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Isabel dos Santos and Africa’s Lumpen-Bourgeoisie

Thirty years ago, I was part of a Tecnica delegation that visited the African National Congress headquarters in Lusaka, Zambia. We were there to discuss the feasibility of a technical aid project for the ANC and the frontline states with Thabo Mbeki, the future president of post-apartheid South Africa. Back then, the term frontline referred to a group of other sub-Saharan nations that were also fighting for liberation.

Chief among them was Angola that had defeated the Portuguese colonial army and gained independence in 1975. However, peace did not ensue. Three rival guerrilla armies began to fight for control over the newly liberated country. The international left identified with the Popular Movement for the Liberation of Angola (MPLA). Unfortunately, the MPLA had to contend with both the National Front for the Liberation of Angola (FNLA) and the National Union for the Total Independence of Angola (UNITA). Israel backed the FNLA, an alliance that most would view as unsavory. However, China also backed the FNLA, which only goes to show that Maoism had its own unsavory aspects. As for UNITA, it was wholly reliant on CIA support and guilty of the same kind of war crimes the Nicaraguan contras were carrying out.

In an epic battle at Cuito Carnevale between August 14, 1987 and March 23, 1988, Cuban volunteers and the MPLA defeated a force made up of UNITA and South African troops. Although Russia did not send its own soldiers to take part in the largest battle on African soil since WWII, it allocated $1 billion to the MPLA that proved critical. Although there was a heavy loss of Cuban and MPLA lives, the costly victory was enough to convince the South African racists to begin taking the steps that would result in Nelson Mandela’s freedom and an end to apartheid.

In 1990, our delegation was imbued with the feeling that a new epoch was opening up. Cuba, Nicaragua, South Africa and the frontline states were destined to be the vanguard of a new revolutionary movement to challenge the imperialist core. The Socialist Workers Party, a group I had left in 1978, became so giddy over these prospects that it shed its Trotskyist ideology and declared itself part of a new international centered in Havana.

While I and most people on the left had figured out these hopes were in vain long ago, nothing prepared me for how bad things could become. The ANC and the MPLA, the two most respected freedom-fighting groups, would end up becoming what Andre Gunder Frank once called the lumpen-bourgeoisie. He was referring to traditional oligarchies in Latin America, not the best hopes of the global left 30 years ago.

To help them rip off the masses who revered them, the ANC and MPLA elites relied on imperialist consulting and accounting firms to hide their corrupt practices. McKinsey & Company, the consulting company that once employed the dreadful Pete Buttigieg, and KPMG, a blue-chip accounting firm, helped ANC President Jacob Zuma’s cronies rob the country blind. Chief among these elites was the Gupta clan that took advantage of the new economic apartheid system to enrich itself.

James McKinsey started his company in 1926. An accountant by trade, he went on to teach at Columbia University. After McKinsey died in 1937, Marvin Bower became the CEO and largely responsible for turning it into the powerhouse that Fortune magazine described as “the most well-known, most secretive, most high-priced, most prestigious, most consistently successful, most envied, most trusted, most disliked management consulting firm on earth” in 1993.

McKinsey understood that big bucks could be made in South Africa by selling its services to government agencies that were filled with opportunist ANC members looking for a fast buck.

In 2011, Transnet, the state-owned rail and port agency, hoped to modernize. After securing the necessary funds, McKinsey advisers and their ANC cohorts siphoned off much of the money for their lavish life-style. Behind the scenes was the Gupta clan that cultivated ties to Jacob Zuma, who during his career cost the country $83 billion in payoffs to corrupt officials and businessmen.

The new head of Transnet, the state-owned railway system, was an ANC hustler named Brian Molefe, who had been running the country’s public pension fund beforehand. Acting as Molefe’s advisers, McKinsey cooked up a deal to buy 1,064 new locomotives, which would be the biggest government purchase in South African history. The NY Times reported that the winning bid came from a Chinese state-owned enterprise that paid more than $100 million to shell companies tied to a Gupta associate, Salim Essa. So considering the transaction as one made between two of the BRICS anti-imperialist stalwarts, who can complain?

