Anatomy of a Bribe: A deep dive into an underworld of corruption

An Al Jazeera investigation into the corrupt power brokers and global business elites defrauding the Namibian people.

by
    The storm is brewing. We are preparing ourselves for war.

    Johannes Stefansson

    I first met Johannes Stefansson on a typically crisp and windswept day in May in the Icelandic capital Reykjavik. As rain fell intermittently outside the makeshift office where we were meeting, Johannes was preparing himself, and the five assembled journalists, for the battle of his life.

    His animated enthusiasm belied the severity of the allegations he was about to bring forward: that, on the instructions of his superiors, he had paid millions of dollars in bribes to well-connected figures in Namibian politics in order to secure the country's lucrative fishing grounds for his former employer, the Icelandic fishing conglomerate Samherji.

    "We are in this all the way," he would say often, underlining his determination to see his former colleagues and business partners face justice for what he claims was a large-scale criminal enterprise defrauding the Namibian people of the proceeds of their country's natural wealth.

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    Facing Johannes was a formidable array of vested interests, political power and financial behemoths, all in league, Johannes claims, with the murky underworld of the South African mafia.

    The whistle-blower

    I was introduced to Johannes by Kristinn Hrafnsson, editor-in-chief of the whistle-blowing group WikiLeaks. Coming straight from Belmarsh Prison, where his erstwhile colleague Julian Assange continues to languish, he met me in London's Fitzrovia.

    He told me about Johannes's journey in one of Iceland's largest fishing companies, Samherji; from his long career as a fisherman on board Icelandic trawlers around the world, to managing Samherji's subsidiaries in Morocco and Namibia, to eventually leaving the company in disgust at what he considered to be the corrupt corporate culture.

    As he left Samherji in 2016, Johannes recognised the significance of the data on his laptop. Emails, memos, presentations, photos and videos would all come to constitute the Fishrot Files, an archive of more than 30,000 documents hosted on WikiLeaks, providing the documentary evidence to back up Johannes's claims of the corruption he facilitated during his time at Samherji. 

    As Kristinn trawled through the thousands of documents, he began to seek potential media partners. The natural partners in Johannes's and Kristinn's native Iceland were Kveikur, the investigative series of RUV, the state broadcaster, and the weekly magazine Stundin. And it was to Al Jazeera's Investigative Unit that WikiLeaks turned to raise the profile of this important leak, give it worldwide coverage and take the investigation in an entirely new direction.

    AoaB - Johannes Steffanson
    Samherji whistle-blower Johannes Stefansson [Al Jazeera]

    From Iceland to Namibia

    Lying in the North Atlantic between Greenland and the Faroe Islands, and brushing up against the Arctic Circle, Iceland was, for much of its history, an island with meagre links to the outside world. A harsh, unforgiving landscape, coupled with a blustery climate meant for the majority of Icelanders, a subsistence life herding sheep. But the country's fate was changed by the second world war, in the wake of which the United States and its NATO allies came to appreciate the island's strategic value as the guardian of vital waterways. The once-isolated country, which gained full independence from Denmark in 1944, became an integrated modern economy.

    Approximately 10,000 kilometres (about 6,200 miles) south, over the equator, Namibia is a vast territory on Africa's southwest coast. Its modern history is stained with the bloody legacy of foreign domination, from the massacres inflicted by the German Empire in the early 20th century, to the racial segregation imposed by the South African apartheid regime.

    After a protracted independence struggle fought by the South West Africa People's Organisation (SWAPO), the country finally gained independence from South Africa in 1990, and the SWAPO party has won every national election since.

    The Namibian landscape is rich with natural resources: from the uranium buried in the ground and treasured by the world's nuclear powers, to diamonds dredged from the seafloor. Despite this, roughly one out of every five Namibians lives in poverty, and the country suffers from a 33 percent unemployment rate. 

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    When it gained its independence, the young Namibian state looked askance at other African nations rich in natural resources and emerging from colonial domination; it saw that foreign companies had replaced overt colonial administrations with a more subtle form of neo-colonial domination, looting national assets and paying as little tax as possible.

