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Report Alleges US Role in Angola Arms-for-Oil Scandal

by Wayne MadsenSpecial to CorpWatch
May 17th, 2002

Angola and Bush
 

As the US Congress continues its investigation of the Enron affair, human rights advocates are calling for a probe of the Bush administration's possible role in another energy and influence-peddling scandal. According to a recent report by the British-based non-governmental organization Global Witness, Bush and US oil interests have ties to some of the key figures in the arms-for-oil scandal which has devastated Angola.

Known as "Angolagate" in France, the scandal involves arms-for-oil deals between French businessman Pierre Falcone, the head of a firm called Brenco International; his colleague Jean-Christophe Mitterand, the son of the former French president; and a Russian-born Israeli named Arkadi Gaydamak.

According to "All the Presidents' Men," a March 25 report on Angolagate by Global Witness, Gaydamak funneled billions of dollars in arms and oil-backed loans to Angola's government in return for lucrative oil contracts with Western oil companies. Falcone and Gaydamak, relying on the special access that Mitterand had to the Angolan government, managed to transfer some $463 million in arms to Angola.

The net effect of the Angolan arms buildup was the scrapping of the 1994 Lusaka Peace Agreement between Angolan President Jose Eduardo dos Santos and long-time UNITA rebel leader Jonas Savimbi, a one-time favorite of the Central Intelligence Agency and a person who President Reagan once hailed as the "George Washington of Angola."

The newly-armed Angolan Army -- supported by an array of US-based private mercenary companies like MPRI and AirScan -- went on a bloody offensive against UNITA in 1998 and was eventually able to push Savimbi's rebels further into the jungles in the eastern part of the country. This compelled UNITA to mine and sell more diamonds on the black market to buy arms. The trade in "blood diamonds," in turn, led to a number of human rights abuses by UNITA. Ironically, Savimbi -- Reagan's George Washington of Africa -- was gunned down by Angolan Army troops in a remote area of Angola on February 22, the birthday of America's first president.

According to Global Witness, the links between Angola's corrupt government and the Bush administration are just as odorous as those linking Luanda's leadership to past and current members of the French government, both Socialist and Gaullist. In addition to the French oil giant Total-Fina-Elf, oil companies like Chevron, Texaco, Philipps Petroleum, Exxon Mobil, and BP-Amoco -- all with close links to Bush and his White House oil team -- were heavily involved in propping up dos Santos in return for profitable off-shore oil concessions.

After transferring some $770 million in oil revenues to their own private bank accounts, dos Santos and his cronies became convinced that pluralism in their country would be a very dangerous thing for their future business deals. They also quickly abandoned their former Marxist beliefs in favor of the type of capitalist principles embraced by George W. Bush and Jacques Chirac.


Paris, Texas

There are similarities between dos Santos' new relationship with George W. Bush and the Bush family's historical ties to the House of Saud. Both represent the murky nature of oil politics that places US economic, national security, and human rights interests far behind the priority assigned to ensuring maximum corporate profits for a tight-knit and secretive international oil fraternity.

Just as Bush's past financial links to the Bin Laden family have been exposed by the media, so too have his links to Angolagate and Falcone. Falcone's wife, Sonia, a former Miss Bolivia and a friend of First Lady Laura Bush, became a big-ticket contributor to Bush's 2000 election campaign. Contributions were made to the campaign through Sonia's Essanté Corporation, a distributor of health, beauty, and sexual pleasure products (such as a cream called Entisse that Essanté's web site says is guaranteed to duplicate the effects of Viagra).

In 2000, Esssanté, which is linked to Falcone's arms trafficking Brenco through the same corporate addresses and shareholding accounts in the United Kingdom and British Virgin Islands, respectively, gave the GOP and Bush campaign over $100,000. Sonia was also an early supporter of Bush. Federal Election Commission records reveal she was on board with a $1000 contribution to Bush's presidential exploratory committee on April 14, 1999. She also rubbed shoulders with George H. W. Bush at an October 6, 2000 fundraiser -- a Bush campaign event that netted $10,000 per person.

