Monrovia – In a chain of emails published by FrontPageAfrica back in 2007, it was revealed that Mr. Willis Knuckles (now deceased), a former Minister of State for Presidential Affairs and a trusted aide to the President may have used his influence to request as much as US$2.5 Million in “success fee” for consultancy and public relations work to two companies – Delta Mining Consolidated and Tata Steel – bidding for the coveted Western Clusters in Liberia.
How a quest for Liberia’s Wologizi Mines led to allegations of bribery and finally, indictment
In the weeks following the email publication, President Ellen Johnson-Sirleaf acting on the release of a Due Diligence Report of Deloitte and Touché’; in tandem with FrontPageAfrica publication of the emails, ordered the re-launching of the Western Cluster bidding, and disqualified Both Delta Mining Consolidated and Tata Steel from participating in the relaunched bidding round for the US$1.5 billion Western Cluster iron ore project, citing “acts of violation” by the two companies.
Delta Bid ‘Compromised’
The Sirleaf administration acknowledged at the time that the earlier bid won by Delta may have been compromised by “external influence”.
Additionally, President Sirleaf, set up a committee to investigate the authenticity of the emails and also wrote the US State Department, through the Federal Bureau of Investigation to help with the probe.
“We’re waiting for the result of the Knuckles’ case to see whether it is Knuckles, a relative or official of government. I know I stand above it because I know nobody can bribe me. I am too far beyond that in my lifetime. And if anybody extorted in my name that person will have to face the law,” the President declared.
“While before we tried to give Mr. Knuckles the benefit of the doubt that perhaps these things were not true and somebody was trying to malign him, but as we see more and more we can think that some of these things can be authentic and so for me, this is a despicable act of betrayal quite frankly because Mr. Knuckles should know what I stand for.”
The decision to terminate Delta from the Western Clusters bid spurred the process of a rebranding of what many today have come to know as Sable Mining, the prime players in a recent bribery allegations unearthed by the London-Based Watchdog Group, Global Witness.
The report alleges that more than US$950,000 in bribes and other suspicious payments were made to top Liberian officials by the United Kingdom-based Sable Mining Company and its Liberian lawyer, Varney Sherman.
According to the report entitled – The Deceivers – Sable wanted to get the concession rights to Liberia’s Wologizi iron ore.
The report says the officials who allegedly received bribes include Speaker of the Liberian House of Representatives Alex Tyler: $75,000 for “consulting fees” and Richard Tolbert, chairman of the National Investment Committee: $50,000 for “consulting fees”.
Morris Saytumah, Minister of State for Finance, Economic and Legal Affairs, now a Senator, also allegedly received $50,000 for “consulting fees”, and Willie Belleh, Chairman of Public Procurement and Concessions Commission allegedly received $10,000 for “consulting fees”.
Two of the biggest payments went to persons identified in the report as “Bigboy 01” and “Bigboy 02”, each receiving $250,000 with no explanation of why the payments were made.
The report also alleges that President Sirleaf’s son, Fombah Sirleaf, who is director of Liberia’s National Security Agency also benefited with “a $7,598 hunting trip to South Africa paid for by Sable.”
Others mentioned in the report include Senator Sumo Kupee and Cletus Wotorson, both allegedly receiving $5,000 each for “consulting fees”.
How Delta Became Sable
Having lost its hold of the lucrative Western Cluster, Sable, formerly Delta now set its sights on Wologizi, a mountain located in Lofa County with an estimate terrain elevation above sea level set at 774 metres. It is considered the last remaining major concession area in Liberia and in Sable’s eyes, a gold mine with the prospects of millions.
In one of his only press conferences he has had since the Global Witness revelation, Cllr. Sherman acknowledged that Sable was in fact a reincarnation of Delta because legally they still had the rights to the Western Clusters.
Phil Edmonds, a former England cricketer and Andrew Groves, a Zimbabwean mining entrepreneur came into the picture in April 2010 and purchased a minority stake in Delta.
