Transparency International, the Berlin based movement that works with governments, businesses and citizens to stop bribery, secret deals and the abuse of power has launched a new competition for the public to define and vote for the most corrupt and corrupting organisation or person in the world.
Portugal is represented by Ricardo Salgado’s Banco Espírito Santo, with Isabel dos Santos, a big investor in Portuguese businesses, also listed in the shortlisted 15 for which the public van vote.
Transparency International wants a world free of corruption and has branches in more than 100 countries helping in the fight against corruption and the abuse of power.
The team of experts at transparency International has reviewed nominations and has selected the shortlist based on the Transparency International key selection criteria: the best fit with its definition of grand corruption, a history of corruption going unpunished, an international flavour to highlight the need for changing the system and finally that the cases selected do not pose safety, security or libel risks to anyone.
Grand corruption is the abuse of high-level power that benefits the few at the expense of the many, and causes serious and widespread harm to individuals and society. It often goes unpunished. It concerns millions of victims around the world.
Isabel dos Santos
The listing for Isabel dos Santos, the daughter of Angola’s President, has been named by Forbes as Africa's first female and youngest billionaire. She’s even recently been featured among BBC’s 100 most inspirational women.
With a current estimated wealth of US$3.4 billion, Isabel, 42, has portrayed herself in international media as a hardworking independent businesswoman who creates opportunities for development in Africa, and who achieved her fortune through merit. But there's a murkier side to this story …
Angola became Africa's largest oil producer in 2015 and is among the continent's top five diamond producers. Despite two-digit economic growth during a decade, over two-thirds of Angola's population lives on less than US$2 a day, and one in every six children dies before age five, the world's highest child mortality rate.
In a country perceived to be among the 14 most corrupt countries in the world, people have questioned whether merit was indeed the route Isabel took to become the richest woman in Africa. Angolan journalist Rafael Marques de Morais has long investigated the presidency of José Eduardo dos Santos and has called it the "epicentre of corruption", building fortunes by transferring public assets to private pockets.
Isabel started her empire in 1999, when she ended up owning important stakes apparently without a public tender in the national diamond and mobile telecommunications business11. Isabel insists the process which granted her a 25% stake in Angola's only private mobile telecommunications company Unitel was fair.
Indeed her father changed the law to allow joint ventures with the state to be granted licenses by the president without public tendering. She has since expanded and diversified into banking, oil and the cement industry in Angola. Since 2009 she has increasingly become involved in Portugal's telecommunications, banking, energy, construction and media sectors, and acquired stakes in telecommunications in several Portuguese-speaking African countries.
According to reports, Isabel and her husband have also been identified as purchasing through anonymous shell companies the majority of shares in the extravagant Swiss jeweller De Grisogono.
Isabel's use of anonymous shell companies is a red flag under international money-laundering legislation. In October 2015, four members of the European Parliament urged the European Commission, the Financial Action Task Force and the European Central Bank to investigate the origin of funds she used to buy a Portuguese engineering company, reported to become an equipment supplier for three Angolan dams, through a shell company that had reportedly been co-funded by an Angolan state owned company, with the president's blessing.
Angola's people have paid a high price for the misappropriation of state assets and revenues by the presidency over decades. The majority of the urban poor live in informal settlements without legal guarantee of tenure and lack sanitation, running water and electricity.
President dos Santos, meanwhile, uses repression to crush dissent - censorship, criminal defamation lawsuits, intimidation, harassment, surveillance, violence, arbitrary arrests, and unfair trials. In 2015, Amnesty International declared 15 Angolan activists as prisoners of conscience.
These days billionaire Isabel dos Santos' diversified empire is thriving, but the commodity price slump has left oil-dependent Angola with empty coffers. Where did all the money go?
Banco Espírito Santo run by tycoon Ricardo Salgado
The name of 'Espírito Santo' means 'Holy Spirit' in Portuguese, but this so-named conglomerate, one of the largest in Portugal, has allegedly made some very unholy alliances, bringing it under investigation for fraud, corruption and money laundering.
Founded 150 years ago and owned by Ricardo Salgado and his family, the company was perceived as an old boy’s network favoured by the government and controlling financial, mining, tourism and agriculture holdings (mostly registered offshore in Luxembourg).
The family was included among Europe’s most prominent business clans. Ricardo Salgado’s nickname said it all: ‘Dono Disto Tudo’ (the Owner of It All).
All this started to unravel when Salgado’s banking arm, Banco Espírito Santo (BES), collapsed in 2014 and required a state bailout. So far, shareholders and investors in the bank and the conglomerate have lost an estimated €10 billion in value, making this one of Europe’s largest corporate meltdowns.
This was not the first time that Banco Espírito Santo, which had operations in more than 20 countries, had run into trouble. The Bank had been swept up in US government investigations in 2005 for hosting accounts of former Chilean dictator Pinochet out of its Miami branch during the 1990s. It has been put under the lens of other investigators who are looking into whether its Libyan bank had helped funnel money out of the country for Muammar Gadhafi and his clan in 2011 while international sanctions were in place. During the Mensalão scandal, a mega-corruption case in Brazil, allegations came to light that the conglomerate made improper payments to politicians during business negotiations.
The Portuguese, Swiss and US governments are now looking into allegations that the Bank laundered money, including facilitating corrupt transactions from Angola to Venezuela.
In the case of Angola, the Bank owned a majority stake in a local affiliate (BESA), who for years reportedly issued massive multimillion-dollar loans to prominent players in the Angolan regime including members of President dos Santos’s family, initially without any guarantees. The Portuguese Central Bank has since accused the Espírito Santo group of numerous oversight breakdowns in the financial dealings between BES and its Angolan affiliate.
When Banco Espirito Santo collapsed, the house of cards that it built went with it. The bail out by the Portuguese Central Bank cost taxpayers €5 billion just as Portugal was emerging from a financial bailout which required it to cut nearly that same amount in public expenditures, including health care, education and pensions. The Central Bank has promised that these funds, provided as a loan, will be recouped once the assets of BES are sold off.
Published reports allege that the Salgado’s family conglomerate had for years over-inflated and leveraged the value of BES, sometimes reportedly into the family’s own pockets21. In response to a Portuguese Parliamentary Committee that looked into the matter and commissioned a forensic study of the bank’s operations, Ricardo Salgado replied that the audit lacked proof and relevant information for many of its conclusions, which he said were incomplete and mostly wrong. Nonetheless, he was ordered not to leave the country after paying €3 million on bail.
Criminal investigations into this "mega case" have just begun. The inquiry being launched in Portugal is expected to call 92 witnesses and review over 58,000 pages of written evidence.
Voting is now open until February 9 at www.unmaskthecorrupt.org
