Press Release: A government committee in Guinea today recommended stripping billionaire Beny Steinmetz of one of the world's biggest iron ore concessions on evidence that his company bribed the president's wife.
In a new report on what has been dubbed "the deal of the century,"
Global Witness examines the evidence on which the mining committee based
its recommendation, including transcripts of FBI recordings
and contracts underpinning the corruption. The key documents were
published by the committee today, along with its findings on the deal.
Global Witness's report also looks at other new evidence, including a
corrupt contract with one of the former president's relatives and
testimony that Beny Steinmetz Group Resources (BSGR) pressured the Guinean
media into hiding the involvement of the president's wife in the deal.
She told the committee that a top BSGR official bribed her with cars,
jewelry and a bag containing a $1 million. Criminal investigations into BSGR's Guinea deal are underway on three continents, including in the United States.
"The committee's extraordinary evidence builds on the revelations
about BSGR's Simandou deal that we have been publishing since late
2012," said Daniel Balint-Kurti of Global Witness. "It
is rare that the mechanics of corrupt deals are laid bare so clearly,
showing how opaque mining deals can short-change the world's poorest
nations."
BSGR says it "acquired its exploration and mining rights in Guinea
after a fully transparent and legal process " and claimed the huge
project would "contribute to increased stability and peace" in the
region. It says that the evidence released by the committee was
"fabricated" and that the whole process is an illegal attempt to seize
its assets.
The contracts released by the mining committee show how BSGR and an
affiliated offshore company promised millions of dollars in bribes to
Mamadie Touré, one of then-President Lansana Conté's
four wives, in exchange for help in obtaining the concessions, at a time
when they were already held by one of the world's biggest miners, Rio Tinto.
The Guinean government then took the rights back from Rio Tinto in 2008 and handed them to BSGR for nothing (although the company says it later invested $160 million). BSGR booked a phenomenal profit by selling half the rights on to another major mining company, Brazil's Vale, for $2.5 billion -- equivalent to twice the Guinean national budget.
After Guinean government-appointed investigators learned of the
corrupt contracts, BSGR adviser Frederic Cilins repeatedly traveled to Florida last year to meet Touré, who had moved there after the death of her husband. The transcripts of the FBI's
recordings of their conversations -- linked to a wider US criminal
inquiry into the Simandou deal -- show that Cilins offered Touré $1 million to destroy the corrupt contracts, claiming that he was acting under instructions from Beny Steinmetz himself.
Cilins has pleaded guilty in the U.S. to obstructing a federal
investigation, for which he could be jailed for up to 47 months. He
could still be charged with other offenses as the U.S. inquiry into the
Simandou deal continues.
Global Witness's reports on BSGR in Guinea can be found here, including our August report that showed how BSGR was intimately connected with the British Virgin Islands company, Pentler, that signed several of the corrupt contracts.