Part 4 :The Looting Machine Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth ... Finance and Cyanide ..God Has Nothing to Do with It

The Looting Machine 

Warlords, Oligarchs, Corporations, 

Smugglers, and the Theft of Africa’s Wealth 

By Tom Burgis

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Finance and Cyanide 

Life for the fauna around the hamlet of Kwamebourkrom in central Ghana got a little easier in late 2009. A pair of hunting dogs, Skimpy and Don’t Forget, which had spent their lives catching the bushmeat that supplemented their owner’s diet of fish and staple crops, barked their last after their master threw them a couple of fish from the day’s catch. Now the antelope, crested porcupines, and plump grass cutters that inhabit the tall grasses had two fewer predators to fear. Only later did Kofi Gyakah come to believe that Skimpy and Don’t Forget had been poisoned. 

Beyond the pond where Gyakah cast his nets each day and above the tousled shrubs, the red arm of a crane rose against the sky. Usually the hamlet’s thirty residents heard the boom of explosive blasts each day at around noon. At night the sound of machines crushing rocks kept them awake. 

Newmont, the biggest American gold mining company, had completed the first phase of the $700 million Ahafo mine three years earlier, with the support of the International Finance Corporation, the arm of the World Bank that lends money to private-sector projects. Three years before the IFC made its loan to Newmont’s new mine in Ghana, the World Bank had conducted an internal review of its programs in Ghanaian mining. The Bank and the IFC had been trying to revive Ghana’s ailing mining sector since the early 1980s. The Bank’s programs aimed to rehabilitate state owned mines, attract private investment, and assist small-scale miners. By and large, they failed. The internal review noted numerous shortcomings, including a “patently untrue” claim that mining in Ghana caused little environmental damage.1 The review, submitted to the Bank’s board, concluded  that because of low taxes on foreign mining companies, modest employment of locals, and scant recompense for people living near the mines, “it is unclear what [the mining sector’s] true net benefits are to Ghana.” 

Nonetheless, the IFC had gone ahead and furnished Newmont with $125 million of finance for the new mine at Ahafo. The company uprooted ninety-five hundred people, but Kofi Gyakah and the other residents of Kwamebourkrom stayed put in their mud-and-thatch cottages, growing crops, fishing, and hunting bushmeat as they always had. Soon the school where they sent their children closed down. The noise grew insufferable. Then came the cyanide. 

Sodium cyanide is used in gold mining to separate the metal from the ores that come out of the ground. On October 12, 2009, Newmont issued a statement saying that a faulty sensor had caused a “minor overflow” of fluid containing cyanide from the Ahafo mine. It said the spill had been “contained and neutralized within the mine site” and that “no pollution of the water sources downstream from the plant site has been found” but that its staff were still trying to establish the cause of “a short-term environmental impact of fish mortality.”2 

The adulterated liquid that flowed from the mine into the waterways around Kwamebourkrom and its neighboring hamlets was too diluted to be a threat to human life, but aquatic life fared less well. Shortly after Newmont’s spill Gyakah and his fellow fishermen found the fish in their ponds floating belly-up. A delegation from Newmont brought the hamlet some clean water—although the villagers recalled that the security man on the team had been sure to bring his own personal supply. Six months after the spill Newmont announced that it would comply with an order from Ghana’s environment ministry to pay compensation, even though it stressed that a government panel that had investigated the spill “found no evidence of adverse consequences to human life or property.”3 The money would be split between the “development needs of the affected communities” and two national regulatory bodies. Based on Ahafo’s production figures and the gold price at the time of the settlement, it would have taken Newmont about three and a half days to earn back the $4.9 million it agreed to pay out. 

When I visited the area a month after the spill the word “cyanide” had entered the local dialect of Twi, Ghana’s main indigenous language. Kofi  Gyakah told me he did not trust the emissary from Newmont who had come to the hamlet to reassure its residents that the water was safe. As far as he was concerned, the demise of Skimpy and Don’t Forget appeared to indicate the contrary. Sporting a tattered shirt and a neat moustache, Gyakah showed me the hamlet’s pond. I asked him how many fish had died. He looked stern as his young daughter peeked bashfully from behind his leg. “Plenty,” he said. We sat down in the dry-earth yard between the hamlet’s huts. A local teacher who had accompanied me translated. “Living here is not comfortable at all,” Gyakah said. “We are powerless.” 

When the International Finance Corporation announced in 2005 that it was planning to invest in Newmont’s development of the Ahafo mine, Newmont’s market capitalization, the total value of all its shares on the New York Stock Exchange, stood at $17.5 billion, twice the size of Ghana’s economy. Its quickly rising annual revenues were $4.5 billion, and it made $434 million in profits from operations on four continents that produced 9 percent of the gold mined worldwide. The Ahafo concession alone was sitting on gold worth some $12 billion. The following year the IFC approved a loan for the Ahafo mine from its own account of $75 million and arranged a further $50 million from commercial banks, including Rothschild and Royal Bank of Scotland. The total package represented a modest 7 percent of Newmont’s $1.9 billion total debt. 

Newmont had a good credit rating and could easily borrow from commercial banks without the IFC’s assistance. According to its charter, the IFC is not meant to lend to companies that can borrow with reasonable terms elsewhere. But since it was set up in 1956 as an adjunct to the World Bank, its role has expanded. The driving force behind the creation of the IFC was Robert L. Garner, a Wall Street banker. The World Bank and the International Monetary Fund, mandated respectively to assist with postwar reconstruction and to ensure stable exchange rates, only worked with governments. Garner saw a need for a multilateral body that would support private investment in underdeveloped countries that traditional moneymen deemed excessively risky. “It was my firm conviction that the most promising future for the less developed countries was the establishing of good private industry,” Garner said.4 

With Garner as its first president, the IFC began work from headquarters in Washington, DC, with twelve staff, authorized capital of $100 million, and a limited mandate to make loans. Over time it effectively became an investment bank, except that its shareholders were, like those of the World Bank and IMF, member states—184 of them, in the IFC’s case. Its role expanded to investing in companies directly and raising its own funds by issuing bonds on international capital markets. It undertook advisory work and funded privatizations. By 2013 it had assets worth $78 billion, a balance sheet that would, were the IFC a normal bank, place it among the top thirty banks in the United States. It consistently makes more than a billion dollars a year in profit from projects in a hundred countries. A fifth of its commitments are in sub-Saharan Africa, where it backs everything from Ivorian poultry and Kenyan housing to oil prospecting along the Central African Rift. As an arm of the World Bank, its stated aim has widened from simply furnishing finance where it is scarce to helping to end extreme poverty by 2030 and a mission to “boost shared prosperity in every developing country.” 

The IFC accounts for most World Bank spending in the oil, gas, and mining industries. Between 2000 and 2012 it provided as much as $800 million annually in financing for such projects. Investments in oil and mining account for only a small fraction of the IFC’s overall outlay, but it is involved in some very large—and very contentious—projects in these industries, in partnership with some of the sector’s most powerful companies, especially in Africa. Some have gone spectacularly wrong. 

In 2000 the World Bank and the IFC agreed to back a $3.5 billion oil venture in Chad, an expanse of deprivation and warfare sandwiched between Niger and Sudan. It was meant to be a flagship project to demonstrate that oil revenues could be managed for the greater good, but it started badly when Chad’s president, Idriss Déby, immediately began to divert the oil rent to the military that had helped keep him in power since 1990.5 

The $4.5 million Déby channeled to the army came from the signature bonus that Chevron and other oil companies paid for the rights to drill Chad’s crude and build a pipeline to export it through Cameroon to the coast, not directly from the $200 million the IFC drummed up for the project. But it quickly became apparent that the commitments the IFC had extracted from Déby’s government in exchange for its support were worthless. Déby’s government had agreed to an innovative mechanism designed to ensure that revenues went to “priority sectors” like health, education, and water supplies for the desert nation. Once the crude was flowing, however, he simply added “security” to the list of priorities, allowing the oil money to slosh into his armed forces’ coffers. Chad’s economy grew by 30 percent thanks to the start of oil production, the fastest rate of any country in 2004, but the overwhelming beneficiary was Déby’s regime. Strengthened by oil money, Déby is, at the time of writing, approaching his quarter-century in office. 

The shambles in Chad dealt a severe blow to the notion that the IFC’s involvement could alter the ruinous effects of resource rents. Nonetheless, the IFC pressed on, its bosses determined to secure a place for themselves at the top tables of an industry that comprised the world’s richest and most powerful corporations. In Guinea the IFC took a stake in Rio Tinto’s much-delayed project to develop the iron ore deposit at Simandou. Among some senior Guinean officials there was a sense that the IFC was on the wrong side of a struggle between a poor country and a giant mining house that appeared in no rush to embark on what would be the biggest industrial development in African history.6 The IFC could argue, as Rio Tinto did, that complex undertakings on the scale of Simandou were always going to take many years to bring to fruition. Yet the IFC was at times prepared to act with undue haste. Such was its eagerness to keep pumping in funds and retain its influence that in 2012 it made a further $150 million equity investment toward the costs of development at Simandou before social and environmental assessments of the mine’s impact had been completed. The IFC signed off on the investment even though its most powerful shareholder, the US government, refused to support the decision, noting that it might have been wise to assess the project’s effect on what the IFC itself had called a “bio-diversity hotspot” before proceeding.7 

As they expanded their portfolio of African oil and mining interests, the IFC’s leaders professed an abiding faith in the resource industry’s potential to serve the greater good, despite a sorry history of evidence suggesting otherwise. In 2006 the IFC proposed investing in a British company called Lonmin that mined South Africa platinum “to assist Lonmin [to] achieve world class safety and efficiency throughout it[s] mining operations, and to promote sustainable economic development in the area surrounding the mining operations.”8 The stated aim of the IFC’s partnership with Lonmin was lofty—to alter the miserable course of South African mining. Its bosses told the World Bank’s board that, if successful, the partnership “will set a new standard for the mining industry’s relationship with the country and community in South Africa, and will forge a sustainable and mutually beneficial partnership with the community surrounding the operations.” 

The IFC invested $50 million in Lonmin and provided another $100 million in credit. But its strategy was flawed from the outset. As the World Bank’s ombudsman subsequently found, the IFC failed to monitor adequately the mounting tension between Lonmin’s management and miners at its mines near Marikana, who were growing increasingly angry over their working conditions. In August 2012 the tensions erupted into bloodshed. Far from the new dawn in South African mining that the IFC had conjured when it invested in Lonmin, the scenes of police firing on demonstrators served as a reminder of the gulf that persists between those who profit from the country’s natural riches and those who dig them out of the ground. 

As well as exposing the IFC’s failure to foresee the explosion of violence at its own project, the inquiry by the World Bank’s ombudsman in the wake of the Marikana massacre called into question the IFC’s whole approach to such investments. By taking a minority stake in publicly traded companies, the IFC could expect dividends like any other investor. But, despite its efforts to look and act like a private investment bank, the IFC’s mandate is to influence those companies’ behavior. Minority investors, however, have little such influence. With its Lonmin investment and elsewhere the IFC was putting taxpayers’ money at the service of large, private oil and mining companies whose primary concern was to enrich their shareholders and over which the IFC held little sway. Its management’s argument was that, by investing in the industry, the IFC could apply pressure for reform. But long before Skimpy and Don’t Forget perished beside Newmont’s Ghanaian gold mine, the IFC had received the clearest of warnings about the dangers of its support for oil and mining in Africa and elsewhere. 

In June 2001 Emil Salim got a call from James Bond.9 Salim was an illustrious economist with a PhD from Berkeley who had served for a decade as Indonesia’s environment minister. Bond was a former head of mining at the World Bank. James Wolfensohn, an Australian banker then in his second term as head of the World Bank, had decided to launch an independent review to establish whether its projects to promote the extractive industries—oil, gas, and mining—contributed to its mandate to reduce poverty. Salim, Bond informed him on the telephone, was the man to run it. It was a moment when the stewards of the global economic order—the World Bank, the IMF, and the World Trade Organization—were coming under unusually forceful scrutiny. 

The previous year tens of thousands of protesters had descended on the WTO summit in Seattle, denouncing it as the patsy of global capital and fighting pitched battles with riot police. Thousands picketed the annual World Bank and IMF meetings in Washington to voice a string of demands that included that the Bank end investment in oil and mining. Salim accepted the job, he wrote, “with full confidence that the [World Bank] is genuinely willing to move away from a conventional ‘business as usual’ approach into sustainable development.”10 

Salim spent the next two years overseeing half a dozen research projects and marshaling teams that visited World Bank–backed oil and mining ventures and held forums in Africa, South America, Eastern Europe, and Asia. Despite campaigners’ concerns that the exercise would produce a whitewash—Salim had served under Suharto’s dictatorship in Indonesia and seemed at times to be in thrall to the industry—when he published his findings in December 2003 they were damning.11 

Salim’s researchers ploughed through the World Bank’s own data on countries with economies that were dependent on exporting natural resources. They found that between 1960 and 2000 poor countries that were rich in natural resources grew two to three times more slowly than those that were not. Over that period, of forty-five countries that failed to sustain economic growth, all but six were heavily dependent on oil or mining.12 Without exception, through the 1990s every country that borrowed from the World Bank did worse the more it depended on extractive industries. The game, Salim and his team concluded, was rigged—and the World Bank appeared to be on the wrong side. “The knowledge, power, financial, and technical resource gaps between major extractive industry companies, civil society, developing-country governments, and local communities throughout the world are profound,” Salim’s research concluded. “The inequalities between local communities and transnational companies are not just economic in nature; they include access to political power and information and the ability to know and use the legal system to their advantage.” In the dry language of the World Bank Salim was describing the looting machine: the alliance between shadow governments and the resource industry that tramples over the people who live where oil and minerals are found. 

Salim’s review examined the record of the World Bank and its two arms that work with private companies—the IFC and the Multilateral Investment Guarantee Agency, or Miga, which provides insurance against political upheaval for companies investing in volatile countries. Although, Salim concluded, the IFC and Miga had at times succeeded in making the oil and mining industries behave better, the Bank, the IFC, and Miga were doing very little to assess whether oil and mining investments did anything to make people less poor. Salim noted the propensity of the resource industry instead to create poverty through pollution (including cyanide spillages), forced resettlement, and the loss of grazing lands. His review quoted statistics that showed that mining was the world’s most hazardous occupation, employing less than 1 percent of all workers but accounting for 5 percent of all deaths on the job, a tally of some fourteen thousand a year. The industry appeared to be a force that ran counter to everything the World Bank existed to promote. 

Salim’s recommendations were explosive. His review recommended that the IFC and Miga “should only support investments where net benefits can be secured, counting all externalities, and where revenues are used transparently for sustainable development.” In policy-speak, he meant that the two organizations should seek to determine whether investments they supported actually did any good for the community at large and whether the investors met the full costs of their activities, including environmental and social costs as well as the usual outlays of doing business. And the IFC and Miga should only go ahead with investments in instances in which revenues would not simply be gobbled up by the corrupt or be siphoned out of the country. Staff, Salim went on, should no longer be rewarded simply for the amount of money they allocated but for whether their projects  reduced poverty. Forced resettlements to make way for oil and mining projects should never be supported. Contracts should be published and revenues disclosed. The World Bank should phase out investments in oil within five years on environmental grounds. “There is still a role for the World Bank Group in the oil, gas, and mining sectors,” Salim wrote, “but only if its interventions allow extractive industries to contribute to poverty alleviation through sustainable development.” 

Salim and his team had skewered some of the myths oil and mining companies propagate about their contribution to reducing poverty and challenged the World Bank to take specific steps to alter the most harmful aspects of its support for the industries. Nine months after Salim published his report the World Bank’s management published its response. It proclaimed that it had “considered these recommendations seriously” and then proceeded to ignore almost all of them.13 

Where Salim’s review had demanded that no one should be resettled from the path of an oil project or a mine without having given “free, prior and informed consent,” the Bank’s management agreed only to insist that companies secure the Orwellian-sounding “free, prior informed consultation.” Oil investment would continue. Salim did not conceal his displeasure. In a bitter echo of the commitment he believed he had won when he began his work, he described the World Bank management’s approach as “business as usual with marginal changes.”14 

Barely a month after the World Bank brushed aside the bulk of Emil Salim’s conclusions, a day of brutality in Congo threw renewed focus on the kind of projects it backs. 

Miga’s management had been warned that there were serious questions about Anvil Mining’s copper mine at Dikulushi in southern Congo well before government troops brought death and destruction to the nearby town of Kilwa. In August 2004 a group of Congolese and foreign human rights organizations wrote to Miga’s board about the Anvil project, which was then under consideration for a Miga risk guarantee.15 The groups raised concerns about the development benefits the mine’s backers claimed it would bring, about employment conditions, and about security. In very clear terms the groups warned Miga’s board that Augustin Katumba Mwanke, the architect of Joseph Kabila’s shadow state, had connections to the project. 

