China’s Mystery Man In Africa
In 2014, Tom Burgis uncovered the story of Sam Pa, an elusive middleman responsible for brokering multi-billion dollar resource-for-infrastructure deals between African despots and Chinese state-owned companies. A reporter for the Financial Times, he showed that in China’s hunger for oil, minerals and diamonds, it put aside ethical concerns and used crooks like Pa to gain access to the continent’s natural wealth.
Besides abetting African leaders to loot their country’s natural resources, little of which trickled down to their citizens, Pa has been accused of multiple offenses ranging from arms dealing to tax evasion. His willingness to work with corrupt autocrats has earned him a spot on the US sanctions list.
Sam Pa, only one of his many aliases, ran his dealings through the ‘88 Queensway Group’, a web of joint ventures, offshore shell companies, and obscure subsidiaries stretching from Singapore to Angola. Though, Burgis said the complexity of Pa’s dealings are not irregular, he felt it was the most “extraordinary example of opaque, complex deals in the mining industry.”
To avoid unwanted attention, Pa seldom puts anything down on paper, and his known associates refer to him exclusively as an “adviser”, a lowly title that understates the key role he plays in these deals. Much of his past is murky, but he is known to have worked as a Chinese intelligence officer in West Africa in the 1980s, during which he developed the high-level connections he needed to go into business.
Burgis first encountered the shadow of Sam Pa during 2008, when a group of army officers launched a successful coup d’état in Guinea. But the new military junta needed cash to cement its fragile hold on power. Under the direction of Mahmoud Thiam, a former Wall Street banker, Guinea’s government sold away its mineral rights for foreign currency.
Of the many deals, one paper trail lead to RUSAL, a Russian aluminum company, which held the rights to extract bauxite from Guinea. Thiam said the deal was made under unfair circumstances and rendered it null and void. Thiam then expropriated the rights and gave it to the China International Fund or CIF, one of the companies that formed the Queensway group.
At first it appeared the deal between CIF and the Guinean government was nothing but a classic infrastructure for resources deal, but upon a closer look Burgis noticed there was nothing public on CIF’s corporate structures and its shareholders. Only a report filed by J.R. Mailey, a think-tank researcher, gave any clues as to the identity of the wheeler-dealers behind CIF. From the report, Burgis learned of Sam Pa, and kept an ear out for other business deals brokered by him and his associates. Throughout his time in West Africa, he repeatedly heard of Sam Pa and the integral role he was playing to funnel Africa’s resources out of the continent.
The second piece of the jigsaw fell in place when he reported on a massive deal for mineral rights for coltan mines in the Democratic Republic of Congo. The two Angolan shareholders part of this secret venture, lead back to China Sonangol, a joint venture formed between Sam Pa and Manuel Vicente, one of the few people who came on-the-record for the story.
From then on, it was a matter of going through reams of corporate documents and legal filings, usually from Hong Kong’s corporate registry, and talking to every person who had came across Pa. Drawing a “snaky map of the Queensway constellation,” it took Burgis hundreds of man-hours to plot out all the connections.
As for on-the-ground reporting, Burgis went far and wide in search of Pa’s footprint. One time, he sneaked into the coltan mining pits of Eastern Congo. Another time, he trekked to the Queensway group office in Harare, Zimbabwe, where he learned the address of the local director of the Queensway group was listed under the address of the Zimbabwean secret police. Details later emerged that Pa was responsible for supplying arms to Mugabe’s regime in return for the safe passage of the diamonds he was spiriting out of the country. These revelations came just after Mugabe was accused of ordering the murder of hundreds of Zimbabweans to ensure his electoral victory.
When Burgis was finished with his reporting, the Financial Time’s lawyers had to go through the story with a fine-tooth comb to ensure the final version could stand up to libel suits, after which “you take the plunge,” he said. With this kind of investigative reporting you could only “report what you can, confirm what you can.” In fact, in the story Burgis describes his confrontation with China Sonangol, which upon receiving questions about the company’s connections with Pa issued a veiled threat saying it could sue Burgis and the Financial Times for defamation.
In the interest of fairness, he contacted anyone associated with the Queensway Group so they could give their account of their dealings with Pa and distance themselves from the more unprincipled actions of their one-time partner. In doing so, he had gained key on-the-record interviews from Mahmoud Thiam and Helder Bataglia, both of whom had billion dollar dealings with Pa, that would help underpin the whole story.
But one interview made little sense. Why did Manuel Vicente, Sam Pa’s partner, agree to talk to the Financial Times? To this, even Burgis was still unsure. He said they had already done a special report on Angola before the story, providing the newspapers with the visibility, and therefore clout, to ask for an interview from a high-ranking official of the Angolan government. In that sense, the timing was fortuitous. But Vicente was closely implicated in Pa’s business. His willingness to come forward was puzzling.
But at the end of the story, other questions are left unresolved for the reader. What could be done with characters like Pa? And when would the cycle of looting and violence end in Africa? Burgis said he was unsure. As long as the incentives were stacked in favor of looting the continent instead of building it up, the “resource curse” would keep a lid on Africa’s growth story.
He likened the great plunder of the continent to the actions of someone who had just won the lottery in two ways. Even if you warned the person that lottery winners tended to waste their money on drugs and fast cars, driving themselves into an early grave, they nevertheless went about it. The second parallel was that it is well-documented that lottery winners are not happier after their (supposed) good fortune.
African nations rich with oil, diamonds and cobalt were much the same. The continent’s leaders had no incentive to govern responsibly with all the natural wealth at their feet. Flushed with money from selling mineral rights, their governments often spent the cash on themselves or shoring up the military. And knowing full well how short-lived their time in power could be, African kleptocrats would embezzle public funds in preparation for the eventual overthrow of their own government. As a result, swathes of Africa are still riddled with civil war, disease and corruption.
Though the continent’s problems may not come to a foreseeable end, the story finished on a positive note. A year after the article was published, Sam Pa was detained by the Communist Party. Observers suggest as China’s economy began to lose steam, its appetite for natural resources also dampened. Chinese officials no longer needed an embarrassment like Pa, who acted as if he was only answerable to himself. But Pa has had past run-ins with the law, and after each encounter he has come out strong. With Pa’s impressive rolodex of contacts and his ability to open doors, Beijing might just need him again.
