bolster their personal finances. Oscar Mudiay, a senior civil servant in Kabila’s government, told me that the president received a minimum of $4 million each week delivered in suitcases by state-owned and private mining companies.¹⁶ Kabila’s government soon signed a flurry of mining and oil deals, with scant regard for due process. The regional coalition that had swept him to power had split into pro-Kabila and pro-Rwanda alliances, and Kabila needed to keep his foreign allies, principally Zimbabwe and Angola, sweet. One beneficiary of the deal-making was Sonangol, the Angolan state oil company controlled by the Futungo, with which the Congolese state formed a partnership.¹⁷ As governor of Katanga province, Katumba was perfectly placed to build his influence over the mining industry. ‘He was more intelligent than the others and got close to Gécamines,’ Oscar Mudiay recalled.

As he built a base for himself in Congo’s mining heartland, Katumba became a member of Kabila’s inner circle. He befriended the president’s son while they travelled together on sensitive diplomatic missions. Monosyllabic and withdrawn, Joseph Kabila had been thrown into the military when his father became the figurehead of the rebellion against Mobutu. He was prematurely promoted to general and, in name at least, appointed head of the army. In December 2000 Rwandan troops and anti-Kabila forces routed the Congolese army and its foreign allies at Pweto, Katumba’s hometown in Katanga. The Rwandans seized a valuable cache of arms, but there was another prize within their reach: Joseph Kabila was on the battlefield. As the Congolese army melted into frantic retreat and the high command took to its heels, Katumba received a call from the president: ‘Kiddo, find Joseph, my son.’¹⁸

Katumba raced to reach Joseph by phone and discovered he was alive and still free. Such were the straits of the government campaign that Katumba, according to his memoir, personally had to find fuel and take it to the airport for a plane to evacuate the president’s son.¹⁹ This was the moment that formed an unbreakable bond between Katumba and the younger Kabila.

Four weeks later one of Laurent Kabila’s bodyguards, an easterner who had been among the cohort of child soldiers in Kabila’s rebel army, approached the president and shot him three times at close range, for reasons that have been the subject of competing conspiracy theories ever since. In disarray, his senior officials decided to create a dynasty on the spot and summoned Joseph to Kinshasa to inherit the presidency. Mawapanga Mwana Nanga, the former finance minister who had brought Katumba back to Congo, was involved in the tense efforts to hold the government together after the assassination. ‘Joseph was a general – he did not know politics,’ Mawapanga told me. ‘So he called Katumba to come back and be his right-hand man and show him how to navigate the political waters.’

In four years Katumba had gone from a junior post in a Johannesburg bank to the side of Congo’s new president. He was appointed minister of the presidency and state portfolio, in charge of state-owned companies. In 2002 UN investigators appointed to study the illegal exploitation of Congo’s resources named him as one of the key figures in an ‘elite network’ of Congolese and Zimbabwean officials, foreign businessmen and organized criminals who were orchestrating the plunder of Congolese minerals under cover of war.²⁰ ‘This network has transferred ownership of at least $5 billion of assets from the state mining sector to private companies under its control in the past three years with no compensation or benefit for the state treasury of the Democratic Republic of the Congo,’ the UN team wrote.

When the UN investigators recommended Katumba be placed under UN sanctions, he was shuffled out of his official post in Kabila’s government – and moved into the shadow state. He became the leading exponent of a system that Africa Confidential, the most comprehensive publication in English on the continent’s affairs, encapsulated: ‘Exercising power, from the late President Mobutu Sese Seko to the Kabila dynasty, has relied on access to secret untraceable funds to reward supporters, buy elections and run vast patronage networks. This parallel state coexists with formal structures and their nominal commitment to transparency and the rule of law.’²¹

I have heard people compare Katumba to Rasputin, Karl Rove and the grand viziers of the Ottoman Empire. Diplomats rarely met him. In photographs his eyes look penetrating, his face set in a permanent semifrown of calculation. One foreigner who found himself in the same room as Katumba described an impressive man, shrewd and gentlemanly, with a fondness for his own jokes. ‘He never spoke much,’ said Oscar Mudiay, the official who served under Laurent Kabila. ‘Just a glance.’

Katumba was like an elder brother to the young president. ‘Joseph Kabila put his total faith in Katumba,’ Olivier Kamitatu, an opposition politician who served for five years as planning minister in Kabila’s government, told me.²² ‘He was hugely intelligent. He knew how to run the political networks and the business networks. The state today is the property of certain individuals. Katumba’s work was to create a parallel state.’

On 15 October 2004, the residents of the Katangan mining town of Kilwa discovered what it meant to fall foul of Katumba’s looting machine. The previous day Alain Kazadi Makalayi, a twenty-year-old fisherman with delusions of grandeur, had arrived in Kilwa at the head of half a dozen ramshackle separatists and proclaimed the independence of Katanga.²³ His call to arms attracted fewer than a hundred young followers. Realizing that a rebellion that could not even organize a radio broadcast was unlikely to last long and that the national army could not be far off, most of Kilwa’s inhabitants ran away.

The separatists posed a negligible threat, but they had dared to challenge the interests of the shadow state. Dikulushi, the copper mine that lay 50 kilometres outside the town, was linked to Katumba.

Anvil Mining, a small Australian outfit, had won the rights to mine the area in 1998 and began producing copper in 2002. According to a subsequent inquiry by the Congolese Parliament, the company was granted a twenty-year exemption from paying any taxes whatsoever.²⁴ Katumba was a founding board member of Anvil’s local subsidiary, and his name appeared on the minutes of three board meetings between 2001 and 2004.²⁵ Bill Turner, Anvil’s chief executive, denied that Katumba held any shares in the company; he said Katumba sat on the board as the government’s representative. But Turner admitted to a reporter from Australia’s ABC television that, as well as a few thousand dollars in director’s fees, the company paid some $50,000 a year to rent a compound Katumba owned in Lubumbashi, Katanga’s capital, for its headquarters.

After the young separatist convened a public meeting in Kilwa’s marketplace to proclaim his rebellion and declare that the days of Joseph Kabila and Katumba ‘pocketing money from the mines’ were over, the president ordered the regional military commander to retake the town within forty-eight hours.²⁶ Troops had orders to ‘shoot anything that moved’, according to a UN inquiry into what followed.²⁷

The soldiers arrived on Anvil Mining’s aircraft and made use of the company’s vehicles. They encountered scant resistance and suffered no casualties putting down the inept rebellion. Once the fighting was over they taught Kilwa a lesson.

Soldiers went from house to house, dispensing vengeance. At least one hundred people were killed. Some were forced to kneel beside a mass grave before being executed one by one. Among the dead were both insurgents and civilians, including a teenager whose killers made off with his bicycle. Kazadi, the hapless separatist leader, was said to have died of his wounds in the hospital. Soldiers who ransacked homes and shops carried their loot away in Anvil vehicles, which were also used to transport corpses, according to the UN investigation, claims the company denied.²⁸

A decade later, in 2014, I asked Bill Turner about Anvil’s role in the Kilwa massacre. ‘Anvil were of course aware of the rebellion and the suppression of the rebellion in Kilwa in October 2004, having provided logistics to the DRC Military, under force of law,’ he told me, declining to elaborate on what those logistics were. But Turner told me he had not been aware of ‘allegations of war crimes or atrocities’ until an ABC reporter asked him about them in an interview seven months after the massacre. (He added that the interview was edited with the aim of ‘portraying Anvil and me in the worst possible light’.) ‘There have been multiple government enquiries in a number of countries, including a detailed Australian Federal Police investigation in Australia into those allegations,’ Turner continued in a letter responding to my questions. ‘None of those enquiries has found that there is any substance whatsoever to the allegations. In addition, there has been litigation instigated in the Democratic Republic of Congo, Western Australia and Canada, which has at least touched on the matters raised by you. In none of those cases have there been findings against Anvil.’²⁹

The survivors’ representatives fought for years to hold those responsible for the Kilwa massacre to account, but they got nowhere. Katumba was untouchable. In 2009 a US diplomatic cable described him as ‘a kind of shady, even nefarious figure within Kabila’s inner circle, [who] is believed to manage much of Kabila’s personal fortune’.³⁰ The cable was transmitting news that Katumba had stepped down from his latest formal position, heading Kabila’s majority in the national assembly. But it predicted – accurately – that his influence would remain.

In 2006 and 2007 two rebel groups and the Congolese army fought for control over Edouard Mwangachuchu’s coltan mine at Bibatama.³¹ The group that won out was arguably the most formidable rebel force in eastern Congo – quite an accolade, given the ferocity of the fighting that continued to erupt regularly despite the formal end of the war in 2003.

Known by its French acronym, CNDP, the Congress for the Defence of the People was the creation of Laurent Nkunda, a Tutsi renegade general and Seventh-Day Adventist pastor from North Kivu. Nkunda had fought with Rwanda against Laurent Kabila before joining the Congolese national army when it incorporated various warring factions under the 2003 peace deal. He rose to general before returning to the cause of rebellion – this time, his own.

The hills and forests around Nkunda’s hometown in North Kivu became his fiefdom, as the forces at his command swelled to eight thousand men (and children).³² A student of psychology, for a time he outwitted everyone, navigating with cunning the treacherous terrain in which Rwanda and Kinshasa jostled for influence with UN peacekeepers, arms dealers, local politicians and eastern Congo’s constellation of paramilitary groups.

For all Nkunda’s rhetoric – he spoke to a Financial Times reporter in 2008 of ‘a cry for peace and freedom’ – his operation was, in large measure and like many of its rivals, a money-making venture.³³ Eastern Congo’s militias – not to mention the army itself – have many ways to bring in revenue, from taxing commercial traffic to ranching and trading in charcoal. But the mining trade is particularly lucrative and has the advantage of bringing in foreign currency that can buy arms.

