In January, the International Consortium of Investigative Journalists and partners in 20 countries published the Luanda Leaks investigation, documenting two decades of inside deals and government giveaways, aided by Western lawyers and advisers, that made Isabel dos Santos, the daughter of the southern African country’s long time strongman ruler, enormously rich.
“Luanda Leaks was a breath of fresh air that entered us through the window,” said Laura Macedo, an anti-corruption organizer.
For dos Santos, well known as Africa’s wealthiest woman, the fallout was cataclysmic. She once dined with global CEOs and posed on red carpets with presidents, princes and the Hollywood elite. But now, her inner circle and related companies are under criminal investigation in three countries. She is blocked from accessing assets worth hundreds of millions of dollars. Among dos Santos’ major investments, she was forced to cede control of three companies, at least seven have been seized as part of lawsuits and another is bankrupt.
Lawyers, advisers and accountants, who opened shell companies, signed off on audits and devised tax avoidance strategies for the billionaire, have walked away. There’s been personal tragedy, as well. In October, dos Santos’ husband Sindika Dokolo, a businessman and art collector also implicated in corrupt schemes revealed by ICIJ reporting, died in a scuba diving accident.
Rarely has a billionaire fallen so far, so fast. But in Angola and beyond, the systemic ills the Luanda Leaks investigation brought into focus — corruption, the flight of wealth to offshore centers and a sprawling dark money industry that enables and accelerates the looting of entire nations — remain largely untreated.
Angolan President João Lourenço came to power in 2017 promising to fight corruption. No one is too powerful to jail, he said. His administration claims to have traced at least $24 billion stolen under the previous regime led by dos Santos’ father, José Eduardo dos Santos, and moved swiftly in the wake of Luanda Leaks to take on the ex-president’s daughter, her allies and a handful of former officials. But Lourenço, once a minister in the dos Santos regime, has been less receptive to self-examination.
In protests throughout October and November, crowds blocked streets with burning tires and called for greater transparency within the Lourenço administration. Hundreds of people, some wearing face masks, marched through the capital of Luanda, chanting, waving signs and thrusting their fists in the air. “Angola says enough,” they shouted.
Protestors clamored for the resignation of Edeltrudes Costa, Lourenco’s chief of staff, who allegedly bought luxury homes overseas through offshore bank accounts after receiving a government contract intended to rebuild airports. In response, police unleashed dogs and fired live rounds at protestors. One victim was Inocêncio de Matos, a 26-year-old engineering student and first-time protester, who bled to death on a busy road.
ICIJ’s reporting showed how professional advisers working in Western nations made it possible for dos Santos to divert her nation’s wealth into personal accounts and ventures. One firm, accounting powerhouse PwC, made more than $1 million advising dos Santos even as corruption allegations flew, and as employees raised — and then ignored — red flags about the movement of money through secrecy havens around the globe. In January, at the World Economic Forum in Davos, Switzerland, Bob Moritz, the head of PwC, said that his company had never before been brought so low. A “shocked and disappointed” Mortiz ordered an investigation.
PwC declined to answer specific questions about that inquiry or what it had found. A spokesperson said that its internal investigation “provided reassurance that the PwC network policies and procedures are sound,” adding that “a number of senior employees have left PwC or been subject to other remedial measures.”
“Luanda Leaks was key for increased anti-corruption activism in Angola and brought new attention to accountants and others who are complicit in the systemic diversion of public funds for private gain,” said Karina Carvalho, the Angolan-born executive director of Transparency International in Portugal.
“But,” Carvalho added, “I also see the continuity of power structures that prevent the return of stolen assets to the Angolan people and protect gatekeepers who profit from money laundering and tax evasion. These enablers bear a share of responsibility for the poor living conditions, even starvation and death, faced by millions of people around the world.”
An empire begins to crumble
The reporting team behind Luanda Leaks included journalists from the BBC, The Namibian, the New York Times and Expresso in Portugal. Through much of 2019, reporters scoured a trove of more than 700,000 leaked records related to dos Santos businesses and followed leads in dozens of countries. The documents were shared with ICIJ by the Platform to Protect Whistleblowers in Africa, or PPLAAF, a Paris-based advocacy group.
Toward the end of the year, ICIJ began asking the Angolan government questions about preferential investments, loans and handouts uncovered by reporters. Reaction was swift.
In December 2019, a Luanda court froze hundreds of millions of dollars of dos Santos’ assets, including stakes in banks, a telecom firm and a brewery. The court estimated that dos Santos, Dokolo and a former PwC manager turned dos Santos business adviser had caused Angola to lose more than $1 billion.
Then, on 2020 Jan 22, one week after ICIJ and its media partners published Luanda Leaks, Angola’s attorney general, Helder Pitta Gros, charged the billionaire and her husband with embezzlement and money laundering.
The accusations relate to dos Santos’ time as head of Sonangol, Angola’s state-owned oil company. According to Angolan prosecutors, whose charges echoed ICIJ’s revelations from leaked emails, invoices and bank statements, dos Santos paid almost $60 million in invoices to a consultancy firm in Dubai owned by a close friend in the weeks and days before dos Santos’ dismissal from Sonangol. –
Dos Santos has denied wrongdoing. She accuses Angolan prosecutors of submitting fake documents, including a passport that bears her name but the signature of the martial arts actor Bruce Lee. “This is a political trial, you have a persecuting state and servile and partisan magistrates,” dos Santos said, describing the case against her as a “witch hunt.” Dokolo also denied wrongdoing.
The denials haven’t slowed investigators or mollified business partners.
In February, a court in Lisbon ordered the seizure of dozens of dos Santos’ bank accounts. Portugal, which invaded and colonized Angola in the 16th century, is home to luxury dos Santos’ apartments and the headquarters of much of her corporate empire.
