Friday, December 2, 2016

EMBRAER BRIBE SCANDAL

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A document from the Federal Public Prosecutor’s Office in Brazil has named the former chairperson of the board of Mozambican Airlines (LAM), Jose Viegas, as involved in taking an 800,000 US dollar bribe from the Brazilian aircraft manufacturer, Embraer.The scandal came to light in October, when US Assistant Attorney General Leslie R. Caldwell announced that Embraer had agreed to pay a fine of more than 107 million US dollars in connection with schemes involving the bribery of senior officials in Mozambique, the Dominican Republic, India and Saudi Arabia. Under questioning, Embraer admitted that its executives had bribed foreign government officials and had falsified records in connection with aircrafts sales in several countries. The Mozambican connection was a bribe of 800,000 dollars paid via what the Justice Department describes as “a false agency agreement with an intermediary designated by a high-level official” in Mozambique Airlines (LAM). The purpose of the bribe was to secure LAM’s agreement to purchase two aircraft from Embraer for approximately 65 million dollars. The full cost to Embraer of these cases is much higher – the company has also reached a settlement with the US Securities and Exchange Commission (SEC) which will cost it over 98 million dollars, and it will pay the Brazilian authorities 20 million dollars.The documentation on the case from the US Justice Department and the SEC gives details of how the bribe was paid, but gives no names. The Brazilian prosecutors are less reticient. Their document, dated 6 October this year, and signed by both prosecutors and senior Embraer officials names Viegas as the LAM official involved and the intermediary (or “Agent C” as he is referred to in one of the US documents) as Mateus Zimba. 
Resultado de imagem para jose viegas lamZimba was not an employee of LAM. For many years he was the Mozambican manager of the South African petrochemical giant, SASOL, and is currently the regional director of the US company General Electric.According to the Brazilian document, Embraer sales director Patrice Candaten had been trying for three years to sell aircraft to LAM and on 22 May 2008 formalised a proposal for the sale of two aircraft for 32 million dollars each, with an option to purchase a further two at the same price.But on 11 August 2008, Candaten sent an e-mail to Luis Fuchs, Vice-President of Embraer-Europe, saying that he had been approached by Mateus Zimba, who had played no part in the sales negotiations.
Resultado de imagem para jose viegas lamResultado de imagem para Mateus ZimbaZimba wanted to work as “a consultant” in the deal, and Candaten proposed that Embraer “create some margin for commissions” for Zimba.Fuchs sent a message to Candaten two days later saying he had spoken to Zimba who told him that, although Embraer had not expected to deal with any consultant, “we would like to have ‘a gesture’ on delivery of the first plane”. Fuchs suggested that this “gesture” could be between 50,000 and 80,000 dollars.He added that he had told Zimba how to set up a company to which Embraer could send payments for the supposed “consultancy services”. This company “should not be based in a tax haven”, Fuchs warned.Another senior Embraer official, Jose Molina, approved the offer of 50,000 dollars to Zimba for each of the first two planes with “a margin of negotiation” that could reach 80,000 dollars.But when Zimba received this “offer”, Fuchs soon understood that he was expecting much more, and hinted that unless the “offer” was increased, LAM might buy its planes from some other manufacturer.Viegas then phoned Fuchs, who briefed Candaten on the conversation in an e-mail of 25 August. He said that Viegas had received reactions from unnamed other people who regarded the Embraer offer “as an insult, and to some extent it would have been less offensive to offer nothing at all”.
