Tuesday, June 12, 2007

Blood chocolate

"There is a very sizable chance that the chocolate bars you eat contain cocoa from Ivory Coast, and it is helping to finance the conflict there," says the director of Global Witness, Patrick Alley. "This should leave a bitter taste in your mouth." Alley calls on the chocolate industry to review its operations and verify that it is selling products not tainted by any association with armed conflicts.

Ivory Coast is located on Africa's western coast and is considered the world's biggest producer of cocoa. It is also the primary supplier of the world chocolate industry. The country supplies 40 percent of the chocolate consumed around the world (the second-largest producer of chocolate in the world is Ghana, with 20 percent). For over three decades, since gaining independence from France in 1960, President Felix Houphouet-Boigny, whom residents consider to be "the father of the nation," ruled Ivory Coast. While opposition parties were suppressed during his rule, Ivory Coast was nonetheless perceived as a model of a stable African country, with its striving economy and its relative ethnic and religious harmony.

The troubles started a few years after Houphouet-Boigny's death. All the rifts and the tribal, religious and political divisions that had been glossed over until then surfaced with great intensity. At the heart of the conflict lies the clash between the Muslim north and the Christian south. In 2002, a military revolt against President Laurent Koudou Gbagbo broke out. It was suppressed and an international peace force led by the French army was sent to the country. But all efforts to reach a peace agreement and achieve a stable political arrangement that would heal the rifts and restore national unity failed. There are occasional military clashes and the country is divided in two, with a buffer zone controlled by the international force. 

The Muslim north is controlled by the rebel front, the New Forces (FN), whose secretary-general is Guillaume Kigbafori Soro, a former student leader. In the south, including the capital of Abidjan, President Laurent Gbagbo is in control. Both sides use the income generated from cocoa exports, which amounts to approximately $1.5 billion annually, to purchase arms - although the United Nations has imposed military sanctions. The war has so far caused thousands of casualties and the country is on the brink of collapse. Over 40 percent of the 17 million residents live below the poverty line, per capita income is approximately $800 and the average lifespan is 45 years for men and 47 for women.

In the past, the UN reported that several Israeli companies had supplied Ivory Coast with arms, helicopters, drones and listening equipment. Among the companies and persons mentioned were Hezi Bezalel, Variant and Aeronautics Defense System. France, which lost some of its peacekeeping soldiers in battles, and the UN asked Israel two years ago to start obeying UN resolutions and begin enforcing the embargo. The Defense Ministry responded to the request after some delay, causing a temporary tension with Paris.

Four of the 72 pages of the Global Witness report are devoted to Israeli citizen Moshe Rothschild, to the companies he owns and to his dealings in Ivory Coast. The report states that Rothschild sold two helicopters to Ivory Coast. In addition, the report claims that companies owned by Rothschild are connected to local personalities suspected of transferring funds earned from cocoa exports to purchase arms and to fund army units. The sale of the Romanian army helicopters, which were upgraded by the Israeli arms manufacturer Elbit, took place before the UN banned the sale of arms to Ivory Coast.

Rothschild, 55, a native of Kibbutz Gvaram, in the south, who is known by his childhood nickname "Shoshi," is a former Phantom jet pilot. He completed his military service in 1978 with the rank of captain and began doing business in Peru. First he dealt in agriculture, but in the 1990s, he brokered a huge arms deal worth half a billion dollars that included the sale of fighter jets, helicopters and transport planes from Belarus to Peru, then ruled by President Alberto Fujimori and his intelligence chief, Vladimiro Montesinos.

After Fujimori was deposed and fled to Japan and Montesinos was convicted and jailed, an investigation against Rothschild opened in Peru. The inquiry found that Rothschild, who collected tens of millions of dollars from the arms deal, bribed several Peruvians, including Montesinos. Peru issued an international arrest warrant for him, he is on Interpol's wanted list and six million dollars of his account in a Swiss bank were frozen. In response to an article about him published in a Haaretz weekend supplement of September 2005, Rothschild claimed he was innocent and said he was a victim of political power struggles in Peru.