Undeterred, Miga’s board approved the issuance of guarantees worth $13 million a month after receiving the warning—the first such approval since Salim’s review was published. Like other transactions by Miga and the IFC, the significance was greater than the relatively small sum involved: by backing a project, they confer the legitimacy that comes with the approval of the World Bank, supposedly the guardian of economic rectitude. The following month the army responded to a small and farcically ill-equipped rebellion in Kilwa by slaughtering a hundred people, an onslaught for which they made use of Anvil’s equipment. 

The following year Miga sought to explain itself to the human rights groups that had raised the alarm. By then an emissary from one of the groups, Patricia Feeney, an expert on African mining with Oxford-based Rights and Accountability in Development, had been leapt on by guard dogs when she visited Anvil’s offices in the Congolese mining capital of Lubumbashi for a meeting during which, according to Feeney’s notes, the company’s local representative expressed no remorse for the military’s actions at Kilwa.16 Miga wrote in a letter to the campaigners that it had been unaware of the scale of what had happened at Kilwa when it signed off on the guarantees for Anvil in May 2005, seven months after the massacre.17 Miga said it had contacted Anvil following the massacre and had been told that the military had commandeered Anvil’s equipment. Miga assured the rights groups that it had looked into Anvil’s relationship with Katumba but that “no evidence of impropriety was provided.” It saw nothing untoward in Katumba’s seat on the board of Anvil’s local subsidiary or the fact that the company rented its headquarters from him. 

Others had availed themselves of the facts of the matter far more quickly than Miga, a body that had put public money at the service of the mining company. In November 2004, a month after the massacre, a US embassy cable named Katumba as a shareholder in the mine and reported, “The allegations of a massacre of civilians by government troops are entirely believable, and—given the high-level Kinshasa interest in Dikulushi mine—we can expect [Congolese government] authorities to obstruct any investigation.”18

When the World Bank’s ombudsman, at the request of the rights groups, conducted its own audit of Miga’s decisions regarding the Anvil mine, it found failures in the due diligence Miga performed before agreeing to provide a guarantee.19 It repeated a finding of Emil Salim’s review—that Miga lacked the expertise to monitor the social impact of the projects it supported but plowed on regardless. The ombudsman said that questions about Anvil’s relationship with Katumba were outside its mandate and referred them to the Bank’s Department for Institutional Integrity, its inhouse corruption watchdog. In 2014, a decade after the massacre, I asked the World Bank whether anything had come of the case. The Department for Institutional Integrity had followed up on the referral from the ombudsman, I was told, “but in line with its disclosure policy, details of investigative processes cannot be disclosed.”20 

Miga’s guarantee remained in place until Anvil ran into financial trouble and stopped mining Dikulushi in 2009. In 2010 Anvil sold the mine to another Australian mining company, Mawson West, in exchange for shares. In 2012 Minmetals, a Chinese state-owned group, bought Anvil for $1.3 billion. 

Miga’s work with Anvil yielded an “implementation toolkit” for companies that wanted their security operations to take human rights into account. But attempts in Congo to bring the perpetrators of the massacre to justice came to nothing. 

When the IFC set about facilitating Newmont’s investment in Ghana’s gold, it was dealing with a very different environment from the chaos of Congo, the volatility of Guinea, or the simmering grievances of post apartheid South Africa. Ghana, the received wisdom goes, is different. Even as the rest of west Africa almost without exception endures some combination of war, insurgency, and venal dictatorship, Ghana has since the 1990s emerged from its own troubles as one of a handful of African states where political parties fight close elections and the loser consistently leaves office. It surveys its hulking near-neighbor Nigeria with the attitude of the respectable professional who finds himself sitting next to an unruly drunk. After the Jubilee oil field was discovered in 2007 off Ghana’s coast, high-minded businessmen in Accra, the capital, shuddered at the resultant influx of Nigerian bankers, convinced that the combined effect of crude and corruption would turn Ghana into a smaller version of Nigeria’s petro-nightmare. Those fears were a little unfair—there are some upstanding Nigerian bankers—but understandable. Ghana had something to protect: a reputation for handling natural resources better than most. 

Such was the mineral wealth of what would become Ghana that European traders and slavers knew it as the Gold Coast. Legend has it that the soul of the Ashanti people, once the most powerful of the territory’s kingdoms (whose capital, Kumasi, lies sixty miles from the site of Newmont’s IFC-backed mine at Ahafo), resides in a golden stool that descended from the heavens. When a colonial administrator demanded that, as the representative of the British Crown, he be afforded the honor of sitting on it, war ensued. Four decades after Ghana, in 1957, became the first African colony to win independence, Ashanti Goldfields became the first African company to list its shares on the New York Stock Exchange. Gold mined both by corporations and artisanal miners is Ghana’s biggest export. It had known years of single-party rule, but by the time it discovered oil Ghana had achieved something almost unique on the continent: it had yielded up great quantities of commodities while building a functioning, democratic state. 

Yet glitter as it may, Ghana’s gold has not made it rich. It is one of only ten countries in sub-Saharan Africa to have achieved “medium development,” according to the UN’s Human Development Index (all the rest are classed as “low development,” with a handful too chaotic or authoritarian for reliable data to be available).21 But Ghana’s relatively comfortable status among African countries should not mask the privation that persists; it sits between Iraq and India in the rankings. Ghana comes close to the top of the UN index that ranks countries by their success in turning GDP per head into improved living standards (scoring 22, compared with -97 for Equatorial Guinea), but Ghanaians’ average income is a tenth of Lithuanians’ and one in three Ghanaians cannot read or write, the same level of illiteracy as in Congo. Inherent in the praise that is heaped on Ghana is a troubling undertone that mitigated penury is the best that Africans can aim for. 

Like the rest of Africa’s resource states, Ghana bowed to the orthodoxy that the World Bank and the IMF imposed from the early 1980s in the form of “structural adjustment programs.” Based on a set of neoliberal economic policies known as the Washington Consensus, these programs made loans to poor countries dependent on their adherence to strict conditions, including deep cuts to public spending, privatizing state-owned assets, and lifting controls on trade. Foreign investment was deemed essential to economic growth. African and other poor countries were exhorted to bend over backward with tax breaks and other incentives in order to attract multinational corporations. When it came to oil and mining, a policy of beggar thy neighbor emerged, as resource states competed to offer ever easier terms to foreign companies. In gold mining the standard rate of mining royalties—a levy charged on mineral production, based on volume, value, or profitability—settled at about 3 percent across the continent, among the lowest anywhere in the world.22 

When a surge of demand from China and other rising economies sent commodity prices rocketing in the mid-2000s, it became increasingly apparent to African governments that they were being fleeced. In Zambia, one of the world’s top copper producers, mining companies were paying lower tax rates than the half a million Zambians employed in the industry. In 2011 only 2.4 percent of the $10 billion of revenues from exports of Zambian copper accrued to the government.23 Across the border in Congo the figure is fractionally higher but still negligible: 2.5 percent. Shortly after I met Kofi Gyakah in the shadow of Newmont’s mine in 2009 I went to Ghana’s Chamber of Mines in Accra and analyzed the data it kept on the mining industry. The previous year the industry generated $2.1 billion. Of that, the sum of royalties, taxes, and dividends from government stakes in mining ventures paid to the state was $146 million, or 7 percent—and that is before factoring in the cost to the state of the subsidized electricity the mines use. It is a pittance compared with 45 to 65 percent that the IMF estimates to be the global average effective tax rate in mining.24 Over the eighteen previous years Ghana had produced 36 million ounces of gold, enough to make ninety thousand standard gold bars. A senior banker I interviewed in Accra put it simply: “People are asking: how did the country earn nothing from a hundred years of mining?” 

I put a version of that question to Somit Varma. Varma, an Indian, was the IFC’s associate director for oil, gas, mining, and chemicals when the decision to invest in Newmont’s Ahafo mine was taken and had since been  appointed head of the joint IFC–World Bank department in charge of all financing and advisory work in those sectors. Later, like several other senior IFC officials, he would switch to a private company that had benefited from IFC financing—in Varma’s case, Warburg Pincus, the New York– based private equity firm whose energy company, Kosmos, had received a $100 million loan agreement from the IFC for its oil venture in Ghana on Varma’s watch.25 

“In all extractive projects we ask: Is the deal fair to the government and the private sector?” Varma told me.26 “Is the royalty regime fair, the tax regime?” He emphasized the ancillary benefits from Newmont’s mine. Newmont had created fifteen thousand jobs, spent $272 million in 2008 within Ghana, and allocated $1 for every ounce of gold sold from Ahafo and 1  percent of the mine’s net profit to community development projects—an impressive array by industry standards. 

But there were other aspects to Newmont’s deal in Ghana that the company was less keen to publicize. It was paying a meager 3 percent royalty on the gold it mined, and like other foreign mining companies across the continent, it had secured a “stabilization agreement” guaranteeing that its payments to the state were kept low. The result is like an inverted auction, in which poor countries compete to sell the family silver at the lowest price. What governments lose under generous deals with resource groups is frequently made up by foreign aid, which constitutes a significant share of many resource states’ income—effectively subsidizing private oil and mining companies with taxpayer funds from donor countries. 

Emil Salim had recommended that the World Bank should strive to broker oil and mining deals to “maximize the benefits retained in the country.” But the IFC was content to back Newmont’s stabilization agreement. “It’s not that hundreds of companies are lining up to invest in the mining sector in Ghana,” the IFC’s Varma told me when I asked whether Newmont’s deal was fair. “They have lots of options worldwide. We have to encourage companies to go into countries where they might not otherwise.” 

Ghana’s minister of finance, Kwabena Duffuor, was clearly less convinced that the apportioning of revenues between his country and the American mining house was equitable. In late 2009, not long after Newmont’s cyanide spill, he declared that he wanted to raise the royalties due  from foreign miners from 3 percent to 6 percent. He said the government would address “the whole mining sector fiscal regime.”27 

Duffuor was echoing his counterparts in other African resource states, who were watching as the fruits of the boom in commodity prices were passing them by. Their demands for renegotiation of the terms prompted dire warnings from the industry about resurgent “resource nationalism.” The perennial threat was repeated anew: even modest increases in royalties or taxes would scare off investors. It was an argument that three top economists from the African Development Bank who studied past efforts to increase African countries’ share of the spoils deemed to be “seldom backed by empirical evidence.”28 But faced with the veiled menace of foreign advisers warning them to remain “investor friendly,” African governments tend to cave. The multinationals have grown accustomed to getting their way. When I asked Jeff Huspeni, Newmont’s senior vice president for Africa, what he made of Ghana’s plan to increase royalties, he said, “Our investment agreement supersedes the mining law.”29 Ghana, its fellow gold producer Tanzania, and copper-rich Zambia all ended up diluting their plans to increase royalties. 

Even when African governments ignore the threats and blandishments of the World Bank and the resources industry and manage to secure a greater share of the revenues from their oil and minerals, there is little they can do to stop the torrent of money that flows out of their countries through tax fiddles made possible by the globalization of finance. Such illicit outflows are not limited to the oil and mining industries, but those industries are particularly well suited to squirreling money out of poor countries, where they often account for the bulk of exports. Two-thirds of trade happens within multinational corporations. To a large extent those companies decide where to pay taxes on which portions of their earnings. That leaves ample scope to avoid paying taxes anywhere or to pay taxes at a rate far below what purely domestic companies pay. 

Imagine a multinational company making rubber chickens, called Fowl Play Incorporated. Fowl Play’s headquarters and most of its customers are in the United States. A subsidiary, Fowl Play Cameroon, runs a rubber  plantation in Cameroon. The rubber is shipped to a factory in China, owned by another subsidiary, Fowl Play China, where it is made into rubber chickens and packaged. The rubber chickens are shipped to Fowl Play’s parent company in the United States, which sells them to mainly US customers. 

Fowl Play could simply pay taxes in each location based on an honest assessment of the proportion of its income that accrues there. But it has a duty to its shareholders to maximize returns, and its executives want the bonuses that come from turning big profits, so its accountants are instructed to minimize the effective tax rate Fowl Play pays by booking more revenues in places with low tax rates and fewer revenues in places with high tax rates. If, for example, Fowl Play wanted to reduce its tax liability in Cameroon and the United States by shifting profits to China, where it has been granted a tax holiday to build its factory, it would undervalue the price at which the rubber is sold from the Cameroonian subsidiary to the Chinese one, then overvalue the price at which the Chinese subsidiary sells the finished rubber chickens to the parent company in the United States. All this happens within one company and bears scant relation to the actual costs involved. The result is that the group’s overall effective tax rate is much lower than it would have been had it apportioned profits fairly. Many such tax maneuvers are perfectly legal. When it is done ethically “transfer pricing,” as the technique in this example is known, uses the same prices when selling goods and services within one company as when selling between companies at market rates. But the ruses to fiddle transfer pricing are legion. A mining company might tweak the value of machinery it ships in from abroad, or an oil company might charge a subsidiary a fortune to use the parent’s corporate logo. 

Suppose Fowl Play gets even cannier. It creates another subsidiary, this time in the British Virgin Islands, one of the tax havens where the rate of corporation tax is zero. Fowl Play BVI extends a loan to the Cameroonian subsidiary at an astronomical interest rate. The Cameroonian subsidiary’s profits are canceled out by the interest payments on the loan, which accrue, untaxed, to Fowl Play BVI. And all the while Fowl Play and the rubber chicken industry’s lobbyists can loudly warn Cameroon, China, and the United States that, should they try to raise taxes or clamp down  on fiddling, the company could move its business, and the attendant jobs, elsewhere. (The BVI company is only a piece of paper and doesn’t employ anyone, but then there is no need to threaten the British Virgin Islands—its tax rate could not be lower.) 

Numerous studies have concluded that, although such tax dodging is a problem, no one knows the scale of it, particularly in poor countries, where reliable data are scarce.30 The Organisation for Economic Co-operation and Development, the club of the world’s richest nations, acknowledged in 2013 that “multinationals have been able to use and/or misapply” the rules that govern transfer pricing “to separate income from the economic activities that produce that income and to shift it into low-tax environments.”31 Noting that “tax policy is at the core of countries’ sovereignty,” the OECD called for “fundamental changes” to the ways in which multinationals are taxed. 

If multinational companies were genuinely declaring profits where they were made, one might expect a broad correlation between the size of the profit and the size of the economy. In 2009 Jane G. Gravelle, an economics specialist working for the research unit of the US Congress, made just such an analysis.32 In the seven richest countries after the United States, American-controlled companies’ pretax profits were, on average, equivalent to 0.6 percent of the gross domestic product of the countries where the profits were declared. That was Gravelle’s benchmark for her experiment. A higher ratio would suggest that companies were booking disproportionate amounts of profit in countries relative to the business they actually did there. 

Gravelle then took ten of the larger countries considered to be tax havens. The profit-to-GDP percentage jumped: to 2.8 percent in Hong Kong, 3.5 percent in Switzerland, 7.6 percent in Ireland, and 18.2 percent in Luxembourg. That suggested that multinationals were artificially switching revenues into low-tax countries, depriving the governments of the countries where the companies had their mines or banks or factories of the tax revenues to which they were entitled. Finally, Gravelle looked at the tiny islands that form the heart of the offshore world. In the Channel Island of Jersey, the profit-to-GDP ratio reached 35.3 percent. In three British Crown dependencies—the British Virgin Islands and the Cayman Islands in the Caribbean and Bermuda in the North Atlantic—as well as the Marshall Islands, an outpost in the Pacific partly controlled by the United States, the figure exceeded 100 percent. Bermuda topped the chart with a profit-to-GDP ratio of 647.7 percent. At this point the notion that multinationals that use tax havens apportion profits fairly becomes absurd: the total profits declared by American companies were several times the size of each tax haven’s entire economy. 

The United States alone is losing as much as $60 billion a year to tax dodges based on income shifting, according to estimates Gravelle cited— and the United States probably has the most advanced system to enforce payment and hunt down tax evaders. In a time of austerity multinationals that pay minute tax bills compared to their earnings have faced popular outrage, among them Starbucks and Amazon in the UK (not to mention Bono, a vocal antipoverty campaigner whose band, U2, switched part of its business affairs from Ireland to the Netherlands to reduce its tax exposure in 2006). When it comes to poor countries, estimated losses represent far greater shares of governments’ overall tax take. Global Financial Integrity, a Washington-based pressure group that has helped propel multinational tax avoidance into the political debate, estimates that illicit outflows from the developing world amounted to $947 billion in 2011 and $5.9 trillion over the preceding decade. Four in every five dollars of those flows were due to trade mispricing, when companies manipulate the prices at which they sell goods and services, either between their own subsidiaries or in transactions with other companies; the rest was the proceeds of corruption, theft, and money laundering. In Africa the outflows amounted to 5.7 percent of GDP, the highest proportion of any region and growing at a rate of 20 percent a year. African losses from trade mispricing alone are roughly equivalent to the continent’s income from aid.33 

The resources industries are ripe for trade mispricing—it serves as the camouflaged conduit of the looting machine. The Norwegian arm of the Publish What You Pay transparency campaign combed the published 2010 accounts of ten of the biggest oil and mining companies, including Exxon Mobil, Shell, Glencore, and Rio Tinto, which together made $145 billion in profits on $1.8 trillion in revenues that year.34 

Between them the ten companies had 6,038 subsidiaries, a third of which were registered in so-called secrecy jurisdictions, tax havens where all but the most basic company information can be concealed and that are thought to be crucial conduits for profit shifting. With their weak, corrupted institutions, African resource states are sitting ducks for such fiddling. By another estimate, the poor country that suffered the heaviest illicit outflows through transfer mispricing in the three years starting from 2005 was Nigeria. Ghana came sixth, and Chad ninth.35 

Next to all of that, the IFC’s support for Newmont’s unpublished deal to keep its royalty payments low might seem insignificant. But it is all part of the same machinery of legitimized plunder. The international financial system, from the institutions charged with helping poor countries escape destitution to the vast architecture of offshore secrecy, is stacked against African states getting a fair cut from their natural resources. 