The business arrangements of eastern Congo’s clandestine mineral trade reveal something else, something that undercuts the crass notion that the primitive hatreds of African tribes are the sole driver of the conflict. The two most important militias, the CNDP and the Forces Démocratiques de Libération du Rwanda (FDLR), are sworn enemies. The former’s stated reason to exist is to defend the Tutsis of eastern Congo from the latter, a cohort formed by the Hutu extremists who perpetrated the Rwandan genocide. Both also serve as proxies: Joseph Kabila has supported the FDLR to counter the influence that Paul Kagame’s Tutsi-led government in Rwanda exercises through the CNDP.

But as one easterner who has worked in both mining and intelligence told me, ‘Formally the groups are all enemies. But when it comes to making money and mining, they cooperate pretty well. War changes, but business goes on. The actors change, but the system stays – the links between the armed groups and the mines. The conflict goes on because it has its own financing: the mines and the weapons. It has its own economy.’³⁴

On a Sunday afternoon in Goma I drank a beer beside a pool at a hotel with Colonel Olivier Hamuli. He is the spokesman of the Congolese armed forces and journalists regard him as one of the more accurate sources of information on the fighting, even if he avoids discussing the military’s own role in plunder and atrocities. An easterner, his convivial demeanour cannot mask the eyes of a man who has seen too much. When we met he was fielding call after call about clashes between Tutsi rebels and the army. The rebels had advanced to take strategic positions on the edge of Goma; the army and UN peacekeepers were preparing helicopter gunships for a counterattack.

‘The CNDP, the FDLR, they say they are fighting against bad governance. They are just mining. Even the FDLR, they are not trying to challenge the Rwandan government – they are here to mine. This is the problem of the war in the east,’ the colonel said.³⁵ ‘It’s a war of economic opportunity. It’s not just Rwanda that benefits; it’s businessmen in the United States, Australia too.’ He brandished one of his incessantly buzzing mobile phones. ‘Smuggling goes on. Mobile phones are still being made. They need the raw materials one way or another.’

According to the UN panel of experts that tries to keep track of the links between eastern Congo’s conflict and the mineral trade, after Nkunda won the battle for the territory that contained Mwangachuchu’s mining operations, the warlord permitted the businessman to retain control of his mines in return for a cut of the coltan.³⁶ Mwangachuchu told the UN team he paid 20 cents per kilo of coltan exported from his mines at checkpoints he suspected were run by the CNDP.³⁷ That levy alone would have channelled thousands of dollars a year into the militia’s war chest. Altogether eastern Congo’s militias are estimated to have raked in something to the tune of $185 million in revenues from the trade in coltan and other minerals in 2008.³⁸ The UN team also reported Mwangachuchu’s excuse for funding the militia: he told the team he had ‘no choice but to accept the presence of CNDP and carry on working at Bibatama, as he needs money to pay $16,000 in taxes to the government.’

To his supporters, Mwangachuchu is a well-meaning employer (of both Tutsis and other ethnicities) assailed by grasping militiamen. His supporters, none of whom wanted to be named when they spoke to me, described a legitimate businessman striving to introduce modern mining techniques in the face of turmoil and wrongheaded foreign interventions. Some well-informed Congolese observers are less inclined to give him the benefit of the doubt. One night in a Goma bar a senior army officer fumed with anger when I asked him about Mwangachuchu and other mining barons of North Kivu. He damned them all as war profiteers who preferred to pay a few dollars to rebel-run rackets than have a functioning state tax them properly. When I asked the easterner who has worked both on mining policy and in Congolese intelligence about Mwangachuchu’s claim that he had been forcibly taxed by the CNDP, he shot back, ‘It’s not a question of taxes. Mwangachuchu and the armed groups are the same thing.’

It is hard to see how Mwangachuchu could have established himself as a leading Tutsi businessman in the East without becoming intertwined with the armed groups. As well as seeking prosperity, Tutsis in eastern Congo have faced near-constant threats to their survival, most terrifyingly from the Rwandan Hutu génocidaires who roam the hills.

In 2011 Mwangachuchu stood as a candidate for CNDP’s political wing in the national assembly – and its foot soldiers helped guarantee his victory. They had been absorbed into the lawless ranks of Congo’s army under a shaky peace deal but retained their mining rackets and their loyalties.³⁹ ‘The CNDP guys used every trick in the book to make sure he got through,’ said a foreign election observer who watched former CNDP rebels filling out ballot papers for Mwangachuchu after the polls had closed.⁴⁰ Ex-CNDP fighters in the national army were observed brazenly intimidating voters in North Kivu, some of the most egregious abuses in a deeply flawed national election that secured Kabila a fresh term.⁴¹ According to a report to the Security Council by a UN group of experts, to ensure the support of the CNDP’s fighters, Mwangachuchu had paid off Bosco Ntaganda. Known as ‘The Terminator’, Ntaganda had replaced the deposed Laurent Nkunda three years earlier as the CNDP boss and brought his boys into the army even though he was wanted by the International Criminal Court for war crimes including murder, rape, conscripting child soldiers, and ethnic persecution.⁴² Despite overwhelming evidence of foul play and months of legal wrangling, Mwangachuchu’s election stood. Even before his victory was secure, Ntaganda named him president of the CNDP’s political party.

Mwangachuchu’s leadership was short-lived. A few months after the 2011 election Kabila’s government sought to strengthen its writ in the East by relocating the former CNDP militiamen who had been brought into the national army to postings elsewhere in the country, far from the East’s coltan, gold and tin mines. But the militiamen were not about to give that up without a fight. Several hundred mutinied under a new acronym, M23, short for March 23, the date of the 2009 deal that had brought them into the army. Rwanda, deeply involved in both eastern Congo’s military and mining networks, again provided covert support to the mainly Tutsi rebels as they advanced on Goma.⁴³

In early May 2012 General James Kabarebe, the redoubtable Rwandan defence minister who had masterminded its military campaigns in Congo and surreptitiously commanded M23, called Mwangachuchu. He ordered him to support the rebels and pull the CNDP political party out of its alliance with Kabila.⁴⁴ Mwangachuchu refused. Perhaps he feared that crossing Kabila would imperil his mining interests; perhaps he sensed that the new rebellion was doomed. A furious Kabarebe told Mwangachuchu that ‘a lightning bolt will strike you’. Within days he had been ousted as president of the CNDP’s political party.

But Mwangachuchu had chosen wisely. Western powers that had long turned a blind eye to Rwanda’s meddling in Congo ran out of patience and suspended aid. Bosco Ntaganda, the Tutsi warlord who had joined the mutiny, found himself under such mortal threat that he chose to take his chances in The Hague and turned himself in at the US embassy in Rwanda, from where he was sent to face justice at the International Criminal Court. At negotiations in Uganda between Kabila’s government and the M23 rebels, Mwangachuchu was part of the government delegation. The talks came to little, and in late 2013 Congolese forces, backed by a new UN force with a mandate to smash the rebel groups, routed the M23 rebels.

I asked Mwangachuchu to give me his own account. He declined. When I e-mailed him a list of questions, it was his lawyer who replied. Mwangachuchu, the lawyer wrote, ‘reminds you that there is a war on in this part of the country and he cannot afford at this stage to answer your questions.’ Mwangachuchu can claim to have played peacemaker – but only when it suits him. ‘He’s not a fighter; he’s a businessman,’ a former minister in Kabila’s government told me. ‘His loyalties are not so strong – except to his business.’

Our two-jeep convoy slowed as it approached a roadblock deep in the tropical forests of one of eastern Congo’s national parks. Manning the roadblock were soldiers from the Congolese army, theoretically the institution that should safeguard the state’s monopoly on the use of force but, in practice, chiefly just another predator on civilians. As my Congolese companions negotiated nervously with the soldiers, I stepped away to take advantage of a break in a very long drive and relieve myself, only to sense someone rushing toward me. Hurriedly zipping up my fly, I turned to see a fast-approaching soldier brandishing his AK47. With a voice that signified a grave transgression, he declared, ‘It is forbidden to piss in the park.’ Human urine, the soldier asserted, posed a threat to eastern Congo’s gorillas. I thought it best not to retort that the poor creatures had been poached close to extinction by, among others, the army, nor that the park attracted far more militiamen than gorilla-watching tourists.

My crime, it transpired, carried a financial penalty. My companions took the soldier aside, and the matter was settled. Perhaps they talked him down, using the presence of a foreign journalist as leverage. Perhaps they slipped him a few dollars. As we drove away it occurred to me that we had witnessed the Congolese state in microcosm. The soldier was following the example set by Kabila, Katumba, Mwangachuchu and Nkunda: capture a piece of territory, be it a remote intersection of potholed road, a vast copper concession, or the presidency itself; protect your claim with a gun, a threat, a semblance of law, or a shibboleth; and extract rent from it. The political economy of the roadblock has taken hold. The more the state crumbles, the greater the need for each individual to make ends meet however they can; the greater the looting, the more the authority of the state withers.

Leaving the roadblock behind, we bounced along the pitted tracks that lead into the interior of South Kivu province. It was late 2010, and a joint offensive against Hutu rebels by Congolese and Rwandan forces and their allied militias had driven masses of civilians from their farmsteads. Kwashiorkor, or severe acute malnutrition in children, was rife.

The lone hospital in Bunyakiri serves 160,000 people. It has no ambulance and no electricity, making it almost impossible after nightfall to find a vein for an injection. The rusting metal of its roof is scarcely less rickety than the surrounding mud huts. When I visited, medicine was in short supply, the army having recently ransacked the hospital. There was no mobile phone reception, an irony in a part of the world whose tantalum is crucial in making the devices.

The hospital’s pediatric ward had fourteen beds. At least two mothers sat on each, cradling their babies. On one, Bora Sifa regarded her surroundings warily. Two years earlier a raiding party from the FDLR, the militia formed by the perpetrators of the Rwandan genocide, had descended on her village in search of loot to supplement the income from their mining operations. The raiders ordered Bora’s husband to gather up what they wanted. ‘They forced him to carry all the things away into the forest,’ Bora told me. ‘Then they killed him.’

