A classic De Beers story culled from the realm of apocrypha finds Louis Nchindo, at the peak of his career, in a group managers’ retreat. The topic of discussion is “How De Beers developed Botswana”. De Beers managers are smacking their lips and thumbing their breasts with pride.
The designer label fashion conscious Botswana champion of citizen empowerment who never toned down his act to accommodate his foreign counterparts reputedly said, “No. The topic of discussion should be: How Botswana developed De Beers.”
Nchindo is a product of an era that produced Festus Mogae and David Magang. He however has little in common with his contemporaries as he never mastered the art of diplomacy. A few years ago he accompanied former president, Festus Mogae on an official visit to Britain. The then British Prime Minister, John Major would not meet Mogae, but made time to meet the then South Africa’s President Thabo Mbeki. While Mogae retreated to his cocoon of diplomacy, Nchindo came charging and threatened to stop Botswana diamonds going through the UK. Not satisfied with the public spat with UK officials that was aired in the British media, Nchindo brought the battle home and locked horn in a bitter public row with the British High Commissioner to Botswana.
Whenever the ruling Botswana Democratic Party (BDP) or its presidents found themselves on slippery slope, Nchindo thought nothing of diverting De Beers’ money or influence to help them out. The saga of Mogae and Sir Ketumile Masire’s relationship with Nchindo is the tale of financially and politically vulnerable presidents whose rise to power pushed him towards the bounds of ethical propriety. Nchindo and his BDP colleagues found themselves caught up in shady political funding processes where they helped move De Beers’ funds to BDP coffers in what insiders say was a lengthy effort to obscure who was paying for what and where the money wound up; a setup that effectively amounted to money laundering.
In secretly engineered deal, Nchindo is reported to have put together a plan for De Beers to bail out Masire. “When I became President in 1980, following the untimely passing of my predecessor, I quickly discovered that I ceased to have control over my own time and thus could no longer actively attend to my farming interests. It was in this context that I welcomed an offer by Louis Nchindo of De Beers, as in the end I had to cut my losses by leasing my properties until I finally retired from public office. Here I am reminded of the adage – “While good judgment comes from experience, experience is often the product of bad judgement.” Masire was responding to reports of his controversial relationship with De Beers.
In a written statement, De beers confirmed that, “it is true that, given the company’s investments and experience in managing farms at the time, we were able to provide management assistance and a loan facility to former President Sir Ketumile Masire. Contrary to your sources, the purpose of the loan was to help the then head of state by relieving him of the burden of debt and providing him with resources for the farm to be independently managed and so enabled him to attend to the duties of his office and matters of national interest. Louis Nchindo put the idea to Sir Ketumile and also recommended the assistance to the company. This was done in his capacity as an employee of the company at the time. In the present day and age, the De Beers family of company’s operates in a completely different environment with clear policy guidelines governing donations and for disclosure.”
De Beers says it was “once again approached by Louis Nchindo to grant financial assistance to the former Masire shortly after his retirement.”
Nchindo’s relationship with Mogae is also full of such cloak and dagger intrigues. Seven years ago, Mogae and former Minister Boometswe Mokgothu are alleged to have given Nchindo the authority to negotiate on behalf of Botswana in a multi billion dollar De Beers restructuring deal. Although Mogae and Mokgothu deny ever giving Nchindo the power to negotiate for Botswana, The Debswana managing director ended up on the negotiating table with a Botswana name plate.
Nchindo emerged from the deal a millionaire while Mogae came out bitter. The result was that their friendship of forty years collapsed. Since then, the two erstwhile friends have been at it hammer and tongs.
Mogae and Nchindo’s curious relationship and the drama that has attended the high profile corruption case have provided fodder for conspiracy theorists. They simply join the dots and a sinister outline emerges: that the trial is about more than just the disputed piece along the A1 highway to Sir Seretse Khama Airport and the controversial visit of discredited American Congressman William Jefferson.
For a long time, Nchindo’s influence on the Mogae administration was widely presumed but hard to illustrate. For example, it is widely believed that when the President was preparing for State House, he often turned to Nchindo for advice. Botswana Democratic Party (BDP) insiders talk of nocturnal meetings between Mogae, Nchindo and the then Botswana Defence Force Commander, Lt Gen Ian Khama, at Nchindo’s mansion in the suburbs of Gaborone Central. Two days before Mogae ascended to the presidency, Lt Gen Khama announced his resignation from the army. In a trade where no one puts much faith in blind coincidences, Khama’s appointment to the Vice Presidency was credited on Nchindo.
