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Ghana: Comparing "Hotel Kufuor" to other Presidential Scandals

An in-depth analysis by Katie Bell for Statesmen

by Katie Bell Home Page Ghana
August 21st, 2005

COUNTS of massive corruption within governments weave their way through almost every nation. Yet, the accusations surrounding President Kufuor’s involvement in the ‘Hotel Scandal’ seems negligible and overhand when compared to past and ongoing corruption scandals hitting the headlines elsewhere. It seems a bit of underhand dealing comes with the job. The question arises however, of where does one draw the line?

President Kufuor is not the only one to be haunted by property scandals. In 2002, the wife of the British Prime Minister, Cherie Blair, was forced to admit that she used a friend and convicted fraudster to negotiate the purchase of two flats in the city of Bristol. By using their position Mr and Mrs Blair managed to reduce the price of the flats, saving a total of nearly £70,000 (¢4.24 billion).

Mrs Cherie Blair defended that purchase of the properties was for her son, Euan, who attended university in Bristol. Accusations surrounded the case however, that the exclusive flats were being rented out to business associates. President Kufuor can be reassured that his son’s suggested involvement in property dealings is trifling when compared to those of political compatriots. In 2004, Abdullah Badawi, Malaysia’s new prime minister, faced embarrassment after it was found that a company controlled by his son was supplying centrifuge parts for use in Libya’s nuclear weapons programme. Scomi, the company run by Kamaluddin Abdullah received a $3.4 million contract. Not only this but since the company started, its shares had risen by nearly 900%, implying the company benefited from ties with the government.

South Korea has also been rocked with scandals involving the president and his family members. The ‘Hanbo’ scandal of 1997, involved President Kim Young-Sam’s youngest son in influence peddling and the acceptance of bribes. The Hanbo Group, South Korea’s fourteenth largest conglomerate had received special treatment in return for massive political contributions to the then-president’s election campaign. Despite bribed loans of $6 billion from legislators and bankers the company went bankrupt and nine further politicians of the then-ruling New Korea Party faced investigations for taking tens of millions of dollars as a reward for mediating the bank loans. In that same month, the president’s second eldest son, Kim Hong-up, was sentenced to three-and-a-half years in jail for taking 3.7bn won ($2.9m) from Tiger Pools International, a sports lottery firm. He was also accused of tax evasion.

In 1999, the ‘Furgate’ scandal instigated the wives of senior government officials in accepting gifts of expensive clothes from the Shindongah Group, a leading business in South Korea. This occurred shortly before two parliamentary by-elections.

In a scandal that took on a new level, Winnie Madikizela-Mandela, the ex-wife of the former South African president, Nelson Mandela, received a five year jail sentence in April 2003, for her involvement in an £80,000 (¢4.9 billion) bank loan fraud. Winnie Mandela, who had an important role in the struggle against apartheid in the 1970s and 1980s, was a MP for the ruling African National Congress at the time. Abuse of her position however, led to a further 43 counts of fraud and 25 counts of theft involving $120,000 (¢13 billion) from the African National Congress Women’s League.

In 2003, Benazir Bhutto, the former Pakistani Prime Minister and her husband were found to have similarly abused their positions. While Mrs. Bhutto was serving her second term it emerged that she enriched herself with kickbacks from a government contract with two Swiss companies.

After a contract for customs inspection of goods being imported into Pakistan was set up, it was reported that 6% of government funds for the project would be paid as commission to two off-shore companies. One of these companies, Bomer Finance, received $8.2 million. Yet the beneficial owner of the company was Asif Ali Zardali, Mrs. Bhutto’s husband. They were both convicted, given suspended jail sentences of 6 months and ordered to repay the Pakistani government $8 million.

Incidentally, Cotecna, the company in the centre of the Pakistani scandal, is the same Swiss company whose Ghanaian agent accused President Jerry Rawlings of accepting kickbacks from. It is also the same company that engulfed UN Secretary General Kofi Annan and his son in a corruption scandal. In 1998, the NDC-dominated Parliament prevented calls from the then opposition NPP to institute investigations into an alleged $5 million bribe from Nigerian dictator Abacha to Rawlings to allegedly peddle his influence to salvage Abacha’s international image.

In another case of influence peddling, a questionable arrangement was discovered involving Equatorial Guinea’s president, Teodoro Obiang Nguema Mbasago, and the first successful oil company to operate in the Western Africa nation, Walter International Inc. The company it seemed was paying to send the president’s son to a top university in California, US The president’s son, taking advantage of the situation, was reported to be “spending at will” as his bills for one single year rose to $50,000.

According to a US senate report, oil companies also formed business ventures and rented property with government officials and hired companies linked to Obiang. Despite the acute poverty in Equatorial Guinea, Obiang and his family members live lavishly. Reports in 2004 revealed that Obiang owns two houses, valued at $1.3 million and $2.5 million. One of his sons, Teodoro Nguema Obiang, also owns a $6.9 million house in Los Angeles, US.

In February, 2005 Israel’s attorney general lifted the threat of indictment against Ariel Sharon in a scandal over illegal campaign funds but charged the prime’s minister’s 40-year-old son, Omri, with fraud and other crimes of a similar style. Omri Sharon faced up to seven years in jail for charges of alleged laundering of illegal campaign contributions through front companies used to fund his father’s bid for the leadership of the Likud party six years ago. Mr Sharon won the race, which laid the ground for his election as prime minister.

In 2004 accusations fell on the son of the former British Prime Minister, Margaret Thatcher, for helping to fund a military coup in Equatorial Guinea. In early 2003, Sir Mark Thatcher, agreed a plan to provide military support to escort the opposition leader in exile, Mr Severo Moto, back to Equatorial Guinea and take over as president – in effect a coup. A contract between the president and an associate of Sir Mark Thatcher, SS officer Simon Mann, would mean that large fees would be paid to them if the operation was successful. Sir Mark Thatcher’s business career, involving controversial business deals in Europe, the Middle East, the Far East and US, had already faced questions. In 1998 Mr Thatcher was sued for £8 million by a former partner for alleged unpaid commission on arms deals brokered while his mother was Prime Minister. For his part in the coup, Mr Thatcher faced 15 years in jail by South African prosecutors, but was saved by a prosecution deal brokered in South Africa.

In 2004 a global watchdog, Transparency International, identified the world’s most corrupt former heads for political embezzlement. Singled out were leaders of Indonesia, the Philippines and the former Zaire, now known as the Central African Republic of Congo. Suharto, Indonesia’s president from 1967 to 1998, embezzled between $15bn and $35bn. Former Philippines leader Ferdinand Marcos was second on the list, the group said for taking between $5bn and $10bn. Third was Mobutu Sese Seko, the former leader of Zaire, embezzling $5bn. In comparison to the exaggerated behaviour of John ‘Chief’ Kufuor, it seems the press are clutching at straws.



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