Bora fled and a stranger in another village took her in, allowing her and her children to live in an outhouse. Now twenty, she made about a dollar a day helping to cultivate cassava, a root crop that fills empty bellies but has little nutritional value. Five days ago she had brought her son, Chance, to the hospital. ‘He wasn’t growing,’ Bora said. ‘I wasn’t making enough milk.’ Like many malnourished children, Chance’s features had aged prematurely. His eyes were sunken, his hair receding.

At any given moment since the start of Congo’s great war in 1998, between 1 million and 3.5 million Congolese have been adrift like Bora. The vast majority are in the East, driven from mining areas or the shifting frontlines of multiple interwoven conflicts. In 2013 2.6 million of Congo’s 66 million people were ‘internally displaced’, as refugees who have remained in their country are known in the jargon of human catastrophe, making up one in ten of the worldwide tally.⁴⁵ Many end up in flimsy bivouacs fashioned from tarpaulins bearing the brands of assorted relief agencies; others appeal to the solidarity of their fellow Congolese, which persists despite the myriad fissures that war, desperation and ethnicity have opened between them. That solidarity can only do so much in a country where two-thirds lack sufficient food. Uprooted, Congo’s wandering millions starve.

With the help of the hospital’s tireless doctor and a French charity, Chance was recovering.⁴⁶ Few others shared his fortune. Further up the road I visited a hilltop clinic beside a school in the town of Hombo Sud. One by one, dozens of emaciated children were being dangled from weighing scales and checked for telltale signs of severe malnutrition: oedema (a buildup of fluids in the legs) and arms with a circumference of less than 10.5 centimetres.

Anna Rebecca Susa, a bundle of spindles in a pink skirt emblazoned with the word ‘Princess’, was dangerously underweight. The special measuring tape showed red when a medic pulled it tight round her arm. Her belly was swollen beneath fleshless ribs, her hair reduced to a faint frizz. At five, she could not understand what was happening to her, but her big eyes were full of anxiety, as though she could sense that her body was failing. She could not keep down a sachet of the peanut paste that can do wonders for malnourished children and was sent home with more in the hope her stomach would settle. Her father, Lavie, invited me back to his home, an outhouse belonging to a distant relative where Lavie, his wife, and their four children had lived since they fled rebel attacks on their home village two years previously.

The signature falsetto guitar of Congolese music drifted over the jagged rooftops of the tiny metal shacks sprayed across the slopes. Lavie’s wife, whose wedding ring he had fashioned from a plastic bottle top, was out foraging for leaves. Anna fell asleep on the shack’s lone bed. Her younger brother, Espoir, tottered around, oblivious to his sister’s plight.

A few weeks later I got in touch with the clinic’s medics to ask after Anna. When she had kept throwing up the peanut paste, the French charity had driven her to the hospital at Bunyakiri. By then there was little anyone could do. Her immune system destroyed by malnutrition, she died of an infection.

The heavens opened the day they buried Augustin Katumba Mwanke. The Congolese establishment sheltered under marquees in Kinshasa before the coffin that sported an enormous floral garland.⁴⁷ In a black suit and black shirt Joseph Kabila arrived amid a phalanx of bodyguards manoeuvring to keep an umbrella over his head. It was a rare public appearance for a reclusive president said to have spent his early years in office in the company of video games. His face was expressionless. Barely two months had passed since he had rigged his way to victory in the presidential election, securing a second five-year term. Now the mastermind behind both his power and his wealth was gone. The previous day, 12 February 2012, the American pilot of the jet carrying a group of Kabila’s senior officials to Bukavu by Lake Kivu had misjudged the landing. Katumba’s last moments came as the aircraft veered off the runway and smashed into a grassy embankment. He was forty-eight.

One other guest at the funeral stood out. He was the lone white face in the front row. Kabila clasped his hand. The burly, bearded man in a yarmulke, the Jewish skullcap, was Dan Gertler. He was the all-important intersection between the shadow state that controlled access to Congo’s minerals and the multinational mining companies that coveted them.

The grandson of one of the founders of Israel’s diamond exchange, in his early twenties Gertler set forth to seek his own fortune. He went to Angola, then still deep in civil war and a rich source of diamonds. But another Israeli, Lev Leviev, had already staked a strong claim there. Gertler arrived in Congo in 1997, days after Laurent Kabila had overthrown Mobutu. An ultra-orthodox Jew, he was introduced by a rabbi to Joseph Kabila, newly installed as the head of the Congolese army.⁴⁸ The younger Kabila and Gertler had much in common. Each stood in the shadow of his elders, carrying a heavy burden on young shoulders into the cauldron of Congolese warfare and politics. They became firm friends.

Gertler soon discovered the value of his friendship with the president’s son. Kabila Sr was in urgent need of funds to arm his forces against Rwandan and Ugandan invaders and to butter up his allies for the fight.⁴⁹ When Joseph took his new friend to meet his father, the president told the young Israeli that if he could raise $20 million without delay, he could have a monopoly to buy every diamond mined in Congo. Gertler cobbled together the cash and was granted the monopoly.

Not for the last time, an arrangement that suited Gertler and the Kabila clan hardly served the interests of the Congolese people. ‘It wasn’t a good deal for us,’ Mawapanga Mwana Nanga, then the finance minister, told me. ‘We should have opened the market to the highest bidder.’⁵⁰ UN investigators declared that Gertler’s diamond monopoly had been a ‘nightmare’ for Congo’s government and a ‘disaster’ for the local diamond trade, encouraging smuggling and costing the treasury tax revenue.⁵¹ It could not last. After Joseph Kabila succeeded his assassinated father in 2001, the monopoly was cancelled under pressure from foreign donors.⁵²

Gertler was not deterred. He re-established a commanding position in the Congolese diamond trade by arranging to buy stones from the state-owned diamond miner and began to turn his attention to the far bigger prize: the copper and cobalt of Katanga, where production and prices would rise dramatically as Asian demand for base metals soared. His most important asset – his bond with the new president – was intact. ‘Gertler showed that he could help the family and, in return, they said, “We can do business with you,”’ a diplomat who spent years watching Gertler’s exploits in Congo told me. ‘Kabila can only keep himself in power with the help of people like Gertler: it’s like an insurance mechanism – someone who can get you money and stuff when you need it.’

Over the years that followed, Gertler cultivated Katumba too, even inviting him to a party on a yacht in the Red Sea that included a performance by Uri Geller, the Israeli illusionist and self-proclaimed psychic.⁵³ In a reverie of gratitude to Gertler, in the final pages of his posthumously published memoir Katumba wrote that ‘in spite of all our seeming differences, I am proud to be the brother you never had.’⁵⁴

The trio of Kabila, Katumba and Gertler was unassailable. ‘It’s like an exclusive golf club,’ one of Kabila’s former ministers told me. ‘If you go and say, “The founders are cheating,” they’re going to say: “And who the hell are you?”’⁵⁵ Gertler’s role in this exclusive club was manifold. ‘It’s an amalgam – business, political assistance, finance,’ said Olivier Kamitatu, who became an opposition legislator after his five-year stint as Kabila’s planning minister.⁵⁶ Gertler’s particular contribution was to build a tangled corporate web through which companies linked to him have made sensational profits through sell-offs of some of Congo’s most valuable mining assets. ‘The line between the interests of the state and the personal interests of the president is not clear,’ Kamitatu told me. ‘That is the presence of Gertler.’

Since he first rode to Laurent Kabila’s rescue with $20 million to fund the war effort, Gertler has proved himself invaluable to Congo’s rulers. Katumba wrote in his memoir that Gertler’s ‘inexhaustible generosity, and the extreme efficiency of his assistance, have been decisive for us in the most crucial moments.’⁵⁷ Deals in which he was involved are said to have helped finance Joseph Kabila’s 2006 election campaign.⁵⁸ Kamitatu told me that Gertler had helped Kabila win that election and said he had also come up with cash for the military campaign against Laurent Nkunda’s rebels in the East. I asked Gertler’s representatives whether he had assisted Kabila at these moments and during the 2011 elections. They did not respond. Gertler has, however, denied that he has underpaid for Congolese mining assets. ‘The lies are screaming to the heavens,’ he told a reporter from Bloomberg in 2012.⁵⁹

Kamitatu, who is the son of one of Congo’s independence leaders and trained in business before a political career that began as a senior figure a rebel group during the war, sees the shadow state as the root of his nation’s failure to escape poverty. ‘You can’t develop the country through parallel institutions. Every infrastructure project you undertake is not done through a strategic vision but with a view to the personal financial results,’ he told me as we sat at his house in Kinshasa in 2013. Politics and private business have fused, Kamitatu believed. Winning a presidential election costs tens of millions of dollars, and the only people with that kind of money are the foreign mining houses. ‘I am extremely worried about a political system where the voters are starving and the politicians buy votes with money from natural resource companies,’ Kamitatu said. ‘Is that democracy?’

Dan Gertler’s Congolese mining deals have made him a billionaire. Many of the transactions in which he has played a part are fiendishly complicated, involving multiple interlinked sales conducted through offshore vehicles registered in tax havens where all but the most basic company information is secret. Nonetheless, a pattern emerges. A copper or cobalt mine owned by the Congolese state or rights to a virgin deposit are sold, sometimes in complete secrecy, to a company controlled by or linked to Gertler’s offshore network for a price far below what it is worth. Then all or part of that asset is sold at a profit to a big foreign mining company, among them some of the biggest groups on the London Stock Exchange.