Meanwhile, the South African version of the IRS hired KPMG to crack down on tax evaders. Considering KPMG’s willingness to cover up exactly such crimes to keep Jacob Zuma and his oligarchs happy, there should have been another firm to investigate them. As the Roman poet Juvenal put it, “Who watches the Watchmen?” After receiving a lucrative contract, the watchdogs went to sleep. Once considered the nation’s pride, South Africa’s tax collection agency was left a smoldering wreck.

Not satisfied with the fees it earned for helping Zuma carve out the tax agency’s innards, KPMG also provided audits to the various companies owned by the Gupta brothers who would eventually flee South Africa to avoid arrest. To give you a sense of how filthy this marquee accounting firm had become, it diverted millions of dollars from a dairy farm project under the auspices of the Department of Agriculture to the pockets of the Gupta family. They spent it instead on a wedding in 2017 written off as a “business expense” vetted by KPMG’s auditor.

Since 2017, Cyril Ramaphosa, whose personal wealth is greater than a half-billion dollars, has been South Africa’s President. Those who voted for him had few hopes that he could root out corruption but he couldn’t be any worse than Zuma. Hopes for reform were guarded at best. The ANC is filled with opportunists like Brian Molefe. To keep their dirty fingers out of the public till requires a new political party. Given the ANC’s prestige, even as it erodes each passing year, it will take a party rooted in the working class to put an end to economic apartheid and corruption. After Ramaphosa ordered his cops to gun down the protesting miners at Marikana in 2012, it will have its work cut out for it. He has been much more effective killing strikers than at tracking down the stolen money from Gupta and other ANC-connected thieves.

Moving from South Africa to Angola, the news is even more depressing.

On January 19, 2020, the New York Times reported on “How U.S. Firms Helped Africa’s Richest Woman Exploit Her Country’s Wealth.” That woman is Isabel dos Santos, who is the oldest daughter of José Eduardo dos Santos, who served as President of Angola between 1979 and 2017. Before becoming President, he was commander-in-chief of the MPLA.

Isabel dos Santos is married to Sindika Dokolo, a Congolese art collector and major investor in a jewelry firm that trafficked in diamonds from Angola, the country’s most valuable resource next to oil. Recently, an Angolan state agency invested more than $120 million into the jewelry company. Now, it is broke. Trying to trace where the money went will be as difficult as finding what happened to the money the Guptas stole.

Dos Santos and Dokolo threw a big party at the latest Cannes film festival that had all the a-list people in attendance, like Leonardo DiCaprio, Naomi Campbell and Antonio Banderas. In keeping with the hosts’ involvement with the diamond trade, the party had a theme: “Love on the Rocks.” Worth more than two billion dollars, Dos Santos is also invested in Angola’s biggest mobile phone company, two of its banks and its biggest cement maker. In a partnership with Angola’s state-owned oil company, she also invested in Portugal’s largest petroleum company. The Times reports:

The empire she and her husband built stretches from Hong Kong to the United States, comprising over 400 companies and subsidiaries. It encompasses properties around the world, including a $55 million mansion in Monte Carlo, a $35 million yacht and a luxury residence in Dubai on a seahorse-shaped artificial island.

She now stands charged with embezzling more than $1 billion in state funds. How do you hide your tracks when such massive amounts of money are involved? That’s easy. Just bring in McKinsey & Company, the Boston Consulting Group, and Price Waterhouse Cooper (now known as PwC)—three of the most prestigious outfits American capitalism has bred. Don’t forget that PwC handles the Academy Awards. Yes, they did screw that up by handing the wrong envelopes to nominees for Best Picture in 2017. Nobody’s perfect.

Acting as Dos Santos’s accountant, consultant and tax adviser, PwC oversaw at least 20 companies controlled by her or her husband. The Times noted, “Yet there were obvious red flags as Angolan state money went unaccounted for, according to money-laundering experts and forensic accountants who reviewed the newly obtained documents.”

