![COLUMN | Congo-Brazzaville’s ruling family, the Trump Tower, corruption and Petronor [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2Fimport%2Fwp-content%2Fuploads%2F230529-Offshore-Accounts1.jpg?w=480&auto=format%2Ccompress&fit=max)
"Mirror, mirror on the wall, who is the richest and most corrupt of us all?" This is exactly the kind of question I can imagine Isabel dos Santos intoning into her luxurious bathroom at the Bulgari Resort and Residences on Jumeira Bay Island in Dubai before she begins a hard day's work posting content about her lifestyle on social media.
For years, the daughter of Angola's late president could be confident that her magic mirror would reply, "Thou, O Isabel, art the most crooked beauty in the land." Indeed, last November, Interpol issued a red notice for Isabel, requesting global law enforcement authorities to locate and provisionally arrest her to face charges of alleged embezzlement, fraud, influence peddling, and money laundering in her homeland. This surely put her in the premier league of nepotism and corruption.
But now, maybe one day soon, the mirror will say back to the Angolan, "Alas, O Isabel, Julienne Sassou-Nguesso, is now the most dubious heiress of them all."
Julienne is the daughter of Congo-Brazzaville's long serving president, Denis Sassou-Nguesso. He was re-elected president of this African country of nearly six million people – not to be confused with its anarchic and much larger neighbour, the Democratic Republic of Congo – in March 2021. Mr Sassou-Nguesso led his country for the first time from 1979 to 1992, then returned to power in 1997 after overthrowing his successor, Pascal Lissouba, after a brief civil war. During this conflict, he was backed by Angolan soldiers, who seized the city of Pointe Noire. He has won every election since 2002.
Congo-Brazzaville is the third largest oil producer in Sub Saharan Africa, after those paragons of virtue Angola and Nigeria. The World Bank reckons that the country's oil sector accounts for about half of its gross domestic product and 80 per cent of its exports. Congo-Brazzaville has averaged around 275,000 barrels of oil production per day so far this year, and ENI is working on a fast track floating liquefied natural gas (FLNG) project in the country. First LNG production from the Tango FLNG is scheduled for later this year, whilst a second unit being constructed by Wison Heavy Industry in China will boost production to three millions tonnes of LNG per year from 2025 onwards.
As you would expect in a country where the same man has been in power for over a quarter century consecutively, and nearly four decades cumulatively, Congo-Brazzaville has gained a reputation for… corruption. In 2019, oil trading company Gunvor Group was found criminally liable in Switzerland for paying bribes to win oil sale agreements with the Congolese state oil company, the Société Nationale des Pétroles du Congo (SNPC). The Geneva-based trading house was ordered to pay penalties of US$94.8 million for bribery in both Congo-Brazzaville and Ivory Coast, Reuters reported. The bribe recipients, according to a plea bargain struck with prosecutors, "included Congolese President Denis Sassou Nguesso, his family members, and former senior Ivory Coast government officials."
The Swiss authorities found that (Shock!), at the time, Gunvor had no code of conduct, no compliance, and completely insufficient oversight of its oil traders to prevent such bribery. Given the company's foundation under the co-ownership of Russian oligarch and billionaire Gennady Timchenko, this is not perhaps a surprise either. Those who followed our coverage of fellow Swiss oil trading house Glencore paying out more than US$1.5 billion in penalties in 2022 for paying kickbacks to win oil shipments in Nigeria, Equatorial Guinea, Ivory Coast, South Sudan, and Cameroon will not be surprised to find that once again, nobody on the African side can explain where the Gunvor bribes went. Nobody in Brazzaville was ever charged with receiving the bribes or behaving unlawfully, and the Congolese government denied the allegations.
Strange that.
Not unexpectedly, President Sassou-Nguesso's wife and children have found themselves in the spotlight in various other investigations into corruption around the world, just as President dos Santos of Angola kids' did. Ten years ago, President Sassou-Nguesso himself was reported to have spent over a million US dollars in Paris on designer shirts and suits that he only wore once and then discarded. In September 2019, the tiny Republic of San Marino confiscated US$19 million from bank accounts controlled by the Congolese president following a money laundering investigation. Britain's Daily Telegraph reported that Mr Sassou-Nguesso, ever the snappy dresser, had used funds from the accounts to spend US$120,000 on crocodile skin shoes. His children have followed his example of extravagance.