Many highly intelligent people of good faith and sound judgment work for the World Bank, its assorted arms, and the International Monetary Fund. Often they work in difficult conditions, driven by a desire to further the greater good. I have met dozens of them in African capitals and found many to be astute critics of the ruination the resource industries cause. But when it comes to the institutions’ relationship with multinational oil and mining companies, something has gone awry. Perhaps institutions whose mandate is to alter the course of the global economy simply cannot avoid coming to an accommodation with what is, alongside banking, its most powerful industry. Perhaps some of their officials are seduced by the sheer wealth and glamour of oil and mining, where chief executives are paid tens of millions of dollars a year, dine with presidents, and inhabit a world of vintage wine, corporate jets, and dick-swinging machismo. Whatever their motivations, the Bank and the Fund have felt compelled to embrace the oil and mining industries and have, through bodies like the IFC, foisted resource ventures of dubious merit on African countries again and again. 

For decades the Bank and the Fund enjoyed unchallenged positions as the arbiters of orthodox economic policy in Africa. They could ram home their arguments by controlling the flow of loans. Sometimes they were right, sometimes they were catastrophically wrong, but their sway scarcely wavered. In recent years, however, that influence has been punctured by the rise of China, a power that can match the old institutions in financial firepower but is prepared to ask far fewer questions in exchange for influence over the management of African governments’ oil and mineral resources. 

Not long after Paul Wolfowitz took charge at the World Bank in June 2005, he made it clear that he wanted to fight back against China’s thrust into Africa. It was becoming evident that China’s easy credit was proving a seductive alternative for African governments to the conditions the Bank and the IMF demanded. In the decade leading up to 2010 lending to Africa by China Exim bank, the state-owned bank through which China funnels most of its loans to the continent, reached $67 billion, $12 billion more than the World Bank’s tally over the same period.36 Wolfowitz, formerly a hawkish member of the US defense establishment and a leading advocate of the 2003 invasion of Iraq, spotted the trend early. In an interview in 2006, although accepting that past Western lending to Africa, especially to the Congolese kleptocracy of Mobutu Sese Seko, had been ruinous, the World Bank’s new boss warned that China risked repeating the madness of saddling African states with debt while their rulers wallowed in luxury. “Let’s be honest, what the US did with Mobutu . . . was really terrible,” Wolfowitz said. “It was a scandal actually. Just because the US did it . . . isn’t the reason that China has to do it all over again, and I hope they won’t, but hope isn’t good enough.”37 Chinese banks, Wolfowitz argued, disregarded the Equator Principles, the voluntary code of conduct, drafted under the IFC’s lead, governing social and environmental considerations for investments. He foresaw “pretty frank and direct discussion with the Chinese.” 

This was a little rich coming from the head of an institution whose role in oil and mining, in Africa and elsewhere, had been condemned by Emil Salim in its own review three years earlier. But Wolfowitz’s point was valid. Access to easy Chinese loans might have looked like a chance for African governments to reassert sovereignty after decades of hectoring by the Bank, the IMF, and Western donors, but like a credit card issued with no credit check, it also removed a source of pressure for sensible economic management. 

James Wolfensohn, Wolfowitz’s predecessor as World Bank president, in an interview reflecting on his tenure, captured the link between the surge in competition between China and the West for Africa’s oil and minerals and the reduction in the World Bank’s ability to press for reform. “What we’re seeing now is a rush for natural resources in Africa,” Wolfensohn said in 2011.38 “I think there’s a lot less concern about the internal development of the countries than would be thought of by, say, the African Development Bank or the World Bank. But you do have ready money going into too many of these countries. And the issue of corruption and the issue of trying to get good governance is, I think, under less pressure now in a number of these countries than it was when I was around. It’s going to be a long road.” 

It was not just the World Bank that found its influence in Africa’s resource states diminished. The IMF, its sister institution charged with maintaining the stability of the world financial system, already had a bad reputation in Africa, with reformers and kleptocrats alike, for imposing the strictures of the Washington Consensus, under which African states had become test tubes for the unfettered free-market philosophy that would also beget the subprime crisis and subsequent near-collapse of the Western banking system. Emil Salim’s review of the World Bank’s record in the oil and mining industries reported that, in the cases it had studied, “the IMF’s approach to the extractive sectors was mainly one that promoted aggressive privatization of significant mining and hydrocarbon assets for short-term financing of the [government’s budget] deficit. This did nothing to ensure the creation of competition, efficiency gains, development of a domestic private sector, or environmentally and socially sound development strategies for the extractive sectors.” 

The backlash to the stringent conditions it imposed under its structural adjustment programs has chastened the IMF, but there were also reasons to be concerned about its increasing readiness to lend money to African governments with fewer stipulations. Using loans as leverage is easily caricatured as a neocolonial bludgeoning of sovereign African states, but it has its uses. In 2012 the IMF suspended a $500 million lending program to Congo to put pressure on Joseph Kabila’s government to disclose the details of one of its murky copper deals with Dan Gertler.39 Elsewhere,  however, the IMF has been far more pliant in its dealings with corrupt governments of African resource states that can play off traditional lenders against deep-pocketed Beijing. 

In the aftermath of Angola’s civil war the refusal of the IMF and Western donors to lend while the government declined to explain where its money was going helped push the country into the arms of the Chinese. By 2007, according to Angola’s finance ministry, the country had secured at least $4 billion in credit lines from China’s state-owned Exim Bank, plus another $2.9 billion arranged by Sam Pa’s Queensway Group through China International Fund.40 As the emerging economic powerhouses of Asia and Latin America guzzled commodities, the price of a barrel of oil, on which Angola’s government depends for three-quarters of its income, had risen from $25 at the start of the decade to $140 by the middle of 2008, pouring money into Sonangol and burnishing the Futungo’s sense of indestructibility. But when, in September of that year, Lehman Brothers came crashing down, sending tremors through the global economy, demand for oil fell dramatically. By December 2008 a barrel of crude was selling for $35. Petro-states that had grown accustomed to the high life suddenly found themselves unable to fund their own budgets. Angola was a case in point. For the IMF it was a chance to get a foot back in the door. 

José Eduardo dos Santos’s government needed money fast. In July 2009 it approached the IMF for emergency funding and said it was prepared to clean up its act to get it.41 Emissaries from the IMF flew to Luanda for talks. Global Witness, which had spent years documenting misrule by Angola’s oil- and diamond-funded elite, warned that the IMF would be “condoning corruption” if it failed to impose sufficiently stringent conditions for the proper management of Angola’s opaque state finances before extending a loan.42 

In November 2009 the IMF announced that it would lend Angola $1.4 billion to tide it over for two years. It declared that the deal included a “focused reform agenda.”43 The government, the IMF said, had agreed to “better oversight of major state-owned enterprises, especially Sonangol, the state-owned oil company,” including ending its “quasi-fiscal operations,” a wonkish term for Sonangol behaving like a state in its own right, taking out loans and spending money with little oversight. authorities’ intention to enhance fiscal transparency, especially in the oil sector, is welcome,” Takatoshi Kato, the IMF’s acting chairman, said when the loan deal was announced.44 

What transpired was superficial reform at best. For every loan it makes to a government, the IMF conducts periodic reviews to see how the national finances are being managed and whether its conditions are being met. As they were poring over Angola’s accounts, the IMF’s economists noticed a discrepancy in the numbers. They totaled up all the revenue Angola should have received—mostly from oil sales—between 2007 and 2010 and compared the figure with how much had actually arrived at the treasury. The gap between the former and the latter was enough to make even seasoned IMF officials’ jaws drop: $32 billion.45 Even once much of the missing money had been traced to Sonangol’s web of financial dealings, $4.2 billion was still completely unaccounted for. Angola’s government had not been strapped for cash merely because of the turmoil in the global economy; the Futungo’s shadow state had looted its treasury. But the IMF continued to hand over its loan, bit by bit, and to repeat assurances it received from the government that reforms were at hand. Sonangol did start disclosing more information about its dealings, even publishing audited accounts, and dos Santos agreed to shift much of Sonangol’s spending on to the government’s books, although he exempted oil-backed loans— precisely the vehicles used by Chinese state-owned banks and the Queens way Group, whose infrastructure projects the Angolan government had bailed out to the tune of $3.5 billion in 2007. Several other conditions of the IMF loan remained unfulfilled. 

Ricardo Soares de Oliveira, the Angola expert at Oxford University who has spent years probing the Futungo, was scathing of the IMF’s leniency: “It is not just the IMF that has gone soft. Many western states supposedly worried about China’s dealings were among the first to backtrack on reform. . . . [W]hile Angola’s oil economy has never been more transparent, the impact of this on the governance of the country is trivial and even strengthens the regime.”46 The cryptocracy evolved, but it kept its most secretive recesses—such as China Sonangol, the oil partnership with the Queensway Group—out of sight behind offshore companies and undisclosed contracts. The Futungo was able to enjoy the legitimacy conferred by the IMF’s engagement, selectively implement the reforms that made commercial sense, and twist others to entrench its authority. 

In 2012, as stipulated in the terms of its loan from the IMF, Angola set up a sovereign wealth fund, a commonly used vehicle for countries that make lots of cash from exports to invest some of it at home and abroad. It was a sensible idea in an economy so skewed by oil. Norway’s sovereign wealth fund is arguably the main reason it has been able to dodge the resource curse—by keeping most of its oil revenues well away from the budget, to be invested for posterity, rather than inflicting Dutch Disease on the economy and allowing the political elite of the day to reward its cronies with fast cash. Angola’s sovereign fund was given $5 billion of oil revenues to invest.47 The choice of leadership for the fund, however, did little to allay fears that it would simply serve as another vehicle for the Futungo—the new fund was to be chaired by José Filomeno dos Santos, the president’s son. 

By early 2011 the oil price was back above $100 a barrel. Even after the full loan had been issued, in 2013 the IMF’s inspectors were still reporting that the government’s endeavors to account for the missing billions were “continuing.”48 As Barnaby Pace, an oil specialist at Global Witness, put it, “The Angolan government effectively treated the IMF as their overdraft.”49 

Little of the detail of such elaborate financial maneuvers reaches the slums of Luanda, the hamlets of central Ghana, or the scarred mining towns of the Congolese copperbelt. But when their inhabitants detect, as Kofi Gyakah did beside a poisoned pond, a nagging sense of powerlessness, it is this maneuvering they are sensing. Like the rumbles of a mine out of sight beyond the foliage, there is an alignment of political elites and transnational corporate networks subverting public institutions to dredge power and wealth upward into their own grasp, along with the oil and minerals they take from beneath African soil to fuel the richer parts of the world. The means are complex, sometimes even well intentioned, but the result is the accumulation of Africa’s natural wealth by the few. For the rest, little remains but dead dogs and promises. 

 »8« 

God Has Nothing to Do with It 

When the warlords of Nigeria’s oil province assembled for a conclave in late 2005 and resolved to shake the world with a campaign of kidnapping and sabotage, they entrusted the task of launching the onslaught to one of their most feared confreres. Farah Dagogo was short and slight, but he had established a reputation for daring and ruthlessness. Born in the east of the Niger Delta, where west Africa’s mighty waterway divides into countless creeks and empties into the Gulf of Guinea, he grew up watching oil desolate his homeland. The lush mangroves of the world’s third-largest wetland, an area the size of Ireland, groan with spilt crude. If you reach out from one of the canoes that ply the creeks and run your hand through the water, chances are you’ll see the telltale rainbow refractions of petroleum. Pillars of flaming gas have raged day and night for fifty years, a technique of oil extraction known as “flaring” that richer countries banned long ago. 

The Niger Delta, as Dagogo and every last one of his 30 million fellow Deltans know, yields the oil that brings in 70 percent of the Nigerian government’s income and almost all the foreign currency that the country needs to pay for imports. Dictators did not hesitate to unleash the military if the Delta grew too restive. For men of Dagogo’s generation the path of life led toward violence. 

Dagogo was bright and received a basic education. “He could be any mother’s son,” Annkio Briggs, a veteran Niger Delta activist who has known him for years, told me.1 “He’s a nice looking young man. They were all young men growing up and who were not able to finish secondary school because there was nothing in the communities. Poverty drove them out, and they had no direction.” 

Dagogo gravitated toward the man, formidable both in bulk and bombast, who was whipping up the Delta’s resentment into a storm. Mujahid Asari-Dokubo was the figurehead of the armed struggle that broke out in the Niger Delta in the years after the end of military rule in 1999. He gave voice to the bruised pride of the Ijaw, the main ethnic group in the Delta and the fourth biggest in the land, who had been excluded from the highest reaches of Nigerian power since independence as the Hausa of the North, the Igbo of the East, and the Yoruba of the Southwest took turns at the trough. Baptized into Christianity like most Deltans, Asari converted to Islam, taking the name Mujahid, or holy warrior, and began to taunt the authorities. More militant than some of his fellow Ijaw agitators, he formed a private army, the Niger Delta People’s Volunteer Force, and declared a guerrilla war against the Nigerian state and foreign oil companies, demanding that the people who lived there retain a greater share of the tens of billions of dollars that the Delta’s oil fetches every year. 

Asari drew in members of armed gangs, such as the KKK and the Greenlanders, which had evolved from university confraternities and bought weapons with the proceeds of the trade in heroin, cocaine, and marijuana.2 Commanders of the militias that blended crime with the cause of liberation joined him too, among them Farah Dagogo, who placed his own burgeoning paramilitary organization under Asari’s banner. Dagogo made himself indispensable, acting as a personal aide to the boss, organizing logistics, and keeping arms caches stocked. As Asari’s forces battled rivals for territory in the eastern Delta, oil companies panicked and retreated. Crude output dropped. When the rattled government arrested Asari in 2004 and charged him with treason, Dagogo supplanted him as leader. 

Along with military men and politicians, Farah Dagogo and his fellow warlords were captains of the trade in stolen crude oil known as “bunkering.” Usually working by night, with the dank air and lapping waters of the creeks making their hands slippery as they smashed open the pipelines that snake through the Delta like black veins, bunkering gangs used two techniques: siphoning oil from a functioning pipeline (“hot-tapping”)  or blowing up the pipe and carting off the crude that spills out (“coldtapping”). The trade was highly lucrative, even if its practitioners risked incineration. The UN estimated that, with a turnover of $2 billion a year, Nigeria’s illicit oil rackets matched the west African cocaine trade in value.3 Once the cargoes that were misappropriated at export terminals were added to the crude siphoned directly from pipelines, bunkering accounted for one hundred thousand barrels of crude a day, equivalent to one in every twenty barrels of Nigeria’s oil production or the entire oil output of Chad. Army and navy officers were complicit in the bunkering networks, and an authoritative investigation into the illicit oil trade pointed to “high-level civilian involvement.”4 

There was also money to be made from ballot stuffing and intimidating voters during elections “characterised by monumental fraud.”5 In the gangs the Delta’s politicians had a ready-made weapon to secure victory. Between polls “the boys,” as they are known, were left to their own devices. 

Farah Dagogo emerged as one of the dons of the eastern Delta. Around the end of 2005 the overlord of the western Delta, Government Ekpemupolo, better known as Tompolo, called for a gathering. Tompolo had built a sophisticated enterprise funded by extortion and oil theft. To a greater extent than his fellow warlords, he was also more like a traditional Nigerian chief, a benefactor to the civilians in his territory, and a skipper to the three thousand armed men under his command. He combined guerrilla warfare with a social safety net. He had an ideology that drew on the Delta’s rich heritage of intellectual agitation for self-determination. Tompolo could claim spiritual authority too, as a follower of Egbesu, war god of the Ijaw. Under his aegis the commanders of the Delta’s militias agreed to coordinate their forces and merge their oil-theft operations. The Movement for the Emancipation of the Niger Delta—MEND—was born. 

