A secret business deal between the government of Guinea and a
multinational firm with a U.S. partner aided by the Obama
administration’s wrongheaded foreign policy could cost American
businesses billions. Congress ought to investigate to protect American
investors, expose any political shenanigans and prosecute the guilty.
The London Sunday Times first cracked the story June 3 of the secret
$25 million loan between an offshore company, Palladino Capital 2, and
the cash-strapped West African country. The funds, according to the
loan agreement, were to finance the start-up of Guinea’s state mining
company, Heritage, but the cash allegedly disappeared and the terms of
the loan include a default clause which gives the lender a juicy 30
percent stake of Guinea’s mushrooming mining assets.
A thirty percent share is especially significant given Guinea’s new
mining code engineered by advisors billionaire trader George Soros and
Palladino’s South African owner Walter Hennig. The 2011 code gives 15
percent of all mining assets to Heritage, including another 20 percent
at market rates. That means foreign mining operators forfeit billions
of dollars in assets and profits atop an 8 percent customs tax.
Further, the $25 million loaned by Hennig’s Palladino, according to
former Guinean mines minister Mahmoud Thiam who spoke with South
Africa’s Mail & Guardian, was a quid pro quo — a bribe — in return
for Guinea President Alpha Conde’s campaign support.
Perhaps word the money was for a political payoff prompted
Palladino’s May 24 loan recall. Or the recall could be part of the
secret deal to cash in on the loan by claiming a 30 percent share of
Heritage, but now the cat is out of the bag.
Mohamed Fofana, the current minister of mines and the official who
signed the 2011 loan with Palladino, rejects the allegations. He claims
the money went to Heritage Company, not Guinea’s government coffers and
it is in the bank waiting to be invested. He also rejects the
allegation he ever agreed to “a $25 million loan in exchange for a third
of our mineral resources.”
Fofana has a problem with the truth, however. His rejection is
refuted by the signed and sealed “Credit Agreement,” a copy of which
Human Events acquired. The April 12, 2011 document is between the
Republic of Guinea and Palladino Capital 2 Limited. Page 3 reads Guinea
“solicited the lender” seeking $25 million to finance the creation of
Heritage Company and page 9, paragraph 11.1 states the “lender may take”
30 percent of the shares of the “Heritage Company” if Guinea defaults
“after a formal notice” and “within sixty (60) working days of the
request by the Lender.”
This case warrants U.S. Congressional investigation to identify
American interests and to protect our foreign investments. Congress
should ask the following questions.
First, was the $25 million loan a violation of U.S. law? The answer
depends on the true purpose of the loan and whether a U.S. entity was
involved in the transaction.
The U.S. Foreign Corrupt Practices Act makes it an offense to offer
money to a foreign official to influence that official in his official
capacity. Clearly, Guinea’s former mines minister Thiam alleges the
money is a bribe to the nation’s president in exchange for a 30 percent
share of Guinea’s mining concessions.
Thiam further alleges the president’s son Mohamed Conde and
Palladino’s Samuel Mebiame, who signed the $25 million loan for the
lender, tried to raise campaign funds in return for access to state
mineral assets, according to the Mail & Guardian.
There is also a U.S. entity connected to the lender. Hennig’s
Palladino partners with U.S. investment fund managers Och-Ziff Capital
Management in African Global Capital. They formed the joint venture in
2008 “as a platform to invest in both private and public markets across
Africa, with a bias towards natural resources and related businesses,”
the partners said in a joint statement.
Second, is there a relationship between the $25 million loan and Guinea’s new mining code? That
is important because it would demonstrate Palladino’s motivation for
making the loan, to wit insider information about Guinea’s plans to
nationalize mining assets. Mining receipts account for 70 percent of
Guinea’s income.
In March 2011 President Conde invited financier George Soros and
former British Prime Minister Tony Blair to advise him on how to best
manage Guinea’s mining assets. They recommended rewriting the mining
code, seizing a portion of foreign company assets and renegotiating
unfavorable provisions in existing contracts.
Palladino also consulted with Guinea officials regarding the new
mining code. In fact, Palladino’s consultations regarding its interest
in Guinean mineral assets culminated in a signed agreement with Guinea
in March 2011 just before the $25 million loan was executed. The new
mining code was published in September, six months after the loan that
includes the default 30 percent proviso.
Third, is there a relationship between the Obama administration’s
decision to reinstate favorable trade relations with Guinea and the $25
million loan? That is important because it addresses
factors that may influence the administration’s foreign policy decisions
that potentially enrich some parties at the expense of other American
businesses.