In May, German police seized files from the headquarters of state-owned export bank, KfW IPEX-Bank, as part of a criminal probe. Police are investigating allegations that bank employees misappropriated public funds when granting a $55 million loan to dos Santos’ brewing company, Sodiba, and that the bank failed to properly vet dos Santos, according to ICIJ partners Süddeutsche Zeitung, NDR and WDR.
As the months passed, dos Santos lost more jewels of her business crown.
Portugal announced the nationalization of dos Santos’ 71.7% stake in Efacec Power Solutions, a company that builds electricity infrastructure around the world. “The cabinet took this decision because Efacec is in a situation of impasse after the ‘Luanda Leaks,’” Economy Minister Pedro Siza Vieira announced on July 2. Dos Santos bought her stake in Efacec in 2015 for about $225 million.
The European Banking Authority, responding to the European Parliament’s request for a probe into Luanda Leaks and any breaches of national or EU law, launched an inquiry.
An Angolan court determined that a deal between Sodiam, Angola’s state-owned diamond company, and a Swiss luxury jewelry firm owned by dos Santos’ husband Dokolo was “fraudulent.”
The terms of the acquisition were enormously favorable to Dokolo. Sodiam pumped tens of millions of dollars into the jewelry company as part of an acquisition that gave Dokolo “full control of the management,” according to documents obtained by ICIJ. The cherry on top: Dokolo got a $4 million “success fee,” drawn from the Angolan state money, for arranging the deal that left him in charge.
To make the loan, Sodiam borrowed $98 million from a bank, Banco BIC — partly owned by dos Santos. Her stake in the bank is estimated to be worth $185 million. De Grisogono was already struggling when Dokolo took control and the investment was effectively lost when the company filed for bankruptcy in the wake of the Luanda Leaks investigation.
Sodiam says that it was misled and that the agreement never benefited Angola.
“By continuing to pay the bank loan, the Angolan State would be benefiting Isabel José dos Santos twice,” the court said. “First, when it asked for credit to create an extremely profitable business for her (Isabel dos Santos) and, now, paying the same credit to the financial institution where…[she] is the biggest effective beneficiary.”
“We are therefore, in fact, facing yet another situation of illicit enrichment,” the court said.” Dokolo denied wrongdoing and previously told ICIJ that the fee was for “the successful complex negotiations and structuring of the acquisition.”
Schillings, London-based law firm representing dos Santos, told ICIJ that she had no connections to de Grisogono. The court decision was “a secret trial … made without her knowledge, without any representation, without even the basic legal requirement of being informed” Schillings said.
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An asset freeze and more investigations
It was the kind of deal only obtainable to someone with the right pedigree.
Sonangol, Angola’s state oil company, sold a $99 million stake in a Portguese oil and gas firm called Galp, but only required a $15 million upfront payment. The fortunate buyer: a Dutch company owned by Dokolo called Exem Energy BV. That investment is now worth about $830 million.
In September, Dutch prosecutors froze Exem’s assets. Attorneys representing Sonangol told ICIJ that the oil company hopes to recoup hundreds of millions of dollars that it argues Angola lost due to the deal. A Dutch court, dealing with similar allegations, ordered the removal of a dos Santos lieutenant from Exem’s board and confiscated future dividend payments until the matter is resolved.
Sonangol’s attorneys credited Luanda Leaks with helping connect the dots of who owned what.
“The fact that these documents are in the public domain is incredibly helpful as we would otherwise have no way of finding out,” Sonangol attorney Emmanuel Gaillard said, referring to copies of some of the records that ICIJ made public.
Dos Santos has defended the deal as having “generated a large amount of return for all the parties.” Exem said that the court had made “no findings of wrongdoing” by the company.
By this time, major telecom assets had also started to fall.
Portuguese telecommunications company, Sonae, announced that it had dissolved a joint-venture with dos Santos that saw them together control one of the country’s largest communications and entertainment companies, NOS.
In October, Angolan mobile phone giant Unitel sued dos Santos in a London court. In 2012 and 2013, Unitel, at the time effectively controlled by dos Santos, loaned one dos Santos’ company $431 million to buy shares in a Portuguese firm used to take control of NOS. Unitel now fears that it may be unable to recover its loans.
About the same time, Portugal’s Securities Market Commission announced 84 cases against nine auditing companies that worked with dos Santos. The unnamed companies broke anti-money laundering laws and failed to report transactions even though auditors had “sufficient reasons” to suspect payments “could be related to funds from criminal activities,” the commission said.
The commission, known as CMVM, recommended Portuguese prosecutors open criminal cases against the auditors. Lawyers for dos Santos said the findings related to possible wrongdoing by external companies, not the billionaire herself.
Back in business
Days after the publication of the Luanda Leaks investigation and more than 30 years after joining PwC, Portuguese tax expert Jaime Esteves was out of a job.
Esteves resigned after ICIJ revealed that his Lisbon-based team was central to PwC’s $1 million-plus windfall from working for dos Santos. PwC prepared tax plans and business proposals for dos Santos’ pet projects, some of which are now under investigation for possible financial crime.
He wasn’t unemployed for long.
Esteves quickly launched JCE. His new website targets wealthy families who want to avoid the “material leakage” of their wealth by government taxes.
Esteves will now help anyone who invests a certain amount of money — currently about $606,000 — in real estate to live in Portugal under the Golden Visa scheme. Critics say the government’s visa program is open to abuse by those who hide dirty money through luxury property. In his first blog post after leaving PwC, Esteves also advertised Portugal’s “very attractive” tax rules and described the country as “Europe’s best kept secret.”
He knew what he was talking about. He and his team at PwC used exactly the same words years ago in a brochure they emailed to dos Santos’ management firm.