UK Lord paid by offshore linked to Angolan Bank Scandal

The President of the Indian Ocean state of Mauritius, biodiversity scientist Ameenah Gurib-Fakim, formally resigned over an expenses scandal last Friday.

A national newspaper had recently published documents showing how she spent lavishly on jewellery and clothing in Milan and Dubai using a credit card supplied to her by the Mauritius office of a London charity, the Planet Earth Institute (PEI).

Designed to aid African science education, PEI was established and is financed by suspected fraudster, Angolan banker and Sporting Lisbon owner, Álvaro Sobrinho.

A year ago, Gurib-Fakim had been forced to step down as Vice-Chairman of PEI in London for intervening to help speed up Sobrinho’s banking license applications in her country.

But President Gurib-Fakim is not the only politician to receive money from Sobrinho.

An investigation into Sobrinho’s business affairs by European Investigative Collaborations (EIC.Network) can reveal that a serving member of the UK House of Lords, former Labour party minister and British High Commissioner to South Africa, Paul Boateng, appears to have received substantial sums from an offshore shell company owned by Sobrinho.

The controversial Angolan banker used this firm to divert at least 42 million Euro from the bank he ran for 11 years, Banco Espírito Santo Angola (BESA).

Boateng’s business relationship with Sobrinho is conducted through his consultancy firm, Akyem Law And Advisory Services Limited, which he owns jointly with his wife, Janet Boateng, the former head of social services at Lambeth Council. Sobrinho paid Akyem from World Property, a Luxembourg shell which is the subject of at least two criminal investigations in Portugal and Switzerland. The millions were earmarked for a hotel project at Berlin’s still-unfinished Brandenburg Airport.

Akyem was created in July 2012, four months after Boateng became Trustee of the Planet Earth Institute. Boateng would not disclose exactly how much money he was paid from Sobrinho or what services he provided. But Akyem’s company accounts submitted a year after it was established show that it took hundreds of thousands in profit, while his parliamentary interests declare that World Property his only client.

Sources and documents obtained by EIC show that World Property’s money came from BESA, the Angolan branch of the Portuguese Banco Espírito Santo, where Sobrinho was CEO from 2001 to 2012. The funds are part of a massive Portuguese-Angolan financial scandal involving the disappearance of 5.7 billion USD from BESA’s books.

Sobrinho and his family members have so far been linked to at least 600 million USD of these allegedly misappropriated funds. Although the money trails lead all over the world, World Property is part of 21 offshore companies which were used by the Angolan banker to shift millions in opaque and unsecured loans from BESA into 22 bank accounts in Switzerland.

The documents raise serious questions not only about how Boateng helped Sobrinho, but why the lord maintained a personal and professional relationship with a businessman named in several criminal investigations as being suspected of money laundering, embezzlement and fraud.

The overlap between pro-bono work in favour of a charity that advocates for the scientific development of Africa and parallel payments from an offshore company suspected of funnelling cash from the Angolan people raises further questions about whether Boateng was being discreetly paid by Sobrinho to lobby in the UK on his behalf.

Paul Boateng, a civil rights lawyer and methodist preacher, was first elected as an MP for Brent South in London in 1987 and later became a rising star in the Tony Blair’s New Labour party.

A committed Blairite, he was soon appointed to ministerial posts first in the Department of Health and then the Home Office. In 2001, he became a cabinet minister after being selected as chief secretary to the Treasury - second in charge after the finance minister, Chancellor of the Exchequer Gordon Brown.

He left his South Brent safe seat in 2005, and accepted a diplomatic post as Britain’s High Commissioner to South Africa. Four laters later he was forced to step down over allegations that his wife had abused the staff at the official residence in Cape Town. The following year he was appointed to the Lords.

Since joining the House of Lords, Boateng has taken positions on the boards of companies, including Gilead Sciences, Africa Enterprise Challenge Fund and Ghana International Bank in London. He also works with development and defence group, MRL Public Sector Consultants, as well as controversial defence and security firms, Aegis Defence Services and Protection Group International.

When we asked him about his relationship with Sobrinho, Boateng stated: “I do not comment on the business of my professional clients. Any suggestion that my relationship with Dr Sobrinho and his business was in any way improper has no basis in fact and would be wholly defamatory.”

He added that, “I and my fellow Trustees [of PEI] welcome the support of Dr Sobrinho for this and other charitable causes on the continent of Africa.”