As for McKinsey and the Boston Consulting Group, they helped restructure Sonangol, the state-owned oil company. Against all financial norms, they agreed to be paid not by the government but through a Maltese company owned by dos Santos. Any time you see the word Malta and financial transactions, you can be sure that malfeasance is involved. Then her father, the one-time Marxist guerrilla, put her in charge of Sonangol. The Times reports that “the government payments soared, routed through another offshore company, this one owned by a friend of hers.”

What do all these rich bastards do with the money they steal? How big a yacht, how many mansions, and how many Rolex watches do you need to feel fulfilled? The World Bank rates Angola as close to the bottom in childhood deaths under the age of five. It is number 177, with 77.2 deaths per 1,000 live births. Somalia is at rock-bottom. Unlike Angola, it does not export oil or diamonds and is currently wracked by civil war. God knows what children would be facing if the crew running Angola faced such circumstances.

It is beyond the scope of this article to analyze how the ANC and the MPLA mutated into such a lumpen-bourgeoisie. We know more about the ANC since it gets much more news coverage, including from the left. Nelson Mandela took power just as the Soviet Union and Eastern Europe began to transition to capitalism. If the Soviet bloc had continued, it is likely that Mandela et al would have had the financial and political support it needed to avoid the kind of open neoliberalism that has left the county with the worst GINI coefficient in the world.

Angola took a political turn toward neoliberalism at around the same time as South Africa and for the same reasons. Like Venezuela’s Hugo Chavez, José Eduardo dos Santos, a petroleum engineer by training, used the oil and diamond industries to create a patrimonial state wholly dependent on exports. Unlike Chavez, who used oil proceeds to benefit the poor, dos Santos followed the same path as Nigeria’s elite. Oil and diamonds provide the cash necessary to throw parties at Cannes, buy yachts, and all the rest.

If Angola has not been able to draw upon the support of the former Soviet bloc, it has a pretty good substitute in China, its number one trading partner. For some on the left, China is still socialist. They point to the prevalence of state-owned industries that also dominate in South Africa (as if this was some kind of litmus test for socialism.) The same leftists would deny that China is operating as an imperialist in the same way Portugal did. Clearly, China is playing a beneficent role if the criterion is providing loans for important projects. Based on Wikipedia’s page on China-Angola relations, this would include a $90 million loan from the Exim Bank of China for the rehabilitation of the Luanda railway and the construction of a 45 km electricity distribution line between Quifangondo and Mabubas. The Exim bank has also generously backed a $1 billion line of credit to repair the country’s infrastructure.

At least one researcher does not buy into this helping hand narrative. In an article titled “The New Imperialism: China in Angola” in the March/April 2011 World Affairs, Rafael Marques de Morais defends a more class-based analysis:

Beyond the low engineering and construction standards, the Chinese intervention in Angola is widely seen as fostering social stultification and regression. It has enabled a string of political measures aimed at perpetuating the power of the president’s inner circle, while setting back internal dialogue on national reconstruction even within the ruling party itself. The Chinese presence has also spawned a mass fantasy about national goals that bears no resemblance to what can really be accomplished – the sheer weight of which, along with threats of repression, often silences critics of the Dos Santos regime.

Among the many promises, the president said during the 2008 legislative elections that he would deliver a million houses in four years. The message was spread that the Chinese were to perform the miracle of rebuilding the whole country in record time. The official propaganda motto was “Angola é um canteiro de obras,” meaning the whole country is a construction site of public works.

Dos Santos knew people did not believe that this would happen. But for a society mired in fear and corruption, waiting idly for changes that will never happen remains a popular substitute for attempts at action that would certainly be crushed.

(Rafael Marques de Morais’s article is behind a paywall. Contact me at lnp3@panix.com for a copy.)

 

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Louis Proyect blogs at http://louisproyect.org and is the moderator of the Marxism mailing list. In his spare time, he reviews films for CounterPunch.

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