When Fuchs asked what he would find acceptable, Viegas suggested a million dollars, but eventually settled on 800,000. Funchs told him that Embraer did not have that sort of money for “consultancy servces”, and so Viegas suggested increasing the price of the aircraft. So on 15 September 2008, LAM and Embraer signed an agreement whereby LAM would buy two Embraer E-190 aircraft for 32.69 million dollars each. Viegas was one of the LAM executives who signed the agreement.On 22 April 2009, Embraer signed a commercial representation agreement with the company Xihevele, set up by Zimba, and registered in Sao Tome and Principe. This company was to promote the sale of E-190 aircraft to LAM, even though LAM had already signed the purchase agreement.Xihevele had not existed during the negotiations between LAM and Embraer. The Brazilian document noted that the contract with Zimba’s company falsely stated that its sales promotion work began in March 2008.Although Zimba had provided no services at all to Embraer, the Brazilian company accepted two invoices from him each for 400,000 dollars, and dated 15 August 2009 and 24 September 2009. The money was paid into a Xihevele account in Portugal, and Embraer explained the payments in its own accounts as “sales commissions”.The independent television station STV asked Viegas about the Brazilian account. He replied that he had nothing to say, because a long time had passed, and there are things he no longer remembers. STV attempted to contact Zimba, but he did not answer the phone. According to the Zitamar News Service, Zimba has refused to comment on the matter. Senior Mozambican lawyers believe that the Public Prosecutor’s Office should act. The former chairperson of the Bar Association (OAM), Gilberto Correia, cited in the daily paper “O Pais”, said Mozambican prosecutors should have begun an investigation when the US Justice Department issued its statement.He noted that LAM had been prejudiced because it paid more than it should have for the planes. Correia called for criminal and civil suits against those involved, to oblige them to compensate LAM. 
Resultado de imagem para teodoro watyTeodoro Waty, a former chairperson of Mozambique Airlines (LAM), has said that he did not notice any irregularities in the management of the company when he took over from Jose Viegas in 2011. Viegas has been implicated in the scandal of an 800,000 US dollar bribe paid to LAM by the Brazilian aircraft manufacturer Embraer in 2009.Asked by the independent television station STV for his reaction to the scandal, Waty said “Newspapers are not courts, I have no proof that what is said is true. I trust my predecessor. When I was there, I saw no signs of what has been reported”.Waty seems unaware that the source of the accusation against Viegas is not any media report, but a document signed by Brazilian federal prosecutors and by officials from Embraer itself. Embraer was accused of bribing officials, not only in Mozambique, but also in India, Saudi Arabia and the Dominican Republic. It reached a settlement both in Brazil and in the United States, which involved paying total fines of around 225 million US dollars, and giving full details of the bribes.Despite his apparent trust in Viegas, Waty also hoped that prosecutors in Mozambique will investigate the case. “We hope that Mozambican justice plays its role”, he said. “I believe that it will intervene and that it will be impartial, equidistant, just and speedy to clear up what happened”.A representative of the Mozambican Bar Association (OAM), Filipe Sitoe, told STV “the judicial bodies should do their work, and with full respect for the rights of the suspect”.A second person named in the Brazilian document is Mateus Zimba, who at the time was the manager in Mozambique for the South African petrochemical giant, Sasol, and is now regional director of the US company, General Electric.Zimba was allegedly a middleman in the bribe, setting up a fake company, named Xihevele, and registered in Sao Tome and Principe, which received the money from Embraer in an account in Portugal.The independent newssheet “Mediafax” caught up with Zimba on Thursday at a conference on natural gas held in Maputo’s Joaquim Chissano Conference Centre and tried to ask him about the scandal.According to Friday’s issue of the paper, Zimba replied “There’s nothing I can say. I have a great deal of respect for your work”.When the reporter tried to insist, Zimba simply said “Thank you very much”.