By the time MEND came together Dagogo was known as a reliable operator. He had demonstrated both his flair for spectacle and his ability to humiliate the authorities, such as when he staged a jailbreak in Port Harcourt, the Delta’s oil city, to spring a crime lord called Soboma George from prison.6 With another warlord, Boyloaf, he was nominated to undertake a mission that would announce MEND’s formation. On January 11, 2006, Dagogo and Boyloaf kidnapped four foreign oil workers in a raid on  a Shell platform in the shallow coastal waters of the Delta.7 The abduction, coupled with a blast that knocked out one of the Delta’s main pipelines, marked the start of Nigeria’s oil war. 

There had been kidnappings before. There had been pipeline attacks and raids by canoe-born gunmen. Nor were the grand threats to hold the federal government ransom by cutting oil production new. What changed was the scale of the onslaught. At the peak of its campaign MEND curtailed Nigeria’s oil production by 40 percent, equivalent to cutting off the entire oil production of the UK. 

From the outset there were indications that MEND’s leadership was, like Laurent Nkunda’s coltan-funded militia in eastern Congo, at least as devoted to self-enrichment as to the political causes it espoused. There was little to indicate that Farah Dagogo was concerned with anything other than lucre. He set up his base close to civilian settlements in the creeks of the eastern Delta, so as to better ward off military attacks. When the kidnap squad arrived back at MEND headquarters it took six days to agree on the demands they should make. Alongside the release of the incarcerated Asari and a state governor with close ties to the gangs, MEND called for total local control of oil revenues and a payment of $1.5 billion from Shell as the price of the hostages’ liberty. None of the demands was met, but the four were freed unharmed after nineteen days, following a ransom payment from the local authorities.8 

But MEND succeeded in generating fear, a commodity as valuable as the crude itself. Claims of responsibility and threats of new attacks e-mailed out to journalists sent shivers through oil markets (though their author, Jomo Gbomo, was nothing more than a Yahoo! account used by a band of eloquent Deltans on whose literary flair MEND’s fighters drew to magnify the impact of their raids). As well as Shell, the two biggest American oil companies, Exxon Mobil and Chevron, came under fire, as did other European groups operating in the Delta. Even the giant offshore fields that the oil majors had constructed in the Nigerian waters of the Gulf of Guinea were not safe. In June 2008 MEND gunmen in speedboats struck Bonga, Shell’s flagship oil field seventy-five miles out to sea, temporarily crippling the $3.6 billion facility and knocking out a tenth of Nigeria’s crude output. 

MEND was always a fractious coalition of rebel groups and criminal syndicates. The divisions that emerged over how to apportion the first  ransom payment only widened, and MEND became a franchise for plunder under the banner of resistance, with no unified leadership. But it nonetheless represented an informal army of as many as sixty thousand men, and its attacks received worldwide attention because of what they did to the price of oil. It so happened that the unrest in the Delta broke out just as oil prices were approaching record levels, as the fast-growing economies of China and India acquired a prodigious thirst for petroleum, and lost Nigerian production drove the price of a barrel higher still. 

In October 2009 Farah Dagogo cashed in some of his chips. Following other senior commanders from MEND, he emerged from the creeks to accept an offer of amnesty that Umaru Yar’Adua, Nigeria’s president, had extended in desperation after a surge of attacks on oil-industry installations. “In line with conditions attached to this amnesty offer, we are surrendering all weapons under our direct control,” Farah said in a grandiose statement.9 “It is my sincere desire that the government immediately embarks on dialogue to forestall a resurgence of violence in the Niger Delta.” 

The rhetoric was of a peace bargain to settle decades of resentment. In reality the whole affair was little more than a way to slug cash into the Delta to buy a lull in hostilities. All the principal warlords took the amnesty. Some decamped to begin luxurious semi retirement in Abuja, the capital, or in the gaudy splendor of uptown Lagos, their pockets lined by the government and their oil-theft empires intact and even expanding. They simply ditched their political demands from the years of “freedom fighting.” 

The Delta is the scene of the most direct struggle for a share of Nigeria’s oil. But the same struggle has consumed the entire Nigerian political system. As in Africa’s other resource states, there is a finite pot of oil—or gold, or copper, or diamonds—so it is a zero-sum game: for me to win, you must lose. 

Umaru Yar’Adua lured the warlords from the creeks with the classic bargain of the rentier state: pledge yourself to the status quo, and we shall cut you in on the resource money. It is the unspoken pact that governs Nigeria—and that catalyzes the oil of the Delta into the violence that stalks the nation. 

In Kano, northern Nigeria’s ancient trading city that is the gateway to the expanses leading up to the Sahara, I met a man who was present at the country’s birth. Yusuf Maitama Sule served as a young minister in Nigeria’s first government. Over the following half-century he had seen how resource states produce predatory governments, both at home and as the chair of the UN’s committee against apartheid. By January 2010, when I sought him out, he had long since retired to his residence in Kano, its stone walls cool against the searing heat of the arid North, but a humble dwelling by the standards of his fellow politicians. Now eighty, age had taken his sight but not the skill for oratory that had earned him his nickname, the Gramophone. 

The problem, Sule declared, was that Nigeria’s political leaders had departed from the golden rule that Ahmadu Bello, the Sardauna of Sokoto and elder statesman of the North at independence, had imparted to his protégés, Sule among them: “Sardauna used to tell us that you can’t be running and scratching your buttocks at the same time. You have to do one or the other. You can’t be in government and do business at the same time. He said, ‘Any of my ministers that is interested in business should resign.’” 

Perhaps Sule’s hankering for the mores of the first republic was tinted with the need of an old man to feel he had done some good. Historians would note that it was the northern elders who transplanted the feudal structures of the old caliphates onto the new country they created, helping to perpetuate the colonial pattern of control by a narrow elite and engendering a political system that was ripe for hijacking by homegrown plunderers. Yet it is hard to argue with the Gramophone’s contention that the trajectory from those first years of nationhood has been downward. 

“Today, our main problem is oil,” Sule went on. The seven-year rule of Ibrahim Babangida, the northern general who seized power in a 1985 coup that deposed the previous northern general, marked the inception of the class of oligarchs and officials who used public office to award themselves stakes in the oil business, Sule explained. “It was during Babangida’s regime that for the first time private individuals started getting oil blocks, and they made a lot of money. Today, unfortunately, all of us have interest in one thing—materialism. Everybody wants to make money. The housewife wants to make money. Her husband wants to make money. The ruler wants to make money. The traditional ruler who used to command a lot of respect because he had no interest in anything but his rulership, today he is interested in making money. The politician, he’s not thinking of the national interest but his own personal interest, making money. All of us, unfortunately, have interest in one thing, and that is why we are having problems. That is why there is chaos in politics.” 

Corruption is bad enough. But something else had happened, something darker still. “Having tasted power, they wanted to go on with it,” Sule said of the class of petro-politicians that emerged. To do that, they “started appealing to the tribal or religious sentiments of their people.” 

In resource states ethnicity takes a terrible form. As resource rents beget a ruling class that is not accountable to the people, power is maintained through patronage. Public service is largely abandoned. With no record of service to point to, politics becomes a game of mobilizing one’s ethnic brethren. For us to win, they have to lose. The social contract is replaced with a compact of violence. 

Some eighteen thousand Nigerians died in ethnic, religious, and political violence between the return of democracy in 1999 and 2012 (a tally that does not include the additional thousands killed by Boko Haram and the part-inept, part-vindictive army response to the insurgency).10 At its heart this violence is the result of Nigeria’s poisonous petro-politics, often dressed up as religious zealotry or ethnic chauvinism. In these direct acts of violence alone—not counting all of the children slipping away in dilapidated hospitals, the drivers who meet their end on roads where maintenance contracts have been embezzled, and the victims of a police force that is more predator than protector—the Nigerian looting machine claims a life every six hours. The common thread between the Niger Delta’s warring militias, the gangs that sack northern villages, and the armed voteriggers who rampage nationwide at election time on behalf of their masters at every level of Nigeria’s federal government is the life-and-death pursuit of oil money. 

I had been sitting with Maitama Sule for many hours when he grew tired and his aides shepherded him away. That evening in Kano my phone rang. Something terrible had happened in Jos. From the commotion emanating from one of the burned-out dwellings I sensed that even the members of a burial detail accustomed to macabre sights had been rattled by their latest discovery. Dressed in white robes,they were systematically extracting the corpses from the rubble. One of them emerged from the blackened husk of a hut carrying the first receptacle that had come to hand, a small cardboard box that had once contained spaghetti branded with “a promise of quality.” The tiny form within was on its side, its arms tucked under its chin, as though sleeping. It was so charred that it could have passed for a lump of charcoal. From the baby’s size, I guessed its life had ended before its first birthday. 

The burial detail moved through the village, which is known as Kuru Karama. Almost every house and hut had been burned, the squat mosque too. Debris shifted underfoot. The flames had peeled first the clothes, then the skin from the women whose bodies had been dumped into wells, there to distend with water for the three days that had passed since their death. An old man, known as the village simpleton, had had his neck broken before his killers shoved him into a hole. His head was twisted at a grotesque angle; his lifeless eyes looked up and out. The other bodies were like the baby’s: scorched to the point that they might never have been flesh. 

The killers had come on a Tuesday morning in January 2010, descending out of the hills that ring the village. They had guns, blades, and machetes. Many of the villagers who had tried to flee into the scrubby farmland were hacked down as they ran. Clothes, long since dry, fluttered uncollected on a washing line. 

Under Islamic custom the dead must be promptly interred. By now it was Friday. The first burial detail had arrived from the main mosque in the nearby city of Jos the previous day, but the scale of the slaughter had been so great that another had had to come to complete the task. The undertakers were working quickly, looking warily up at the hills. Corpses are heavy. These ones made a dull thud of lifelessness as they joined their neighbors in a mass grave. By the time the sun slipped toward the horizon on the second day of burials, a hundred and fifty bodies had been consigned to the ground.11 

Abdullahi Wase had left the village on business the day before the attack. He came back in time to watch his wife’s body being heaved into the burial pit. His children were nowhere to be found. Around him other residents who had dared to return salvaged what they could, scampering to catch their chickens and goats and manhandle them into the trunks of waiting  cars. Perhaps they would head to the primary schools in Jos, which had been turned into refugee camps over the past few days, joining the eighteen thousand people who had been driven from their homes. From there they would try to start rebuilding their lives. Until the next time. 

I had arrived in Jos the previous day. On the road down from Kano into the Middle Belt that marks Nigeria’s religious division we passed twenty roadblocks manned by soldiers and police deployed to stop the turmoil in Jos from spilling outward. Behind the scrap yards on the outskirts of the city, a lone man was praying. The workshops were deserted, so too the streets. Toward the center of the city a family was cramming belongings and relatives into a hopelessly overloaded red Volkswagen as the early evening curfew, which the military had shoot-on-sight orders to enforce, drew near. A charred body lay within the estate they were fleeing, they said, but no one dared enter to retrieve it. 

I made it to a hotel just before the curfew descended and called Mohammed Lawal Ishaq. Ishaq was a lawyer and a leader of Jos’s Hausas. A majority across the North, the Hausa are regarded as outsiders or “settlers” in Jos by the Berom and the other ethnic groups deemed “indigenes” of the state. “The so-called indigenes dominate government patronage,” Ishaq told me, as rifle fire echoed around the city. “So the so-called settlers, they venture into business. Some of them happen to be very successful. That is a trigger. The presence of the settlers in large numbers is threatening the political power of the indigenes. The people who consider themselves the indigenes, they happen to be Christians. The ‘settlers’ happen to be Muslims. The government is supposed to be for all. But the so-called settlers believe the government is behind what is happening today. Now it’s every man for himself.” 

There were conflicting accounts of how the trouble had started. The most reliable seemed to be that a Hausa man had been trying to repair the damage done to his house in a previous bout of destruction. There had been an altercation with some young Christian men. In such crucibles of hatred that is all it takes—the city burned. Ishaq said fifty bodies had been brought to the central mosque so far. I had heard that at least two hundred people had died, both Christians and Muslims. Goodluck Jonathan, tentatively in charge while Yar’Adua was lying in a Saudi Arabian hospital, had sent in the troops. The presence of the army, traditionally dominated by northerners, had calmed the Hausa population, who regarded the local security forces as loyal to the Berom, just as the Berom believed the military had arrived to avenge slain Muslims. Burial teams from the central mosque had begun to venture, under military escort, to the outlying Hausa areas. 

Jos was once a boom town. World War II stoked demand for the tin that lay in rich seams beneath its rocky outcrops. The colonial authorities brought in labor, adding to the flow of migrants who had been arriving since the previous century. Hausas from the Islamic North settled among the Berom and other local tribes, many of whom had been converted to Christianity by colonial missionaries. When the going was good, harmony prevailed. Nigerians of a certain age and class wistfully recall eating strawberries in Jos in the 1970s, caressed by cool breezes. Future prime minister John Major did a stint in one of the city’s banks before returning to Britain and entering politics. But the tin mines fell into decline, their stocks exhausted and their administration beset by corruption. Hausas, better educated than the local inhabitants and connected to trade networks stretching across the North, weathered the changes well. They had secured titles to land; they prospered. Among the Christians the relative success of the newer arrivals bred resentment. 

The Berom and their ilk amount to mere specks in Nigeria’s ethnic tapestry. However, under the federal constitution, designed in the wake of the Biafran War to ensure that opportunities for patronage were widely distributed, they were designated the “indigenes” of Plateau State. That gives them first claim to every public office and, in turn, to the share of Nigeria’s oil revenue that represents almost the entire income of state governments— it gives their leaders a stake in the looting machine. For more than two decades Hausas’ attempts, often backed by the federal government, to secure local government positions have triggered what amount to street battles over oil rent. In September 2001 a thousand people died in seven days. 

In 2007, eight years into civilian rule, the governorship of Plateau State became vacant. Joshua Dariye, the governor since 1999, had succumbed to the consequences of his own greed. He had been detained on money laundering charges during a visit to the UK in 2004 but absconded, beginning what would become a tradition for Nigerian governors who enjoyed impunity at home but fell foul of the authorities in Britain, where much of their looted wealth ended up. Back in Nigeria, Dariye was suspended from office by Olusegun Obasanjo, then president, for failing to prevent— and even, it was suggested, instigating—the near-constant ethnic violence in his state. A vociferous Christian and member of a small indigene tribe, Dariye described Jos’s Hausas as “unruly tenants.” He clung to the governorship for a while until charges of embezzling $9 million of public funds eventually brought him down.12 (The case became bogged down in Nigeria’s tortuous legal system, and in 2011 Dariye won a senate seat.) 

Dariye was a prime example of what is known in Nigeria as an “ethnic entrepreneur,” the kind of politician that Maitama Sule feared was taking over the country. His successor was less clownish and more politically astute but belonged to the same category. As a senior officer in the Nigerian air force, Jonah Jang had twice served as a military governor of two states near Plateau during army rule. Born in Du, at the heart of Berom country, Jang was a Christian, a theologian, and a Pentecostal pastor. His official hagiography describes him as a “jolly good fellow.”13 He left the military once the soldiers relinquished power, helping to form the People’s Democratic Party. He lost the 1999 gubernatorial race to Dariye but clinched the post in the shambolic elections of 2007. 

The Christians of Nigeria’s Middle Belt have long feared subjugation by Islamic invaders from the North, real and imagined, and men like Jang portray themselves as their defenders. On Jang’s watch the Hausa in Jos were not only excluded from representation in public office but also felt that their housing and the markets where they traded were under threat.14 “The governor has become an evangelist of the assertiveness of Berom hegemony,” a high-ranking Christian cleric told me.15 “He has become very paranoid.” A moderate Berom in Jos who had held high office in the state government saw Jang as the embodiment of what was becoming a campaign of ethnic cleansing: “He’s an extremist. He has very strong tribal views. Politicians . . . manipulate feelings. That’s what people have come to call the Berom Agenda: capture power, capture the resources, the state and the patronage, mostly to the Berom. Now this has become: ‘The Hausa imperialists, they must be curtailed and controlled.’”16 Jos’s indigenes were prepared to kill in the name of their governor. On the walls of a burned-out  house in a Hausa quarter of the city, where a scorched torso and two human limbs lay scattered among the debris, the killers had daubed, “God bless Jang.” 

I wanted to meet this man who epitomized both Jos’s tragic spirit of violence and the politics of ethnic patronage through which the Nigerian petro-state is controlled. Once the nightly curfew was over I set off for the governor’s offices, edging through the roadblocks. At the state government headquarters I had arranged to see Jang’s spokesman, James Mannock. The prospects of an interview with the governor were slim, he told me.17 Instead, Mannock introduced me to Toma Jang Davou. 

Davou was large, aging, and enraged. As the head of the local Berom parliamentary forum, Davou shared with the governor a birthplace and a political creed. Jos’s suffering could be blamed squarely on the northerners, he said. “They have made concerted attempts to destroy democratic structures and impose upon Nigerians an Islamic sultanate,” Davou thundered. “In order to achieve this aim, they have connived with al-Qaeda.” There were, it was true, the first signs of links between northern Nigerian jihadists and al-Qaeda affiliates in the Sahara. But what outraged Davou most was the way the northern dictator Ibrahim Babangida had tinkered with Berom dominance of Plateau State’s patronage system in 1991 by creating a new constituency with a natural Hausa majority. “He made Jos North exclusively for them. That was what triggered the problem, up to today.” 