In October 2011 Obama restored privileged U.S. trade partner status
under the African Growth and Opportunity Act (AGOA) with Guinea after
revoking them following Guinea’s 2008 coup. The published criteria for
that decision include hosting free and fair elections, establishment of
the rule of law and combating corruption.
Restoring AGOA status is desirable for Guinea because the U.S.
Government restores trade preferences and other benefits such as
political risk insurance to American firms through the Overseas Private
Investment Corporation. Guinea understandably wants the jobs that come
with AGOA status and the protection OPIC offers because it incentivizes
American businesses by mitigating risk in Guinea’s volatile markets.
But granting Guinea favorable trade status was a bad decision based
on the published criteria. Even though Guinea’s 2010 election was
largely free and fair, the country still suffers from numerous
problems. Human Rights Watch cautioned that Guinea has seen new
security force abuses, including killings, a concentration of power in
the executive, weak implementation of the rule of law, and rising ethnic
tensions. Further, Guinea is creating regional insecurity,
particularly in its role as a hub for transnational narcotics trade.
It is possible political lobbying and donations trumped what should
have been an unfavorable trade status decision possibly due to its nexus
with the $25 million loan. Specifically, Och-Ziff Capital Management
which is partnered with Palladino, the $25 million lender and possible
big winner in the case of loan default, had a financial incentive to
encourage restoration of favorable trade status with Guinea. Further,
it had the opportunity to influence the administration’s decision.
Public records indicate Och-Ziff uses the services of Washington
lobbyists Fierce, Isakowitz & Blalock to promote its interests with
the U.S. Government, which included five reported meetings with White
House staff in 2011. Also, Daniel Och and Dirk Ziff and their families,
according to public records, are big donors to Democrat Party campaigns
and especially Obama, which argue for additional clout.
Congress should determine whether Och-Ziff or other parties unduly
influenced the administration’s Guinea trade status decision and whether
that decision has any direct or indirect impact on Guinean mining
operations.
Congress must ask these tough questions to determine the truth.
Clearly, the secret deal could hurt American mining businesses, exposes
the administration’s wrongheaded foreign policy, and may violate our
foreign corruption laws.
Source: Human Events
Showing posts with label Walter Hennig. Show all posts
Showing posts with label Walter Hennig. Show all posts
Monday, July 2, 2012
Saturday, June 23, 2012
Saturday, June 2, 2012
Alpha Conde accused of having sold Guinean mining interests in favor of South African ... for $ 25 million
The Sunday Times wrote that Alpha Condé has signed an agreement with a certain Walter Hennig, a wealthy white businessman from South Africa is among other things specializes in diamond mining in Angola and Congo.
Mining is the economic powerhouse of Guinea with more than 70 percent of state revenues. In September, Guinea adopted a new mining code. A committee was also established to "review mining contracts" signed by the previous regimes and that the new government elected in 2010 estimates not be in favor of Guinea. Mining companies have criticized the new code and argued that several clauses will discourage mining investment in Guinea.
The Sunday Times wrote that he had access to documents which indicate that already in April last year - or months before the Code was adopted by the National Council of Transition the body that takes the place of the Parliament- Mines Minister Mohamed Lamine Fofana has agreed a loan of $ 25 million with Palladino Capital, a company controlled by Hennig and registered in the British Virgin Islands, a tax haven known. Hennig created in 2003 the firm Palladino Holdings as a vehicle for "mining, energy and other assets in Africa."
The loan of $ 25 million was never publicly revealed Guineans, initialed in the margin or in the national budget although the President Alpha Conde has said that "contracts which commit Guinea will be published on the Internet." Sources told the Guinéenews © Minister of Mines executed an order of Alpha Condé, whose son Mohamed Conde would deal with Paladino, Mvellapenda (group Tokyo Sexwale) and Och Ziff, an investment fund. The agreement was initialed by the Guinean side Mohamed Fofana and Kerfalla Yansané, the Minister of Finance and the South African side by a certain Samuel Mebiane, listed as "agent" for Palladino.
One of the clauses is controversial is the provision which states that if the Guinean government can not repay the loan, the company will convert the debt to a 30 percent in the operations of the Guinean national mining company SOGUIPAMI that was created by presidential decree adopted by the NTC in August 2011. However, under the tutelage of the IMF is, because research HIPC expenditures Guinea are controlled by the Bretton Woods institutions and it is very probable that the repayment of $ 25 million to a billionaire may be seen from askance by the mandarins of Washington announce the fight against poverty in Guinea and most want to know how the 25 million was spent.