The deal made sense at the time for Sable because Delta already had a setup in Liberia and an exploration and development company. Delta was at the time run by South African businessman Heine van Niekerk.
Most of Sable’s operations were run from Cllr. Sherman’s office.
The Western Clusters Curse
For Liberia, the lucrative Western Clusters has always been a problematic. Even after the much-publicized failed Delta arrangement, the country endure a lengthy controversy over the company which was later awarded the bid.
Elenilto acquired an investment in Liberia’s mineral-rich Western Cluster promising to spend US$2.4 billion to develop Liberia’s Western Cluster iron ore deposit.
But after years of holding on to the concession, the company, against massive public outcry, sold its interest to Vedanta in a deal which the Israeli company earned a whopping US$23.5 million.
The company had initially promised to produce as much as 1.1 billion metric tons of ore after being awarded the rights to develop the Western Cluster project. The project consists of three deposits and two idled mines, which were closed in 1976 and 1985 during Liberia’s two civil wars, the last of which ended in 2003.
Under the arrangement, Elenilto was expected to pay Liberia a one-time fee of US$25 million and an annual tax equivalent to 21 percent of the company’s profit from the deposits, according to the ministry’s statement.
It was also agreed that the company would pay US$3.1 million a year toward community development. Unable to deliver on its pledge, the company held on to the concession for several months before it was finally rescued by Vedanta although Amir Nagammy, the company’s Country Director was emphatic that Elelnilto was in Liberia for the long haul.
Elenilto undertook to pay the Liberian government $100 million, $25 million immediately and the remainder in annual payment throughout the franchise period. Furthermore, the company undertook to pay 21% of its profits after the investment had been returned.
Elenilto won the Liberia bid against mounting criticisms and pounding on the government.
The Sirleaf administration was warned by experts including Dr. Togba Nah-Tipoteh and Economist Samuel Jackson against awarding the Western Cluster to the Israeli mining firm, Elenilto Minerals but those appeals and cautions fell on deaf ears.
Jackson raised a red flag at the time that upon closer examination of the vetting process, it was discovered that no due diligence was conducted on any of the prospective bidders.
In fact, Jackon wrote: “The Ministry of Lands, Mines and Energy (MLME) simply asked the short listed companies to present review of information by international auditing companies. Thus the bidders paid international companies to submit review of documents.
The international auditing firms put disclaimers in their reviews stating the information provided should not be relied upon to make a decision on the award. The MLME made no other attempt to corroborate information in the review process.
This is surprising since award of the Western Cluster Deposits have the potential to impact the lives of hundreds of thousands of Liberian in the depressed Western corner of the country!”
Despite clear due diligence findings that Elenilto had no technical history in the mining and beneficiation of iron ore; neither did it have any provenance in the industry, Liberia took a chance on a novice company; and lost millions in its gamble.
Backdated Letters Help in Delta Rebranding
Africa Confidential quoting the Global Witness report reported recently that the deal was facilitated by Eugene Shannon, a former Lands, Mines and Energy Minister.
“President Ellen Johnson-Sirleaf sacked him and half of the cabinet in 2011, despite having been an ally of the President and in exile with her in Côte d’Ivoire in the 1990s. Shannon’s removal followed his role in the Western Cluster tender, which attracted negative attention from diplomats and activists,” according to the report.
The report stated that Shannon helped Sable by lobbying Morris Saytumah, an adviser and confidant of the President, now a Senator, to write a backdated letter to further its campaign to win assets, including the Wologizi deposit.
Shannon received US$5,000 from Sable, which he denies. Shannon did obtain Saytumah’s letter, backdated to April 2009, which then went to Sable, presumably to help in its lobbying for the concession.
Saytumah, a former chief negotiator, was investigated by Liberia’s Dunn Commission after the Knuckles scandal, which saw him resign as Presidential Adviser after emails emerged soliciting payment for government contracts.
In the letter which Sable gave to Shannon, Saytumah wrote, ‘the Government will assist the Delta Mining Consolidated in its bid for any iron ore reserve that it may be interested in and has the technical and financial capacity to operate.’