In 2017, his daughter Julienne and her husband Guy Johnson were placed under investigation in France for "money laundering and misuse of public funds", as the authorities sought to identify whether the money used to buy two large residential properties in Paris by the couple had been illegally taken from Congolese public funds. Such trifles are why Ms Dos Santos now resides in the UAE, which doesn't ask so many irritating questions on the provenance of funds.
In 2019, Global Witness published a report into irregularities in the award of stakes in ENI's oil blocks in the country, and a second report into how Julienne's sister, Claudia Sassou-Nguesso, came to buy an apartment in the Trump International Hotel and Tower at 1 Central Park West in New York. Fans of international corruption will recognise this as the same tower where notorious football bribe taker Chuck Blazer lived using the proceeds of his ill-gotten gains before he was busted by the FBI.
Needless the say, Global Witness found that Claudia's apartment appeared to have been acquired using funds paid out from the Congolese treasury under an inflated contract for public works to a Brazilian company, which then paid millions of dollars to shell companies in Europe owned by the presidential family, over which a former director of Benfica football club in Portugal, Jose Viega, was appointed manager.
A few months later, Global Witness also revealed how Julienne's brother, Denis Christel Sassou-Nguesso, "apparently stole over US$50 million of state funds for his personal gain." The investigators found that he had used a similar arrangement as that used by his sister, Claudia – he received payments in Cyprus through a shell company from the same Brazilian contractor performing public works for the government in Congo-Brazzaville at very high prices.
At that time both Denis Christel and Claudia were members of parliament in Brazzaville, and in 2021 Denis-Christel was appointed as a cabinet minister by his father. In 2015, the French authorities seized his Parisian apartment on the grounds that it was purchased with the proceeds of corruption, and in 2020, the American authorities seized his US$3 million Miami penthouse, owned in the name of his wife. Federal prosecutors claimed that Denis Christel had allegedly embezzled millions of dollars in public funds from the state oil company SNPC, and that these funds had been used to pay for penthouse unit Number 6107 at 900 Biscayne Boulevard. So, it was subject to forfeiture.
Again, perhaps he should have bought in Dubai, like Ms Dos Santos did, where spending stolen government funds on expensive real estate is not a crime. In fact, it seems to be positively encouraged!
In 2020, yet another Global Witness report found that the award of the onshore Ngoki block in virgin forest in Congo was bedevilled by yet more conflicts of interest and the involvement of close associates of the presidential family. In 2021, the European Network of Corporate Observatories (ENCO) provided a detailed report into corruption allegations in Congo involving, amongst others ENI, ENI managers, the offshore support vessel (OSV) agency Petro-Services and its management in Monte Carlo, and members of the Congolese presidential family, including Julienne.
The latter is alleged to have a joint shareholding in a Mauritian shell company called African Beer Investment, along with the wife of the CEO of ENI, Marie Magdalena Ingoba. The purpose of the entity is not clear because Mauritius is a tax haven where corporate disclosure is minimal and records are not publicly available. Ms Ingoba was at one time the controlling shareholder of Petro-Services' holding company in Cyprus. The ENCO report is a long read but it is very worthwhile for anyone to understand the complex nexus of connections between the presidential family in Brazzaville, ENI, and their mutual fixers and middlemen.
But this wasn't the dodgy oil deal in Ngoki or the machinations around the offshore ENI blocks that drew Julienne to our attention. That one involves certain of Perenco's offshore blocks in Congo-Brazzaville….
By now you will not be surprised to learn that the presidential family of Congo has "fingers in many pies." So the revelations by Investigate Europe two months ago that Julienne "secretly obtained 15 per cent in a subsidiary of Oslo-listed Petronor, a minority partner in a lucrative drilling licence" operated in Perenco offshore Congo will not shock you. The report found that, "thanks to a backstage deal, Julienne Sassou-Nguesso was entitled to millions in dividends" from the PNGF Sud oil field.