Gertler did not invent complexity in mining deals. Webs of subsidiaries and offshore holding companies are common in the resource industries, either to dodge taxation or to shield the beneficiaries from scrutiny. But even by the industry’s bewildering standards, the structure of Gertler’s Congo deals is labyrinthine. The sale of SMKK was typical.⁶⁰

SMKK was founded in 1999 as a joint venture between Gécamines, Congo’s state-owned mining company, and a small mining company from Canada.⁶¹ SMKK held rights to a tract of land in the heart of the copperbelt. It sits beside some of the planet’s most prodigious copper mines, making it a fair bet that the area the company’s permits cover contains plentiful ore. Indeed, Gécamines had mined the site in the 1980s before Mobutu’s looting drove the company into collapse.⁶² After a string of complicated transactions beginning in November 2007, involving a former England cricketer, a white crony of Robert Mugabe, and assorted offshore vehicles, 50 per cent of SMKK ended up in the hands of Eurasian Natural Resources Corporation (ENRC), whose oligarch owners had raised a few eyebrows in the City of London in 2007 when they obtained a London Stock Exchange listing for a company they had built from privatized mines in Kazakhstan.⁶³ The Congolese state, through Gécamines, still owned the remaining 50 per cent of SMKK.

Toward the end of 2009 ENRC bought an option, only made public months later, to purchase the 50 per cent it did not already own. The strange thing was that ENRC did not buy that option from the owner of the stake, state-owned Gécamines, but from a hitherto unknown company called Emerald Star Enterprises Limited.⁶⁴ Emerald Star was incorporated in the British Virgin Islands, one of the most popular secrecy jurisdictions, shortly before it struck this agreement with ENRC, which suggests that it was set up for that specific purpose.⁶⁵ There is nothing in Emerald Star’s registration documents to show who owns it. But other documents related to the deal would later reveal the identity of its principal owner, Dan Gertler’s family trust.⁶⁶

At this stage all Gertler had was a deal to sell to ENRC a stake in SMKK that he did not yet own. That was soon rectified. On 1 February 2010, Gertler’s Emerald Star signed an agreement with Gécamines to buy the Congolese state’s 50 per cent share in SMKK for $15 million.⁶⁷ ENRC duly exercised its option to buy the stake by buying Emerald Star for another $50 million on top of the $25 million it had paid for the option. The interwoven deals were done and dusted by June 2010.⁶⁸ All the corporate chicanery masked a simple fact: the Congolese state had sold rights to a juicy copper prospect for $15 million to a private company, which immediately sold the same rights on for $75 million – a $60 million loss for the state and a $60 million profit for Gertler.

The Congolese people were not the only losers in the SMKK deal. ENRC’s would seem to have suffered too. When it bought the first 50 per cent of SMKK, ENRC had also acquired a right of first refusal should Gécamines decide to sell the other half.⁶⁹ That meant that ENRC could have bought the stake when it was offered to Dan Gertler’s company for $15 million. Instead, it paid $75 million a few months later, once the stake had first passed to Gertler’s offshore vehicle. ENRC has not disclosed the terms of its right of first refusal and did not reply to my questions about it. Perhaps there was some stipulation in it that meant buying the stake directly from Gécamines would have been more expensive for ENRC than buying it via Gertler. But based on the details that have emerged, it is hard to see how the oligarch founders of ENRC thought the SMKK manoeuvre was in the best interests of the rest of the investors who had bought shares in the company when it floated in London.

ENRC was a member of the FTSE 100, the prestigious list of the UK’s biggest listed companies, in which pension funds invest savers’ money. Investors who bought shares when ENRC listed some of its stock in December 2007 paid £5.40 a share, raising £1.4 billion for the company. Over the six years that followed, ENRC’s boardroom was a scene of unceasing turbulence, as the oligarch founders continued to exert their influence over a company that was supposedly subject to British governance rules for listed corporations.⁷⁰ ENRC snapped up assets in Africa, including SMKK, and struck other deals with Gertler in Congo. The Serious Fraud Office was in the middle of an investigation (still active at the time of writing) into ENRC’s activities in Africa and Kazakhstan – and its share price was sliding precipitously downward – when the oligarchs announced that they planned, with the help of the Kazakh government, to buy back the stock they had listed in London, thereby taking the company private again.⁷¹ The offer was valued at £2.28 a share – less than half of what investors who bought in at the start had paid for them.⁷²

If some British pension funds and stock-market dabblers felt burned by their investments in ENRC, their losses were relatively easy to bear compared with those that Gertler’s sweetheart deals have inflicted on Congo. The best estimate, calculated by Kofi Annan’s Africa Progress Panel, puts the losses to the Congolese state from SMKK and four other such deals at $1.36 billion between 2010 and 2012.⁷³ Based on that estimate, Congo lost more money from these deals alone than it received in humanitarian aid over the same period.⁷⁴ So porous is Congo’s treasury that there is no guarantee that, had they ended up there, these revenues would have been spent on schools and hospitals and other worthwhile endeavours; indeed, government income from resource rent has a tendency to add to misrule, absolving rulers of the need to convince electorates to pay taxes. But no state can fulfil its basic duties if it is broke. Between 2007 and 2012 just 2.5 per cent of the $41 billion that the mining industry generated in Congo flowed into the country’s meagre budget.⁷⁵ Meanwhile, the shadow state flourishes.

Since at least 1885, when Congo became the personal possession of Belgium’s King Leopold II, outsiders have been complicit in the plunder of Congo’s natural wealth. King Leopold turned the country into a commercial enterprise, producing first ivory then rubber at the cost of millions of Congolese lives. In 1908 Leopold yielded personal ownership of Congo to the Belgian state, which, keen to retain influence over the mineral seams of Katanga following independence in 1960, encouraged the region’s secessionists, helping to bring down the liberation leader Patrice Lumumba in a CIA-sponsored coup that ushered in Mobutu, who became one of the century’s most rapacious kleptocrats.⁷⁶ Richard Nixon, Ronald Reagan and George H. W. Bush welcomed him warmly to Washington. Only once his usefulness expired after the end of the Cold War did the United States abandon Mobutu to flee from Laurent Kabila’s advancing rebels.

In the era of globalization the foreign protagonists in Congo’s looting machine are not monarchs or imperial states but rather tycoons and multinationals. As well as the likes of Dan Gertler, there are the companies that do business with him. ENRC is one. Another is Glencore, the giant commodity trading house based in the Swiss town of Zug, which listed its shares on the London Stock Exchange in 2011, immediately becoming one of the UK’s biggest listed companies. In 2010 and 2011 Glencore was involved in transactions in which, according to calculations by Kofi Annan’s Africa Progress Panel, the Congolese state sold mining assets to companies connected to Gertler for hundreds of millions of dollars less than they were worth.⁷⁷ (Both ENRC and Glencore insist there has been nothing improper in their Congolese dealings.⁷⁸)

From multibillion-dollar copper deals in Katanga to smuggling rackets shifting coltan out of the East, Congo’s looting machine extends from the locals who control access to the mining areas, via middlemen to traders, global markets and consumers. During the war UN investigators described companies trading minerals as ‘the engine of the conflict’.⁷⁹ A senior Congolese army officer remembered Viktor Bout, a notorious KGB agent turned arms dealer who was implicated in the illicit coltan trade – and whose exploits inspired the 2005 film Lord of War – dropping in to do business.⁸⁰ ‘He did terrible things here,’ the officer told me.⁸¹ The trade in minerals from eastern Congo spans the globe. In 2012, according to official records, North Kivu’s declared exports of raw minerals went to Dubai, China, Hong Kong, Switzerland, Panama and Singapore.

When Wall Street nearly imploded in 2008, triggering economic havoc far beyond Manhattan, the world was reminded of the extent of the damage that a complex cross-border network combining financial, economic and political power can do. The reforming legislation in the aftermath of the crisis dealt mostly with the financial quackery that had grown rife in US banks. But toward the end of the 848-page Dodd–Frank Act of 2010 was an item that had nothing to do with subprime mortgages or liquidity ratios. ‘It is the sense of Congress that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo,’ read a clause in the Act that responded to years of pressure from campaigners. In the future companies using coltan and other resources from Congo in their products would have to submit to US regulators a report on their supply chain, signed off by an independent auditor, demonstrating that they were not funding armed groups. Some six thousand companies would be affected, among them Apple, Ford and Boeing.⁸²

Few could fault the sentiment. But the legislation was drafted in Congress, not Congo. It backfired. For one thing, the definition of ‘armed groups’ left out the Congolese army, which has been responsible for looting and wanton violence. Then there was the practical difficulty of tracking supply chains in a war zone. When the Dodd–Frank Act passed, many buyers of Congolese minerals simply took their business elsewhere, reinforcing a temporary ban on mineral exports imposed by Joseph Kabila in response to pressure to curtail the turmoil in the East.

A score of ‘conflict-free’ certification schemes have sprung up, some connected to Dodd–Frank, some to Congolese initiatives, and some to industry efforts to wipe the stigma from their products. In April 2013 an independent German auditor who had spent five days at Edouard Mwangachuchu’s coltan mines concluded that ‘with the evidence presented there was no indication that there are armed groups involved in mining’.⁸³ The bigger militias had pulled back from Mwangachuchu’s corner of North Kivu; M23, the most threatening armed group of the day, was camped close to the Ugandan border, away from the main mining areas.

I wanted to see for myself whether the link between eastern Congo’s minerals and its conflict was loosening. I asked to visit Mwangachuchu’s mines. He was out of town, and his company declined to grant me access. But I knew that a cooperative of informal miners was also mining the area, the subject of years of dispute with Mwangachuchu. On the three-hour drive from Goma we passed a settlement nestled in a bend in a valley that had served as the base for Laurent Nkunda’s CNDP rebels. Further along was a camp for refugees displaced by the M23 conflict. At the metal barriers marking the entrance to each village, young men flagged us down and suggested they might be due payment. Children, no older than five, had imitated their elders and crafted a makeshift roadblock of rocks and half a yellow water-canteen. They scampered from the road as approaching vehicles failed to slow.

