The President Buys a Plane: Part Deux

Corruption is like a cruise missile: you never see it coming — until it’s too late

Cameroon is one of the most corrupt countries on earth; every year when the Transparency International’s Global Corruption Report is published, Cameroon is a perennial member of the top ten, or bottom ten depending on how you look at it. As noted in that other unimpeachable source, Wikipedia: “Cameroon is viewed as rife with corruption at all levels of government.” Since 1982 the country has been under the firm control of President (some would say dictator) Paul Biya and his flame-headed wife Chantal.

In 2005 I was working with International Finance Corporation (IFC), in the Johannesburg office. We were the privatizers: bringing the brave new world of private sector efficiency to Africa. Or something like that. One day at a staff meeting I learnt that I’d drawn some invisible short straw and had been selected to lead one of our recently signed advisory mandates: the privatization of Cameroon Airlines (Camair). I wasn’t enthused, in fact I strenuously resisted the honour: how can I lead the team, when I don’t speak French? No problem, I’d have a French-speaking team. So despite my severe reservations I was duly appointed team leader of the Camair privatization. Oh merde

Cameroon is a tale of two cities: Douala the hot, humid commercial capital on the Atlantic coast, and Yaounde the hot, humid government capital in the interior. It was a short flight from one city to the other, but you wouldn’t entrust your life to the chronically crashing Camair, so the preferred route was a four-hour drive in the back of the IFC Land Cruiser, a trip I did many, many times. The saddest feature of the journey was the continual stream of huge, overloaded tractor trailers carrying gigantic hardwood trees from the interior tropical forests to the port at Doula, never to be replaced.

Cameroon Airlines had the dubious distinction of being the most corrupt government company I had ever seen — and I’d seen a lot. It wasn’t so much a company; as an empire. Everyone had their snouts in the trough, and the amounts were staggering. Every time Camair bought a plane, leased a plane, signed a contract, purchased every nut and bolt, someone got a cut, and someone else got a cut of that cut, all the way up the chain. Although it operated only four planes (on the rare occasions when all four of them were airworthy), Camair employed 1,600 people — four hundred people per plane! They had offices in cities they hadn’t flown to in years, all fully staffed.

With all the publicity surrounding the privatization, rats started scurrying out of the woodwork: calls and emails from people claiming that Camair owed millions, from one past shady deal or another. The amounts were eye-watering: $25 million there; €15 million there. And to whom were these alleged debts owed? Shell companies, front companies; but not real companies.

The term “presidential palace” is often used when in fact it’s no more than some crumbling old colonial mansion in need of plumbing and paintwork. But Paul Biya’s palace is a real palace, an African Versailles. Located on a hill on the outskirts of Yaounde, all the surrounding areas have been cleared and you approach via a long and winding road. Then you see the enormous gates, emblazoned with classic motifs gilded in gold. Inside the palace is a warren of plush-carpeted, marble-tiled anterooms decorated with chintzy diplomatic gifts and framed photographs of himself. Once, as we were leaving I turned around snapped a picture of the front gate. The guards spotted me and were not pleased, waving at us as we drove away: “Drive, drive!”

Sitting at the end of the runway at Douala Airport was a Boeing 767, painted in faded Camair colours. The plane had obviously been languishing for a long time: its tyres were flat and there were rust streaks from the windows and doors. At a meeting I asked the management team about it: why was it just sitting there? Everyone shrugged in that Afro-Gallic way, and stared into the middle distance. Plane, what plane? No one professed to know anything about it: who it belonged to, or what it was doing there. Are you kidding me? A two hundred ton aircraft is parked at the end of your runway, in your colours, and nobody knows anything about it? More shrugs.

In addition to its long catalogue of plane crashes, Camair was plagued by an equally unimpressive history of financial scandals. One such scandal was the “Albatross Affair”. This was a disastrous plan to buy an executive jet for President Paul Biya, a debacle that ultimately cost the Cameroonian taxpayer over $37 million. The job of buying the presidential jet fell to Marafa Hamidou Yaya, Minister in the President’s Office, and Yves Michel Fotso, Director-General of Cameroon Airlines. The plane they decided to buy was a brand new Boeing 737 Business Jet (BBJ). We don’t know what “incentives” the procurement team were offered, but in an industry rife with commissions, kickbacks and corruption, I’m sure they all did very well out of the deal.

At the time, Cameroon was in the grips of an IMF austerity programme and that notoriously stingy institution would never authorize the purchase of a brand new presidential jet, so the procurement team came up with a cunning plan. They disguised a $31 million payment from the Ministry of Finance to Camair as a “loan repayment”. Camair then passed (most of) this money to a shady US aircraft leasing company called GIA International, who in turn passed (most of) the money to the Boeing Corporation, for a brand-new B737 Business Jet.

However news of the planned purchase leaked out, and the deal was scrapped. Boeing say they returned the money to GIA International, minus a penalty. Undaunted, the President’s men were still determined to get their man his jet. With what was left from the aborted purchase of the Boeing 737, plus another $5 million from the government, an ageing Boeing 767 was acquired, again through the dubious GIA International.