When the production licence for PNGF Sud was due for renewal in 2016, Julienne, through nominees, secretly obtained a 15 per cent stake in a subsidiary of Oslo-listed Petronor, which won a 20 per cent share in the block. Perenco is operator with 40 per cent. Investigate Europe found that, "while Ms Sassou-Nguesso's name was concealed behind nominees, she was able to reap dividends for years behind the scenes. In 2018 alone she was entitled to at least US$3.3 million thanks to her hidden shares in the oil block." Money for nothing.
Unfortunately, Norway's authority for fighting economic crimes, Økokrim, detained Petronor's CEO Knut Søvold and his business partner Gerhard Ludvigsen in December 2021 on suspicion of corruption in projects in Africa, without specifically naming Congo-Brazzaville. The company has been connected to interests in oil blocks in Gambia, Guinea-Buissau, Nigeria, and Senegal as well as Congo-Brazzaville. News of the arrest caused Petronor's share price to fall 15 per cent, Upstream reported. In 2022, Petronor's chairman, Eyas Alhomouz, who is a US citizen, was formally named as a suspect in a United States Department of Justice corruption investigation.
But once again, there is no sign of any meaningful sanctions against the Sassou-Nguesso family, who have so successfully plundered the country since 1979. In Angola, change only came when Isabel's father handed over power not to her or her brother, but to his trusted Minister of Defence, João Lourenço, in 2017. Rather than protecting his predecessor's family, he turned on them and exiled Isabel and jailed her brother. By appointing his son to the cabinet and grooming him for leadership, Denis Sassou-Nguesso seems to be seeking to avoid such an unpleasant fate for his next generation.
By now, you should have a pretty detailed picture of the poor state of governance in Congo. The country has been plundered by its ruling family for decades. That we know what has gone on and how is largely thanks to the hard work of investigative journalists at ENCO, and Global Witness, Transparency International and Investigate Europe. It is also due to the willingness of western governments to prosecute those politically connected individuals, like the Sassou-Nguesso family, who hold valuable assets in the west but cannot explain how they acquired their wealth.
There is obviously a lot more work to be done clamping down on the proceeds of corruption, especially in the UK, where the BBC tracked down the former Georgian minister of Defence, David Kezerashvili, last month to a US$20 million townhouse in London and tried to discuss his alleged involvement in a pan-European scam.
However, you don't see anyone in the UAE or Saudi Arabia or Qatar or Singapore or Hong Kong investigating the source of funds of the mega-rich who buy luxury property and open bank accounts and moor their yachts there. Instead, they are feted as "high net worth individuals" whose "private offices" can create wealth for local developers, bankers, retailers, and landlords.
Until those jurisdictions take action, people like Isabel dos Santos and Julienne Sassou-Nguesso can smile at themselves in their magic mirrors every morning, confident that they have gotten away with their embezzlements, their money laundering, and their corruption.
That's the unfairest of it all.
Background Reading
En français! French language reporting on the ties of shareholders in PNGF Sub block to the ruling family of Congo-Brazzaville from the NGO Disclose is here.
We first covered the Petro-Services investigation and the police raids on the company in 2019.
The full set of Investigate Europe reports into Perenco is here.
In 2020, we reported on Perenco's do-it-yourself strategy of asset ownership in Africa, using its own service companies to drive down costs in drilling and production operations.
Energy Voice has covered Perenco's rather unfortunate safety record in the British North Sea here and here. In March, the company faced uproar in the UK after an oil spill into Poole Harbour in southern England from its onshore Wytch Farm field.
No wrongdoing by Perenco in Congo is suggested here, and the company made a statement to Investigate Europe: "There are no failures of compliance with regards Perenco's activities on the PNGF Sud permit." The company spokesperson added that licence shares are allocated directly by the government of Congo-Brazzaville. Perenco declined to comment on the beneficial owners of its Congolese partners, but it did tell the organisation that it "identified no risks in working with them."