In 2008, a year into his tenure as governor, Jonah Jang decided to hold long-postponed elections that would include a contest for the chairmanship of the Jos North local government. The governor had been warned that staging an election would be fraught with danger.18 He proceeded nonetheless. The Hausa would probably have had a majority in a free vote, but this would not be a free vote. Such was the PDP’s dominance that, as with most other elections for every office from the presidency downward, the decisive contest would be the party primary to choose a candidate. Jang refused demands to nominate a Hausa; instead, he shipped in a Berom from his hometown to be the PDP candidate for Jos North. When the election came, the Hausa voted for an opposition party. Discovering that the vote count had been moved to a Berom-dominated part of Jos North, Hausas began to muster outside it, suspecting foul play.19 Chanting PDP partisans descended too, and PDP officials were seen entering the building. Late into the night the police told the crowds to disperse. Stones flew through the air. The next day, as Muslim and Christian, Hausa and Berom, set upon one another’s women and children, it was announced that the PDP had won Jos North and every other local government chairmanship in the state. 

Davou begrudgingly acknowledged that there had been violence on both sides in Jos, in 2008 and now. But he insisted that hundreds of Christian bodies would shortly be discovered, claims for which I did not find any proof, although the Red Cross confirmed that there were Christians among the dead, and Berom neighborhoods were as fraught with fear as Hausa ones. 

The next day I negotiated the checkpoints again, heading for Ignatius Kaigama’s church. Jos felt, if not calm, at least numbed, like a fist fighter who realizes, as the adrenalin subsides, that he has gone too far and beaten his opponent to a pulp. 

Kaigama managed a hearty, gap-toothed smile of greeting despite the misery engulfing the city whose Catholics he had watched over for a decade. I had listened to Hausa and Berom alike vowing that there would be no peace until their enemies yielded. Kaigama’s was one of the few pacific voices, though it was seldom heard above the clamor for vengeance. His position as the chair of the Christian Association of Nigeria had not shielded him from being accused of treachery by other Christian leaders when he had sought to set up an interreligious committee for peace with his Muslim counterparts. 

Ushering me into his rectory, he dismissed the rumor that the likes of Davou had circulated that the latest trouble had begun when a church was attacked. The church in question was untouched, Kaigama said. Such fictions were part of Jos’s theater of violence: facts are mutilated, history is maimed. In any case, as far as the archbishop was concerned, God had nothing to do with it. 

“No crisis in Jos is religious,” Kaigama told me. “You get some religious leaders on both sides who use their preaching to say, ‘They are the enemy.’ The real issue is the competition for who owns Jos. It’s ethnic and  political.” Like the Niger Delta, where the rhetoric of resistance serves as a cover for a vast criminal enterprise, the cloak of religion provides a disguise for the Middle Belt’s looters who will use any means to secure their share of the resource rents. Their henchmen enjoy impunity. “How many cases have we had?” the archbishop went on. “Who has ever been punished? People have been arrested. After a month or two we hear nothing more of it. They just get released.” 

Like the Futungo in Angola, Nigeria’s rulers had abdicated the stewardship of the common good, Kaigama believed. “I suffer the consequences of their failure,” he told me. “Every day there is a queue here,” he gestured toward the door of the rectory. “They are not coming for spiritual guidance. I end up being a social worker or giving money to people whose wife needs a blood transfusion. Nobody is talking about the HIV pandemic, hunger, youth unemployment.” By contrast, the struggle for patronage was all consuming. “There’s no room for merit: it’s survival of who knows who. It’s about numeric superiority and territorial controls, then it’s put in religious garb.” 

I was about to leave when Kaigama’s genial expression became grave. “A culture of violence is developing,” the archbishop said. “Young people who are growing up know nothing but hatred and violence. They don’t see the sanctity of life. They are ready to kill. God is not such a weakling that we must kill for him. Any politician who has failed resorts to religion. If he doesn’t win a contract or a position, he will say it is because I am a Christian or a Muslim. It is religion politicized and used as a weapon.” 

A governor of one of Nigeria’s thirty-six states is effectively president of his own fiefdom. He has immunity from prosecution and controls the state security budget. The chairman of each of the 774 local governments is answerable to the state governor. To win a presidential primary a candidate needs two-thirds of the states to back him. That backing is in the gift of the governors. The Governors’ Forum is perhaps the most potent gathering in the land. Only about half of Nigeria’s oil revenues are allocated to the federal government. A fifth goes to the local governments. The governors control the quarter of oil revenues that goes to the states. 

Oil-producing states receive an additional 13 percent share of Nigeria’s oil income before it is divided between the tiers of government. The state houses of the Niger Delta are powerful pistons of the looting machine. When he agreed to meet me in late 2010, Timipre Sylva had succeeded Goodluck Jonathan as governor of Bayelsa, one of the Delta’s three main states. I had hoped to interview him at Gloryland, the gubernatorial palace set well apart from the shacks that house his constituents. Instead, I was summoned to the penthouse suite of a five-star hotel in Lagos, where Sylva was staying with his entourage during a visit to the commercial capital. 

A tall and intelligent man, Sylva was under pressure. Politics in the Niger Delta is unremittingly volatile. Gunmen drift between the militias of MEND, crime gangs, and squads of political thugs that freelance for competing aspirants to power. As Sylva’s rivals sought to force him from office, loyalists were exchanging tit-for-tat attacks with his enemies. Relations with Jonathan, recently elevated to the presidential palace by Yar’Adua’s death, had soured. Little wonder, I suggested, that others coveted his job: his immediate predecessor had found himself president and the one before had siphoned off so much cash that he, like Joshua Dariye and James Ibori, the former governors of Plateau and Delta States, had snapped up enough assets abroad to earn the attention of the British police. 

Sylva accepted that there had been widespread corruption among the governors. But he was, he pleaded, just a cog in a patronage system not of his making. “If a chief walks into my office, he expects me to take care of his problems because that is what the military used to do,” Sylva said. “That’s what he’s used to. If I don’t, I’ve got a very big political enemy.” 

So you have to “settle” them, I suggested, using the Nigerian term for the dispensing of cash. 

“Yes. And you will read that as corruption. But me, I probably will read that as political survival, because I have to survive before I become incorruptible.” 

“And you use public funds to do that?” I asked. 

“What does he expect me to do? I don’t have that kind of money; the kind of money he’s expecting. Even if I have it privately, I won’t do that with it. And he’s coming to me because I’m governor. If, for example, the big chief comes, and he has to go for a medical check, it shouldn’t be my problem. But it is. If a very big traditional ruler dies somewhere, and they want to do an elaborate burial ceremony, they come to me. I have to do it.” 

Me, I probably will read that as political survival. To justify corruption, Sylva reached for the same word—“survival”—that Mahmoud Thiam had chosen when he explained why pariah states are willing to deal with the likes of Sam Pa and the Queensway Group. Said Djinnit, the UN’s man in west Africa, called the competition to control political power in the resource states “a struggle for survival at the highest level.” Paul Collier talks about the law of “the survival of the fattest” in rentier states. Plenty of political careers in Nigeria and Angola, Zimbabwe and Guinea, have ended in untimely death. The gulf between the captains of the looting machine and the masses is vast in material terms, but it is just that—a gulf. Fall off the looting machine, and you are precipitously back in the world of Kuru Karama, wondering when your house will burn. 

Keen to shift our conversation away from his own diversions of public money, the governor pointed out that Nigeria’s looters have had willing overseas accomplices: “Of course, most of the time corruption is supported by foreigners. They come here with the perception that everything goes here. They just do all kinds of things, and that’s how they actually corrupted our people.” 

Corruption does not start or end at the borders of Nigeria or Angola or Equatorial Guinea. Its proponents include some of the world’s biggest companies, among them the blue-chip multinationals in which, if you live in the West and have a pension, your money is almost certainly invested. 

In recent years, as US officials energetically enforced the Foreign Corrupt Practices Act, settlement agreements published by the Department of Justice have exposed details of foreign companies’ participation in Nigeria’s looting machine. Willbros, listed in New York, made “commitments” to Nigerian officials and politicians running into millions of dollars through the mid-2000s to secure contracts to build natural gas pipelines through the Niger Delta.20 Shell admitted paying bribes worth $2 million to Nigerian customs officials between 2004 and 2006. One installment of a $5 million bribe paid by Kellogg, Brown & Root (KBR) was so bulky when converted into naira that it had to be loaded onto vehicles for delivery. As part of a slush fund worth some $180 million deployed over ten years to 2004, the kickbacks helped to win KBR contracts to build one of Nigeria’s  biggest oil facilities, the $6 billion liquefied natural gas plant at Bonny Island, on the lip of the Niger Delta. At the time KBR was a subsidiary of the American engineering giant Halliburton, whose chief executive, Dick Cheney, departed in 2000 to be George W. Bush’s vice president. 

Bribe by bribe, these companies and others help to make Nigeria’s public servants instruments of illicit private gain. And these are merely the cases in which the foreign perpetrators of corruption have been caught. Nigeria has the distinction of being the African nation most frequently involved in international bribery schemes exposed by anti-corruption prosecutors, behind only Iraq and China worldwide.21 Other transactions are structured in an effort to enrich officials without crossing the threshold of illegality. In 2011 Shell and the Italian oil company Eni paid $1.3 billion to the Nigerian government for the rights to a choice offshore oil prospect. The government promptly transferred $1.1 billion to an offshore company called Malabu. 

One substantial shareholder in Malabu was, as a UK High Court judge found in 2013, a man called Dan Etete.22 Etete, a convicted money-launderer, awarded his own company the rights to the prospect while serving as oil minister under the military dictator Sani Abacha. The deal was described by a fixer involved in the deal as a “safe sex transaction” in which the government served as a “condom” protecting Etete and the oil companies.23 In September 2014 Italian prosecutors opened an investigation into Eni’s role in the OPL 245 deal. British police have also commenced an investigation into allegations of money laundering connected to the deal. Eni and Shell, which has not been placed under investigation, denied they had done anything wrong. Both said they had legitimately paid the government for the oil rights and had made no payment to Malabu.24 

Another oil block adjacent to the one for which Shell and Eni paid handsomely is designated as Oil Prospecting Licence 256 (OPL 256), a potentially prodigious 965-square-mile concession. The license was previously held by Devon Energy, an American company that decided to sell off its African interests in 2007. There are conflicting accounts of what happened next to OPL 256, but it ultimately ended up in the hands of Sam Pa’s Queensway Group. 

A spokesman for Devon Energy told me it sold its rights to OPL 256 in late 2009 to a Nigerian company called Fusion Grid Limited.25 I had never heard of Fusion Grid and neither had knowledgeable contacts of  mine in the oil industry. When I got hold of its registered owner, a Lagos lawyer called Koye Edu, he told me that Fusion Grid was nothing more than a shell company and that it had never held the rights to OPL 256.26 They had been returned to the government when Devon pulled out, Edu said. A spokesman for Statoil, the Norwegian oil company that had held a minority interest in the block alongside Devon, told me the rights had been handed back to the state in 2008.27 

By mid-2009 the oil industry press was reporting that China Sonangol, the Queensway Group’s partnership with Angola’s state oil company, had secretly acquired OPL 256.28 Nigeria’s rulers have long awarded oil rights at their discretion. Even when open auctions are held, blocks have been awarded to obscure companies whose hidden owners include powerful members of the political elite and the security forces, who subsequently flip them on to foreign oil companies at a profit that might otherwise have accrued to the Nigerian people.29 There was no open tender for OPL 256. When I asked about the block some Nigerian officials and lawmakers told me the state still held the rights. But three well-connected contacts I spoke to in 2013—a serving senior official, a former senior official, and an industry insider—told me that China Sonangol was the proprietor.30 

A former presidential aide who served under both Umaru Yar’Adua, president when China Sonangol appears to have secured the license, and under Goodluck Jonathan, agreed to speak to me in 2013. Although he was usually candid when explaining the oil industry, he became nervous when I asked him about OPL 256. “I would not like to talk about the owner,” the former aide said, asking me not to print his name. “They went through a lot of controversy in acquiring it.”31 I asked whether the owner was China Sonangol. “You might not be wrong, but I can’t confirm if China Sonangol is the owner. As far back as Yar’Adua’s time there was a lot of controversy on that block.” The former aide knew the oil industry well, and I asked him what he thought of China Sonangol. “There are many people, almost cannibals of the industry, who just buy their way into these things, just by serious, serious political connections, but that does not make you a good player in the industry. China Sonangol is in that category.” Another contact, who was also well versed in Nigerian oil and had held senior official positions, told me in early 2014 that China Sonangol had begun drilling wells on its prospect.32 

There were other indications that China Sonangol was moving large sums of money in connection with OPL 256. The transactions ledger published in the Hong Kong court dispute between the Chinese oilman Wu Yang and his former allies in the Queensway Group recorded a payment in 2008 or 2009 by China Sonangol International Holding of nearly 20 million Hong Kong dollars (about US$2.5 million). It was marked as “Nigeria 256.” 

It is not clear who in Nigeria opened the door for the Queensway Group. This was not Guinea or Madagascar or Niger, whose coup leaders desperately needed any investor prepared to do business with them. Nor was it Angola, smarting from Western donors’ refusal to fund postwar reconstruction and eager to embrace investors from China. All the biggest Western majors and, increasingly, the national oil companies from the emerging powers have interests in Nigerian oil. I was told that Andy Uba had facilitated China Sonangol’s entry to the Nigerian oil industry. As an aide to Olusegun Obasanjo, president from 1999 to 2007, Uba’s roles had included, according to African Confidential, “representing his interests in business deals.”33 Uba also has “extensive oil and gas interests” of his own. Some of the industry figures whom I asked about Uba’s role suggested his power had waned significantly since Obasanjo’s departure from office, but another of my contacts, who has worked with oil companies in Nigeria for years and was relaying information from within the industry, told me, “Anything that China Sonangol do in Nigeria is Andy Uba.”34 

Alliances between powerful foreign companies and Nigeria’s kleptocrats sustain a ruling class that has shown itself willing to whip up violence to protect its interests. But there are also more direct connections between the multinationals that profit from the country’s crude and the gunmen who enforce Nigeria’s compact of violence. 

Mutiu Sunmonu is an inscrutable man. Solidly built, he has a way of breathing that gives his voice a lulling quality. As I prepared to take a seat beside him on a stage in central London one evening in early 2012, I recalled attending the party two years earlier to celebrate his promotion to Shell’s managing director in Nigeria. At a ritzy venue in Lagos, used for gigs by Nigeria’s superstar rappers, the big men of the business scene raised flutes  of champagne to the man assuming what is arguably the second-most important office in the land, after the presidency but at least on a par with senior cabinet posts. 

A Nigerian friend of mine had arranged for Sunmonu to come to London and deliver a lecture and had asked me to put some questions to him once he had spoken. It would be a rare opportunity to call the company’s leadership to account in public. Shell’s revenues of $484 billion in 2012 were almost twice the entire annual output of the Nigerian economy. It pumps about half of Nigeria’s daily crude output of 2.5 million barrels. Shell’s Nigeria boss answers to the Africa boss, who answers to the top team, then led by Peter Voser, a Swiss national who fought off rivals in 2009 to become chief executive, a position for which he was paid $16.5 million in 2011. 

Sunmonu, like his predecessors, wore two hats. He was Shell’s top man in Nigeria and the head of the Shell Development Petroleum Company of Nigeria (SPDC), the country’s biggest company, of which the Nigerian state is the largest shareholder. Shell has 30 percent of SPDC and is the operator. It drills the wells and pumps the crude but funds only 30 percent of the expenditure and, thus, is entitled to only 30 percent of the profits. The head of SPDC has two masters: the management of Shell and the Nigerian state. 

For his London appearance, even though public relations handlers prepped him, Sunmonu looked uncomfortable. “As a Nigerian,” he said, “the situation in the Delta actually brings tears to my eyes. I see it, I feel it.” 

He went on, “The people in the Delta, they don’t have access to clean water, and they don’t have access to good medical care. They don’t have access to education. There are no jobs, so everyone is trying to fend for himself, and they have seen this oil as an easy source to make money.” 

It was a clear-eyed diagnosis of the maladies of the Delta, but it had one glaring omission: the role of the oil companies. 

On a November morning in 1995 Shell’s activities in the Niger Delta became headline news across the world. The dew was still fresh on the grass when Ken Saro-Wiwa and eight fellow activists were hanged in Port Harcourt prison on the orders of Nigeria’s military government.35 The men were leaders of a campaign by the Ogoni ethnic group, which had forced Shell to withdraw from their polluted corner of the Delta. Sani Abacha, a world-class embezzler who had ruled Nigeria since he seized power in 1993, would brook no such dissent. The Ogoni resistance was a threat to Shell’s operations and, thus, to the oil money that funded his regime. Some of Saro-Wiwa’s critics have argued that he had more in common with the venal Nigerian politicians he lambasted than his crusading image suggested.36 Nonetheless, from the jail cell where he was awaiting trial in late 1995, he rejected anything short of full compensation for the oil slicks that had poisoned Ogoniland. On October 31 a kangaroo court pronounced a death sentence on the Ogoni Nine. Horrified protests from world powers and African elders went unheeded. 