Despite nearly seven years of operations and over seven million GBP budget in that time, PEI also appears to have achieved little of what it is purpose: advance education or provide PhDs funding to African scientists.

The first traces of a relationship between Sobrinho and Boateng appear in the summer of 2011 and the grand unveiling of Planet Earth Institute (PEI) in London. Sobrinho had established the charity the year before with a mission to “advance education” in Africa.

In a promotional video, he announced that PEI would provide “Africans” with opportunities to obtain PhDs in science, technology, engineering and mathematics.

Sobrinho received a warm welcome. He attended the House of Lords in July 2011 to advertise the inauguration of the charity’s scientific board by Lord Bruce Grocott and Lord Paul Boateng, of Akyem in the Republic of Ghana and Wembley in London.

Grocott told EIC that, at the time, he was chairman of the All-Party Parliamentary Group on Angola, run from British think tank Chatham House, and that it was normal for Angolans to request meetings while they passed through London. It was rare, however, for businessmen to get in touch. Sobrinho was the first to request a photo op.

“The photo was the only part that I thought was strange,” Lord Grocott told EIC. “We did this one meeting for less than an hour, and then I never heard from him or of him again.”

To aid his mission, Sobrinho enrolled Professor Paul Lawrence Younger, an engineer and the Pro-Vice-Chancellor of Newcastle University, and Sir Christopher Edwards, a clinician and former Vice-Chancellor at Newcastle. He also appointed his right-hand man, Portuguese manager Mauricio Fernandes, to run PEI.

Sobrinho’s reputation in these days was less than stellar. As far back as May 2011, two months before his photo op in London, he was experiencing legal problems in Portugal. The prosecution office in Lisbon named him as a formal suspect in the vanishing of 48 millions Euro from the Angolan Treasury’s bank account in London.

Within a few months, there was more smoke. He became a formal suspect in a second criminal inquiry in Portugal, in November. This time for a potential money laundering scam over the purchase of six apartments in a luxury building near Lisbon for nearly ten million Euro.

If the source of the money for the apartments was curious for the police investigators, so too was his subsequent spending spree: In a few years he bought several newspapers in Portugal and Angola; the largest stake in the Portuguese football club Sporting Lisbon, an interest in Swiss telecom company YooMee Africa - where Boateng is a paid advisor, a canned tuna fish factory and real estate.

The multi-million binges occurred while he was the CEO of BESA and despite a reputed annual salary of around one million Euro.

With his business affairs under scrutiny, Sobrinho began to craft a story to explain his wealth: that his family was already rich in Angola. This claim appears to be untrue, according to EIC’s research. His father was a civil servant with a modest income who eventually opened a pastry shop and two butcheries in a Luanda market, where he used to work as trade inspector for the mayor’s office.

While Sobrinho painted himself as the product of huge wealth, billions of BESA’s cash was disappearing.

The files obtained by Der Spiegel and shared with EIC show that Sobrinho was behind several companies in Angola, Switzerland, Portugal, the British Virgin Islands, Samoa, Panama and Luxembourg, which received over 600 million Euro in questionable transfers from BESA’s accounts in Angola and Portugal. The payments continued up until Sobrinho left the institution to start his own Angolan bank, Banco Valor, in 2013.

Sobrinho’s wealth management company in Switzerland, Akoya, opened for him World Property S.A. in Luxembourg in late October 2011. The plan, said a source with direct knowledge of the firm’s affairs, was to purchase residential buildings in Switzerland and Germany and collect rent. At some point this changed. World Property would instead invest in a hotel at the new Brandenburg Berlin airport, which was under construction.

Within a few weeks, money from BESA began to flow to World Property’s Swiss bank account, also managed by Akoya. The court files of the subsequent BESA investigation show that between 17 November and 8 February 2012, World Property received 42 million Euro into its account at Credit Suisse in Zurich.

To justify the transfers to the bank, they were listed internally as “shareholder loans” from a series of offshore companies in Samoa, Panama, Switzerland and the British Virgin Islands, all owned by Sobrinho or his close family members and, again, managed by Akoya. None of these companies had any official stake in World Property.

This 42 million Euro was part of a much larger Swiss operation. Account statements found in a police search in April 2012 reveal that by that time Sobrinho had 180 million Euro in cash deposits in 22 Credit Suisse accounts in Switzerland.

World Property then invested in a Swiss company, at first called Acron Helvetia VIII Immobilien AG and then Acron Berlin Brandenburg International Airporthotel (ABBIA) AG.