Thursday, December 1, 2016

BALTAZAR DENOUNCES ELECTORAL CRIMES

The former chairperson of Mozambique’s Constitutional Council, the body that is the final arbiter on matters of constitutional and electoral law, Rui Baltazar, on Monday demanded that people who commit electoral crimes should be treated in exactly the same way as any other criminalBaltazar is one of the most experienced and respected jurists in Mozambique. As a young lawyer he defended political prisoners in the colonial courts, and after independence he was justice minister and later finance minister in the governments of the country’s first president, Samora Machel. He was the first chairperson of the Constitutional Council, between 2003 and 2009.At a Maputo seminar on the country’s electoral legislation on Monday, Baltazar expressed his anger at the failure of the country’s legal system to punish people who violate the election laws. Despite well attested cases of fraud, and of violence during election campaign, very few people have ever been brought to trial for such offences. Baltazar had direct experience of fraudulent behaviour when would-be presidential candidates presented the Constitutional Council with documents that were obviously forged. One requirement for any presidential candidate is a list of at least 10,000 supporters, whose signatures must be verified by a notary.
Resultado de imagem para rui baltazar maputoBaltazar noted that, in the 2009 elections, one of the would-be candidates presented just ten valid signatures. At the time the Council noted that several candidates from minor political parties presented lists of names that had obviously just been copied from an electoral register, and that signatures had been added that were clearly by the same person. Although forging documents is a serious offence, the Public Prosecutor’s Office took no action against these fraudulent candidates Repeatedly, the media have reported on dishonest polling station staff deliberately invalidating votes (usually for opposition candidates) by adding another mark to ballot papers during the count. This type of fraud was denounced in 2009 by both the National Elections Commission (CNE) and by the Constitutional Council, but no action was taken.“The more electoral offences are committed, the more this behavior becomes normal, banal, and the less seriousness can we expect from our elections”, warned Baltazar”.“Something must be done to put an end to this impunity”, he declared. “It is a crime as serious as any other crime. We must regard the people who commit these electoral offences as criminals, as delinquents, regardless of what party they may belong to”.While it is true that political parties exist to compete for power, said Baltazar, that power should be used to serve the people, and not for personal gain.“Fight to win elections, yes”, he added, “but in order to develop the country, and improve the living conditions of our people, and not for personal benefit. Our political parties should be ashamed of having members or sympathizers who commit electoral crimes, and they should be the first to denounce them, however painful that may be”.He attacked the shift in attitudes away from collective solidarity towards personal benefits. “The philosophy that power exists to serve the people has been replaced by the belief that we must reach power in order to obtain privileges and benefits”, he accused.Political parties ought to be inspired by “ideals of solidarity, of sacrifice for the common good. But this is being lost in our country, if it ever existed, and power is being viewed fundamentally as a source of benefits”.

Wednesday, November 30, 2016

GUEBUZA TESTIFIES TO PARLIAMENTARY COMMISSION

Former Mozambican President Armando Guebuza on Monday testified before the parliamentary commission of inquiry set up to investigate the enormous government guaranteed loans granted by the European banks Credit Suisse and VTB of Russia to the quasi-public companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Assets Management).The loans date from 2013 and 2014, at the end of Guebuza’s second term of office as President. Taken together, the three loans amounted to over two billion US dollars (850 million for Ematum, 622 million for Proindicus, and 535 million for MAM).Because of the government guarantees, these loans added 20 per cent to Mozambique’s foreign debt. 
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The short repayment payment periods and the high interest rates the loans bear have thrust the Mozambican debt over the sustainability threshold, forcing the Ministry of Economy and Finance to inform creditors that, since the country cannot possibly meet the repayment schedule, these debts must be restructured.Under an agreement reached with the International Monetary Fund (IMF), Ematum, Proindicus and MAM are to be audited by the US company Kroll (the world’s foremost forensic audit experts) to find out what the money was spent on.Even before agreement was reached on the audit, the Attorney-General’s Office had begun investigating the three loans, and assistant Attorney-General Taibo Mocubora told reporters that signs of criminal behavior has been found.He gave no details, but this may refer to violations of the 2013 and 2014 budget laws. Every year the budget law contains a clause limiting the amount of loans that the government can guarantee. In the 2013 law that ceiling was the equivalent of 6.5 million dollars, and in 2014 it was raised to the equivalent of 515 million dollars. Cleary, guarantees for over two billion dollars are massive breaches of these ceilings.The commission of inquiry questioned Guebuza behind closed doors, and the former president did not speak to reporters. He met with the commission for about an hour.Guebuza arrived at the country’s parliament, the Assembly of the Republic, with the police escort to which he is entitled, as a former head of state. He was accompanied by several advisers, including former transport minister Gabriel Muthisse and a former chairperson of Mozambican public television (TVM), Armindo Chavana. Guebuza is the last person to give evidence to the commission, which has already questioned former finance minister, Manuel Chang, who signed the government guarantees for the loans. The Commission must now deliver its report to the Assembly, and the deadline for this is Wednesday. The Commission of Inquiry, chaired by Eneas Comiche, head of the Assembly’s Plan and Budget Commission. consists of 11 members, ten from the ruling Frelimo Party, and one from the opposition Mozambique Democratic Movement (MDM). The main opposition party, the rebel movement Renamo, is boycotting the Commission.Renamo said it would not join the commission unless it also contained non-parliamentary figures from civil society. Frelimo and the MDM believe that a parliamentary commission of inquiry must consist solely of parliamentary deputies, as specified in the Assembly’s own standing orders.The result of the Renamo boycott is that the MDM’s Venancio Mondlane is the sole opposition voice on the commission. 

