We also need to make sure that mineral wealth in developing countries becomes a blessing, not a curse. It is to the shame of the whole world that a lack of transparency allowed the illicit diamond trade to fuel appalling conflicts in Sierra Leone and Liberia. Today, we have a duty to make sure that resource wealth does not fuel conflict, corruption and crime.

UK Prime Minister David Cameron in The Wall Street Journal. You have to wonder if he’s ever heard of Peppercoast Petroleum?

Rebel Diplomacy and the Long Memory of Broken Promises

ABC’s Luis Martinez has a great scoop on U.S. Ambassador to Syria Robert Ford’s journey across the Syria border to meet with “opposition leader.”

A bit of precedent to this, though one that didn’t pan out so well for the Americans—or the civilians backing this particular rebel leader.

In early 1990, U.S. Ambassador to Ivory Coast Kenneth Brown met with Charles Taylor in Liberia, far behind rebel lines. I touched on this in my piece for Rolling Stone on Taylor’s son:

It turns out that the Americans weren’t someone Taylor could work with. George Bush Sr. forced his diplomats to break a promise that they would remove President Samuel Doe (and presumably allow Taylor to seize power). This led to the disintegration of the relationship with Taylor and his rebels and likely a much longer, more miserable war for the Liberian people and those in Sierra Leone.

Syria is a very different environment and situation. I think the only lesson learned is that whatever promises Ford made—if any—Obama should consider the long memory of someone on the end of a broken one.

The story of Liberia’s transformation from a “post-conflict society” to a “developing economy” is a complex one—and not necessarily the Cinderella story, the current government would like told. Last week’s leaked audit of Liberia’s extractive industries (mining, oil, forestry) made that abundantly clear. First reported by Reuters, an independent inquiry found that approximately $8 billion in government ratified contracts violate existing Liberian laws.

This is hardly a surprise. For anyone following the offshore oil rush in Liberia, it is clear that the legislature and executive branch have a degree of tolerance (and complicity) in the corruption and mismanagement that have shortchanged the Liberian people. 

But, another way to view this transformation is in the statistical exhaust left in the wake of a decade of international aid. The chart story is pretty plain. A steep rise in GDP is mirrored by a similarly steep rise in international aid dollars. Which itself is mirrored by debt forgiveness. (The inverse reflection is drop in external debt.) Foreign direct investment follows the upward trajectory of the other trends. And gross national income rises. All the makings of a success story, right?

But, you take a look at primary education flat-lining or seeing only incremental improvements. Or worse you see educational spending (as % of GDP) drop in spite of economic growth. Even as a percentage of GDP, it raises questions why Charles Taylor was spending one percent more on education than Ellen Johnson Sirleaf is.

Fair enough, I cherry-picked these stats. Not because they told a specific story, but because they could be easily understood as indicators that Liberia’s story of resurgence doesn’t easily fit into a few column inches or IFC documentary. 

But, the real data on Liberia’s future isn’t being tabulated by the World Bank. It’s being served up on Youtube and Soundcloud with the explosion of music—particularly Liberia’s bouyant take on hip hop called “Hipco.” The best Hipco is coming from a few rappers—Luckay Buckay, Takun J, and Bentman—to name a few. There’s enough blingy posturing for the music to be familiar to American audiences, but the lyrics reflect an entirely different politics. A few of these rappers have done stints in the U.S., sometimes being asked to leave, before coming home to the “new” Liberia. One rapper (Bentman) is the son of Charles Taylor, who raps like he grew up in Oakland rather than Whiteflower. What makes these young men different—and likely underestimated by the powers that be—is that they have something that had been drowned out by the civil war for prior generations of Liberian youth: a voice.

For your consideration, “Pot Boiling”:

An FCPA Case in the Southern District

It’s an age old problem in West Africa. A lot of mineral wealth, not a lot of expertise, infrastructure or political will to make it pay off for the society at large.

That is the jam that Guinea has found itself in. With a relatively new president—Alpha Conde—and representative democracy playing out in it’s own way there, it still must contend with the legacy of the prior strongman. It has one of the world’s largest—if not the largest—repository of bauxite (the raw material of aluminum). But the nation’s largest reserve has been in limbo because of a sketchy concession deal struck by the prior president. 

Situations like these tend to fester. One party has a legal claim to develop a resource, even if it was not obtained legally. The other party has a stack of evidence and no courtroom to hear, much less try a crime. 

But a case in the Southern District of New York suggests something altogether new (and different) going on. David Rohde reported this first for Reuters—Israeli company BSGR run by Beny Steinmetz found itself in an FBI sting targeting a representative, Frederic Cillins, who was charged with a range of crimes from tampering with a witness to destroying evidence. That witness was former president Lansana Conte’s wife, now resident in Jacksonville, Florida.

Aside from the Florida connection—Guinea’s troubles with BSGR and corruption within it’s former leadership are seemingly far afield from American prosecutorial interests. But someone at DOJ believes this is a good case—and I’d be surprised if State didn’t agree. This may not be the standard definition of soft power, but if it results in Guinea’s bauxite industry coming back to life than I think it will be viewed as a diplomatic victory of sorts.

The parallels to the case of LB-13, the Liberian oil grid that Exxon recently acquired, are notable. That grid was acquired by what state auditors emphatically declared to be bribery and deal-cutting with a few ministers on the take. Senior officials in Sirleaf’s government told me that even though they knew this to be the case, they had no good legal options. A foreign company with no real track record in the oil business held the concession, they said, and there wasn’t anything they can do about.

It appeared that no American company would bite, because of the danger of running afoul of the FCPA. Chevron passed, even though the block sat smack dab in the middle of the other grids it acquired.

But, Exxon—through a deal with a Canadian company—was able to acquire rights to LB-13 without drawing any SEC or DOJ scrutiny. At least yet.

Minor relevations/major footnotes from the Kissinger Cables on Wikileaks. Not only was Ellen Johnson Sirleaf a favorite of American officials long before the Rice Riots of 1979 or Tolbert’s assassination a year later, the future president who used her first-term political capital to jettison Liberia’s suffocating debt, three decades earlier actively solicited loans for the government of Liberia.

Liberia's Legislature Ratifies Exxon Deal

A remarkable moment of near unanimity for Liberia’s legislature: last week a controversial and possibly illegal deal for Exxon to explore an oil-block parked by an Isle of Wight-based Peppercoast Petroleum passed. Unclear how Exxon dodged FCPA concerns on an exploration grid with a troubled past, but the acquisition involves a third party, Canadian Overseas Petroleum Limited. Liberia’s legislature has a history of pay-to-play for ratification which I discussed here

Visualization of public reporting on drone strikes in Pakistan.
dataviz-visualiza:

Impressive visualization of American drone attacks in Pakistan since 2004, showing the number of victims, identifying if they were civilians, children, high-profile targets or “other”. It was made by the Pitch Interactive studio, using d3.js.

Visualization of public reporting on drone strikes in Pakistan.

dataviz-visualiza:

Impressive visualization of American drone attacks in Pakistan since 2004, showing the number of victims, identifying if they were civilians, children, high-profile targets or “other”. It was made by the Pitch Interactive studio, using d3.js.

The indictment I am referring to herein is ‘legally Defective’ and as you know it was not brought in court during the trial of Victor Bout; nor it will ever be invoked against him. In this regards also, I have communicated to the US Embassy in Moscow that I will be ready to return to the US to try the case, and the response was – placing my name on the no-fly list, just to make sure that I cannot return!

Richard Chichakli, alleged associate of Victor Bout arrested in Australia yesterday, responding to an email I sent him last week about the unsealing of his indictment in the Southern District of New York.