Shell was accused of having offered to secure Saro-Wiwa’s release if he called off a propaganda offensive that was damaging its reputation.37 That allegation has never been proven, and Shell has always denied wrongdoing in the Saro-Wiwa case. In 2009, while maintaining those denials, it paid $15.5 million to settle a case brought by Ogoni plaintiffs in an American court related to allegations of complicity in Saro-Wiwa’s death.38 

When the gunmen of MEND launched their oil war a decade after Saro-Wiwa’s uprising Shell faced a new threat. It responded with a mixture of co-option and confrontation. In 2006 Shell admitted that it had given contracts to companies connected to MEND.39 Shell executives were also privy to the details of operations conducted by the Joint Task force, or JTF, the special contingent of the Nigerian military stationed in the Delta to keep the oil flowing and known for its heavy-handed tactics.40 

Given its links to both the militants and the military—and what MEND fighters had told me during my trips to the Delta about Shell and other oil companies paying them protection money—when he finished speaking I asked Sunmonu whether he thought his company played a role in sustaining the conflict. 

“It’s a very difficult question,” he responded. “I believe that some of the things we do in the Delta could indeed unintentionally provoke conflict. I will be the first to admit that the dynamics in the Delta are very complex. In one vein, the oil company might be thinking of promoting development within a community, but they may not realize that that community is not a homogenous one. So you are looking at it as a single community, well united. It’s only when you go in there that you will find that there are factions within the community, and so your efforts of promoting development could in some cases actually lead to conflict. I think the point you are talking about, the oil companies using some of the militants as civilian guards, I can tell you that, as far as Shell is concerned, our business principle is very clear. We do not pay protection money. However, you also have to admit that except if a guy has a label on his forehead saying, ‘I’m a militant,’ you do not know who is a militant and who is a genuine contractor. There could be cases in the past where you have been told you are employing the genuine, bona fide contractor, and yet he’s probably a militant or a warlord.” 

Sunmonu conceded that such a situation could have arisen “in the past” but insisted Shell acted “always with the best of intentions.” Even if you credit his insistence that, contrary to the accounts I heard from militants during my trips to the Niger Delta, his company did not pay protection money, it is a startling admission: Shell’s top executive in Nigeria was aware that company money might—even if unintentionally—be ending up in the warlords’ coffers. 

In a roundabout way, it seemed to me, Sunmonu was talking about the alignment of commercial interests that underpins Nigeria’s compact of violence. I wanted to hear the warlords’ take on their relationship with Shell. The next time I was in the Delta, in April 2013, a year after Sunmonu’s talk, I sent word through an intermediary to Farah Dagogo. Dagogo had taken the amnesty, but like other senior figures from MEND, he was still very much in business, running his bunkering operations and his protection racket. I was told he was willing to meet me but could not. The government had taken to using poachers as gamekeepers and had given him and some fellow senior militants a surveillance contract to protect an oil facility. Some of his partners believed he had ripped them off, pocketing the payment for himself. The traditional Delta way of settling such disputes is with guns, so Dagogo had gone into hiding. But one of the militia commanders who had broken with him did agree to meet with me. 

I was hanging around in Port Harcourt, a city as oversupplied with suspicion as it is with weapons, when the call came toward noon on a Saturday. With George, one of the unflappable drivers on whose courage and calm foreign correspondents in Nigeria rely, I drove away from the supermarkets and pizza joints of the city center into the slums that spill out to the edge of the creeks. The roads became more pothole than tarmac, flanked by fetid open drains. We arrived at the designated spot, and I called my intermediary. He led me down a narrow alley, past cobwebs of electricity cables that had not carried a current in years. A teenager standing watch moved aside to let me into a discreet backroom in the warren of dwellings. 

The General looked uneasy. He sported a navy blue vest, long white shorts, and a goatee beard. His dark brown eyes scanned me. Swigging from a bottle of Guinness, he told me that some of the foot soldiers he had brought with him from their base in the creeks were loitering down the street. They would soon start to wonder what their commander was up to, so the General cut to the chase. 

Now thirty-three, the General was born in Buguma, a settlement in the creeks beyond Port Harcourt. After elementary schooling in his village he came to the city to study business at university, an apt preparation for a career that required at least as much commercial as military acumen. Then he felt the lure of the gun. In 2003 he signed up with Mujahid Asari-Dokubo, the first of the Delta’s superstar commanders. “Along the line Asari betrayed us. He was making money alone.” So he switched his allegiance to Farah Dagogo, who stepped into the power vacuum left by Asari’s arrest. The General carved out his own domain within Dagogo’s territory in the eastern Delta, controlling a handful of settlements and the waterways between them. “We accepted the amnesty, but it’s not working out. We have nothing to show for it.” He maintained five camps, he said, with five thousand men at his command, a tally that seemed high but perhaps not grossly exaggerated. Now, on account of the allegations that he had swindled his partners in a pipeline surveillance contract, Dagogo too had been deemed a traitor, and the General had transferred his loyalty to yet another warlord of the eastern Delta, Ateke Tom. 

The General paused. “Do you smoke?” I offered a cigarette. “No,” he corrected me, looking slightly put out, “marijuana.” The General expertly rolled himself a chunky joint, lit it, exhaled a thick cloud, and continued. 

“We have a cause to fight. The spillage has really affected our communities. Every place is downtrodden. No water; we cannot afford food. All  our livestock are dying because of the pollution. Bunkering is our means of survival,” the General said. Kidnapping for ransoms brought in some money alongside the revenues from oil theft. He explained why he would not agree to let me publish his name, only his rank in the Delta’s shadow military. Doing so might endanger another important income stream: his illicit contractual arrangements with the oil industry. 

The General rattled off half a dozen areas in the eastern Delta where he claimed that, indirectly, the militants had succeeded in getting a cut of Shell’s community development contracts. The militants would set up front companies. “Through these companies we get pieces from Shell,” the General said, though I was not permitted to see the contracts. The General’s militia was also indirectly given work cleaning up oil spills, he said, splitting the proceeds fifty-fifty with an official contractor.41 

Under Shell’s Global Memoranda of Understanding, introduced in 2006 following unrest in the Delta that crippled its installations to replace ad hoc corporate social responsibility projects with a more comprehensive approach to mollifying resentment, representatives of each settlement where the company operates inform Shell of their priorities. The projects Shell funds range from town halls to printing presses and scholarships, with each contract worth between 12 million and 60 million naira (US$80,000 to $400,000).42 Shell says the program “represents an important shift in approach, placing emphasis on more transparent and accountable processes, regular communication with the grassroots, sustainability, and conflict prevention.”43 

Before I met the General, a Port Harcourt go-between, well connected to the militants and whom we shall call Arthur, explained to me how Farah Dagogo and a fellow militia boss, who borrowed his nom de guerre from the American rapper Busta Rhymes, had diverted some of Shell’s largesse to their own war chest.44 Shell would send liaison officers for consultations with the Delta’s inhabitants on the projects they wanted, Arthur told me. Dagogo and Busta Rhymes surreptitiously inserted themselves into the process, sending “fictitious youth leaders, fictitious elders, fictitious women’s groups, fictitious chiefs” to meet Shell’s emissaries. SPDC, Shell’s joint venture with the Nigerian state, keeps a list of the outside companies it has registered as contractors, and only these companies can be awarded contracts to undertake the community development projects that SPDC funds. “So,” Arthur said, “Dagogo and Busta Rhymes formed alliances with some of these contractors and told them, ‘This is the percentage that you will pay us.’” 

The General corroborated Arthur’s account. If the hospitals and schools did not get built, it was because Shell’s liaison officers were creaming off too much for themselves on top of the funds siphoned off by the likes of Dagogo and Busta Rhymes, the General insisted, making grabbing motions in the air. He reckoned that only half of the contracts that were paid out were actually fulfilled. 

Before long the General decided he had to get back to the creeks. He mentioned an intermediary for Shell, a Nigerian known as Dr. Frank, who had, possibly unwittingly, helped the militants secure their contracts. I was unable to track down Dr. Frank or even to confirm his role. I tried to talk to two Shell managers whom I had heard were involved in pipeline protection and community development in order to see what they knew of the militants’ racket. In both cases Shell’s press office in Lagos got wind of my approaches and told the managers not to talk to me. 

When I e-mailed the press office and asked about Farah Dagogo and his cohorts benefiting from Shell contracts, a spokesman would only say that “cluster development boards” composed of community representatives, not by SPDC itself, awarded contracts for development projects.45 When I asked about protection money being paid to militants in the form of pipeline surveillance contracts, I was told, “We do not award contracts to armed groups, and it is completely against our company policy to do so.” Surveillance contracts employed “more than nine thousand unarmed people, primarily indigenes of the communities through which the pipelines traverse.” The spokesman declined to answer my questions about what safeguards Shell had put in place to prevent money from its community programs flowing to militants. 

I heard differing accounts about the extent to which the diversion of money from Shell’s community programs was the result of the actions of a few rogue contractors or whether knowledge of such diversions went higher up the company’s chain of command. A former Shell employee, who spoke to me on the condition that I did not name him, told me, “Shell has quite stringent mechanisms in place but Nigeria is a difficult place to adhere to any kind of rules.”46 He suggested that complicity in such schemes was limited to low-level Shell employees and added, “The whole community liaison system is incredibly corrupt. . . . It was difficult to quantify how many Nigerian staff were in bed with the bad guys.” 

One former Shell manager in the Delta did agree to talk to me on the record. A native of the Niger Delta, Harriman Oyofo spent twenty-nine years at Shell. He held various posts in Shell’s Nigerian and African divisions before, in 1999, joining the external relations department in the Delta for SPDC, Shell’s joint venture with the Nigerian state, and becoming, in his own words, Shell’s de facto spokesman for the whole of its Nigerian operation. He left in 2010 to set up his own oil consultancy. 

I asked him whether he knew of Shell money ending up with armed groups. “Shell has never made policies because of armed groups. If you have a community of ten people, there may be one who is bent. You are not going to tailor your project just for that one person. When you build a health center or a school or develop seedlings for a community, that’s not because of any armed group; it’s just that it makes sense to put back into the community.”47 He conceded, however, that it was hard to discern between “communities” and armed groups and that some community liaison officers had been “reprimanded for one type of misdemeanor or another.” “Some communities had hidden agendas,” he added. 

When I asked Oyofo whether the pipeline surveillance contracts that Shell doled out amounted to protection money, he waxed gnomic. “If you ask someone to look after your bag, are you asking them not to steal it? No. You are asking them to look after it.” He steadfastly absolved Shell of responsibility. Wasn’t it oil that had destroyed his homeland? “Oil maybe—not Shell. Oil itself may be a problem, but the administration of the proceeds of oil is not in the hands of Shell. Shell is not the political administrator of Nigeria. Shell is just a company.” 

Shell may be just a company, but it is one of the biggest in the world, richer than many governments. It has been part of Nigeria since before independence. Between 2007 and 2009 it spent at least $383 million on security in Nigeria.48 The scale of its “community development” spending in the Niger Delta is vast. By the end of 2011 these programs covered 290 communities. Shell’s Nigerian spokesman told me that in 2012 it spent  $103 million “addressing social and economic development challenges in the region.”49 Shell has since sold off some of its oil fields in the Niger Delta, preferring to concentrate on offshore operations that are harder to attack, but it remains a powerful force in the creeks. 

Aaron Sayne, a languid American lawyer who worked on foreign corruption prosecutions before becoming one of the best-informed due-diligence investigators in Nigeria, has tried to put a figure on the overall amount of cash the oil companies slosh into the Delta. “Each year the majors distribute over half a billion dollars in contracts, cash, compensation, jobs, donations, and development programs to Niger Delta communities—by one tally over $350 million in community development alone,” Sayne wrote in 2010.50 He adds, “That practices of Shell . . . and others stoke unrest in the Niger Delta is not news to analysts or the companies themselves. They are part of the Niger Delta conflict system, in spite of the money they spend on communities—or sometimes because of it.” 

Local activists told me they had warned senior managers at Shell that the community development programs were being abused, to no avail. “They are pragmatic,” said one, who has spent years campaigning against the Delta’s noxious cocktail of environmental degradation, violence, and corruption.51 “They will do anything to make sure the oil will continue to flow.” He was equally scathing of the warlords who claimed to be warriors in the Delta’s cause. “The majority of the militants, especially the leadership, initially they were flagging up environmental things,” the activist told me, fuming with the anger of the betrayed as we spoke in a quiet corner of a Port Harcourt bar. “Then the money came and the amnesty came. None of these fuckers ever talk about it anymore.” 

In January 2011, a year after he sent troops to restore order in Jos, Goodluck Jonathan walked into Eagle Square, Abuja’s parade ground, to be invested as captain of Nigeria’s looting machine. He had already assumed the presidency after Yar’Adua’s death, becoming the first son of the Niger Delta to hold the highest office in a political system fueled by the region’s oil. Now the People’s Democratic Party presidential primary was about to nominate him to serve a full term. His name and that of his wife, Patience, could not have been more apt for the occasion. 

Twelve years earlier Jonathan had been an obscure zoologist in a backwater of the Delta. As the founders of the PDP cast around for candidates as they prepared to inherit power from the military in the 1999 elections, they sought someone for whom a particular ethnic group in a corner of Jonathan’s home state of Bayelsa might be persuaded—or, if necessary, coerced—to vote. Jonathan, a minor local environmental official, was reluctant but could not refuse when the local elders insisted. He was nominated as the PDP candidate for deputy governor of Bayelsa. The party won the presidency and the bulk of the governorships, as it has at every election since. 

From there Jonathan’s rise was as meteoric as it was fortuitous. In 2005 the governor of Bayelsa, Diepreye Alamieyeseigha, was arrested in London on money laundering charges in connection with his $3.2 million of ill-gotten wealth that the Metropolitan Police said it found in cash and bank accounts.52 He skipped bail and made it back to Nigeria but, having fallen foul of his political masters at home, was impeached and, eventually, jailed. He was two years into his second and final term as governor when his deputy, Goodluck Jonathan, was automatically promoted in his stead. 

That might have marked the peak of Jonathan’s ascent had it not been for the machinations that were then under way in Abuja, the city the political class crafted out of the bush in the center of the country in the 1980s after the erstwhile capital of Lagos had become bloated with the masses of the poor. The 2007 elections were drawing near, and Obasanjo was trying to tinker with the constitution to permit himself a third term. Although he was thwarted, he remained Nigeria’s political godfather, the kingmaker of the PDP, and he anointed Umaru Yar’Adua as the party’s candidate to succeed him. For the second name on the ticket the PDP needed a state governor from the Niger Delta. The oil province was restive. The newly formed MEND was destabilizing the font of the patronage system. Other candidates had made too many enemies as they rose through Nigerian politics and were so mired in corruption that their rivals had enough dirt to stymie their aspirations. 

Jonathan was a political minnow, but with his fedora hat and his Ijaw blood, he fitted the bill. After elections that observers deemed the most fraudulent in Nigeria’s short democratic era, Jonathan became vice president.53 When Yar’Adua’s allies failed to cling to power as the president’s health faded, Jonathan was sworn in to serve out the remaining year of the presidential term. 

As vice president, Jonathan had been routinely snubbed by the members of Yar’Adua’s inner circle. Even after he stepped into Yar’Adua’s shoes, the heavyweights of the PDP regarded him as a pawn, someone who lacked the heft to challenge their interests, even if he had wanted to. For that very reason the party barons and their allies among the oligarchs who controlled the economy felt comfortable with the new man and threw their weight behind him for the forthcoming elections, opting to risk the wrath of the northern establishment by ditching an unwritten rule that rotates power between ethnic blocs, under which the North’s turn had been cut short by Yar’Adua’s death. 

As acrobats cartwheeled around Eagle Square, thirty-four hundred delegates from across the nation converged to select the PDP presidential candidate for an election due three months later. Such was the party’s grip on power that no one was in any doubt that the delegates were effectively selecting the next president. “We have never had the presidency before,” Rotimi Amaechi, the governor of Rivers, the Niger Delta state that includes Port Harcourt, told me.54 “So we want to have a bite.” 

The PDP, which likes to call itself the biggest political party in Africa, is simultaneously rife with competing ethnic claims on power and patronage and the vehicle through which Nigeria’s revolving cast of rulers privately set aside their differences to ensure the continued hegemony of the looting class. It is also the political home of some brilliant lawmakers and scrupulous reformers. But they are in the minority. “It’s not a political party,” said Clement Nwankwo, who founded Nigeria’s first human rights organization in the days of military rule, did two stints in jail, failed in his attempt to stand for the national assembly as a PDP candidate because he couldn’t afford to pay the required bribes to party officials, and now ranks as one of Nigeria’s most astute political analysts.55 “It’s a platform to seize power and then share the resultant booty.” 