In September 2004, President Biya finally got his heart’s desire: the biggest presidential jet in Africa. But from day one it was an unmitigated disaster. President Biya flew on his plane only once, accompanied by his family on a flight from Douala to Paris. En route the aircraft ran into severe weather, compounded by engine trouble, and eventually discharged its terrified passengers in Paris after a harrowing overnight flight. President Biya was convinced that either the plane was accursed, or that someone had tried to murder him and his family. Either way, he never flew on it again[4]. Thus ended the working life of the shortest-lived presidential jet in history! Poor President Biya wasn’t lucky with planes, in 1989 he had been on board a previous presidential jet, a Boeing 737, which developed technical problems and crash-landed in the Doula swamp.

They flew the Albatross back to Doula, empty of its presidential passengers, and left it there. To languish. Camair didn’t want it, equipped for executive not commercial use, and no purchasers could be found for this peculiar plane. What became of the ill-fated Albatross? Finally, it was revealed to be none other than the derelict airplane we had seen rusting at the end of Douala Airport, the mystery plane that nobody knew about!

We never did privatize Camair. Or rather: we did privatize Camair … and then we didn’t. To cut a long and depressing story short: the IFC team led by yours truly implemented a transparent tender for a new national airline of Cameroon. It was won by SN Brussels from Belgium, who promised to invest $15 million in the new airline. The deal was accepted by the government, announcements made, congratulations modestly accepted. Phew, another African deal done — against the odds!

3rd July 2006:

The government is pleased to announce the selection of First Delta Air Services, a consortium comprising SN Brussels Airlines of Belgium and CENANVEST, a Cameroonian venture capital fund, as Provisional winning bidders for the purchase of 51 percent of the shares in the new airline being created to replace CAMAIR as the national airline of Cameroon. The government and First Delta Air Services are expected to sign the transaction documents within ten business days.

Not so fast, Kymosabe. A lot of people were making a lot of money out of Camair, and didn’t want their cash cow killed. One of the many “non-documents” I’d seen during the tortuous due diligence had been a copy of a UK Certificate of Incorporation for the shell company that acted as Camair’s purchasing agent, making a handsome profit in the process. Listed as a 50 percent shareholder was Ephraim Inoni, Prime Minister of Cameroon.

So while we were back in Johannesburg, wondering when the government was going to call us to finalize the transaction documents, vested interests in Cameroon started a whispering campaign, with the sole objective of killing the SN Brussels deal. In this they were aided and abetted, it has to be said, by the US Embassy in Yaounde, which shamelessly promoted a competing “offer” from an American group, made outside of the accepted channels.

14th September 2006:

President Paul Biya has reportedly put the privatisation of the Cameroon Airlines, CAMAIR on hold. The Post gathered that an American company has made a better offer than SN Brussels Airlines of Belgium who came through First Delta Air Services.

As we in IFC knew all along, the American “investor group” turned out to be a complete sham. They weren’t an airline, weren’t a member of IATA, didn’t own a single plane, and their so-called business plan was nothing more than a collection of outlandish cut-and-paste promises; with nothing to back them up. But it had the desired effect: our deal was dead, slaughtered on the altar of corruption. Entrenched interests in Cameroon killed the deal, but they couldn’t have done so without the complicity of the Americans; both in business and government. One of the millions of classified documents unearthed by Wikileaks is this excerpt from an encrypted US government cable from Cameroon to Washington: “Post (i.e. the Embassy) clearly show that American citizens and American companies were involved in the corrupt deal.”

In the intervening years, little has changed. With its mountain of losses and never-ending scandals, the government liquidated Camair and set up its successor: CamairCo. Various attempts have been made to privatize it, none successful.

And the gravy train rolls on …

Post script: Chickens to Roost

BBC, 17 April 2012

Cameroon ‘Albatross’ jet affair: Ministers arrested

Two high-profile politicians have been arrested in Cameroon in connection with the allegedly fraudulent purchase of a presidential plane. Marafa Hamidou Yaya used to be the interior minister and Chief Ephraim Inoni is a former prime minister. They were part of a delegation that went to the US in 2004 to buy a $31m (£20m) jet, the Albatross.

It developed problems on its inaugural flight, and was later found to be an old aircraft with a new coat of paint. President Paul Biya, his wife Chantal and their children were onboard when mechanical difficulties forced the pilot to make an emergency landing.

At the time, Mr Yaya was secretary-general at the presidency and Mr Inoni his deputy. Mr Inoni later went on to be prime minister from 2004 to 2009 — while Mr Yaya held several senior government positions before holding the powerful interior ministry portfolio.

He was seen a potential successor to President Biya, who sacked him in December 2011. The BBC’s Randy Jo Sa’ah in Yaounde says that the “Albatross Affair” has dominated Cameroon’s headlines for many years.

Once news spread of the arrests of Mr Yaya and Mr Inoni, a large crowd gathered to see the once powerful men being driven from the courtrooms to the capital’s maximum security prison, our correspondent says.

Another former minister, Jean-Marie Atangana Mebara, a former ambassador to the United States, Jerome Mendouga, and the former head of Cameroon’s now defunct national airlines, Yves Michel Fotso, were earlier arrested for their alleged roles in the deal.