NO DECENTRALISATION PROPOSAL YET, ADMITS RAFFAELLI

As November slips to its end, there is still no consensual proposal on decentralization from the joint commission between the Mozambican government and the rebel movement Renamo.The international mediating team had hoped to submit this proposal to the country’s parliament, the Assembly of the Republic before the end of the month. But on Tuesday, the coordinator of the mediating team, European Union representative Mario Raffaelli, admitted that it might only reach the Assembly’s hands in December.Raffaelli admitted this delay when he spoke to reporters after an internal meeting of the mediating team, at which the former President of Botswana, Ketumile Masire, who has been absent from recent sessions, was brought up to scratch on the latest development.“November is an indicative date”, said Raffaelli. “There’s no problem if the document is delayed by three days. We shall do everything to send it”.The mediators drew up a proposal on decentralization in late October, and then left the country for a short period while the government and Renamo analysed the proposal, which centres on the issue of provincial governance, and how provincial governors should be appointed or elected.This month, the government and Renamo made their counter-proposals, and the mediators’ task is to attempt to weave these together into something that will enjoy consensus. Raffaelli confirmed that the mediators are still working on harmonizing the counter-proposals.“If we had already harmonized them, then we would have a full meeting of the Joint Commisison”, he said. In recent weeks, there have been no plenary sessions of the Joint Commission. Instead, the mediators have held separate meetings with each of the two delegations.The decentralization proposal is supposed to lead to constitutional amendments and to new, or revised legislation, which must be approved by the Assembly.As the days pass, the likelihood that the Assembly will be able to approve any part of the decentralization package before the end of the year is diminishing. For the current sitting of the Assembly is due to end on 20 December, and has yet to deal with several items that cannot be delayed, such as the 2017 government plan and budget, and President Filipe Nyusi’s State of the Nation address. 

Thursday, November 17, 2016

Mozambican exports to the US

Resultado de imagem para porta contentoresThe United States of America this week expressed its interest in continuing to support the Mozambican private sector in identifying and removing barriers that hinder exports to the North American market.Such was the sentiment expressed by the US African Export and Administration Policy Coordinator Florizelle Liser at a meeting with the Mozambican private sector in Maputo aimed at finding ways to overcome difficulties that domestic companies face exporting products to the North American market.Under the African Growth and Opportunity Act (AGOA), a US Government program to boost the sale of goods and goods produced in Africa, Mozambique can export 6,500 different products to the American market, but has taken little advantage of this opportunity opened by the American Government because of a number of factors.Among these, Paulo Fumane, a CTA adviser, singles out technical constraints related to the export chain itself and the demanding sanitary requirements imposed by the American market.
“In recent years, some sectors have reduced or almost stopped exporting to the American market. It is necessary to reactivate trade relations by seeking ways to remove the barriers, which are not tariffs but rather technical requirements in the export chain itself, together,” said Fumane.
He said that included in this perspective were processed as well as fresh products.
Fumane said that the US was willing to support the Mozambican private sector in removing barriers in order to increase in the volume of exports, and the US African Export and Administration Policy coordinator Florizelle Liser reaffirmed the US Government’s willingness to support the Mozambican private sector, noting that Mozambique had many products that it could export to the US duty-free but was not taking the opportunity.As a result, she said: “We had a meeting to see what we could do with the Mozambican government and private sector in order to increase the levels of trade relations.”A day before the meeting with the private sector the US representative met members of the Mozambican government to define a joint action plan aimed at promoting American investment in Mozambique and increasing trade between the two countries.The national director of external trade at the Ministry of Industry and Trade, Amílcar Arone, said that the government was continuing to work with the private sector to remove barriers and improve the business environment.