Guarded by secret service agents, Nigeria’s potentates had gathered in the VIP stands of Eagle Square as dusk descended. Louis Armstrong’s voice lilted from giant speakers, singing “What a Wonderful World.” Night  fell, unleashing mosquitoes. The representatives of north, south, east, and west—Muslims, Christians, and animists, speakers of half a dozen different languages—eyed one another with mistrust. Tempers frayed as supporters of Atiku Abubakar, a northern businessman and former vice president who had taken on the quixotic task of challenging an incumbent president for the PDP nomination, started to realize that they had been outmaneuvered and outspent. Jonathan’s victory had been ordained in advance. Each delegate received a cash bribe of $7,000 to vote for him, roughly five times the average Nigerian’s annual income.56 Bidding for the loyalty of all thirty-four hundred delegates would have cost the Jonathan campaign some $24 million. And that was just the basic payoff—higher-ranking officials could have expected much more. In the days leading up to the primary so much hard currency changed hands in Abuja that the dollar-naira exchange rate moved. 

It was past 10 p.m. when the count started. Under the night sky PDP officials read the name written on each ballot. “Jonathan, Jonathan, Goodluck Jonathan.” Just after 6 a.m. the victor emerged from the bowels of Eagle Square. The party’s call-and-answer chant greeted him: “PDP! Power!” Triumphant, Jonathan waved an arm and vowed to break with “the corruption of the past that had held us down for too long.” 

As he consolidated his position, Goodluck Jonathan’s senior aides told me and other foreign journalists in hotel-room briefings that he was what he claimed to be: “an agent of transformation.” He was using the dinosaurs of Nigerian politics to get him to the presidency, they said, but in time he would consign them to history and unleash Nigeria’s potential. And there were encouraging signs. Jonathan appointed Attahiru Jega, an upstanding northern professor, to head the electoral commission. The April 2011 elections were deeply flawed but marked an improvement on previous polls, though the resentment in the North that a southern Christian was usurping its stint in the presidency triggered three days of rioting that left eight hundred people dead.57 

The promised reforms began. Power stations were privatized, taking them out of the hands of a corrupt bureaucracy and raising the prospect that Nigeria’s crippling electricity shortages might ease. Nigeria’s image was improving—though, in many cases, it was no thanks to Jonathan. Babatunde Fashola, the governor of Lagos State and a leading light in one of the main opposition parties, started to restore a sense of civic pride to his city—laying roads, reining in the predatory police, and persuading Lagosians to pay their taxes. With much fanfare, Nigeria officially overtook South Africa as the continent’s biggest economy. 

But Jonathan had little charisma. He lacked Yar’Adua’s depth of thought and the natural authority that Obasanjo possessed as a war hero and master tactician. The only way to maintain his grip on power was to open the sluice gates of the looting machine. Jonathan presided over a binge of corruption and embezzlement that was dizzying even by Nigerian standards. 

Nigeria’s pot of oil rent is enormous. Unlike the mining industry, from which African states glean a minimal share of the profits, between 65 percent and 85 percent of the income from oil extraction typically accrues to the governments who license oil companies to pump it.58 In recent years Nigeria’s annual oil income has ranged between $20 billion and $60 billion, depending on the price of oil and the level of violence in the Delta.59 The latter figure, for 2011, was one and a half times the profits Exxon Mobil, the world’s most profitable company, recorded that year. Jaw-dropping quantities of these revenues go missing each year and, although the nature of corruption is that it is hard to quantify, the theft appeared to accelerate under Jonathan. 

There were those who tried to stem the deluge. “I’m emotionally drained because I’m swimming against the tide,” a reform-minded minister in Jonathan’s cabinet told me in August 2010, adding, with some understatement, that “the fight against corruption is not going well.” 

Lamido Sanusi, a blue-blooded banker from Kano whom Umaru Yar’Adua had appointed as central bank governor with the task of cleaning up a financial system imploding under the weight of malpractice, came to the fore. He used the central bank’s powers as best he could to arrest the perilous decline in Nigeria’s foreign currency reserves as the politicians splurged. 

As the plundering started to run out of control, Sanusi compiled a dossier showing that scams involving NNPC, the national oil company that serves, like Sonangol to the Angolan Futungo, as the engine of Nigeria’s looting machine, were bleeding a billion dollars a month from the treasury.60 When Sanusi went public with his allegations in early 2014 Jonathan forced him out of the central bank, dealing a blow to the independence of  one of the few Nigerian institutions with the power to check the excesses of the country’s rulers—though he could not prevent Sanusi’s appointment as Emir of Kano, an influential position in the North’s religious hierarchy. 

A short, wiry man with a penchant for bow ties, Sanusi understood that Nigeria’s petro-politics lay beneath the violence that was mounting across the nation, including the barbaric insurgency in the North launched by the jihadists of Boko Haram. “There’s a clear, direct link between the uneven distribution of resources and the rise in violence,” Sanusi said.61 “That’s not to say that the political system is not corrupt all over, but the most critical element is the poor infrastructure that makes it difficult for industrialization and job creation to take place.” Addressing the economic ills that helped to feed Boko Haram’s cause was next to impossible, however, while the looting machine was in such high gear. “What we have seen with Boko Haram and all the violence in the country should give politicians pause,” Sanusi went on. “Maybe it’s time to start asking if the very opportunistic identity politics . . . is not endangering the entire system.” 

As Jonathan’s regime devoted itself to guzzling oil rents, Boko Haram, whose name means “Western education is forbidden,” sowed terror. From its heartland in the remote northeast its fighters bombed cities and burned villages across the North. Thousands died. The region’s idle young men, their prospects as bleak as those of the mill hands whose textile factories had been felled by Dutch Disease, were ready recruits. Abubakar Shekau, the sect’s megalomaniac leader, posted rambling videos online and established himself among the world’s most notorious jihadis. The corruption of the ruling class, as much as its bellicose interpretations of Quranic law, was Boko Haram’s rallying cry. 

Like the Delta militias before them, Boko Haram’s guerrillas struck Abuja, the bubble of the elite, with car bombs, though that was nothing compared to the havoc it unleashed in the North. The military, incapacitated by corruption and its budgets embezzled, was no match for the gun-toting jihadists. When a raiding party abducted two hundred schoolgirls from the village of Chibok in April 2014, the extent to which the oil-sickened Nigerian state had become incapable of its most basic duty, to safeguard its citizens, was plain for all to see. At the time of writing, Nigerians were awaiting elections scheduled for February 2015—in which Jonathan is widely expected to secure a second full term—with trepidation. [he ended up losing to General Muhammadu Buhari, dc]

What has happened to Nigeria is not the result of some innate facet of the African spirit, as some observers suggest with a shrug of casual racism. British members of Parliament have shown themselves willing to sell their right to ask parliamentary questions, and the pork-barrel politics of Capitol Hill in Washington, DC, looks very much like a patronage system. Lobbyists in every major capital inject money into politics on behalf of vested interests. The difference between a corrupted resource state and a state that can still call itself a place of representative rule is the extent to which such subversion of public office for personal benefit is the scandal or the norm. It is the degree to which the institutions of state—legislative bodies, the police, the courts—serve as instruments of the mighty or as checks on arbitrary power. 

“If you had a government in the UK or the US that could get away with these levels of corruption, they would do it,” Clement Nwankwo, the astute Nigerian political analyst, told me, sitting in his simple office on an Abuja side street. “But there are always institutions. In Nigeria people have not overcome their diversity enough to realize that they could make a difference, they could challenge this fear of authority. They resign themselves to what is. People exploit the divisions: ethnic, religious, regional. They represent themselves as protecting these interests, and they call on their people to protect them. The reality is that the generality of people don’t benefit.” 

Chinua Achebe, the late Nigerian Nobel laureate, wrote in 1983, “The trouble with Nigeria is simply and squarely a failure of leadership. There is nothing basically wrong with the Nigerian character. There is nothing wrong with the Nigerian land or climate or water or air or anything else. The Nigerian problem is the unwillingness or inability of its leaders to rise to the responsibility, to the challenge of personal example which are the hallmarks of true leadership.”62 

That remains an unsurpassed diagnosis of his nation’s malady. There is, though, something else Achebe wrote that captures the strange dissonance I witnessed time and again when I spoke with the lords of the looting machine. 

The General in the Niger Delta told me he kidnapped to pay school fees. Shell’s Mutiu Sunmonu had a lump in his throat as he recalled the terrible state of his homeland, despoiled by the oil industry he helps to run. Manuel Vicente lamented the hunger that surrounded him in Luanda, even when confronted with evidence of how the Futungo hordes the benefits of Angola’s oil. Joseph Kabila, the Congolese president whose shadow state is partly responsible for the violence that stalks his country, once said, “The worst thing I have ever seen is the sight of a village after a massacre; you can never erase that from your memory.”63 These men and thousands less prominent have enough empathy to feel the suffering caused by the system they perpetuate. But they are somehow able to subordinate that empathy to the need to keep the machine going and to ensure that they remain at the controls rather than joining the countless others who are crushed beneath it. 

Achebe’s poem “Vultures” might have been written of the perpetrators of the horrors in Jos or eastern Congo or the national stadium in Conakry, who have mothers and brothers and lovers just as their victims did. He pictures the vulture that picks the eyes of a swollen corpse in a trench before nestling its head against its mate. He imagines the commandant at Belsen who stops off on his way home after a day’s work at the concentration camp to: 

pick up a chocolate 

for his tender offspring 

waiting at home 

for Daddy’s return. . . . 

It would be ludicrous to compare the resource industry in Africa to the Holocaust, but I think Achebe was seeking to make a wider point about the human spirit: it is capable of loving and of participating in horrors in the same afternoon. Perhaps it is a source of hope for Africa’s resource states that those who wield power are coming to see the terrible cost of the trade in oil and minerals. Or perhaps the looting machine has just enough humanity to allow it to keep on turning.

next

black gold 236s

notes

chapter 7: finance and cyanide 

1. “Project Performance Assessment Report: Ghana, Mining Sector Rehabilitation Project (Credit 1921-Gh), Mining Sector Development and Environment 9781610394390-text.indd 282 1/13/15 12:15 PM notes to chapter 7 283 Project (Credit 2743-Gh), Operations Evaluation Department,” World Bank, July 2003, http://lnweb90.worldbank.org/oed/oeddoclib.nsf/docunidviewforjava search/a89aedb05623fd6085256e37005cd815/$file/ppar_26197.pdf. 

2. Newmont Ghana Gold Ltd, Press statement, October 12, 2009. 

3. Omar Jabara of Newmont Corporate Communications wrote a letter to the editor of the Financial Times, published March 31, 2010 (www.ft.com/cms/ s/0/6a148c3e-3c5d-11df-b316-00144feabdc0.html?siteedition=uk#axzz3Hpltff T1) in response to my article on Newmont, the cyanide spill and Ghana’s gold, “Mining Fails to Produce Golden Era for Ghana,” Financial Times, March 22, 2010, www.ft.com/intl/cms/s/0/0d3e06c4-35dd-11df-aa43-00144feabdc0.html#ax zz3F02grPqh. 

4. “IFC History,” IFC, www.ifc.org/wps/wcm/connect/corp_ext_content/ ifc_external_corporate_site/about+ifc/ifc+history. 

5. “The Inspection Panel Investigation Report,” World Bank, September 17, 2001, http://siteresources.worldbank.org/EXTINSPECTIONPANEL/ Resources/ChadInvestigationReporFinal.pdf. 

6. Guinean government official, telephone interview with author, September 2013. 

7. “IFC Investment in Simandou Mine (Guinea)—US Position,” US Treasury, May 24, 2012, www.treasury.gov/resource-center/international/development -banks/Documents/(2012-05-22)%20Guinea%20Statement_As%20Posted.pdf. 

8. Compliance Advisor/Ombudsman, “Appraisal Report on IFC Investment in Lonmin Platinum Group Metals Project, South Africa,” World Bank, August 30, 2013, www.cao-ombudsman.org/cases/document-links/documents/CAO_ Appraisal_LONMIN_C-I-R4-Y12-F171.pdf. 

9. “Striking a Better Balance—The World Bank Group and Extractive Industries: The Final Report of the Extractive Industries Review,” Preface, December 2003, https://openknowledge.worldbank.org/handle/10986/17705.

10. Ibid. 

11. Alan Beattie, “The World Bank Digs a Hole for Itself,” Financial Times, February 25, 2004. 

12. “Striking a Better Balance.” 

13. “Striking a Better Balance—The World Bank Group And Extractive Industries: The Final Report of the Extractive Industries Review,” World Bank Group Management Response, September 2004, http://siteresources.worldbank.org/ INTOGMC/Resources/finaleirmanagementresponseexecsum.pdf. 

14. Mark Drajem, “World Bank Accepts New Oil, Gas Lending Controls; Call to Discontinue Programs Rejected,” Washington Post, August 4, 2004, www. washingtonpost.com/wp-dyn/articles/A38174-2004Aug3.html. 9781610394390-text.indd 283 1/13/15 12:15 PM 284 notes to chapter 7 

15. Action Contre l’Impunité pour les Droits Humains, Nouvelle Dynamique Syndicale, Rights and Accountability in Development, Friends of the Earth and Environmental Defense, letter to Miga’s executive director, August 25, 2004 (copy in author’s possession). 

16. Right and Accountability in Development et al., “Anvil Mining Limited and the Kilwa Incident: Unanswered Questions,” October 20, 2005, www.raid-uk .org/sites/default/files/qq-anvil.pdf. 

17. Philippe Valahu, acting director of Miga’s operations group, letter to Patricia Feeney of Rights and Accountability in Development and Colleen Freeman of Friends of the Earth US, August 18, 2005 (copy in author’s possession). 

18. US Embassy in Kinshasa, “Possible Massacre at Kilwa,” diplomatic cable, November 18 2004, WikiLeaks, September 1, 2011, www.wikileaks.org/plusd/ cables/04KINSHASA2118_a.html. 

19. Office of the Compliance Advisor/Ombudsman, “CAO Audit of Miga’s Due Diligence of the Dikulushi Copper-Silver Mining Project in The Democratic Republic of the Congo,” November 2005, www.cao-ombudsman.org/cases/ document-links/documents/DikulushiDRCfinalversion02-01-06.pdf. 

20. World Bank spokesperson, e-mail exchange with author, January 2014. 

21. Human Development Index 2014, UN Development Programme, http://hdr .undp.org/en/content/table-1-human-development-index-and-its-components. 

22. Ousman Gajigo, Emelly Mutambatsere, and Guirane Ndiaye, “Royalty Rates in African Mining Revisited: Evidence from Gold Mining,” African Development Bank, June 2012, www.afdb.org/fileadmin/uploads/afdb/Documents/ Publications/AEB%20VOL%203%20Issue%206%20avril%202012%20Bis_ AEB%20VOL%203%20Issue%206%20avril%202012%20bis_01.pdf. 

23. The figures on Zambia are drawn from “Equity in Extractives,” Africa Progress Panel, 2013, http://africaprogresspanel.org/wp-content/uploads /2013/08/2013_APR_Equity_in_Extractives_25062013_ENG_HR.pdf. 

24. “Fiscal Regimes for Extractive Industries: Design and Implementation, International Monetary Fund,” April 2012, www.imf.org/external/np/pp/ eng/2012/081512.pdf, cited in “Equity in Extractives.” 

25. Varma is not the only senior IFC official to switch between the institution and companies it assists. Thierry Tanoh, a former IFC vice-president for Latin America, sub-Saharan Africa, and western Europe, was designated as the next chief executive designate of a pan-African bank called Ecobank Transnational (ETI) a day before the IFC revealed it would increase its investment in the bank by $100 million. Lars Thunell, a former IFC chief executive, was in 2012 appointed to the board of Kosmos, the Texan oil explorer with interests in Ghana, 9781610394390-text.indd 284 1/13/15 12:15 PM notes to chapter 7 285 which was backed by the IFC and private equity houses, including Warburg Pincus, the one Varma had joined in 2011. Following such moves, the IFC tightened rules designed to prevent conflicts of interest. See William Wallis, “World Bank Unit Toughens Staff Rules,” Financial Times, December 23, 2013, www.ft.com/ cms/s/0/5a6a4054-6250-11e3-bba5-00144feabdc0.html#axzz3F0NBUX6g. 

26. Somit Varma, telephone interview with author, November 2009. 

27. Burgis, “Mining Fails to Produce Golden Era for Ghana.” 

28. Gajigo, Mutambatsere, and Ndiaye, “Royalty Rates in African Mining Revisited: Evidence from Gold Mining.” 

29. Jeff Huspeni, telephone interview with author, November 2009. 

30. Much of the literature is reviewed in “Addressing Base Erosion and Profit Shifting,” Organisation for Economic Co-operation and Development, 2013, www.loyensloeff.com/nl-NL/Documents/OECD.pdf. 