Saytumah is one of a string of senior Liberian officials named in a spreadsheet listing payments made by Sherman and Sherman from Sable’s account with them. The spreadsheet was emailed to Sable in August 2010.
According to the leaked email in the Global Witness report, Saytumah received US$50,000. The spreadsheet, dated August 2010, also includes payments of US$50,000 to Richard Tolbert (a former Wall Street banker and nephew of President William Tolbert, murdered in 1980), who headed the National Investment Commission (AC Vol 47 No 2, In cabinet).
The sum of $10,000 went to Professor Willie Belleh Junior, Chairman of the Public Procurement and Concessions Commission and former Chief of Staff of the National Transitional Government.
Interestingly, the spreadsheet also included a US$75,000 entry for ‘Payment (facilitation) revised PPCC act’, a change in Liberian law which would allow Sable to get closer to winning the Wologizi iron deposit.
Belleh wrote to Varney Sherman on 10 August, saying: ‘We finally got the revised PPCC Act completed. The Minister of Justice and I met with the President last night and reviewed areas of concern to her.
She approved. The document has been forwarded to the National Legislature. It is expected to be fast-tracked.’ There is no suggestion that the then Justice Minister, Prof. Christiana Tah, or the President knew about the bribes,” according to the report.
The new PPCC Act was passed, containing a loophole which allowed Sable the possibility of winning the Wologizi deposit without participating in an open tender, which the company was not confident it would otherwise win.
However, despite allegedly distributing close to $1 million in bribes and questionable payments, Sable did not win the Wologizi concession. It did win the Kpo Range iron-ore concession, which remains undeveloped by the company.
It is an argument that Sherman has been trumpeting on, insisting that because Wologizi was never up for bid, the Global Witness report has no legs.
Sherman told a May 13 news conference: “Wologizi was never considered by me or anybody else in the mineral industry to be a prized asset of Liberia; besides, in 2010 or thereabouts, Liberia had not offered Wologizi for the purpose of a concession.
Even the Liberia Government, in its written reaction to the Global Witness Report, said in part, that “However, we wish to clarify that the government of Liberia has never initiated, commissioned, nor participated in any process for granting a concession of the Wologizi Mountains to Sable.”
Certainly, there was no basis for the outrageous allegation made by Global Witness. Why would Sable Mining, with my assistance, have to bribe Liberian Government officials for a mineral deposit that was never considered by the Liberian Government for a concession?”
After Indictments; What’s next?
Last week, a grand jury indicted Sherman along with the Speaker of the legislature, along with London AIM-listed Sable Mining on charges including bribery. President Ellen Johnson Sirleaf ordered an inquiry into Sable’s attempt to acquire an iron ore concession in northern Liberia after the watchdog group Global Witness made accusations of wrong-doing in a report earlier this month.
The indictment, which covers a period including 2010 and 2011, alleged that the defendants conspired to use their positions to amend Liberia’s public procurement and concessions law. It asserted that they succeeded in changing the law to give the Minister of Lands, Mines and Energy the power to declare a concession area as a non-bidding area.
Sable, in a statement last week, acknowledged that it was aware of “the recent media comment and speculation regarding allegations of bribery and corruption” made against the company in Liberia and says company is investigating the matters and taking appropriate legal advice.
But in the days after the indictments, many have called on the Sirleaf administration to do more. “She needs to go beyond the Global witness report. It should not stop with Cllr. Sherman and others. “
“It must go further. It is not good that we have to get Global witness report before we start to act swiftly. I do know there are other corruption cases that are ongoing and they need work hard on it,” said Cllr. Tiawon Gongloe last week.
For the immediate future, Liberians may continue to remain puzzled over how one company’s transformation from Delta to Sable Mining shook a post-war nation on the mends, not once, but twice.
In the quest for answers many are also confused over how Liberia has allowed itself to fall for one shady investment after the next with very little in terms of returns for those languishing at the bottom of the economic ladder.
Rodney D. Sieh, [email protected]