Members of the BDP so-called “Big Two” faction also believe Nchindo was instrumental in sidelining Ponatshego Kedikilwe in the contest for Vice President. Although Nchindo has never confirmed this, he has dropped enough hints to suggest that it is true. He likes to regale friends with stories of how Mogae was toying around with the idea of making Kedikilwe Vice President “until the Tlokweng incident.” By the Tlokweng incident, he is referring to the alleged mid night meeting of the Big two faction in Tlokweng where they allegedly plotted to shore up Kedikilwe’s position.
A reconstruction of the rise and fall of Nchindo’s relationship with Mogae suggests that the Debswana Managing Director was an ingenuous power player who used Mogae’s weaknesses and his friendship with the president to strengthen own hand. Nchindo had mammoth ambitions. From the beginning, the man wanted to cultivate a span of influence that would extend far beyond his established power base of diamond mining into agriculture, tourism and become, by all intents and purposes, the power behind the presidency.
In his interview with DCEC chief, Tymon Katlholo, Nchindo stated that “I had a dream of developing tourism in the country by setting the hotels in Gaborone, Maun and Kasane. I still have that dream.”
Nchindo said the dream was “in my personal capacity. I tried to pursue Debswana to join me to develop the hotels.” The hotel planned for Gaborone was to be built on Nchindo’s disputed plot along the A1 highway, which is currently at the centre of the corruption case.
For a time, all things seemed possible as Mogae and Nchindo seemed to be marching to the beat of the same drummer. Sources inside the government enclave like to tell the story of how Members of Parliament used to lobby Nchindo to get them appointed into cabinet.
Even Cabinet Ministers used to refer to him whenever they wanted to know what was going on inside the president’s head. When speculation was rife about who would be Mogae’s Vice President, the then Cabinet Minister and BDP Secretary General, Daniel Kwelagobe, confided in Nchindo that he was worried David Magang was going to be the next Vice President.
Kwelagobe and Magang, though both Molepolole men, had never seen eye to eye.
The reason for Kwelagobe’s apprehension was the close friendship between Magang and Mogae. Nchindo retorted that “if that is the way you look at it, then Gobe Matenge has a better chance. He is closer to Mogae than Magang.”
Stories doing the rounds in the corridors of power reveal how Assistant Minister Olifant Mfa first got to know about his appointment to cabinet through Nchindo.
At the time, Mfa was causing a lot of trouble for cabinet from the backbenches, from where he was calling Vice President Ian Khama all sorts of names.
At one point the maverick Mfa even went as far as to demand that he be given the money for his constituency to take it to where it belonged; Sebina/Gweta. Worried about Mfa’s irrational pranks, Mogae decided to rope the maverick into cabinet as a junior minister from where he would be restrained to yell his mind by collective responsibility.
But before an official announcement could be made that Mfa had finally realized his dream into cabinet, it is understood Louis Nchindo whispered to the legislator’s daughter, obviously for the benefit of the father’s ear “to tell your old man to behave, because we are considering appointing him to Cabinet.”
Mfa, who was given to abrasive outbursts in parliament piped down. A few weeks later he was appointed Assistant Minister of Presidential Affairs. He has remained in cabinet ever since.
Nchindo’s brash style, however, often clashed with the culturally conservative government enclave. Although he was not exactly the power behind the throne of popular lore, many people were drawn to his moxie and apparent influence.
His bravery and abrasive disposition, his knack for risk, flamboyant lifestyle, a hearty and disarming laughter combined with street charm and fondness for detail made Nchindo an asset for a president still groping for a footing in a party literally baying for his blood.
From early on, Mogae and Nchindo were an odd combination ÔÇô here was an introverted and clearly reluctant master who always shied away from a fight, flirting with an extroverted aide, an outspoken power player who took no hostages and insisted on the master hitting the ground running.
The relationship though worked, at least for sometime. Although it’s probable that Mogae may have set his own course, it was always in the direction that Nchindo preferred.
There is another feeling, difficult to dismiss that enjoying his influence and perhaps owing to his immodesty and carried away by the success of his plans, Nchindo always overplayed an impression, perhaps too much that he was actually the brains and power behind the throne.
When the country started agitating for diamond beneficiation, President Mogae went against the advice of his friend of long standing and Minister of Mineral Resources and Water Affairs, David Magang, and took sides with Nchindo.