Only after Newsweek and The Arizona Republic published details of Falcone's international arms dealing involving Gaydamak was the money returned by the GOP to Essanté, and then only a few days prior to Bush's inauguration. The money, of course, was available to Bush all during the contested Florida election and the state and federal Supreme Court battles. The Republican National Committee said in a statement that the money was returned to "avoid the appearance of impropriety."

More noteworthy, just before Falcone was arrested in France in December 2000 (along with Mitterand's son), police discovered computer files that included a letter from Falcone inviting then-candidate Bush to meet with dos Santos at Falcone's Arizona Paradise Valley ranch. Although there is no record of such a meeting taking place, Bush did host dos Santos at the White House shortly after the killing of Savimbi. The timing of this meeting raises serious questions about the transfer of money to Bush's campaign coffers and its impact on changing the Republican Party's long-held policy of support for Savimbi.

It is also interesting that one of Bush's top Arizona campaign officials, State Senator Scott Bundgaard, arranged for Sonia Falcone to meet Bush at Phoenix Airport just after Essanté dropped one down payment of $20,000 into Bush's campaign chest. According to Global Witness, there is good reason to believe the donations to Bush were actually made by Pierre Falcone himself using "coded accounts" maintained at the UBS Bank in Switzerland, Bank Leumiin Tel Aviv, and Banque Rothschild in Monaco.


The Cheney Connection

The Global Witness report also reveals that French investigators discovered questionable links between the Angolan government and Vice President Dick Cheney's old firm Halliburton and its subsidiary Brown & Root. The investigators believe Halliburton 's success in Angola is tied to Falcone's intercessions with Luanda: actions that would have directly benefited Cheney when he headed the firm between 1995 and 2000. According to an Associated Press report on October 26, 2000, the US Embassy in Luanda assisted Halliburton in securing a $68 million US Export-Import Bank loan for Angola in 1998, during the height of much of the arms running activity between dos Santos, Falcone and Gaydamak. The AP cited a cable from the US Embassy in Luanda to Secretary of State Madeleine Albright that states, "Our commercial officer literally camped out at the offices of the national oil company, petroleum ministry and central bank, unraveling snag after snag to obtain the transfer of funds . . . The bottom line: thousands of American jobs and a foot in the door for Halliburton to win even bigger contracts."

Cheney, a one-time supporter of UNITA, appears to have changed his mind after the former CIA-backed guerrillas were deemed a threat to US oil interests. Savimbi, like Laurent Kabila and Joseph Mobutu of Congo, Panama's Manuel Noriega, and Iraq's Sadaam Hussein, became just another disposable CIA asset who outlived his usefulness.

Another Bush confidant who had a vested interest in propping up dos Santos is Bush National Security Adviser Condoleezza Rice. A former Chevron director and, until recently, the namesake of a Chevron supertanker, the SS Condoleezza Rice (since renamed the SS Altair Voyager), Rice would have had good reason to see Angola stabilized under the dos Santos regime and permanently eliminate the UNITA threat to her old employer.

Perhaps the most ironic link described in the Global Witness report is one involving the former "fugitive financier" Marc Rich. He appears as a major player in the arms-for-oil scandal through a Swiss-based oil trading company named Glencore. The firm played a major role in guaranteeing a total of $1 billion in oil-backed loans for Angola in 1998. The first set of oil-backed loans in 1993 involved Glencore, Falcone, and Gaydamak. Soon after, Gaydamak arranged for the sale of Russian helicopters and ammunition through a Slovak company called ZTS-OSOS. The 1998 billion-dollar loan deal included the Export-Import Bank loans being pushed by Halliburton and Cheney. The GOP conveniently seized on President Clinton's pardon of Rich without describing the vice president's links to the fugitive financier's vast international money-lending and influence-peddling empire.

The ties of President Chirac's administration to Angolagate are as clear as those of other leading French politicians -- right and left, Socialist and Gaullist. What is not clear is what Chirac and President-elect Bush spoke about on December 18, 2000 in Washington, DC at the French Embassy in an unprecedented meeting between a president-elect and a foreign leader in a foreign diplomatic mission. Coming just four days after the Supreme Court handed the White House to Bush, the Bush-Chirac meeting took on an even greater aura of mystery.

