Treasure Islands - Nicholas Shaxson [155]
14.Author’s interview with Morgenthau, May 4, 2009; and “More Offshore Tax Probes in Works: NY’s Morgenthau,” Reuters, April 27, 2009.
15.See the author’s Poisoned Wells: The Dirty Politics of African Oil (New York: Palgrave, 2007).
16.French magistrates issued an international arrest warrant for Gaydamak in January 2001, and he moved to Moscow; in October 2009 he was convicted in absentia for arms trafficking, fraud, and tax offenses. Gaydamak says the magistrates used forged documents and said he owed no French taxes because he had been resident in London at the time in question. Author’s interview with Gaydamak, and Le Monde, December 8, 2000, cited in Global Witness, All the President’s Men, 2002, p. 26.
17.The arms he helped finance did, it is true, hasten victory over UNITA, though not everyone would agree that helping supply arms constitutes “bringing peace.” Gaydamak had recently bought the Israeli football team Hapoel and a basketball team, Betar Jerusalem, with, he said, political aims.
18.Russia agreed, with Gaydamak’s help, to cut the debt down to just $1.5 billion, sliced into 31 promissory notes with a face value of $48.3 million each. Angola would pay these off at face value in six monthly installments, after a five-year grace period, from 2001 to 2016. Gaydamak and his partner Pierre Falcone then set up a private company, Abalone Investments, with an account at UBS in Geneva. Abalone bought the 31 notes from Russia for $750 million—at a 50 percent discount—though Angola would pay Abalone the $1.5 billion in full. Angola’s state oil company Sonangol started paying money into the Abalone account via the controversial and secretive oil trader Glencore. In February 2001, after 16 of the 31 notes (or $774 million) had been paid off, the Swiss judge froze the remaining 15 notes.
19.Global Witness, Time for Transparency, March 2004, p. 44.
20.Over $160 million went to an account called “Treasury Ministry of Finance” in Moscow, though knowledgeable sources in Switzerland told me that despite its name, this account may have been a front, with other interests behind it.
21.Le Monde, April 3, 2002: “Le règlement de la dette angolaise aurait donné lieu à des détournements de fonds,” quoted in Global Witness, Time for Transparency, March 2004. I asked Gaydamak if the money had simply disappeared into private pockets, offshore. No, he said: Instead of paying Russia in cash for the promissory notes, Abalone paid Russia in “Russian obligations”—Russian debts he bought on secondary markets via these mysterious offshore companies and then redeemed to Russia—and Abalone had legally profited on those debt trades too. It was a “huge stupidity,” he said, to assume that he would pay Russia back directly, rather than via intermediary accounts.
22.Dev Kar and Devon Cartwright-Smith, “Illicit Financial Flows from Africa: Hidden Resource for Development,” Global Financial Integrity, March 26, 2010. Dev Kar is a former senior IMF economist.
23.See “‘Angolagate’ Revisited,” Global Financial Integrity, Task Force on Financial Integrity & Economic Development, April 7, 2010, http://www.financialtaskforce.org/2010/04/07/angolagate-revisited/.
24.IMF data, “Angola: Selected Issues and Statistical Annex,” April 1999 and Sept. 2003, and “Angola, Recent Economic Developments,” Dec. 1995,