Maputo — London-based journalist Joseph Hanlon, author of several well received books on Mozambique, has asked five western governments to clarify once and for all whether aid money they sent to Mozambique in the early 1990s was used fraudulently by Portuguese businessman Antonio Simoes.
This allegation was first made by the late Carlos Cardoso, editor of the independent newsheet "Metical", in an article published on 9 April 1998.
That article said that the Mozambican treasury had lent at least 17 million US dollars to two Maputo engineering companies owned by Simoes - the steel rolling mill CSM, and the wire- drawing company Trefil.
This money came from foreign grants and loans to Mozambique, and Cardoso could cite the dates and numbers of the agreements concerned. French, Norwegian, Swedish and Swiss money was lent to CSM, and German and Norwegian money to Trefil.
This would be fine - if CSM and Trefil had been rehabilitated, and if the money was repaid. But in fact, CSM ground to a halt - promised raw materials did not arrive, promised new equipment was not installed, and CSM workers complained that their wages were not being paid.
Nonetheless, in 1996 Simoes put together a consortium that purchased the larger of the two state-owned banks, the BCM, in 1996.
Where did Simoes find the money to purchase his share of the BCM ? Cardoso suspected that Simoes had used the money he obtained from the Treasury (and thus indirectly from foreign donors) to buy the BCM.
The result was a double disaster for the Mozambican economy: there was no renaissance in the metal-working industry, and the Simoes management of the BCM ruined the bank, forcing it into a costly recapitalisation in 2000.
Right up until his murder on 22 November 2000, Cardoso had repeatedly asked both the Mozambican government and the donors whether the loans to Simoes had ever been repaid, and whether the possible abuse of donor money had been investigated. As far as Hanlon (who worked very closely with Cardoso) knows, he never received a reply.
Now Hanlon has written a lengthy paper on donor involvement in corruption, delivered at a conference in the English city of Sheffield earlier this month. This evoked a swift response: donor officials sent a memorandum to heads of mission in Maputo, attempting to deny several of Hanlon's claims.
In an open letter this week to the ambassadors to Mozambique and the development cooperation ministers of the five countries whose money went to Simoes, Hanlon notes "In response to a recent article of mine, several of you have argued that your countries were not directly involved in corruption".
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Yet, four years ago, "Mozambique's most respected journalist publicly accused you of being directly involved in corruption".
So perhaps now, the Norwegian, Swedish, French, German and Swiss authorities might like to tell Hanlon what they never told Cardoso.
Hanlon's letter asks the donors several straightforward questions. First, were the loans to Simoes used for the intended purposes (that is, to rehabilitate engineering industries), and were they ever repaid ?
Hanlon then asks "Did you investigate Cardoso's allegations at the time, or subsequently ?", and if so with what result ?
And if the donors did not investigate, why not ? Hanlon adds "If you did not investigate, why do you feel this was not tacit support for corruption ?"
The final question asks the ministers and ambassadors "Is it a violation of your national laws or regulations to fail to follow up such an allegation ?"
Hanlon also offers to send the donors the original 1998 "Metical" article, if they do not already have it on their files.
It will be interesting to see if the donors respond to these specific questions with the same alacrity that their officials wrote the memorandum contesting the statistics used in Hanlon's Sheffield paper.
