Sunday, September 20, 2020

BDP in De Beers, Debswana slush funds scandal

De Beers and its appendage ÔÇô Debswana Diamond Mining Company -have for close to three decades been running and maintaining slush funds to finance Botswana Democratic Party (BDP) election campaigns and to pay for lavish entertainment for ruling party big wigs and their friends ÔÇô Sunday Standard investigations have revealed.

The Debswana fund, approved by the board of directors under the “executive entertainment vote”, was used as recently as 2004 (May) when the ruling BDP hosted Armando Guebuza, six months before he became the President of Mozambique.

Guebuza, who was then Secretary General of Mozambique’s ruling Frelimo, had come to Botswana as a BDP guest. Guebuza, together with some senior members of Frelimo and BDP, were flown to Kasane and entertained at Debswana cost from the slush fund.

Former President Festus Mogae also personally benefited from the slush fund on a number of occasions. The fund was on numerous occasions used to finance the then President’s private sessions when privately entertaining personal friends at the Debswana Guest House in Gaborone Central, behind the State House.

The fund, it is understood, was at one point also used to help out former cabinet minister and current speaker, Margaret Nasha, and Bank of Botswana Governor Linah Mohohlo when the two were stranded in what started off as a holiday outing in Kasane.
Mohohlo is also a Debswana board member.
The two had run out of petrol in Kasane while on vacation on 25th December 2000. The then Debswana Managing Director, Louis Nchindo, instructed the then Orapa & Letlhakane Mines General Manager, Len Makwinja, to have petrol transported all the way from Orapa to Kasane at Debswana’s expense. The issue was also raised in the Slaughter and May investigation report.
Slaughter and May, a British law firm, was in 2004 commissioned to investigate and audit corporate governance at Debswana. At the time, Government said they were worried that the shares of Debswana’s direct shareholders were not quoted on any stock exchange, and as such the company was not subjected to any of the regulatory processes which apply to quoted companies, hence the need for an independent audit.
Government stated that there was need to obtain advice from independent international experts on appropriate governance arrangements for the world’s leading diamond miner.
Sunday Standard investigations have further turned up information that De Beers has, for close to 20 years, been channeling donations to the BDP through secret overseas accounts. The De Beers secret donations to BDP election campaigns were almost exposed on the eve of the 1999 elections after documentation of their transaction was intercepted.
This was after De Beers transferred US $ 500, 000 (then P2, 4 million) from a secret Swiss bank account to the BDP bank account at the First National Bank in Gaborone. The money was transferred from an account at Guyerzeller Bank AG in Zurich, Switzerland, to Marine Midland Bank N.A in New York before it was finally credited into the BDP’s account at FNBB Industrial Branch.

A young banker named Dumelang Saleshando was to lose his job at FNBB after he was accused of leaking the details of the transaction to the media.
Years later, FNBB settled its dispute with Saleshando, now a Member of Parliament, by paying him out an undisclosed amount of money for unfair dismissal.

Following the near miss, Debswana then decided to route their election contributions to the BDP through a trust fund account of a local law firm.

Since the late 1960s, there have only been two General Elections in which De Beers did not make donations to the BDP, these being the two immediate past General Elections, when, as it turns out De Beers had reconsidered its corporate governance practices and opposition parties in Botswana had become vocal against the company’s contamination of the country’s democratic process.

It is understood that only four people knew the source of the secret donor, Party treasurer Satar Dada, then party Chairman Ponatshego Kedikilwe, Secretary General Daniel Kwelagobe and former party president Festus Mogae.

De Beers is also understood to have used the slush fund to buy former president Ketumile Masire out of State House. De Beers helped set up a ghost company called Clairemont Corporation, which they used to transfer close to P 4 million to former President Ketumile Masire’s company, GM Five, under the pretext that they were buying into the company.

The Fund was also used to finance a consultancy by South Africa’s Professor Lawrence Schlemmer, to come up with a strategy that would help the BDP win the 1999 elections when the party was facing unprecedented challenge from opposition.

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Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.