    Namibia sought to escape this resource curse by enacting legislation ensuring domestic ownership of the industries exploiting the nation's natural resources. The "Namibianisation" policy in the country's fishing industry encourages foreign companies to enter into joint ventures with Namibian companies. As long as 51 percent of the company is owned by Namibians, and ideally those Namibians from historically disadvantaged black African communities, they can benefit from advantageous access to fishing quotas.

    The Namibian government had reason to promote such protections for its people. Recent studies by the African Union show that Africa loses at least $50bn annually as a result of illicit financial flows from foreign companies doing business on the continent. Global Financial Integrity estimates that for every dollar that comes into the developing world in the form of foreign aid, $10 leave, mostly as a result of tax avoidance by multinational companies. These figures are a stark reminder of how foreign companies have thoroughly ravaged African economies, leaving little behind for the people of the continent.

    The 'sharks' among Namibia's fish

    I met the executive director of the Tax Justice Network Africa, Alvin Mosioma, who explained to me how African economies have been victims of what has come to be known as "state capture", whereby "a very small clique of the elite are able to determine the decisions which a government makes".

    In the context of the Namibian fishing industry, the members of this clique are the so-called "sharks", the figures implicated in the Fishrot files. They are the Minister of Fisheries and Marine Resources Bernhard Esau, Minister of Justice Sacky Shanghala, state-owned fishing company Fishcor's Chairman James Hatuikulipi, and their close associate, Tamson Hatuikulipi who is Esau's son-in-law and James Hatuikulpi's cousin. 

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    Johannes speaks of how his former employers Samherji used their privileged connections with these power brokers to facilitate their entry into - and ultimately capturing a significant portion of - the Namibian fishing industry.

    With James Hatuikulipi installed as the chairman of Fishcor, the state-owned company began selling large quantities of quota at below-market prices. Almost at the same time, the power brokers, led by Sacky Shanghala, pushed through a bilateral agreement with neighbouring Angola, profiting from a little-used loophole in Namibia's fishing regulations allowing Samherji to bypass the competitive tendering process and catch greater harvests of Namibian fish.

    In return for these generous allocations of fishing quotas, the "sharks" and others in their entourage collectively earned more than $10m in what Johannes claims were "bribes".

    The undercover investigation

    With Johannes's powerful testimony and the abundant documentary evidence to back it up, Al Jazeera decided to investigate further the allegations of corruption in the Namibian fishing industry.

    The mission was simple: to see if Al Jazeera could replicate the successes of Samherji, gaining access to Namibia's lucrative fishing grounds by offering kickbacks to well-connected individuals in the industry.

    In just three months, our undercover reporter "Jonny", posing as a Chinese investor, negotiated a joint-venture partnership with local fishing company Omualu, managed by Sacky Kadhila.

    Media reports from 2014 show that Namibia's Anti-Corruption Commission had been investigating Kadhila's company for allegedly paying $65,000 to a director at the Ministry of Fisheries. Al Jazeera does not know what this alleged payment was for, or indeed what came of this investigation, but what is known is that Kadhila told Al Jazeera's undercover reporter he could "find somebody in the ministry that we could place in our company ... that person is only for the influence, to ensure that Omualu always gets a quota".

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    Former Minister of Fisheries and Marine Resources Bernhard Esau and Omualu Managing Director Sacky Kadhila, filmed by Al Jazeera's undercover reporter [Al Jazeera]

    The need to line the pockets of public officials in order to gain preferential access to fishing quotas led our fake investor to the CEO of Fishcor, Mike Nghipunya, and Minister of Fisheries Bernhard Esau. For his efforts to secure quotas, Nghipunya is offered a 20-percent stake in the proposed joint venture, as well as a one-off payment of $500,000. Likewise, to enter into the good graces of Minister Esau, our Chinese investor offered him a gift of a limited-edition iPhone and promised to make a $200,000 donation to the ruling SWAPO party in the run-up to the country's general elections, held on November 27.

    Outing himself as a proxy for the minister, Kadhila remarked that Esau "thought very highly" of our undercover investor, and assured us that he would do "whatever it is that we would require from him to assist us".

    Dancing the corruption tango

    As Al Jazeera exposes the corrupt power brokers in the Namibian fishing industry, it is important to not lose sight of the dual nature of corruption.

    As Alvin Mosioma told Al Jazeera: "All too often, we tend to focus much more on the beneficiary of corruption and not the supplier of corruption." In other words, in the dance of corruption, "it takes two to tango".