Potentially - observers note - 25 million loan that will bring billions of dollars to Henning for participation in the project Guinean Simandou iron mine only - owned by Rio Tinto, Chinalco, and Vale Beny Steinmetz - is at least 10 billion. Guinea also options for investments in mining projects with mining giants such as BHP Billiton, Arcelor Mittal and Rusal.
But more importantly, note sources contacted by Guinéenews © This type of agreement is in flagrant violation of the Mining Code, which stipulates in Article 150 that "The State reserves the right to sell all or part of its interest in cash, without pre-emptive rights of the other shareholders of the mining title holder, through a bidding process open and transparent. " In addition it was found that the president's son would have a direct or indirect, that would be another violation of the Guinean Constitution, which stipulates in Article 39 that: "During his tenure, the President may, by itself, for a member of his family and even others, buy or lease a property in the area belongs to the State, without the consent of the Constitutional Court under the conditions set by law. '
The agreement was signed with Palladino less than a month after qu'Hennig has signed a Memorandum of Understanding under which another vehicle, Flores Bell, would become a "partner" with the government in the mining industry.
The British newspaper concludes that this revelation may become an embarrassment to Tony Blair, former British Prime Minister who is supposed to advise Conde for better governance through its NGO "Africa Governance Initiative."]
Source: Guinéenews
also see Commission for Africa
Mining is the economic powerhouse of Guinea with more than 70 percent of state revenues. In September, Guinea adopted a new mining code. A committee was also established to "review mining contracts" signed by the previous regimes and that the new government elected in 2010 estimates not be in favor of Guinea. Mining companies have criticized the new code and argued that several clauses will discourage mining investment in Guinea.
The Sunday Times wrote that he had access to documents which indicate that already in April last year - or months before the Code was adopted by the National Council of Transition the body that takes the place of the Parliament- Mines Minister Mohamed Lamine Fofana has agreed a loan of $ 25 million with Palladino Capital, a company controlled by Hennig and registered in the British Virgin Islands, a tax haven known. Hennig created in 2003 the firm Palladino Holdings as a vehicle for "mining, energy and other assets in Africa."
The loan of $ 25 million was never publicly revealed Guineans, initialed in the margin or in the national budget although the President Alpha Conde has said that "contracts which commit Guinea will be published on the Internet." Sources told the Guinéenews © Minister of Mines executed an order of Alpha Condé, whose son Mohamed Conde would deal with Paladino, Mvellapenda (group Tokyo Sexwale) and Och Ziff, an investment fund. The agreement was initialed by the Guinean side Mohamed Fofana and Kerfalla Yansané, the Minister of Finance and the South African side by a certain Samuel Mebiane, listed as "agent" for Palladino.
One of the clauses is controversial is the provision which states that if the Guinean government can not repay the loan, the company will convert the debt to a 30 percent in the operations of the Guinean national mining company SOGUIPAMI that was created by presidential decree adopted by the NTC in August 2011. However, under the tutelage of the IMF is, because research HIPC expenditures Guinea are controlled by the Bretton Woods institutions and it is very probable that the repayment of $ 25 million to a billionaire may be seen from askance by the mandarins of Washington announce the fight against poverty in Guinea and most want to know how the 25 million was spent.
Potentially - observers note - 25 million loan that will bring billions of dollars to Henning for participation in the project Guinean Simandou iron mine only - owned by Rio Tinto, Chinalco, and Vale Beny Steinmetz - is at least 10 billion. Guinea also options for investments in mining projects with mining giants such as BHP Billiton, Arcelor Mittal and Rusal.
But more importantly, note sources contacted by Guinéenews © This type of agreement is in flagrant violation of the Mining Code, which stipulates in Article 150 that "The State reserves the right to sell all or part of its interest in cash, without pre-emptive rights of the other shareholders of the mining title holder, through a bidding process open and transparent. " In addition it was found that the president's son would have a direct or indirect, that would be another violation of the Guinean Constitution, which stipulates in Article 39 that: "During his tenure, the President may, by itself, for a member of his family and even others, buy or lease a property in the area belongs to the State, without the consent of the Constitutional Court under the conditions set by law. '
The agreement was signed with Palladino less than a month after qu'Hennig has signed a Memorandum of Understanding under which another vehicle, Flores Bell, would become a "partner" with the government in the mining industry.
The British newspaper concludes that this revelation may become an embarrassment to Tony Blair, former British Prime Minister who is supposed to advise Conde for better governance through its NGO "Africa Governance Initiative."]
Source: Guinéenews
also see Commission for Africa
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