This project was a “4-star superior Steigenberger Hotel” at the new Berlin Brandenburg International Airport. The airport was at the time due for completion in 2012, but is now set to open in 2020.

Soon Sobrinho was in trouble again. His wealth management company, Akoya, which administered World Property, was investigated by Swiss and Portuguese authorities for helping wealthy Angolans and Portuguese to evade taxes and launder cash.

While travelling to Portugal in May 2012, three Akoya managers were arrested and indicted for being part of an international money laundering network through the firm. One of the detainees was the personal manager of all of Sobrinho’s Swiss accounts. Sobrinho is yet to be announced as a formal suspect in that ongoing criminal inquiry.

On its website, Acron states that the hotel project was dead by autumn 2013, “reversed by the construction delay at [the] airport without financial losses for the sole investor.”

An Acron spokesperson refused to answer EIC’s questions about whether it knew the ‘sole investor’ was Sobrinho and the source of the project’s cash.

What happened to the 42 million Euro after the collapse of the hotel project is not clear, but World Property’s accounts show it still has substantial funds.

Neither Boateng or Sobrinho would clarify how exactly the parliamentarian was able to assist efforts of the Angolan’s offshore companies to build the hotel in Berlin.

Sobrinho’s mounting legal troubles appear to have had little effect on Boateng. Over the spring and summer of 2012, not only did Boateng join Planet Earth Institute as its trustee and public face, he established his London consultancy firm and took on World Property as a client.

The consultancy firm’s annual accounts show that at the end of its first year, it made 320,445 GBP in profit, with thousands more in the subsequent years. It also had obtained collateral-free, cash debt of over 228,000 GBP, which is almost all repaid as of last year.

Boateng declares on his official Register of Members Interests in the UK that World Property is his only client - without mentioning its connection to Sobrinho. Other funds could have come from the activities of his wife, Janet. Parliamentary standards rules suggest all Akyem’s clients should be disclosed, since as a 50 per cent shareholder Boateng would personally benefit from all money that the company makes. The office of the Lords Standards Commissioner, which deals with ethics of the UK parliamentarians, would not clarify the matter.

Since meeting Boateng, Sobrinho has had better luck than most connecting to the UK parliament. In October 2012, despite having no completed charitable programmes, PEI gave evidence to parliament, specifically to the International Development Committee as part of its inquiry into ‘Post-2015 Development Goals’. Boateng was never a member of the committee.

A year later, there was a meeting at the House of Lords on 5 June 2013, where Sobrinho's and Boateng's business interests overlapped with their more public roles. The event was a consultation on the use of mobile technology in education across Africa and led by Boateng, Sobrinho and Mauricio Fernandes, CEO of PEI.

Also present was Anat Bar-Gera, friend of Sobrinho’s and the founder of YooMee Africa. Boateng was at the time a paid advisor for YooMee, and Sobrinho had a ‘large’ investment in the company.

Boateng has taken several foreign trips to promote PEI abroad, in New York and Luanda, Angola, where he chaired several high-level meetings with politicians and businessmen. He would not state to EIC who paid for the trips. The office of Lords Commissioner for Standards states that Boateng would not be required to disclose the trips, regardless of the cost, despite his relationship with PEI listed as officially ‘non-financial’.

By 2014, the problems at the Angolan bank BESA, its Portuguese owner BES, and their ultimate owners, the Espirito Santo Group (GES), were impossible to ignore. So were the growing rumblings around Sobrinho, who had been pushed out from bank’s core back in December 2012. He stayed on as chairman, but the board eventually replaced him in 2013 after unearthing evidence suggesting he had issued secret payments to himself which then disappeared into a maze of offshore companies.

The century-old Portuguese financial conglomerate collapsed. When administrators took over, they found 5.7 billion USD missing from BESA’s books.

The whole Espirito Santo Group nearly caused a financial crisis in Portugal. Sobrinho was suspected by police of having a personal involvement in diverting these funds to himself and his family, as well as prominent politicians and businessmen in Angola.

Although Angolan authorities failed to open a criminal inquiry, the Portuguese wanted answers. Sobrinho was deposed by MPs in parliament just before Christmas 2014 to explain how it was possible for billions to be issued in collateral-free loans to companies with no obvious owners. He acted surprised, but provided few explanations. Nevertheless, he believed he left the inquiry vindicated.