    On one side, you have the powerful political elites who have captured democratic processes, while on the other, you have powerful business elites who, for the right price, can bend the rules to work in their favour.

    As for the activities of Samherji, the leaked documents show how they conducted their operations in Namibia with full knowledge of the prevailing corruption. Memos written in Icelandic for Samherji's senior management attest to the powerful role played by the so-called "strategic group" - comprised of Minister Esau and his associates - in ensuring Samherji's favourable position in the industry.

    "Frontmen" were used so that Samherji's Namibian subsidiaries could, on paper, be majority-owned by Namibians, meeting the standards of "Namibianisation". And yet, despite the bounty of profits Namibia provided for Samherji, a leading company executive was found in a draft presentation to have described the Namibian people as "happy lazybones". 

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    While Samherji may not have invaded Namibia by force, set up a colonial administration or brought large numbers of Icelanders to settle there, in many ways, its corrupt business practices are neo-colonial: treating the local population and institutions with contempt and considering respect for local laws and regulations as optional. The company structure was set up in such a way as to avoid paying as much tax as possible, taking advantage of double tax treaties with tax havens like Mauritius, the Marshall Islands and Cyprus to reduce their tax liabilities to a fraction of what Namibian corporations have to pay.

    The South African mafia

    In anticipation of breaking his silence on the corruption he admits to facilitating, Johannes sought the legal services of the world-famous politician, lawyer and anti-corruption activist Eva Joly. The naturalised French citizen of Norwegian origin, who once ran for the French presidency, told me of the "huge risks" that Johannes faces by blowing the whistle.

    "Death threats among whistle-blowers are rather common. It can get very dangerous, because people have a lot to lose."

    In the months before July 2016, when Johannes departed Namibia for good, he spent some time in Cape Town, South Africa, where he undertook negotiations with a local businessman, Allie Baderoen, who was interested in entering into a business partnership with Samherji in the South African fishing industry. While the negotiations ultimately led nowhere, these relationships were to have serious consequences for Johannes's life, as he came to appreciate the interconnected worlds of business and the mafia in South Africa.

    Death threats among whistle-blowers are rather common. It can get very dangerous, because people have a lot to lose.

    Eva Joly

    After leaving Namibia, Johannes moved to Cape Town and struck up an unexpected friendship with a former Congolese soldier, Christian Yema Y'Okungo, who now works in private security in South Africa. While he was negotiating his termination agreement with Samherji, Johannes began to hear rumours about himself - that he abused drugs and alcohol.

    Christian, who Johannes refers to as his "brother", warned him of the impending danger to his life as he began to extricate himself from the web of corruption he had been a party to in neighbouring Namibia.

    To this day, Johannes and Christian enjoy an extremely close relationship and speak on a daily basis. Whenever Johannes travels abroad, Christian calls upon local Congolese expats to provide him with tight security.

    Johannes Steffanson - Anatomy of a Bribe
    Johannes Stefansson's swollen face shortly after his alleged poisoning [Johannes Stefansson/Al Jazeera]

    According to Johannes, shortly after finally terminating his employment with Samherji in December 2016, he began to suffer acute health symptoms, including seizures, collapses and uncontrollable shaking. He went to a doctor in Cape Town who told him his symptoms were unexplainable, and a doctor in Iceland later told him that his symptoms resembled those of someone who had been poisoned, although a definitive diagnosis was not forthcoming.

    Close friends of Johannes who witnessed the rapid deterioration of his health continue to be astounded by his eventual recovery, convinced that he should have succumbed to his life-threatening symptoms.

    Suspicions that he was poisoned have occupied Johannes since he left Africa at the beginning of 2017, but definitive proof, not to mention evidence of the culprits, has been elusive. 

    A curious document sent to Al Jazeera's Investigative Unit in early November, two weeks after it reached out to people to respond to the allegations against them, may provide some insight into the forces Johannes was up against.

    Tamson Hatuikulipi, who was Samherji's conduit into the local industry, sent us an affidavit, signed by Johannes's "brother" Christian at a Cape Town police station. The affidavit made a series of allegations against Johannes: that he is an alcoholic, a drug addict, and that his purported addiction to prostitutes led to him being 75,000 rands (more than $5,000) in debt to Cape Town pimps.

