The Darkest Web: How Western Firms Helped Launder Money for Angola's Elite
President dos Santos of Angola. Obtained courtesy of Wikimedia Commons under an Attribution 3.0 Brazil license. No changes were made to the image.
In Luanda, Angola’s sprawling capital, the average rent for a two-bedroom apartment is a whopping $6,800 USD per month. A half-litre tub of vanilla ice cream will set you back around $31. On the city’s wealthy Atlantic peninsula, ritzy beach bars and luxury condominiums abound, and finding a meal for two under $50 is considered a bargain. Yet the majority of Angola’s population live on less than $2 a day, in arduous conditions, with poor access to food, clean water, and sanitation, coupled with high illiteracy and infant mortality rates. These inequalities raise two important questions. First, why is Luanda one of the world’s most expensive cities to live in? And second, why do Angolans continue to pay exorbitant prices for most basic goods and services?
The answers to both of these questions, from the standpoint of the Angolan government and external financial services firms, are fairly simple. Following Angola’s independence from Portugal in 1975, and a protracted civil war in the country that lasted until 2002, Angola could finally turn to its economy and rebuild. Under the leadership of Jose Eduardo dos Santos, Angola’s autocratic president from 1979 to 2017, the country experienced rapid economic growth in the early 2000s, with annual GDP growth peaking at an astonishing 23% in 2008, and exceeding 10% per annum 5 out of 6 years between 2003 and 2009, due in large part to Angola’s vast oil and mineral reserves. This rapid economic growth brought large numbers of foreign expatriates to Angola, primarily to work in the country’s booming oil industry, and consequently raising prices exponentially in the nation’s capital through increased demand for luxury housing and other commodities in short supply, not only raising the prices of these goods but trickling down to the local level and raising the price of staple goods, consequently pushing the average Angolan further into poverty.
This rise in inequality was not the only negative symptom of Angola’s economic boom. As Angola’s GDP and oil revenues began to rise, so did the personal wealth of the country’s leader, Jose dos Santos. Throughout his presidency, dos Santos grossly mismanaged and embezzled state oil revenues using Angola’s nationally owned oil company, Sonangol. From 1997 to 2002 alone, approximately $4.2 billion disappeared from government accounts, according to Human Rights Watch, an amount roughly equal to all foreign and domestic social and humanitarian spending in the country over that same period. Dos Santos’ frequent embezzlement and squandering of public funds meant to enrich and improve the lives of average Angolans is perhaps one of the most sickening symptoms of the country’s inherent corruption. However, the facilitation of this corruption, through a web of nepotism, bribes, and intervention by some of the world’s largest banks and consulting companies, is far darker than almost anyone could imagine.
In 2013, almost 34 years into the rule of the elder dos Santos, the president’s daughter, Isabel, was reported by Forbes to have become Africa’s richest woman, with a net worth of around $2 billion. According to Ms dos Santos, her wealth was gained independently, with little involvement from her father, and with no capital injection from the Angolan government. Ms dos Santos further claims that she is a private investor, who ended up with stakes in companies in both Angola and abroad, allowing her to make her wealth. As one would imagine, the truth is far more complex. As Ms dos Santos returned to Angola after studying abroad in London, she used her father’s connections to buy stakes in various companies involved in contracting, telecoms, mineral extraction, and other fields, systematically using her name to avoid financial due diligence checks by Angolan regulators, who were likely indifferent in the first place. It is alleged that Ms dos Santos used money from the Angolan treasury, embezzled by her father, to fund her various business projects, concealing the money’s origin using over 400 shell companies and subsidiaries in 41 countries, and gaining lucrative contracts with the Angolan government through her various business holdings. Ms dos Santos also had the help of various Western firms in helping to conceal her money, including the Boston Consulting Group, McKinsey & Company, and PwC, who helped oversee financial transfers that the current Angolan government describes as acts of money laundering. All the while, these Western advisers collected a share of the proceeds.
In 2016, Ms dos Santos was appointed chairwoman of Sonangol, the same state oil company alleged to have been linked to the disappearance of public funds, by her father. In addition, President dos Santos’ elder son, Jose Filomeno dos Santos, became head of Angola’s sovereign wealth fund in 2013, cementing the dos Santos legacy in many of Angola’s most notable firms. However, these appointments were relatively short-lived. Following President dos Santos’ retirement in 2017, his successor, João Lourenço, began to scrutinize dos Santos’ holdings more critically, removing both Ms. dos Santos and her brother from their positions, and in August of 2020, arresting Ms. dos Santos’ brother, Jose, for money laundering.
Yet, both Ms dos Santos and her father, the former president, remain free for the time being, despite the publication of the ‘Luanda Leaks’ in early 2020 by the International Consortium of Investigative Journalists, which found that hundreds of millions of dollars in loans and contracts were directed to dos Santos' companies and that two firms, PwC and Boston Consulting Group, together earned more than $5.6 million between 2010 and 2017 for services provided to Ms dos Santos. However, despite the mountains of evidence against Ms dos Santos and her father, they will likely remain free or in hiding, using their wealth to bypass detection or keep authorities at arms’ length. In the days following the publication of the leaks, for example, Ms dos Santos’ personal wealth manager was found dead, just one of the many casualties at the hands of Angola’s MPLA government.
Angola is but one case of blatant corruption among many throughout both Africa and the world at large. Laundered money accounts for around 2-5% of global GDP annually, and shows few signs of reduction. Large scale government corruption, therefore, is not merely an Angolan problem, but a global one, unless the same firms that now choose to take a cut of the profits decide to report their true findings. Sadly, however, greed often comes at the expense of those with few resources to fight back, a problem exemplified in Angola, and one which is unlikely to ever fully change.
