8/19/11 - how to keep robbing an ex-colony

In today's excerpt - in the 17th through the 19th centuries, an astonishing thing happened: the countries from the tiny continent of Europe took over almost the entire rest of the world and ran those lands as colonies. All of Africa save Ethiopia became colonies; all of the Americas, almost all of Asia (save China, which became a de facto colony after the opium wars). And while this was portrayed as an effort to lift up these savage countries ("the white man's burden"), it retarded the natural development of leadership within these countries and instead became an opportunity for daring entrepreneurs like Cecil Rhodes to build fortunes.

The benefits to the European governments that did the colonizing was far less evident though, and the colonies became a financial burden, which led to the unraveling of the British, French and other empires in the aftermath of two world wars. However, the great mineral wealth of these countries was too much for the businesses and entrepreneurs to leave behind, so as these countries were being "de-colonized", the sponsoring countries attempted to leave behind "friendly" leadership, even if the result was to continued to retard the development of organic leadership and democracy within those countries. Such was the case with the African nation of Gabon and the "Elf affair" which splashed across European headlines in the mid-1990s. One of the most fascinating aspects of this—which is relevant in understanding the selection of post-colonial dictators in numerous other countries—is that the French chose a dictator from a minority tribe to increase that dictator's dependency on French support:

"[The so-called Elf affair scandal] began in 1994 when U.S.-based Fairchild Corp. opened a commer­cial dispute with a French industrialist, triggering a stock exchange inquiry. Unlike in more adversarial Anglo-Saxon legal systems, where the prosecution jousts with the de­fense to produce a resolution, the investigating magistrate in France is more like an impartial detective inserted between the two sides. ... In this case Eva Joly, the Norwegian-born investigating magistrate, found that every time she investigated something new leads would emerge. ... She began re­ceiving death threats: A miniature coffin was sent to her in the post, and on a raid of one business she found a Smith & Wesson revolver, fully loaded and pointed at the en­trance. But she persisted: Other magistrates became involved, and as the extraordinary revelations began to accumulate, they began to discern the outlines of a gigantic sys­tem of corruption that connected the French state-owned oil company Elf Aquitaine with the French political, commercial, and intelligence establishments, via Gabon's deeply corrupt ruler Omar Bongo.

"Bongo's story is a miniature tale of what happened when France formally relin­quished its colonies. As countries in Africa and elsewhere gained independence, the old beneficiaries of the French empire set up new ways to stay in control behind the scenes. Gabon became independent in 1960, just as it was starting to emerge as a promising new African oil frontier, and France paid it particular attention. France needed to install the right president: an authentic African leader who would be charis­matic, strong, cunning, and, when it mattered, utterly pro-French. In Omar Bongo they found the perfect candidate. He was from a tiny minority ethnic group and had no natural domestic support base, so he would have to rely on France to protect him. In 1967, aged just 32, Bongo became the world's youngest president, and for good measure France placed several hundred paratroopers in a barracks in Libreville, con­nected to one of his palaces by underground tunnels. This intimidating deterrent against coup plots proved so effective that by the time Bongo died in 2009, he was the world's longest-serving leader.

"In exchange for France's backing Bongo gave two things. First, he gave French companies almost exclusive access to his country's minerals, on highly preferential terms that were deeply unfair to the people of Gabon. The country became known as French companies' chasse gardee—their private hunting ground. But the second thing Bongo provided was more interesting. He allowed his country, through its oil indus­try, to become the African linchpin of the gigantic, secret Elf system—a vast, spooky web of global corruption secretly connecting the oil industries of former French African colonies with mainstream politics in metropolitan France, via Switzerland, Luxembourg, and other tax havens. Parts of Gabon's oil industry, Joly discovered as she dug deeper and deeper in Paris, had been serving as a giant slush fund: a pot of secret money outside the reach of French judicial authorities in which hundreds of millions of dollars were made available for the use of French elites. An African oil cargo would be sold, and the proceeds would split up into a range of bewildering ac­counts in tax havens, where they could be used to supply bribes and baubles for what­ever [those] who controlled the system deemed fit."


Nicholas Shaxson


Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens


Palgrave MacMillan


Copyright 2011 by Nicholas Shaxson


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