    Johannes strongly denies all such allegations and, indeed, has long been expecting them.

    A few days after Al Jazeera sent Tamson Hatuikulipi the letter requesting his response to the allegations against him, Christian says that his family were threatened by figures associated with the Cape Town mafia. Evidence allegedly implicating him in criminal activity would be shared with the police, he was told. Thus, with the threat of physical violence and imprisonment, Christian was blackmailed into signing an affidavit with false allegations against his close friend.

    Attached to the forced affidavit was a purported certificate from a "medical surgery" in the Cape Town suburb of Kraaifontein, which alleges that Johannes sought "drug rehabilitation" treatment in December 2016 - as false rumours of Johannes's drug addiction reached a crescendo, and a few days before his health took a swift turn for the worse.

    A cursory glance at the document indicated some red flags: The address of the "medical surgery" is non-existent, the name of a doctor absent, and the telephone number provided is not active. These suspicions have since been corroborated by the Health Professions Council of South Africa, which was unable to find evidence of the existence of this "medical surgery".

    Why somebody would seek to forge a medical record attempting to portray Johannes in a bad light, and attach such a forgery to an affidavit signed under threat of blackmail made by figures associated with the mafia; and how such a forged document and forced affidavit would come into the possession of Tamson Hatuikulipi mere weeks after receiving a letter presenting him with evidence of his alleged criminality; and why Tamson Hatuikulipi would find it necessary to send such an obvious forgery to Al Jazeera are all legitimate questions that, for the time being, can only be answered with speculation.

    Caryn Dolley, who has spent six years reporting on the Cape Town mafia, focusing on links between the criminal underworld and police services, told Al Jazeera that allegations have been made linking the Cape Town mafia with certain police officers. "It is not clear just how common it is for underworld figures to blackmail others into making affidavits against their rivals," she said, "however, claims in this vein have definitely surfaced in Cape Town".

    But, for his part, Johannes remains unperturbed by these attempts to silence him. His lawyer Joly plans to bring him to the Fishing Committee of the European Parliament, where he can share his singular expertise on corruption with politicians. In the meantime, she speaks of his courage in blowing the whistle: "He knows why he is doing this, he knows that he is doing this for the ordinary people in Namibia. He thinks that fighting corruption is paramount for the development in Africa."

    The response to Al Jazeera's allegations

    Since Al Jazeera first presented the accused parties with evidence of their alleged wrongdoing, the response has been swift and overwhelming: Minister of Fisheries Bernhard Esau and the minister of justice have both resigned from their cabinet positions; James Hatuikulipi has resigned as the chairman of Fishcor, and has also resigned from his job as the managing director of Investec Asset Management.

    In the run-up to elections in Namibia, the #Fishrot affair has caused outrage in the country, leading to protests in the capital, Windhoek, with hundreds of people marching to the Anti-Corruption Commission demanding decisive action against corruption in the country.

    On the day of the elections on November 27, most of the Namibians implicated in the investigation were arrested on charges of corruption, money laundering and fraud.

    All the Namibians featured in the Al Jazeera investigation deny all wrongdoing.

    The myth of Iceland's innocence is dead.

    Icelandic MP Halldora Mogensen

    Sacky Kadhila told The Namibian newspaper that he knew from the start that our undercover reporters were "fake businessmen". "I played along ... in order to confirm my suspicions," he wrote. He added that he had reported the matter to the president's lawyer, Sisa Namandje, who in turn claimed he had alerted police.

    In Iceland, the scandal has led to the suspension of Samherji's longtime CEO Thorsteinn Mar Baldvinsson, pending an internal investigation.

    On November 12, Samherji released a statement, saying: "Samherji will co-operate with the relevant authorities that may investigate the fisheries industry in Namibia. If such an investigation will take place, Samherji has nothing to hide."

    The revelations, reported by Iceland's national broadcasting service RUV and the weekly magazine Stundin, have profoundly shocked this small island nation of 350,000 people. One of the few European countries with no history of colonialism or warmongering, Iceland has long prided itself on its purported "innocence".

    Halldora Mogensen, an Icelandic MP with the Pirate Party, put it bluntly: "The myth of Iceland's innocence is dead."

    SOURCE: Al Jazeera News


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