Another refugee camp marked the start of Rubaya, the mining town at the foot of the hills that Mwangachuchu and the informal miners exploit. Toddlers with bloated bellies, the signature of malnutrition, tottered at the road’s verge. The town itself boasted more robust dwellings than the makeshift tents of the displaced. Mining money had even allowed the construction of a few sturdy wooden houses. Rows of cassava tubers lay whitening in the sun. The whole town sounded as though it were wailing, so numerous were its infants, a chorus pierced by the occasional squawk of a cockerel. A tattered Congolese flag flapped from a skinny tree trunk.

After an hour waiting to pay our respects to the town administrator – during which, a local activist whispered in my ear, the mining bosses were checking that there were not too many children at work for their visitor to see – my Congolese companions and I began our ascent to the summit. Red dust devils swirled around us as we climbed. A local man who worked to get children out of the mines pointed across a valley to the village where he had been one of the few survivors of a revenge massacre of Hutus by Rwandan invaders in 1997.

Porters with white sacks on their heads cascaded down the unpaved paths from the peak, throwing up clouds of red-brown dust. Each sack contained up to 25 kilograms of rock hewn from the mountain. The porters’ haste was a matter of economics: they were paid 1,000 Congolese francs per trip (about $1) and had to wash and sift their cargo in the stream at the bottom before it began the long trip toward the border or the buying houses of Goma.

Most of the incipient certification schemes for Congolese minerals work by tagging sacks of ore as they emerge from the mine to certify their provenance, imitating the Kimberley Process, which was designed to stem the flow of ‘blood diamonds’. The idea is to prevent belligerents getting around embargoes by passing off their minerals as originating from another mine or smuggling them across borders to allow Congolese coltan to be branded as Rwandan or Angolan diamonds as Zambian. But on this hillside there was not a tag in sight. One local, a peace campaigner who had come along for the climb and who kept his distance from the mining bosses leading the ascent, told me that some of the coltan extracted here was crossing the nearby border into Uganda clandestinely. That took it right through the territory of M23 rebels.

The slope grew steeper. The earth underfoot gave way like a sand dune. Finally a peak of jagged rock emerged, a giant fossilized sponge of warrens that the miners had dug by hand. About two thousand miners, all in Wellington boots, many bearing spades and picks, swarmed among the pits and trenches, some delving as deep as 15 metres into the ground with only rudimentary props to keep the sides from burying them alive. Some looked decidedly younger than eighteen. One was clearly baffled by the white-skinned visitor whose hair was longer than the standard Congolese buzz cut. ‘He has the voice of a man,’ the young miner intoned with consternation to one of my companions, ‘but the hair of a woman.’

On the next hill over we could make out Mwangachuchu’s mine. All this territory lay under his concession, but the informal miners had enough political clout to carry on regardless of his protests, in part thanks to ethnic manoeuvring by the cooperative’s Hutu leadership against the Tutsi Mwangachuchu. The cooperative had resisted Mwangachuchu’s repeated attempts to turf them off his land, challenging the validity of his claim. Mwangachuchu has countered by trying to oblige the informal miners to sell all their production through his company, without which it would be impossible for him to prove that minerals from the concession were not funding militias.

The chief miner, Bazinga Kabano, a well-dressed man with a long walking cane and a penchant for bellowing at his subordinates, told me that when the CNDP controlled the area the miners’ association used to pay the rebels a $50 fee to be allowed to dig. But he was keen to paint his industry not as an engine of war but as a path to betterment. He explained that some of the miners graduated to be négociants, the intermediaries who buy coltan at the mine and sell it on to the comptoirs that export it. Surveying the teeming hilltop, he declared, ‘We are helping them to live their dreams.’

I wandered off to talk to some miners out of earshot of the boss. Kafanya Salongo bore a passing resemblance to a meerkat as his blinking head popped out of a hole in the ground. He was short, slim and strong, ideal for a human burrower. He churned out one hundred sacks worth of rock a day, and that brought in $9. From that he had to find the $25 each miner must pay the bosses every month for the privilege of digging. ‘It’s not enough for the family,’ he told me. ‘I can afford some food and some medicine, but that’s it.’ At thirty-two, he had a wife and two sons. He laughed in the face of danger. ‘Yeah, it looks dangerous, but we know how to construct the shafts, so it’s fine.’

It is easy to scoff at the boss’s notion that these miners are digging toward their dreams. The work is gruelling and perilous. The official statistics recorded twenty deaths in mining accidents in North Kivu in 2012, six of them at an adjacent mine worked by the cooperative. The authorities noted that it is ‘very possible’ that not all deaths were reported. But by local standards the miners’ wages amount to big bucks. Some splash their pay on booze and hookers; some build better houses.

Kabila’s mining ban and the boycott prompted by the Dodd–Frank Act pitched thousands of eastern Congolese miners out of work. The World Bank has estimated that 16 per cent of Congo’s population is directly or indirectly engaged in informal mining, which accounts for all but a fraction of the industry as measured by employment;⁸⁴ in North Kivu in 2006 mining revenue provided an estimated two-thirds of state income.⁸⁵ But revenues to the provincial government’s coffers fell by three-quarters in the four years before 2012, in part because of what officials called the ‘global criminalization of the mining sector’ of eastern Congo. The state’s loss is the smugglers’ gain: when the official routes are closed, the clandestine trade picks up the slack.

By the middle of 2013 Kabila’s ban had been partially relaxed, and previously blacklisted comptoirs in Goma had reopened. A dozen mines in North Kivu that the government deemed to be unconnected to armed groups had been ‘green-lighted’ to export. But Emmanuel Ndimubanzi, the head of North Kivu’s mining division, told me that not a single mine was tagging its output so that buyers could identify the mine at which it had originated. ‘Tagging is very expensive,’ he said. ‘We don’t have the partners to pay for it.’ In what might have been a line from Catch-22, he added, ‘Certification can only happen with better security.’

Regional initiatives are increasingly tracking shipments of coltan and other ores, even if North Kivu is lagging behind. Some campaigners have welcomed what appears to be a significant reduction in the documented connections between militias and mining sites as a result of certification efforts and a UN-backed offensive against the armed groups.⁸⁶ Gradually Western-based electronics groups are drawing up lists of approved smelters that can demonstrate that their metals come from mines that do not benefit Congolese militias, although the campaign group Global Witness warned in 2014 that the first supply-chain reports, which US companies buying Congolese minerals are now required to submit to regulators, ‘lack substance’.⁸⁷ The German Federal Institute for Geosciences and Natural Resources has developed ‘fingerprinting’ technology that can trace a shipment of ore back to the mine from which it was extracted. This technology could, if comprehensively applied, prevent the entry into the international market of minerals from militia-controlled mines, provided that it were matched with an intelligence-gathering programme to keep tabs on all the militias’ mining operations.

It appears unlikely that the certification schemes will ever reliably cover the whole of eastern Congo’s mining trade. Clean miners have been squeezed, as the retreat of Western buyers has let Chinese comptoirs gain a near-monopoly on Congolese coltan, allowing them to dictate prices. The efforts to impose some control on the mineral trade might trim the income of the armed groups, but it does so at the cost of weakening the already precarious livelihoods of eastern Congo’s diggers and porters and their dependents. In a land ruled by the law of the roadblock, such initiatives can look quixotic. As Aloys Tegera of Goma’s Pole Institute, one of eastern Congo’s most astute commentators, writes, ‘Without a Congolese state capable of playing its role in controlling and running affairs, how can the minerals of Kivu be de-criminalised?’⁸⁸

In the run-up to the 2011 elections and during the months that followed, the SMKK transactions and other similar ones effectively transferred hundreds of millions of dollars from the state to a close personal friend of a president. Dan Gertler has doubled as an emissary for the president, conducting diplomatic missions to Washington and Rwanda. ‘The truth is, during our very difficult times, there were investors who came and left and others who braved the hurricane,’ Kabila has said of Gertler.⁸⁹ ‘He’s one of those.’ Kabila might have added that some of those who left did so when their assets were confiscated – and, in some cases, handed to Gertler.⁹⁰

Gertler maintains that, far from being a predator, he is among Congo’s greatest benefactors. He and his representatives point out, with some justification, that unlike the most egregious asset-flippers, who do nothing beyond using bribes and connections to win mining rights before selling them on, Gertler’s operations in Congo actually produce minerals, and lots of them. His company, the Fleurette Group, says it has invested $1.5 billion ‘in the acquisition and development of mining and other assets in the DRC’, that it supports twenty thousand Congolese jobs, and that it ranks among the country’s biggest taxpayers and philanthropists.⁹¹ Gertler himself has said his work in Congo is worthy of a Nobel Prize.⁹²

Katumba’s death sent a tremor through Kabila’s regime. Would-be investors whose only contract was an understanding they had reached with Katumba evaporated after the plane crash. But the president and Gertler, brothers in spirit, have maintained the shadow government that Katumba helped to construct. Gertler has branched out into oil, prospecting promising new sites at Lake Albert. As for Kabila, he must now decide whether to run in the next elections, due in 2016. To do so he would need to induce the national assembly to change the constitution and remove the two-term limit for presidents, then conduct what one election monitor at the 2011 polls told me would need to be ‘a huge rigging operation’ to overcome the electorate’s outrage. To pull off such an expensive task, Kabila would need to ratchet up the looting machine once again.

3
Incubators of Poverty

THE CHIEF OF the border post let out another long sigh. ‘On attend.’ The wait had already lasted hours. Not for the first time I was at the mercy of a temperamental fax machine. I was trying to cross the Nigerian border with its northern neighbour, Niger, where the official language changes from English to French. Someone in the visa section of Niger’s embassy in Nigeria had neglected to send some document or other to headquarters to authorize my visa, and faxing it over was proving complicated. I sat on the stoop of the border post, looking out over the scorched terrain that leads up to the Sahara. Goats, the hungry and the maimed shuffled between breezeblock structures, lashed by the swirling dust. Periodically the chief of the border post would make a call on his mobile phone to check whether I should be allowed to pass. Then he would resume his contemplative silence, speaking only to bemoan ‘this interminable heat’. The sun was melting the horizon to a shimmer. ‘On attend.’

