Preliminary musings.
There is an ancient Chinese curse that goes ‘May you live in interesting times’ Forget common usage of the term interesting, it can be translated to mean may trouble never leave your side. This week in Uganda, we lived out that statement, some people more than others.
This week opposition politicians dropped the equivalent of a daisy cutter. http://en.wikipedia.org/wiki/BLU-82. The allegations that three cabinet ministers had been offered carrots to the tune of twenty three million Euros by Tullow the international oil company for vague services granted, in short a bribe. The media picked up on the figures and run with them, creating a blast wave in which many of us, me included forgot the basic adage, never make important decisions based on first information.
Two of the three ministers were specifically named, Sam Kuteesa Minister of Foreign Affairs and Hillary Onek former minister of Energy, the Prime Minister Amama Mbabazi was named in passing. Kuteesa and Mbabazi are lighting rods, revered and reviled in almost equal measure. Kuteesa has been censured for corruption in the past; against this backdrop it is easy to see how these accusations seem believable.
International oil companies have a torrid reputation with respect to corruption. Furthermore, by virtue of the fact they deal with the government in power it is easy to see how they can be seen as willing allies of the ruling system which makes them an easy target.
Into this mix add the opaque negotiation process associated with Uganda's oil contracts and you have the perfect storm for a political lynching.
I will admit I was dumbfounded by the figures, in economic times when most of us have tightened our belts to the point where they have cut us in half; it beggars belief that there are individuals who may have money we can only dream of in pot induced flights of fancy.
And therein lies the problem, I was so taken up by the figures, stunned into flights of fancy of what those funds could do I did not stop to think that there is a possibility that there is no substance to these allegations. What if these allegations were false? What if the people making these allegations could have discovered the fallacy of their documentation with minimal investigation?
In this week’s edition of The Independent Magazine I had a chance to see reproductions of these documents and the more I read, the less convinced I was that there was truth in all this.
The Power of Attorney Documentation.
Tullow Oil is a limited liability company listed on the London stock exchange. According to information available in the public domain, 26.5% of this company is privately held by different entities the rest is owned by investors through the stock exchange. http://www.tullowoil.com/index.asp?pageid=104. The compliance standards for listed companies are very high, it does not mean they are not and cannot be breached; however, the consequences are normally enough to give one pause.
The first glaring hole that I see, if you ignore the atrocious grammar, is the powers were granted to PAY cash. It would logically consistent assuming Mr. Heavey was indisposed, for him to grant powers to Mr. Glover to DRAW cash against a cheque or any other instrument.
Moreover, addressing this document to the bank is a redundancy. Banks are primarily interested in the persons who DRAW cash; in this case there is no indication as to whether or not Mr. Glover has the power to draw cash. A more relevant document from a banks perspective would have allowed Mr. Glover to DRAW cash which does not seem to be the case here.
Also, I find it very hard to believe that a listed company would on the strength of a letter signed by a single individual transfer power of attorney. Dual control and succession planning are basic tenets of corporate governance, is Mr. Glover, Mr. Heaveys’ designated successor in the event Mr. Heavey is indisposed? Aidan Heavey may have founded Tullow but I would be hard pressed to believe that he would turn around and run it like a local mom and pop shop in down town Kampala.
Assuming the document in The Independent is accurate; I do not see how it could have passed legal muster. In my experience with such documentation, the drafting is very specific. It would have at the very least identified Brian Glover and specified the duration for which the document had potency.
The third aspect that I find very suspicious is the overt use of the names of Sam Kahamba Kuteesa and his date of birth. Reading points one and two above in combination, Bank of Valletta had no relationship with East African Development Limited and by extension Sam Kahamba Kuteesa as such it is completely unnecessary for him to be identified to Bank of Valletta.
In addition, a date of birth does not serve to identify anyone, even with entities that have a much lower profile than Tullow the proper positive identification of an agent is never taken for granted. In my view, the date of birth especially if it is used in combination with other official documentation like a passport or driver’s license number (Banks have a preference for nationally issued ID) would have made the documentation less suspicious.
Tullow Oil operates in one of the most limiting environments with respect to corruption and bribery, the UK Anti-Bribery Act 2010 is easily one of the toughest laws on the books anywhere http://www.cliffordchance.com/publicationviews/publications/2011/03/the_uk_bribery_act2010anendtomixin.html.
Aidan Heavey and the Tullow are aware of the game changing nature of this legislation and have been aware for at least a year. Why would he, assuming he was interested in corrupting the system leave breadcrumbs that could be directly linked to him? An in-depth look at the aforementioned analysis would give you pause or convince you that Tullow is being run by a bunch of mad men. This new law takes no hostages.
Funds Transfer in the Post 9/11 World.
Banking generally speaking is a web, a myriad of interconnected interests. International funds transfer is primarily done through a system called Society for Worldwide Interbank Financial Telecommunication (SWIFT). There is no limit to the amount of funds that can be transferred though it follows, that certain funds attract far more attention than others. In the aftermath of 9/11 as part of the war against terror SWIFT has been cooperating with international intelligence agencies, handing over their transaction database for scrutiny. http://articles.technology.findlaw.com/2006/Jul/18/10162.html. I can categorically state it is impossible to wire ten thousand US dollars or its equivalent without it being flagged. The funds in question could not have been moved without there being an electronic trail.
Bank of Valletta it is the second largest financial institution in Malta with impressive financial figures, in short they are a credible institution with plenty to lose if they engaged in nefarious activity. What's more Bank of Valletta has been certified by the US government with respect to compliance with the relevant provisions of the PATRIOT act relating to foreign banks.
Suspicious transaction monitoring is considered business as usual in all banks, any funds received outside normal account activity would immediately be flagged and the beneficiary would have to provide documentary evidence to support the legitimacy of these funds. Funds of this magnitude would have triggered anti money laundering alarms before they were allowed into the banking system.
East African Development Limited supposedly operates an account with the Dubai branch of EFG Private Bank limited. http://www.efginternational.com/ Private bankers are inherently snobbish; it is an exclusive club where having plenty of money does not guarantee access. How would a company like EADL that has no bona fides get access into this elite world?
The final issue here would be screening system used by banks to deal with politically exposed persons. In banking parlance they are called PEPS and no relationship can be established with PEP unless it has been signed off by the country head in the case of international banks. Assuming Sam Kuteesa is indeed a shareholder in EADL, I doubt it would have been impossible to find any information related to him or this entity because higher than normal standards would have been applied.
If all other factors are excluded.
Sherlock Holmes famously stated, if all other possibilities are eliminated whatever remains however improbable must be the truth. I am unwilling, to convict Tullow on the basis of what the opposition politicians are calling evidence because it would call on me to believe that Sam Kuteesa is clinically insane. As is Aidan Heavey, Brian Glover and the evidence of that is as solid as the power of attorney document provided by the opposition.
So if this is not about the truth, then what is it about? There has been some speculation in the media that this is linked to the succession battles within the NRM, in some quarters it is seen as battle between those who actively fought the bush war and those who were part of the external wing. Some say it is about new NRM versus old NRM. That is beyond the scope of this piece. I can say is the documentation provided does not meet even the lightest standards of proof. As a Ugandan I take exception politicians’ of any persuasion stirring up the hornets’ nest with allegations which hold no water and serve no purpose other than bad showmanship.
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