In 2000, Rothschild relocated the heart of his business operations to the western coast of Africa. Through a company by the name of R-T-Com he was involved in communications deals in Sierra Leone and the construction of a container platform in a port in Liberia. The Liberia deal also involved two partners, veterans of the Israel Navy's Flotilla 13, Azaria Gilboa and Udi Malnik. The partnership broke down and Gilboa and Malnik filed a suit against Rothschild in an Israeli court.

In Ivory Coast, Rothschild worked together with Gabi Levi-Gonen, a former insurance agent. The two set up several companies, the most important of which is a local company called Lev-CI. The company acquired old heavy engineering equipment and sought to win contracts in construction. The company also hired the services of Dr. Natan Peled, an expert in civil engineering from the Technion (the Israel Institute of Technology in Haifa), who was appointed the company's CEO. But Lev-CI encountered financial difficulties and last year this partnership also came to an end, not without accusations and mutual recriminations to the authorities. An international auditor, who was hired to investigate the collapse, discovered that $13 million were missing from the company's coffers.

The Global Witness report exposes a complex web of companies stretching from Ivory Coast to Holland, which in recent years has become a convenient tax haven for international companies. The complicated structure of the companies, which have names such as R-T-Com Sierra Leone, the Lev-Mandel Group, Golden Creek, HTM Beheer and First Alliance Trust, allows the owners to conceal their identities. The report notes that the common denominator among several of these companies is the involvement of Moshe Rothschild. One of these companies was also involved in the sale of the helicopters.

According to the report, as well as statements made by Nathan Peled, Lev-CI was jointly owned by the Lev Group, which is controlled by Rothschild and Levi-Gonen (75 percent), and the BNI (Bank National Investment) with a 25 percent share. BNI is one of the largest banks in Ivory Coast. The chairman of the bank is Victor Jerome Nembelessini-Silue, who was a special adviser to the finance minister before being appointed to the post by President Gbagbo. Nembelessini-Silue was also the chairman of the board of Lev-CI.

When the construction company was disbanded, Nembelessini-Silue and Peled accused each other of concealing the missing money and of forging receipts for equipment presumably purchased in Israel. An audit by a well-known international accounting firm (Price Waterhouse Coopers) found that around $13 million disappeared from the company. In August 2006 Peled was laid off. "I was a hired CEO in a company run by Rothschild and Gabi Levy," Peled said in response to Haaretz. "Happily for me, the association between us ended. All of the clarifications were completed and the authorities cleared me of any complaints that had been made against me. It was a construction and infrastructure company, and it was never involved in arms sales, money transfers or money laundering."

Nembelessini-Silue confirmed that he visited Israel several times and met with Rothschild. In a letter to the organization, he claimed that he did not know Rothschild was wanted by the Peruvian authorities on suspicion of bribery and corruption charges. He writes that if he had known this, he would have reported it to the board of directors.

"We are worried," Global Witness spokeswoman Maria Lopez told Haaretz in a phone conversation from Senegal. "A man who is wanted in Peru on suspected corruption charges and who sold arms to the Ivory Coast army is on the board of directors of a company whose chairman is the head of a large national bank. We call on the government of Ivory Coast to investigate the matter and take action if it is found that inappropriate actions occurred."

Levi-Gonen said in response that he ended the partnership with Rothschild three years ago and denied any connection to inappropriate actions. Several calls to Moshe Rothschild's cellular phones, secretary and office went unanswered.

Rothschild's role in the economy of Ivory Coast is marginal compared to the involvement of bigger companies and arms dealers from France, Western Europe, the U.S. and other countries. But time and again the question arises: Why do businessman and companies from Israel feature prominently in almost every point of tension, war or conflict in the world?

Link to Haaretz.com