Was it merely coincidental that Chirac was the first foreign leader to meet with America's dauphin, even prior to Bush's inauguration? Reportedly, a number of French prosecutors who investigated Angolagate would like to know the answer.


Hold the Phone

There is yet another disturbing element involved in Bush's ties to dos Santos. Global Witness reports that there was a secret agreement between the French firm Communications et Systémes, the French Defense Ministry, and dos Santos to acquire during 2000 two types of communications monitoring equipment suites to triangulate the location of Savimbi's GSM cell and satellite telephone calls in the Angolan bush. The two systems -- Murene (for GSM calls) and Menta (for satellite calls), were supposed to help dos Santos' forces locate Savimbi's constantly moving jungle headquarters.

Apparently, the multimillion dollar systems were not all that helpful in locating Savimbi. However, legitimate questions exist about what U.S. official and unofficial intelligence resources were brought to bear on the recalcitrant ex-US. ally Savimbi. Under CIA Director George Tenet's new authority to eliminate terrorists listed in his "worldwide attack matrix," it is open season on anyone the U.S. brands a terrorist. According to US government sources, Savimbi was tracked by the military forces of U.S. NATO ally Portugal, who were aided by private mercenaries from Israel and South Africa. Jardo Muekalia, who headed UNITA's Washington office until it was forced to close in 1997, says that that the military forces that ultimately succeeded in assassinating Savimbi were supported by commercial satellite imagery and other intelligence support provided by Houston-based Brown & Root, Cheney's old outfit. Both the State Department and Pentagon vehemently deny any US government role in the killing of Savimbi.

But the US frequently uses such intelligence wizardry to help track down troublesome leaders. In 1996, according to US and British intelligence sources, the NSA may have passed on location data to the Russians on the location of Chechen President Dzhokar Dudayev (he was struck by an air-to-surface missile while talking on his satellite phone). In 1999, the New York Times reported that Turkey captured Kurdish Workers' Party leader Abdallah Ocalan after his cell phone location data was tracked by U.S., British, and Israeli intelligence agents.

It is not only Angola where the oil interests of Falcone and Bush coincide. Falcone's Brenco also has significant interests in Colombia and Venezuela, two recent bastions of CIA and US paramilitary activity in support of US oil interests in the region. Gaydamak has also been involved in business with Falcone in Latin America since 1993.

Interestingly, although Interpol on January 11, 2001 issued an arrest warrant for Gaydamak, he continues to travel between Israel, the United Kingdom, and South America using his Israeli, Canadian, and Angolan passports, eluding police, and passing from capital to capital with the full support of the Israeli government. Falcone and Mitterand's son have already been arrested and released on bail in France. If the Bush administration is really interested in tracking down and bringing to justice people involved in funding terrorism, like that which has occurred for years in Angola, it might pressure Israel to end its diplomatic protection of Gaydamak and cooperate with Interpol in bringing him to justice. However, considering the fact that so many members of the Bush administration appear to have links to Angolagate, such a prospect appears bleak.

And what has continuation of warfare to the benefit of oil companies meant for Angola? The consequences are dire:

  • Angola is one of the poorest countries in the world.

  • Famine is increasing throughout the country with one child dying of malnutrition and associated diseases every three minutes.

  • Life expectancy is 45 years in a country that earned $5 billion in oil revenues in 2001.

  • The Angolan Civil War has resulted in the deaths of over half a million people and 3.1 people becoming refugees.

  • Tens of thousands of children have been maimed by land mines.

In any case, Bush's so-called "compassionate conservatism," has been a myth for the people of Angola and a windfall for oily business friends like the Falcones and Ken Lays of the world. The Bush administration does not appear to be bothered by the havoc being wrought by oil company cartels on the countries of Africa.


Further Reading

Wayne Madsen is a Washington-based journalist who covers intelligence, national security, and foreign affairs. He is also a Senior Fellow of the Electronic Privacy Information Center (EPIC) in Washington, DC and author of "Genocide and Covert Operations in Africa 1993-1999" (Mellen Press).