Whiling away the morning beside the taciturn border chief offered me an opportunity to observe one of the few effective institutions in this part of the world: the smuggling racket.¹ Dozens of trucks were queuing to cross from Niger into Nigeria. Their contents seemed harmless enough: many contained textiles and clothing bound for the markets of Kano and Kaduna, northern Nigeria’s two main cities.

Weapons and unwilling human traffic cross Nigeria’s northern border covertly. But the flow of counterfeit Chinese-made textiles has grown so voluminous that it would be impossible to keep it secret even if secrecy were required to ensure its safe passage. All the same, most of the shipments go through under cover of darkness. Those who control the trade engage in highly organized ‘settling’, or bribing, of the border officials, smoothing the textiles’ transit.

The Nigerian stretch is just the final leg of a 10,000-kilometre journey. It begins in Chinese factories, churning out imitations of the textiles that Nigerians previously produced for themselves, with their signature prime colours and waxiness to the touch. By the boatload they arrive in west Africa’s ports, chiefly Cotonou, Benin’s biggest city, a tiny country beside Nigeria that has, like Montenegro in Europe or Paraguay in South America, become a state whose major economic activity is the trans-shipment of contraband. At the ports the counterfeit consignments are loaded onto trucks and either driven straight over the land border between Benin and western Nigeria or up through Niger and round to the border post with its taciturn chief. The trade is estimated to be worth about $2 billion a year, equivalent to about a fifth of all annual recorded imports of textiles, clothing, fabric and yarn into the whole of sub-Saharan Africa.²

Smuggling is a long-established profession here. Before colonial cartographers imposed the frontier, today’s smuggling routes were the byways of legitimate commerce. The border marks a delineation of what used to be British and French territory in west Africa, but no natural division of language or ethnicity exists. People on both sides speak Hausa, a tongue in which the word for smuggling, sumoga, strikes a less pejorative note than its English equivalent. The textile-smuggling bosses are the oligarchs of the northern borderlands. For those in their pay, they can be generous benefactors.

Not being a roll of fake west African fabric, I was not a priority for processing. Eventually the border chief’s phone rang. Off we trundled, past trucks with ‘Chine’ daubed on the side, a brazen reference to their cargo’s origin. Another name went unrecorded, that of the trucks’ proprietor. Few dare to speak it openly here. But further to the south, where the truckloads of counterfeit textiles have helped to wreak economic destruction, I had heard it whispered a year earlier.

A country of 170 million people – home to one in six Africans, three main ethnic groups subdivided into hundreds more speaking five hundred languages and bolted together on the whim of British colonial administrators; split between a north that largely follows Allah and a south more partial to the Christian God and animist deities; hollowed out by corruption that has fattened a ruling class of stupendous wealth while most of the rest lack the means to fill their stomachs, treat their ailments, or educate their children; humiliated by a reputation for contributing little to human endeavour but venal politicians and ingenious scams – Nigeria has paid quite a price for the dubious honour of being the continent’s biggest oil producer.

The crude began to flow in 1956, four years before independence from Britain. Almost immediately it started to ruin Nigeria. Two-thirds of the newfound oil reserves lay within the territory that secessionists claimed for themselves when they declared the Republic of Biafra in 1967, raising the stakes in the standoff between the ethnic blocs vying for power in the young nation. Between five hundred thousand and 2 million Nigerians died in the civil war that ensued, many from starvation. Nigeria remained whole, but any hope that it might rise as a black star to lead an independent Africa dissipated as dictator followed ruinous dictator. Instead, it became a petro-state, where oil accounts for four in every five dollars of government revenue and capturing a share of the resource rent is a life-and-death struggle.

The Niger Delta, the maze of creeks where the River Niger reaches the sea at Nigeria’s southern edge, proved to be a prodigious font of crude. Along with the offshore discoveries that followed, it made Nigeria a major supplier of oil to the United States and the fourth-biggest source of European oil imports. Few countries can claim to be so vital a source of the basic ingredient of the world’s oil-fired economy. Nigeria’s stocks of natural gas, estimated to be the eighth-largest on the planet, have scarcely been tapped, but they already account for one in every twenty cubic feet that the European Union imports.

The insidious effects of oil have permeated outward from the brutalized, despoiled and destitute Niger Delta. I had been living in Nigeria for less than two weeks when I arrived in Kaduna. The city is the gateway between the Christian south and the northern half of the country, an expanse that stretches up to the border with Niger and used to form part of an Islamic caliphate that the jihad of Usman dan Fodio founded two hundred years ago. Kaduna lies in the turbulent Middle Belt, prone to spasms of communal violence when patronage politics, dressed in the garb of religion or ethnicity, turns bloody.

On a stifling Sunday morning a friend took me around Kaduna’s central market, a teeming grid of wooden booths. Many of the stalls were selling clothes. Some bore the misspellings that are counterfeiters’ inadvertent trademark: ‘Clavin Klein’ read one shirt label. Others carried the equivalent of the appellation d’origine contrôlée badges that French vineyards and cheese makers append to their produce. ‘Made in Nigeria’ the labels declared. But they were fake too. Aike, a young trader from the East, told me he stocked up on bogus labels when he went north to Kano to replenish his supplies of lace. ‘Mostly everything is made in China,’ explained another trader selling jeans.

At Raymond Okwuanyinu’s stall I found rolls and rolls of the coloured fabric that is used for fashioning a popular style of billowing trousers. Here there was no attempt at subterfuge. Raymond told me it was a matter of simple economics. Nigeria may be the largest source of African energy exports, but it generates only enough electricity to power one toaster for every forty-four of its own people. Billions of dollars assigned to fix the rundown power stations and the dilapidated grid have been squandered or pilfered. A privatization drive in recent years has raised some tentative hope of improvement, but for now Nigeria produces only half as much electricity as North Korea. Even those lucky enough to be connected to a functioning cable face the maddening task of negotiating with what used to be called the National Electric Power Authority, or NEPA (but known as Never Expect Power Anytime). It was rebranded as the Power Holding Company of Nigeria, or PHCN (Please Have Candles Nearby or, simply, Problem Has Changed Name). Most must make do with spluttering diesel generators. In a country where 62 per cent of people live on less than $1.25 a day, running a generator costs about twice as much as the average Briton pays for electricity.³

The crippling cost of electricity makes Nigerian textiles expensive to produce. Raymond, the Kaduna trader, told me he could sell trousers made from Chinese fabric at two-thirds the price of those made from Nigerian fabric and still turn a profit. Hillary Umunna, a few stalls over, concurred. The government’s attempt to support the Nigerian textile sector by banning imports was futile, Hillary opined, his tailor’s tape-measure draped around his shoulders. ‘These things now,’ he said, gesturing at his wares, ‘they say it is contraband. They can’t produce it, but they ban it. So we have to smuggle.’

The cheaper price of smuggled garments relative to locally produced ones was good news, superficially at least, for the traders’ hard-pressed customers but less so for the employees of Nigeria’s textile industry. ‘It is a pitiable situation,’ said Hillary, apparently oblivious to his and his colleagues’ role in their compatriots’ downfall. ‘All the [textile factories] we have here have shut down. The workers are now on the streets.’

In the mid-1980s Nigeria had 175 textile mills. Over the quarter-century that followed, all but 25 shut down. Many of those that have struggled on do so only at a fraction of their capacity. Of the 350,000 people the industry employed in its heyday, making it comfortably Nigeria’s most important manufacturing sector, all but 25,000 have lost their jobs.⁴ Imports comprise 85 per cent of the market, despite the fact that importing textiles is illegal. The World Bank has estimated that textiles smuggled into Nigeria through Benin are worth $2.2 billion a year, compared with local Nigerian production that has shrivelled to $40 million annually.⁵ A team of experts working for the United Nations concluded in 2009, ‘The Nigerian textile industry is on the verge of a total collapse.’⁶ Given the power crisis, the near-impassable state of Nigeria’s roads and the deluge of counterfeit clothes, it is a wonder that the industry kept going as long as it did.

The knock-on effects of this collapse are hard to quantify, but they ripple far into the Nigerian economy, especially in the North. About half of the million farmers who used to grow cotton to supply textile mills no longer do so, although some have switched to other crops. Formal jobs in Nigeria are scarce and precious. Each textile employee supports maybe half a dozen relatives. It is safe to say that the destruction of the Nigerian textile industry has blighted millions of lives.

After I left Kaduna’s market my friend took me to meet some of those who had felt the industry’s collapse hardest. Sitting around on rickety desks in the half-light of a classroom beside the church where some of Kaduna’s Christians were loudly asking a higher power for succour, nine redundant textile workers poured forth their woes. Tens of thousands of textile jobs had disappeared in Kaduna alone, the mill hands told me. I had seen the factory where some of them used to work. The gates of the United Nigerian Textiles plant were firmly shuttered. Jagged glass topped the high walls, and a lone security guard kept watch, protecting the machinery within on the minuscule chance that it would someday whir into action again.* No other living thing came or went, save for the yellow-headed lizards scuttling among the undergrowth.

Father Matthew Hassan Kukah looked pained as he recalled the day when the factory, Kaduna’s last, had closed its doors the previous year. The hymns from his Sunday service had subsided. Like Archbishop Desmond Tutu in South Africa, Kukah is a figure of moral authority in Nigeria – and shares with Tutu a subversive sense of humour in the face of adversity. Kukah’s voice needles the mighty as few others can. The demise of Kaduna’s textile industry had drained the life from the city, he told me, sitting in a sweltering office above his sacristy and dressed in a simple black vestment. ‘We’ve gone backward twenty years,’ he said. ‘Back in the seventies there were textiles, people were energetic. But that generation was not able to produce the young, upwardly mobile elite. That’s what their children should have been.’ Kaduna’s impoverished inhabitants had retreated into their ethnic and religious identities. ‘Kaduna is now a tale of two cities,’ said the priest. ‘This side of the river is Christians; the other is Muslims.’