Magang was championing the national campaign for beneficiation, while Nchindo, the De Beers point man in Botswana, was dead set against bringing diamond cutting and polishing to Botswana.
As a minister in the previous administration, Magang had tried to sell beneficiation to Cabinet, but there were no buyers. The then president, Sir Ketumile Masire, and his deputy, Festus Mogae, had been sold onto the De Beers/Nchindo propaganda machine and were in no mood to establish a cutting industry in Botswana.
Magang was punching above his weight. De Beers was the main financier of the ruling Botswana Democratic Party and also spent millions of Pula to help a peaceful transition from Masire to Mogae.
“I had no support from top to bottom, however much I tried. My President and Vice President thought I was mad,” Magang recalls.
Treated to generous quantities of wine and champagne, even local journalists who attended regular briefings from Debswana Managing Director were convinced that Magang was a buffoon.
“At the time, I felt terribly lonely. Very few Batswana knew about diamonds. It was me, the President, the Vice President, the Attorney General, Minister of Finance and their officials. These were key ministers involved in negotiations with De Beers. We were supposed to be the leading diamond producer in the world. It made sense that we should understand diamonds just as we understand cattle. But De Beers had deliberately kept Batswana in the dark. I became the butt of Cabinet jokes when discussions turned to diamonds. Mogae used to laugh saying that at least I had been consistent for years in my beneficiation campaign.”
Frustrated and almost broken, one day, in a fit of madness Magang walked into De Beers offices in Johannesburg and started railing about how De Beers had deliberately kept Batswana in the dark about the diamond industry. He pointed out that in the 25 years that De Beers had been operating in Botswana; it had not trained a single citizen on the workings of the diamond industry.
Never fond of each other to begin with, Magang’s campaign for beneficiation further poisoned his relationship with Nchindo. When Mogae took over as president he moved Magang from the all too powerful Ministry of Mineral Resources and replaced him with the timid Boometswe Mokgothu. Magang was the only minister who was moved during the reshuffle.
Nchindo, who was riding the wave of influence, would go on and on about how the new replacement, Boometswe Mokgothu was the best choice for the ministry, fuelling speculation that, as in many other previous instances, he had influenced Mogae’s decision.
The trio (Mogae, Mokgothu and Nchindo) allegedly sidelined the whole government enclave during discussions for the $17.6 billion deal to privatize and delist De Beers Corporation from both the Johannesburg and New York Stock Exchanges. The Oppenheimer family, which had controlled much of the world diamond trade for more than 70 years, wanted to tighten its already powerful grip with the multi-billion dollar agreement to turn De Beers into a private company in partnership with its sister corporation, Anglo America, and the Botswana government.
Under the agreement, De Beer’s stockholders were bought out by a consortium to be called DB Investments, in which Anglo American and the Oppenheimer family through their Central Holdings would jointly have an 85 percent stake. The remaining 15 percent went to Debswana which was jointly owned by the De Beers and the Botswana government. It was a noisy, opaque and somewhat untidy corporate affair.
In a secretly engineered operation, Mogae allegedly gave Nchindo to negotiate on behalf of Botswana, this despite the fact that Nchindo was a well known De Beers’s point man and a senior member of the De Beers Executive board in his own capacity.
It was an extraordinary step. Efforts were allegedly put in place to bypass Cabinet, Parliament and the civil service bureaucracy and to keep the whole thing secret, away from officials who were likely to object until it was too late. Senior government officials, including Debswana Board Members, read about Nchindo’s role from the Reuters News agency.
Among those excluded were the then Attorney General, Phandu Skelemani, the Permanent Secretary in the Ministry of Minerals Morago Ngidi and the Debswana board of directors.
Mogae however insists that he never gave Nchindo the authority to negotiate on behalf of the Botswana government and details are hazy on what happened between the government enclave and the De beers negotiating table.
The De Beers buy out was the second largest private transaction ever done in the world and was shrouded in a lot of secrecy. A lawyer from WWB, a leading South African law firm that handled the transaction on behalf of De Beers would later recall that “in true merger and acquisition fashion, transactions like these have code names, the parties have code names, and you never refer to the party by their real name. You do as much as you can to maintain the confidentiality. I was amazed that the leak took so long considering that there were a number of legal firms, investment banks, the whole of the Anglo board, their executive committee, let alone the De Beers board involved. I reckon the inner circle must have numbered nearly forty people. Leaks normally happen very quickly in transactions, so given the size of this one and the companies involved, that it took three months for the story to make headlines was remarkable.”