According to an analysis by EIC, since its inception Planet Earth Institute has had an average annual budget of around one million GBP. Most of this is provided by Sobrinho, either personally, or through the banks he ran: BESA in the early days and, later, Banco Valor in Angola, which he owns.

PEI boasts of several flagship programmes. Its principal is the Centre of Excellence in Science for Sustainability in Africa (CESSAF) based in Angola, a “joint initiative in partnership with Newcastle University, Agostinho Neto University [in Angola] and Banco Espirito Santo Angola” which launched in 2014. In reality, there is little evidence that any African scientist obtained a PhD though CESSAF.

The professor at Newcastle University who was part of the programme was unable to name any either. He also explained that although PEI ”acknowledged as a partner... it was under direct control of the [Agostinho Neto University] management.” and has now progressed to a initiative between the UK and Angola governments, “completely independent of both BESA and PEI.”

A similar programme was set up through a local branch of PEI - PEI Foundation - which enrolled the help of the President of Indian Ocean state Mauritius, Ameenah Gurib-Fakim, a prominent scientist in her own right, who became a director of UK PEI in 2015.

While Sobrinho was establishing his property company, Vango Properties Ltd, and the Alvaro Sobrinho Africa Investment Bank (ASA) in Mauritius, he honoured the president with the H.E. Ameenah Gurib-Fakim PhD Programme. It, too, would help Mauritius science education, they said.

There were problems. The Bill & Melinda Gates Foundation provided a 450,000 USD grant, which according to national newspaper, L’Espress, was mostly used to organise a trip for rich, private school kids. Those who were selected did not get to attend the universities advertised and PEI had to scramble to find alternatives. When that story broke, PEI made the students sign non-disclosure agreements.

Shortly after, in May last year, President Gurib-Fakim was forced to step down from PEI in the UK after it emerged she had intervened with both the Mauritius Minister of Good Governance and the Financial Services Commission to “speed up the process” of granting Sobrinho financial licences.

Sobrinho and his companies are being probed by Mauritian authorities, who believe that the banker is also using his foundation to advance his business interests. Mauricio Fernandes is also under investigation for forging the signatures of lawyers on company documents.

Two weeks ago, allegations emerged that Gurib-Fakim used a PEI credit card to make luxury purchases for herself. She agreed to resign as President.

Boateng would not answer the question as to whether he had ever received a credit card from the Planet Earth Institute.

Activity of the PEI over its seven year existence is fascinating.

Most of the cash - nearly 70 per cent annually - is spent on hosting high-level and exclusive breakfast meetings and conferences in Angola, where trustees such as Boateng entertained ambassadors from UK, Portugal and Zimbabwe, private businesses BP, McKinsey, PetroAfrica, Eaglestone – started by a former BES and ESCOM financial director; and FESA, the foundation of the then-Angolan president, José Eduardo dos Santos.

Emails obtained by EIC also show that PEI staff regularly acted in Sobrinho’s personal interests, running his public relations and dealing with his legal issues.

In 2014, the institute’s CEO Mauricio Fernandes emails instructions from PEI to Anat Bar-Gera, chairperson of YooMee Africa, the Swiss-based telecoms company in which Sobrinho invested - and where Boateng has been a paid advisor since 2011.

He encloses Sobrinho’s new résumé, and tells Bar-Gera that PEI is “now co-ordinating Dr Sobrinho's public profile, and as such I'd like to keep all communications consistent.”

He adds that, “Toward the end of last year, we took responsibility for a new and integrated programme of work relating to Dr Sobrinho's public profile, and this includes SEO activity, alongside numerous other services such as copywriting, media relations and legal PR advice…”

“[Sobrinho’s new public profile] is in its early stages but…. It's already showing some positive signs, including better Google rankings and increased positive coverage through blogs, interviews and articles like Private Banker and the FT's This is Africa, and I'm very confidant [sic] this will only increase in the coming months.”

Other emails are more serious. His staff were involved in setting up meetings with Sobrinho’s lawyer in the UK around the time he sued EIC’s Portuguese partner, Expresso, in London over allegations he was personally benefiting from BESA cash. They also acted as intermediaries between Sobrinho’s UK and Portuguese lawyers.

Later, during the lawsuit, PEI staff would give evidence to support Sobrinho’s case. For PEI and its staff to be paid to aid Sobrinho in his private matters could be a breach of UK charity rules, which states that benefit to individuals involved must be ‘incidental’.

Sobrinho did not answer EIC’s questions.

Main photo credit: Luis Barra (Expresso)