Kaduna’s decline was only one symptom of Nigeria’s descent into privation, Kukah went on. The national political class had abandoned civic duty to line its own pockets instead. The social fabric had been rent. ‘As a result of the collapse of the state, everybody, from the president down, is trying to find his own power, his own security. People are falling back on vigilante groups.’ Violence had become the tenor of life. ‘Everywhere in the world the ghettoes are combustible. The North is an incubator of poverty.’

The former mill hands among Kukah’s congregation and Kaduna’s Muslims shared in that poverty: buying food, let alone paying school fees that even the dilapidated state-run schools charge, was a daily trial. The mill hands told me they had tried to hold a demonstration outside the state governor’s house, but the police had blocked them. The federal government had repeatedly promised to bail out the industry, yet little assistance had been forthcoming. The more clear-eyed workers realized that, in any case, the game was up. Even if they could get the factories running again, Chinese contraband had so thoroughly captured the market that it would be impossible for the Nigerian operations to compete. And there was something that had accelerated the mill hands’ consignment to the trash can of globalization. Shuffling their feet and looking warily around for anyone who might be eavesdropping, the men murmured a single word: ‘Mangal.’

Alhaji Dahiru Mangal is a businessman whose fortune is thought to run to billions, a confidant of presidents, a devout Muslim, and a philanthropist whose airline transports Nigerian pilgrims to the annual hajj in Mecca. He also ranks among west Africa’s pre-eminent smugglers.

Growing up in Katsina, the last outpost before Nigeria’s frontier with Niger, Mangal received little formal education. More cosmopolitan Nigerian businessmen speak of him with a mixture of snobbery, envy and fear. He got his start as a teenager in the 1980s, following his father into the import-export business, and he swiftly made the cross-border freight routes his own.⁷ ‘He is shrewd,’ a northern leader who knows him told me. ‘He knows how to make money.’

In the shadier corners of the workshop of the world Mangal found the perfect business partners. ‘The Chinese attacked at the heart of the industry: the wax-print and African-print segment,’ a consultant who has spent years investigating – and trying to reverse – the slow death of Nigerian textiles explained to me. During the 1990s Chinese factories began copying west African designs and opening their own distribution branches in the region. ‘This is 100 percent illicit – but the locals do the smuggling,’ the consultant went on. There are, he said, sixteen factories in China dedicated to churning out textiles with a ‘Made in Nigeria’ badge sewn into them. For a time the Chinese material was of a much lower quality than Nigerian originals, but that gap narrowed as Chinese standards rose. The Chinese began to take control of the market, in league with Nigerian vendors. Mangal acts as the facilitator, the conduit between manufacturer and distributor, managing a shadow economy that includes the border authorities and his political allies. Like many others who profit from the resource curse, he plies the hidden byways of the globalized economy.

Mangal’s network of warehouses and agents stretches to Dubai, the Gulf emirate where much clandestine African business is done, and beyond into China and India. ‘You put it in his warehouse, and he will smuggle,’ a top northern banker told me. ‘He controls the import of everything that requires duty or is contraband.’

From his base in Katsina Mangal arranges the import of food, fuel, and anything his wealthy Nigerian clients might desire. But the staple of his operation is the textiles that have helped kill off the local industry. He is said to charge a flat fee of 2 million naira (about $13,000) per cargo, plus the cost of goods.⁸ In 2008 Mangal was estimated to be bringing about a hundred 40-foot shipping containers across the frontier each month.⁹

Mangal’s fortunes have risen and fallen with Nigeria’s procession of dictators. When democracy – and, notionally, the rule of law – returned in 1999, he needed allies in the new order. He found one in Umaru Yar’Adua. The People’s Democratic Party, the affiliation comprising most of Nigeria’s political elites that would dominate the new dispensation, had chosen Yar’Adua to be the governor of Mangal’s home state, Katsina. Several northern leaders, businessmen and government insiders told me Mangal was one of the most generous funders of Yar’Adua’s two successful gubernatorial campaigns, in 1999 and 2003.

The master smuggler’s political largesse did not make him entirely immune, however. Around 2005 Olusegun Obasanjo, the former military ruler then embarking on his second term as elected president, decided to do something about smuggling and the damage it was causing to the textile industry. Obasanjo was told, according to a consultant who was involved in lobbying the president, that Mangal was ‘the kingpin’. Obasanjo dispatched Nasir El-Rufai, a northern-born minister with a reputation as a reformer, to try to get Mangal to clean up his act.¹⁰ El-Rufai told me he reached an agreement with Yar’Adua, the beneficiary of Mangal’s generous campaign funding and his political protector, and the smuggler would endeavour to transform himself into a legitimate businessman.

El-Rufai recalled that Mangal asked him, ‘Why does Obasanjo call me a smuggler? I just do logistics. I don’t buy any of the goods that are smuggled. I’m just providing a service.’ Mangal told El-Rufai that he had a fleet of six hundred trucks plying the trade routes. He promised to switch into refined petroleum products, another time-honoured money spinner for Nigeria’s politically connected trading barons. But the illicit textile trade continued, and Mangal’s operations remained under scrutiny. Nigeria’s Economic and Financial Crimes Commission, traditionally nothing more than a vehicle for settling political scores, had gained some teeth and a degree of independence under an energetic fraud-buster called Nuhu Ribadu. It began to take an interest in Mangal.¹¹ But then the gods of Nigeria’s petro-politics smiled on the smuggler once again.

When Obasanjo’s attempts to change the constitution to allow himself a third term as president were thwarted, he sought to maintain his influence from behind the scenes by plucking Yar’Adua from the obscurity of Katsina to be the People’s Democratic Party candidate in the 2007 presidential elections – tantamount, given the party’s dominance, to handing him the keys to the presidential palace. Mangal contributed to Yar’Adua’s presidential campaign, along with other backers who had also attracted the attention of the anticorruption squad. Not long after Yar’Adua took office they got their payback. Ribadu was forced out, and the anticorruption unit’s teeth were pulled. ‘The moment Yar’Adua became president [Mangal] had a blank cheque,’ El-Rufai, whom Yar’Adua also cast into the wilderness, told me. It was another death knell for the north’s textile industry.

Mangal and the rest of northern Nigeria’s crime lords can trace their hegemony – and the abandoned textile workers their strife – to the discovery of oil in the Niger Delta.

In 1959, three years after Royal Dutch Shell struck oil in commercial quantities in the Delta, the company sank another well by the village of Slochteren in the northern Netherlands, in partnership with Exxon of the United States. They discovered the biggest gas field in Europe. A gas bonanza followed. It was not long, however, before the Dutch began to wonder whether the discovery had truly been a blessing. People outside the energy industry started losing their jobs.¹² Other sectors of the economy slumped, following a pattern that The Economist would, in 1977, diagnose as ‘Dutch Disease’.

What happened in the Netherlands was not an isolated outbreak, even if a prosperous European country was better placed than many to withstand it. Dutch Disease is a pandemic whose symptoms, in many cases, include poverty and oppression.

The disease enters a country through its currency. The dollars that pay for exported hydrocarbons, minerals, ores and gems push up the value of the local currency. Imports become cheaper relative to locally made products, undercutting homegrown enterprises. Arable land lies fallow as local farmers find that imported fare has displaced their produce. For countries that have started to industrialize, the process goes into reverse; those that aspire to industrialize are stymied. Processing natural commodities can multiply their value four hundredfold, but, lacking industrial capacity, Africa’s resource states watch their oil and minerals sail away in raw form for that value to accrue elsewhere.¹³

A cycle of economic addiction sets in: the decay of the other parts of the economy increases the dependency on natural resources. Opportunity becomes confined to the resources business, but only for the few: whereas mines and oil fields require vast sums of capital, they employ tiny workforces compared with farming or manufacturing. As oil or mining suck the life from the rest of the economy, infrastructure that could foster broader opportunities – electricity grids, roads, schools – is neglected.

In Africa Dutch Disease is chronic and debilitating. Instead of broad economies with an industrial base to provide mass employment, poverty breeds and the resource sector becomes an enclave of plenty for those who control it. Measured as a share of the overall output of the combined African economy, manufacturing has fallen from 15 per cent in 1990 to 11 per cent in 2008.¹⁴ Telecoms and financial services have boomed, but the path to industrialization is blocked off. During the very years when Brazil, India, China and the other ‘emerging markets’ were transforming their economies, Africa’s resource states remained tethered to the bottom of the industrial supply chain. Africa’s share of global manufacturing stood in 2011 exactly where it stood in 2000: at 1 per cent.¹⁵

There are pockets of Africa where manufacturing has taken hold, notably in South Africa, where platinum is used to make catalytic converters, and in Botswana, where a nascent cutting and polishing industry is retaining some of the value-addition process for diamonds. But far more common are sights like the defunct General Motors assembly plant that used to hum outside Kinshasa or the uptown Luanda supermarket that boasts eight varieties of tinned peas, none of them home-grown despite Angola boasting enough arable land to cover Germany. The commodity boom of the past decade that has had hedge funds and investment analysts salivating over Africa’s economic prospects might even have made matters worse for those outside the resource bubble. While Nigeria was recording annual gross domestic product growth of more than 5 per cent, unemployment increased from 15 per cent in 2005 to 25 per cent in 2011.¹⁶ Youth unemployment was estimated at 60 per cent.

