Contrary to popular belief, the best place to start looking for corrupt crony capitalism is not the developing world but London, says Solomon Hughes
Ten years ago I broke a story in Britain about how Halliburton — the firm formerly run by US vice-president Dick Cheney — was funnelling millions in bribe money for African politicians through an office on West Green Road, a shabby street in Tottenham, north London.
Halliburton led a consortium of companies that wanted to win contracts building a liquid natural gas plant on Bonny Island in Nigeria.
Halliburton and co were willing to spend millions bribing Nigerian politicians to win the work.
Its agent for the bribes was a lawyer called Jeffrey Tesler who worked from a dusty storefront office next to a north London newsagent.
The Halliburton consortium used Tesler to pay $182 million of bribes to win the deal up to 2003.
It was an interesting story because it showed Cheney had run a major corporation involved in corruption.
It showed that the vice-president who went on to drive the Iraq war and US torture programmes was always close to crime.
When the case broke, Nigeria actually indicted Cheney over the bribes, but dropped its attempt to prosecute him when Halliburton paid a multimillion-dollar settlement.
I found out about it because a French judge, Renaud van Ruymbeke, was investigating the case — one of the firms in the consortium was French.
Halliburton used its British subsidiary to run the scheme and the bribes went through a British lawyer.
The British government actually subsidised Halliburton on the Bonny Island scheme by offering “export credit” insurance as an “export promotion.”
But British authorities did little to break the corruption.
Peter Mandelson, who was minister in charge of export promotion, had opposed rules which said firms backed by government “export credits” must reveal the names of their agents as an anti-bribery measure.
It was blindingly obvious that “agents” were used by British firms to bribe developing world politicians, but Mandelson did not want to cause companies any inconvenience.
Tesler was finally extradited from Britain to the US, where he was tried and imprisoned in 2012. Even when the scandal was exposed, Britain left it up to another country to prosecute.
The reason I am returning to the story is because the recently leaked HSBC files reveal the bent bank’s Swiss branch held Tesler’s accounts.
The bribe money was shifted through HSBC Switzerland. The same bank also held the accounts for the companies that were used to transfer the bribes and the Nigerian politicians who took the bribes.
Not only that, but HSBC kept holding accounts for Tesler and his family years later.
HSBC could have known all about Tesler’s involvement with the bribe scandal in 2004 by simply reading my original story in the Independent. But it kept his accounts open until 2007 and beyond.
Tesler paid some of the bribes in cash.
In one case a million dollars was left in a pilot’s briefcase in a Lagos hotel. Another time a car with half a million dollars was left outside another hotel.
How Tesler got such huge sums of untraceable cash was a bit of a mystery — one that now seems to be solved.
HSBC Switzerland happily handed out millions of dollars in notes without question. The bank was, quite simply, involved in organised crime on a massive scale.
So a future vice-president runs the US firm that runs a multimillion-dollar bribe scheme.
The bribe money runs through a bank run by a future British trade minister. Sometimes people talk about “crony capitalism” and “endemic corruption” and sleazy politics when they talk about Nigeria.
But if you want to find crony corrupt capitalism, the best place to start is London.
Libya and the ‘stupid, stupid facts’
Just as Libya turns a very dark corner, with Isis setting up its bloody camp, comes news that the intervention which hurried the nation into chaos was based on a false prospectus.
The Washington Times has got hold of tapes of conversations between Saif Gadaffi and US officials from summer 2011.
Back then US secretary of state Hillary Clinton — the US equivalent of the foreign secretary — was lobbying hard for more intervention.
She argued that, faced with a revolution, Muammar Gadaffi’s government would launch a massacre of the rebels and their families, justifying Nato bombing.
But it turns out the US joint chiefs of staff distrusted Clinton so much they opened their own negotiations with people around Gadaffi. The talks show that the Pentagon did not believe this massacre was coming.
The Pentagon intermediary told Gadaffi’s government: “You should see these internal State Department reports … that go out to the Congress. They’re just full of stupid, stupid facts,”
The State Department was Clinton’s department. The “stupid, stupid facts” were the arguments for war.
The Pentagon’s intermediary told the Gadaffi government that the adviser to the chair of the joint chiefs of staff — the US’s highest ranking officer — “does not trust the reports that are coming out of the State Department and CIA, but there’s nothing he can do about it.”
The Pentagon’s negotiator told Gadaffi’s people that “I can tell you that the president is not getting accurate information, so at some point someone has to get accurate information to him,” suggesting other intermediaries for negotiations.
Lots of “cruise missile liberals” got overexcited and had a kind of Iraq flashback during the Libyan intervention, backing the bombing as some kind of “liberation.”
But, like Iraq, it was based on a false premise.
The Washington Post files make this case, but it was known at the time. I wrote a series of articles (again, for the Independent) based on conversations with Libyan government figures and intermediaries.
They were, in truth, shocked and surprised that Western governments that had been so friendly to Gadaffi had now turned 180 degrees and were rushing to war against him.
The Libyan government was suing for peace with the revolution.
It was looking for a deal to edge Gadaffi out of power and bring the rebels into government.
Ultimately the decision on any negotiations with the dictator’s regime had to be one for the Libyan rebels themselves. But Nato’s decision to start bombing wiped out any chance for compromise.
It did not, however, prepare the ground for a new Libya. Bombers can’t build anything, let alone a new society.
The bombing meant that neither Libyan group — rebel or government — had to try build a new consensus or create a national coalition.
Unsurprisingly the result is a dark, chaotic country which is fragmenting and creating space for Isis, just like Iraq.