The so-called ‘Luanda Leaks’ dossier was recently published by the International Consortium of Investigative Journalists (ICIJ). It revealed that Africa’s richest woman, Isabel dos Santos, had used PricewaterhouseCoopers (PwC) in London to advise her as she accumulated a $2.2 billion fortune by exploiting Angola’s natural riches and diverting millions of pounds abroad.
The ICIJ investigation established how dos Santos was given free rein by her father during his 38-year rule of Angola – the mineral-rich state which became synonymous with nepotism and corruption – to exploit deals in oil, diamonds and property and to set up about 20 companies in Luxembourg, Malta and the Netherlands.
Angolan authorities have compiled a list of at least 10 Maltese companies which they believe the billionaire daughter of the former African dictator may have used to siphon money out of state funds.
The ICIJ dossier shows that dos Santos used Maltese financial services practitioners to set up “letterbox” companies in Malta, some of which were given Angolan State contracts and funds. A shell company typically has no substantive presence in the country and is used primarily to move money around.
As a columnist who has followed closely the allegations of corruption in Malta since the Panama Papers story broke in 2016 implicating individuals at the very top of government, I have been waiting with bated breath for the public reaction to this latest instance of institutional corruption since it involved Ganado Advocates, one of the most respected legal firms in Malta.
Given the outcry in the wake of the Panama Papers scandal and the calibre of Maltese financial services company which has been exposed, the response to this scandal has been curiously muted.
Ganado Advocates is one of Malta’s foremost law practices with a history stretching back over 100 years, led by generations of Ganados.
I should declare for the record that I personally knew the late Joe Ganado and have had dealings with his son, Max, the managing partner when these events occurred, and current senior partner.
Ganado Advocates appears to have been content to accommodate Africa’s richest woman, despite the potentially dubious provenance of the funds flowing through the Maltese companies they set up and serviced.
As the tragic death of Miriam Pace showed, greed and hypocrisy know no bounds
One of several shell companies established by Ganado Advocates on behalf of dos Santos was Wise Intelligence Solutions Limited (WISL). WISL was given a contract worth €8.5 million to carry out consultancy services, despite never having traded since it was set up 10 years ago.
The contract was purportedly to help Angola to reform its struggling state-owned energy company, Sonangol. WISL declared a profit of €2.4 million in 2016 as a result of this contract and another with Angola Telecom, also a state-owned entity.
Financial services companies are obliged under Maltese law to report suspicious activities to the Financial Intelligence Analysis Unit through what are known as “suspicious activity reports”.
Indeed, one of the leaked e-mails indicates that, five years ago, Ganado Advocates was guarded about the prospect of an investigation following negative media reports about dos Santos.
The e-mail showed that while Ganado Advocates was registering Winterfell 2 – another dos Santos shell company that is now the subject of a criminal complaint in Portugal – the Malta Business Registry began asking questions about the suitability of its directors, including Isabel dos Santos.
Ganado Advocates has claimed it complied with all due diligence obligations, including “extensive enhanced customer due diligence as required by law”. It also claims that it “performed appropriate ongoing monitoring, as necessary”.
But as a former experienced US federal agent who exposed a notorious Columbian drug cartel in the 1980s told the ICIJ, the financial providers involved in dos Santos’s transactions should have seriously considered filing a ‘Suspicious Transaction Report’.
This is the crux of the issue. Even a layman would surely have known that dealing with dos Santos, the daughter of the former dictator of Angola – with its appalling human rights record and Stygian levels of corruption, a GDP per head about nine times smaller than Malta’s and one of the lowest human development indices in the world – should have set Ganado Advocates’ alarm bells ringing about the propriety and legitimacy of the vast sums of money being moved around by her.
Yet, just as the Panama files proved that banks and law firms worldwide often failed to carry out proper checks of their clients to ensure that they are not involved in criminal enterprises, tax-dodging or political corruption, it appears Ganado Advocates exercised such light due diligence over this undertaking as to expose Malta to another accusation of corrupt practice.
Although Ganado Advocates, in an act of self-preservation, has cut its links with dos Santos, it is astonishing that such a distinguished company sullied its hands in this way with an obviously tarnished and disreputable enterprise.
The dos Santos connection with Malta is a tale of corruption, mismanagement and poor financial services oversight and leadership that must not be brushed under the carpet. Lessons need to be learnt. What’s so worrying about this affair is that if “Malta’s foremost legal firm” is so casual about conducting proper due diligence, what are other, less scrupulous firms up to?
As the tragic death of Miriam Pace showed, greed and hypocrisy know no bounds.
Are the Malta Financial Services Authority and the Financial Intelligence Analysis Unit taking the steps necessary to bring those responsible to book?