A recalculation of Nigeria’s GDP in 2014, to take into account hitherto under-recorded booms in services such as telecoms and banking, made Africa’s most populous nation officially its biggest economy, surpassing South Africa. The statistical revisions did nothing to make Nigerians less poor, but it did halve the share of oil in GDP to 14 per cent. ‘The new figures show that Nigeria is much more than just an oil enclave,’ declared The Economist.¹⁷ ‘Nigeria now looks like an economy to take seriously.’

But oil has so corrupted Nigeria that, for those trying to make an honest buck, the outlook is dispiriting. Richard Akerele, a veteran British–Nigerian businessman from an old Lagos family whose latest endeavour has been to establish a new line of passenger suites at African airports, is of an almost unassailably cheery disposition. Yet even he is losing hope.

‘We have everything here, everything,’ Akerele told me. ‘But our people are poor and our society is poor.’ We were sitting at a waterside bar on one of the islands of uptown Lagos. The sun danced on the waters that separate the wealthy islands from the heaving mass of humanity on the mainland, with its profusion of crammed yellow buses, its cacophony of Afrobeat and generators, its defiantly sharp-suited slum dwellers.

For Akerele’s generation there is something deeply poignant about what Nigeria has become. He was right – Nigeria has everything: fertile land, great natural wealth, universities that in the years after independence were the envy of Africa, an abundance of intelligence and ingenuity reflected in the ease with which Nigerian expatriates make headway abroad, Nobel Prize-winning novelists, and savvy businessmen. But oil has sickened Nigeria’s heart. Akerele, who worked for a while with Tiny Rowland of Lonrho, one of Africa’s most successful and contentious mining tycoons, knows better than most what the resources industry had done to his country and his continent.

One evening, when he and I were the last two still going at 3 A.M. after a merry evening attempting to skewer Nigeria’s ills, I asked Akerele what he foresaw for Africa. His expression, usually jovial, fell. ‘Africa will be a mine,’ he said, ‘and Africans will be the drones of the world.’

The electronics market at Alaba proclaims itself to be Africa’s biggest. It is a sprawling bazaar located close to the clogged road – known, improbably, as the expressway – that arcs through mainland Lagos where most of the city’s 20 million inhabitants live. On sale here are the trappings of a middle-class life: refrigerators and telephones, stereos and televisions. The traders are proud that they have brought the means for a comfortable existence within reach for more of their compatriots, not just the elite who used to be the market’s sole customers before Chinese-manufactured cheaper goods arrived. But, just as in the textile markets of the North, the omnipresence of foreign-made wares testifies to Nigeria’s near-total failure to develop a strong manufacturing sector of its own.

As I wandered through the stacks of white goods, one of the traders drew me aside. Okolie was fifty-nine. He had spent thirty years selling radios and working out how Nigeria’s petro-politics shapes the dynamics of supply and demand.

Business was slow just then, Okolie told me. It was May 2010: Greece was on the brink of defaulting on its debts, and I presumed the reason for the slowdown at Alaba was another symptom of the global economy’s travails. I was wrong. ‘Money is down,’ Okolie explained, ‘since the president is sick.’

Umaru Yar’Adua’s health had been weak since well before his elevation to the highest office. The state of the presidential kidneys was a favourite topic of conversation among taxi drivers and in the hotel bars where businessmen and politicians gathered. In the final weeks of 2009 Yar’Adua’s heart began to fail. He was rushed to Saudi Arabia for treatment, triggering political paralysis.

Alaba market was struggling because the patronage system had ground to a halt. It was a perfect illustration of what Noo Saro-Wiwa, the daughter of the executed Niger Delta activist Ken Saro-Wiwa, has called Nigeria’s ‘contractocracy’.¹⁸ The beneficiaries of the government contracts that spew Nigeria’s oil rent into the patronage system, both the favoured contractors and the officials and politicians they cut in on the deals, would, under normal circumstances, spend some of their dubious earnings in places like Alaba market. But Yar’Adua’s long illness and the ensuing power struggle meant that contracts were not getting signed. The outflow of the looting machine had been temporarily blocked. But Okolie was not overly concerned. Soon the contractocracy would resume normal service. The public goods the contracts were supposed to deliver would not materialize – the subsidized fuel would be siphoned off, the potholes would go unfilled, the lights would stay off – but at least the shadow economy would be moving again. ‘If the government gives money to the contractors, money will reach us,’ Okolie said.

Okolie had grasped a central truth about how resource states work. Demanding their rights from their British colonial rulers, the American revolutionaries declared that there would be no taxation without representation. The inverse is also true: without taxation, there is no representation. Not being funded by the people, the rulers of resource states are not beholden to them.

Taking Africa as a whole, for every six dollars that governments bring in from direct taxation – taxes on personal income and company profits – they bring in ten dollars from taxes on the extraction and export of resources.¹⁹ In Mali gold and other minerals account for 20 per cent of government income; in Chad, an oil producer, resource revenues are more than half the total. In Nigeria the sale of crude oil and natural gas generates about 70 per cent of government revenue; in newborn South Sudan the figure is 98 per cent. Taxes, customs receipts and revenues from the sale of state assets – the things on which industrialized nations rely to fund the state and that require the acquiescence of the population – matter far less than keeping the resource money flowing. Nigeria’s GDP recalculation in 2014 showed that, once taxes from the oil industry were stripped out, the government relied on the people for just 4 per cent of its income.²⁰

The ability of the rulers of Africa’s resource states to govern without recourse to popular consent goes to the heart of the resource curse. The resource business ruptures the social contract between rulers and ruled – the idea, shaped by political philosophers such as Rousseau and Locke, that a government draws its legitimacy from the consensual sacrifice of certain freedoms by the people in exchange for those vested with authority upholding the common interest. Instead of calling their rulers to account, the citizens of resource states are reduced to angling for a share of the loot. This creates an ideal fiscal system for supporting autocrats, from the Saudi royal family to the strongmen of the Caspian states. And data collected by Paul Collier, a professor at Oxford University who has spent his career studying the causes of African poverty, suggest a still more insidious effect. ‘The heart of the resource curse,’ Collier writes, ‘is that it makes democracy malfunction.’²¹

Collier estimated that once natural resource rents exceed about 8 per cent of GDP, the economy of a country that stages competitive elections typically grows 3 percentage points more slowly than an equivalent autocracy’s economy. Collier’s research suggests that, in countries where a significant share of national income comes from natural resource industries, the purpose of elections is subverted. Normally electoral competition is healthy, ensuring some accountability for elected officials. Political parties can be turfed out of office. In the resource states that go through the motions of democracy, however, the rules governing both how power is won and how it is used are turned on their head. Greater ethnic diversity makes things worse, generating greater demands on the patronage system. ‘Where patronage politics is not feasible, the people attracted to politics are more likely to be interested in issues of public service provision,’ Collier writes. ‘Of course, for societies where patronage is feasible, this works in reverse: democratic politics then tends to attract crooks rather than altruists.’ Collier has a name for this law of resource-state politics: ‘the survival of the fattest’.

Maintaining power through patronage is expensive. But self-enrichment is part of the prize. And all that stolen money has to go somewhere. Some of it is used to pay off patronage networks. Some of it buys elections. Much of it goes overseas: according to a US Senate report, kleptocrats from African resource states have used banks, including HSBC, Citibank and Riggs, to squirrel away millions of plundered dollars in the United States alone, often concealing the origin of their wealth by shifting funds through secretive offshore tax havens.²² But some of it needs to be laundered at home.

An hour or two through Lagos’s suffocated thoroughfares from the electronics market at Alaba, on a leafy avenue close to the financial district, Bismarck Rewane oversees an office full of phenomenally bright young Nigerians trying to fathom the mysteries of the world’s twenty-sixth-largest economy. Slick-haired and loudly pinstriped, Rewane is one of Nigeria’s shrewdest financiers and a trenchant critic of the misrule that has turned a country of immense potential into the sorry mess that it is. Some of the distortions that trouble him are glaring: the effects of oil on inflation, the exchange rate and the financial system. But one of the biggest is almost undetectable: the effect of stolen money being injected back into the economy.

‘Money is trapped in the hands of those who need it for maintaining power through patronage,’ Rewane told me. ‘It can’t be invested openly because it has to be hidden.’ The effects of all this clandestine money sloshing through an underdeveloped economy are almost impossible to gauge. Because money launderers are seeking primarily to turn dirty cash into other assets as quickly as possible rather than to turn a profit or invest prudently, they are happy to pay more than a fair price for goods and services. That distorts everything, from banking to real estate. It furthers the accumulation of a country’s prime economic assets in the hands of the minority, just as Sonangol, the Angolan state-owned oil company that is the engine of the Futungo’s looting machine, has expanded into property, finance and aviation. Then there is the dirty money that is simply parked in bank accounts or basements rather than stimulating the economy by circulating. When I asked Rewane how much money he thought was trapped, he laughed. ‘That’s the million-dollar question.’ I asked him what the consequence of all this skulduggery was for the Nigerian economy as a whole. ‘When you have an imperfect economy where all money is dirty money, you will just have a completely dysfunctional economic arrangement.’

Where legitimate business cannot thrive, crime flourishes. Mafias from New York to Naples work by creating scarcity and controlling supply. Northern Nigeria’s Mafiosi are no different. Dahiru Mangal might not have been responsible for the collapse of the electricity network and the crumbling roads that crippled the Nigerian textile industry – Dutch Disease and oil-fuelled corruption took care of that. Neither is he the sole corrupter of the Nigerian customs service – Shell has admitted paying bungs worth $2 million between 2004 and 2006 to Nigerian customs officials to smooth the importation of materials for Bonga, its giant offshore oilfield, part of a wider scheme in which the Swiss group Panalpina showered bribes on Nigerian officials, some on behalf of Shell, booking them as ‘evacuations’, ‘special handling’, and ‘prereleases’.²³

Конец ознакомительного фрагмента.

Текст предоставлен ООО «ЛитРес».

Прочитайте эту книгу целиком, купив полную легальную версию на ЛитРес.

Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.