31. “Action Plan on Base Erosion and Profit Shifting,” Organisation for Economic Co-operation and Development, 2013, www.oecd.org/ctp/BEPSAction Plan.pdf. 

32. Jane G. Gravelle, “Tax Havens: International Tax Avoidance and Evasion,” National Tax Journal 62, no. 4 (December 2009): 727. 

33. “Equity in Extractives.” 

34. Nick Mathiason, “Piping Profits,” Publish What You Pay (Norway), September 19, 2011, www.publishwhatyoupay.org/resources/piping-profits-secret -world-oil-gas-and-mining-giants. 

35. Christian Aid, “False Profits: Robbing the Poor to Keep the Rich TaxFree,” March 2009, www.christianaid.org.uk/images/false-profits.pdf. 

36. “The Africa-China Connection,” Fitch Ratings, December 28, 2011, private note to clients. 

37. Paul Wolfowitz, interview with Les Echos, October 19, 2006, http://web .worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION /EXTPRESIDENT/EXTPASTPRESIDENTS/EXTOFFICEPRESIDENT/ 0,,contentMDK:21102200~menuPK:64343277~pagePK:51174171~piPK:6425 8873~theSitePK:1014541,00.html. 

38. James Wolfensohn, interview with Forbes, January 17, 2011, www.forbes .com/2011/01/14/james-wolfensohn-world-bank-transcript-intelligent-investing .html. 

39. Michael J. Kavanagh, “IMF Halts Congo Loans over Failure to Publish Mine Contract,” Bloomberg, December 3, 2012, www.bloomberg.com/news/2012-12 -03/imf-halts-congo-loans-over-failure-to-publish-mine-contract-2-.html; International official, telephone interview with author, July 2013. The deal in question 9781610394390-text.indd 285 1/13/15 12:15 PM 286 notes to chapter 7 involved the undisclosed transfer of the state’s 25 percent stake in the Comide copper project to a British Virgin Islands company called Straker International, as part of a broader transaction involving Gertler companies. 

40. Angolan Embassy in London, “Ministry of Finance Denies Misuse of Chinese Loans,” October 17, 2007. 

41. “Transcript of a Conference Call on Angola with Sean Nolan, Senior Advisor in the African Department, and Lamin Leigh, Angola Mission Chief,” IMF, November 25, 2009, www.imf.org/external/np/tr/2009/tr112509.htm. 

42. “IMF Risks Condoning Corruption with New Loan to Angola,” Global Witness, October 5 2009, www.globalwitness.org/fr/node/3855. 

43. Lamin Leigh, Yuan Xiao, and Nir Klein (of the IMF’s Africa department), “IMF Lends Angola $1.4 Billion to Support Reserves, Reforms,” International Monetary Fund, November 23, 2009, www.imf.org/external/pubs/ft/survey/ so/2009/car112309b.htm. 

44. “IMF Executive Board Approves US$1.4 Billion Stand-By Arrangement with Angola,” IMF, November 23, 2009, www.imf.org/external/np/sec/pr/2009/ pr09425.htm. 

45. The IMF’s first analysis of the hole in Angola’s accounts and the reasons for it is in the “Fifth Review Under the Stand-By Arrangement with Angola,” IMF, December 8, 2011. This and all other IMF reports on Angola are at www. imf.org/external/country/ago. 

46. Ricardo Soares de Oliveira, “Transparency Reforms Yield Little Change,” Financial Times, July 18, 2012, www.ft.com/intl/cms/s/0/e8c819ce-c5f9-11e1 -b57e-00144feabdc0.html#axzz3F0NBUX6g. 

47. Andrew England and William Wallis, “Angola Sets Up Fund to Preserve Oil Riches,” Financial Times, October 17, 2012, www.ft.com/intl/cms/s/0/fb1db978 -186d-11e2-8705-00144feabdc0.html#axzz3F0NBUX6g. 

48. International Monetary Fund, “IMF Concludes Second Post-Program Monitoring Mission to Angola,” press release, January 30, 2013, www.imf.org/ external/np/sec/pr/2013/pr1329.htm. 

49. Barnaby Pace, interview with author, London, February 2014. 

chapter 8: god has nothing to do with it 

1. Annkio Briggs, interview with author, Port Harcourt, May 2013. 

2. Judith Burdin Asuni, “Understanding the Armed Groups of the Niger 9781610394390-text.indd 286 1/13/15 12:15 PM notes to chapter 8 287 Delta,” Council on Foreign Relations, September 2009, www.cfr.org/nigeria/ understanding-armed-groups-niger-delta/p20146. 

3. UN Office on Drugs and Crime, “Transnational Trafficking and the Rule of Law in West Africa: A Threat Assessment,” July 2009, www.unodc.org/ documents/data-and-analysis/Studies/West_Africa_Report_2009.pdf. 

4. Christina Katsouris and Aaron Sayne, “Nigeria’s Criminal Crude: International Options to Combat the Export of Stolen Oil,” Chatham House, September 2013, www.chathamhouse.org/sites/files/chathamhouse/public/Research/ Africa/0913pr_nigeriaoil.pdf. 

5. Transition Monitoring Group final report on the 2003 Nigerian elections, quoted in “Nigeria’s 2003 Elections: The Unacknowledged Violence,” Human Rights Watch, June 2004, www.hrw.org/reports/2004/nigeria0604/nigeria0604 .pdf. 

6. Patrick Naagbanton, “On the Denouement of Soboma George (Part 1),” Sahara Reporters, August 31, 2010, http://saharareporters.com/2010/08/31/ denouement-soboma-george-part-1. 

7. IRIN, “Nigeria: Shell Evacuates Oil Platforms After Fresh Attacks,” January 16, 2006, www.irinnews.org/report/57816/nigeria-shell-evacuates-oil -platforms-after-fresh-attacks. 8. Asuni, “Understanding the Armed Groups of the Niger Delta.” 

9. “Statement by Farah Dagogo, Out-Going Commander of MEND,” issued by Jomo Gbomo, October 3, 2009, in author’s possession. 

10. “World Report 2013,” Human Rights Watch, Nigeria chapter, www.hrw .org/world-report/2013/country-chapters/nigeria. 

11. Published accounts of the massacre include “Nigeria: Protect Survivors, Fully Investigate Massacre Reports,” Human Rights Watch, January 24, 2010, www.hrw.org/news/2010/01/22/nigeria-protect-survivors-fully-investigate -massacre-reports. 

12. Senan Murray, “Profile: Joshua Dariye,” BBC, July 24, 2007, http://news .bbc.co.uk/2/hi/africa/6908960.stm. 

13. “Biography,” Plateau State, www.plateaustate.gov.ng/?ContentPage&sec id=55&sub_cnt=sectionpage&sub_cntid=155. 

14. Philip Ostien, “Jonah Jang and the Jasawa: Ethno-Religious Conflict in Jos, Nigeria,” Muslim-Christian Relations in Africa series, August 2009, www. sharia-in-africa.net/media/publications/ethno-religious-conflict-in-Jos-Nigeria/ Ostien_Jos.pdf. 

15. Northern Christian leader, interview with author, Kaduna, January 2010. 

16. Former Plateau State official, interview with author, Jos, January 2010. 9781610394390-text.indd 287 1/13/15 12:15 PM 288 notes to chapter 8 

17. I requested an interview with Jonah Jang again when I was back in Nigeria in 2013 but was told he was not available. 

18. US Embassy in Abuja, “Nigeria: Jos Riots Not/not Caused by Outsiders from Niger and Chad,” cable, December 19, 2008, WikiLeaks, www.wikileaks .org/plusd/cables/08ABUJA2494_a.html. 

19. Ostien, Jonah Jang. 

20. The details of the Willbros, Panalpina, and KBR bribery schemes are detailed in settlements with the US Department of Justice at www.justice .gov and the Securities and Exchange Commission at www.sec.gov (Willbros: www.justice.gov/criminal/fraud/fcpa/cases/willbros-group.html; Panalpina/ Shell: www.justice.gov/opa/pr/oil-services-companies-and-freight-forwarding -company-agree-resolve-foreign-bribery; KBR/Haliburton: www.justice.gov/ opa/pr/kellogg-brown-root-llc-pleads-guilty-foreign-bribery-charges-and-agrees -pay-402-million). 

21. “Global Enforcement Report 2012,” TRACE International, www.trace international.org/data/public/GER_2012_Final-147966-1.pdf 

22. Judgment of Lady Justice Gloster, High Court, London, in Energy Venture Partners Limited v. Malabu Oil and Gas Limited, July 17, 2013, in author’s possession. 

23. “Safe Sex in Nigeria,” The Economist, June 15, 2013, www.economist .com/news/business/21579469-court-documents-shed-light-manoeuvrings -shell-and-eni-win-huge-nigerian-oil-block; “The Scandal of Nigerian Oil Block OPL 245,” Global Witness, November 2013, www.globalwitness.org/library/ scandal-nigerian-oil-block-opl-245-0. 

24. Emilio Parodi and Oleg Vukmanovic, “Large Part of Eni’s Nigerian Oil Deal Cash Went on Bribes—Italian Prosecutors,” Reuters, October 1, 2014, www.reuters.com/article/2014/10/01/eni-nigeria-investigation-idUSL6N0RW 40720141001. 

25. Chip Minty (spokesman for Devon Energy), e-mail exchange with author, October 2013. 

26. Koye Edu, telephone interview with author, December 2013. 

27. Bård Glad Pedersen (spokesman for Statoil), e-mail exchange with author, October 2013. 

28. “China Sonangol’s Secret License,” Africa Energy Intelligence, July 8, 2009, www.africaintelligence.com/AEM/oil/2009/07/08/china-sonangol-s-secret -license,65100549-GRA. 

29. See, for example, Dino Mahtani, “Nigeria Vows to Investigate $90m Oil Deal,” Financial Times, October 31, 2006; Kate Linebaugh and Shai Oster, 9781610394390-text.indd 288 1/13/15 12:15 PM notes to chapter 8 289 “Cnooc Pays $2.27 Billion for Nigerian Oil, Gas Stake,” Wall Street Journal, January 10, 2006, http://online.wsj.com/articles/SB113680307278841473. 

30. There were also reports in the Nigerian press that corroborated what my contacts told me: China Sonangol had secured a 95 percent stake in OPL 256, with the remaining 5 percent held by the Nigerian Petroleum Development Company, an arm of the state-owned Nigerian National Petroleum Corporation. See Hamisu Muhammad, “Most Indigenous Oil Blocks Not Producing— Report,” Daily Trust, March 19, 2013, http://allafrica.com/stories/201303190385 .html. 

31. Former presidential aide, telephone interview with author, October 2013.

32. Former senior Nigerian official, telephone interview with author, January 2014. 

33. “Who’s Who: Dr Andy Uba,” Africa Confidential, June 5, 2014, www. africa-confidential.com/whos-who-profile/id/2603/Andy_Uba. This profile also says that Uba “has a significant stake in China Sonangol,” although I was unable to find company documents demonstrating as much. 

34. Oil industry professional, telephone interview with author, September 2013. 

35. Ike Okonta and Oronto Douglas, Where Vultures Feast: Shell, Human Rights, and Oil (Brooklyn: Verso, 2003), 134. 

36. See, for example, Adewale Maja-Pearce, “Remembering Ken Saro-Wiwa,” in Remembering Ken Saro-Wiwa and Other Essays (Lagos, Nigeria: New Gong, 2005). 

37. See, for example, Okonta and Douglas, Where Vultures Feast, 58. 

38. Royal Dutch Shell, “Shell Settles Wiwa Case with Humanitarian Gesture,” press release, June 8, 2009, www.shell.com/global/aboutshell/media/news-and -media-releases/2009/shell-settlement-wiwa-case-08062009.html. 

39. Dino Mahtani and Daniel Balint-Kurti, “Shell Gives Nigerian Work to Militants’ Companies,” Financial Times, April 27, 2006. 

40. A US diplomatic cable, “Militants Ask Mittee for Help for Villagers Wounded in Rivers Conflict; Some Villagers Killed in JTF Attacks,” September 24, 2008, WikiLeaks, https://wikileaks.org/plusd/cables/08LAGOS374_a.html, shows that Ann Pickard, then Shell’s Africa chief, was aware of precise details of a JTF assault in the Niger Delta reported to have caused civilian casualties. I asked Shell for its comments on the cable, and a spokesman responded, “Shell’s Country Chairs regularly meet with government officials in the countries where we operate and discuss topics of mutual concern. There is nothing untoward about this. It is not unusual for issues relating to the security of our facilities to 9781610394390-text.indd 289 1/13/15 12:15 PM 290 notes to chapter 8 be discussed in those meetings, in particular in Nigeria, but we cannot comment on the contents of documents which we did not produce.” Precious Okolobo, spokesman for Shell companies in Nigeria, e-mail exchange with author, July 2013. 

41. I asked Shell’s spokesmen in Nigeria and London to comment on the accounts I was told about the ties between the company and the Delta’s militants. Part of their reply was: “It is also SPDC policy that certain types of contracts are awarded to community contractors; yet even these contracts are based on transparent and auditable processes. SPDC does not award contracts to armed groups, this being against the Shell General Business Principles. All SPDC contractors (including community contractors) are subjected to a rigorous Integrity Due Diligence (IDD) checks before registration as contractors and also before contract award or renewal.” 

42. Shell’s e-mail responses to questions from author, July 2013. 

43. Shell briefing notes, “Global Memorandum of Understanding,” April 2013, http://nidprodev.org/index.php/programmes/current-projects/global-memo randum-of-understanding-gmou-deployment. 

44. Niger Delta go-between, interviews with author, Port Harcourt, August 2010 and April 2013. 

45. Shell’s e-mail responses to questions from author, July 2013. 

46. Former Shell employee, interview with author, April 2013. 

47. Harriman Oyofo, interview with author, Warri, April 2013. 

48. Ben Amunwa, “Dirty Work: Shell’s Security Spending in Nigeria and Beyond,” Platform, August 2012, http://platformlondon.org/wp-content/uploads /2012/08/Dirty-work-Shell%E2%80%99s-security-spending-in-Nigeria-and -beyond-Platform-August-2012.pdf. 

49. When I asked the company about the scale of its community development spending, it said, “We calculate figures annually. In 2012, SPDC and SNEPCo [the Shell subsidiary that runs its offshore oil projects in Nigeria] directly invested $103.2 million toward addressing social and economic development challenges in the region. This has nothing to do with the security budget. The annual GMoU budget is based on the agreed mandate with the clusters. It may interest you to know that, in addition to the GMoU initiative, Shell operations in 2012, contributed over $178 million to the Niger Delta Development Commission (NDDC), as required by law.” Shell’s e-mail responses to questions from author, July 2013. 

50. Aaron Sayne, “Antidote to Violence? Lessons for the Nigerian Federal Government’s Ten Percent Community Royalty from the Oil Company Experience,” 9781610394390-text.indd 290 1/13/15 12:15 PM notes to chapter 9 291 Transnational Crisis Project, February 2010, http://crisisproject.org/wp-content/ uploads/2011/09/Antidote-to-Violence-Niger-Delta-Report-no.1.pdf. 

51. Niger Delta activist, interview with author, Port Harcourt, May 2013. 

52. “Nigeria Governor to Be Impeached,” BBC News, November 23, 2005, http://news.bbc.co.uk/2/hi/africa/4462444.stm. 

53. See, for example, “Nigeria: Presidential Election Marred by Fraud, Violence,” Human Rights Watch, April 26, 2007, www.hrw.org/news/2007/04/25/ nigeria-presidential-election-marred-fraud-violence. 

54. Tom Burgis, “Jonathan Wins Nigerian Ruling Party Primary,” Financial Times, January 14, 2011. 

55. Clement Nwankwo, interview with author, Abuja, April 2013. 

56. Financier close to the PDP and a senior PDP politician, interviews with author, Lagos, May 2013. 

57. “Nigeria: Post-Election Violence Killed 800,” Human Rights Watch, May 17, 2011, www.hrw.org/news/2011/05/16/nigeria-post-election-violence-killed-800. 

58. “Fiscal Regimes for Extractive Industries: Design and Implementation,” International Monetary Fund, August 15, 2012, www.imf.org/external/np/pp/ eng/2012/081512.pdf. 

59. Oil revenue data from the International Monetary Fund, IMF Article IV Consultation reports on Nigeria, various years, www.imf.org/external/country/ nga. 

60. William Wallis, “Nigeria Bank Governor Alleges Oil Subsidy Racket,” Financial Times, February 12, 2014, www.ft.com/cms/s/0/6c4aea72-93cd-11e3-a0e1 -00144feab7de.html#axzz3F0fTN4qv. 

61. Lamido Sanusi, interview with author and William Wallis of the Financial Times, London, January 2012. 

62. Chinua Achebe, The Trouble with Nigeria (London: Heinemann, 1983), 1. 

63. Francois Soudan, “Portrait: Joseph Kabila,” La Revue, July/August 2006, quoted in Jason K. Stearns, Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa (New York: PublicAffairs, 2011), 311.

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