By Lydia Polgreen in the Congo Republic
Most creditors go along with debt reduction or write-off deals, and the Congo Republic has qualified under international programs for a reduction of much of the $8.5 million in debt it owed as of December 2004.
Government officials here point to a slew of new projects under construction, like a hydroelectric dam, hundreds of miles of new roads and an emergency power plant as evidence that they are rebuilding the country. A June report from the I.M.F. noted that at least some progress has been made to address “corruption and weak governance.”
Still, half the nation’s population lacks access to clean water, according to Unicef. The lifetime risk of dying in childbirth for women in the Congo Republic is 1 in 26, one of the world’s highest rates. Life expectancy is just 53 years, down from 55 in 1990.
That deprivation exists despite the significant amount of oil the country produces relative to its 3.8 million people -- 250,000 barrels a day.
The litigation surrounding the country has unearthed a complex web of questionable practices that may have stripped untold millions of that oil money from the nation’s treasury since 1997.
Defense From Creditors
In interviews, officials here said the purpose of their complex transactions -- which, according to court documents, included discounted prices for well-connected companies -- was to avoid what it viewed as overzealous creditors.
“We are in a war, and we have to defend ourselves,” said Alain Akouala, the Congo Republic’s information minister.
But the group Global Witness has seized on court records to tease out these connections between government officials, private companies and a French bank that set up oil transactions.
The litigation has also exposed the free-spending habits of government officials. According to hotel bills, the country’s president, Denis Sassou-Nguesso, paid $8,500 a night for a triplex suite at the New York Palace Hotel during a visit to the United Nations in 2005. His hotel bills in the United States in 2005 and 2006 added up to hundreds of thousands of dollars.
Officials here said that Mr. Sassou-Nguesso was simply staying in the same type of hotels as other heads of state.
Another embarrassing find was the credit card bills of one of the president’s sons, Denis Christel Sassou-Nguesso, who runs the marketing arm of the Congo Republic’s state oil business, Cotrade. They showed large purchases from shops like Christian Dior, Louis Vuitton and Gucci, and a paper trail suggesting that companies receiving state oil business had paid for the purchases, Global Witness said.
The world of luxury implied by those credit card bills is emblematic of the vast gap between the country’s elite and its impoverished masses.
The Congo Republic’s main teaching hospital may be in terrible shape, but its director, Ignace Ngakala, works in a plush office outfitted with a large, lacquered wood desk and a high-backed leather chair. His office, he said, was recently renovated along with the delivery room in the maternity ward and a meeting room for medical conferences, complete with a state-of-the-art sound system. In his parking space sat a late-model Volkswagen sport utility vehicle that sells for about $50,000 in the United States.
“We are coming from war,” he said, explaining why the elevator in one of the hospital buildings was not fixed. “We are in the middle of a progressive renovation.”
Mr. Sassou-Nguesso, the president, first ruled the country as a Marxist-Leninist dictator, from 1979 to 1992, then seized power again in 1997. A brutal civil war followed, devastating the country. He was elected president in 2002, but the vote was deeply flawed because his main rivals were excluded, international observers say.
Mr. Sassou-Nguesso’s government has jettisoned its Communist past in favor of petro-capitalism. But aides say that the image of a free-spending kleptocrat is false, noting that here in the capital the president stays in the same modest home he has lived in since he was an army lieutenant.
But in Pointe-Noire, the center of the Congo Republic’s booming oil industry, Mr. Sassou-Nguesso lives in a sprawling oceanfront mansion. At a reception there in October, government ministers drank single-malt Scotch by the swimming pool, while Mr. Sassou-Nguesso sipped Champagne from a cut-crystal glass.
In an interview, Mr. Sassou-Nguesso said his government was committed to transparency and posts oil revenues on a Web site. It also submits to independent audits, as requested by the International Monetary Fund.
Both Sides Point Fingers
He criticized as immoral the private creditors seeking to gain from the Congo Republic’s misery, and rejected the notion that debt investors could play a positive role in exposing corruption. “Vulture funds cannot give us lessons,” he said.
In a statement, Elliott Associates said it could not be blamed for the Congo Republic’s problems. “The poor in developing countries are poor because the political and economic systems in their countries have failed them,” the statement said.
According to Justice Department records, the Congo Republic’s government has spent $3.3 million this year and last to hire lobbyists and lawyers to press its cause in Congress and in the news media, including the firms of Washington heavyweights like Plato Cacheris and Bob Livingston.
Their efforts have borne some fruit in the form of Congressional hearings on the impact of debt investors, and news articles about Mr. Singer’s contributions to Mr. Giuliani’s presidential campaign.
Caught in the middle of this fight are schoolchildren, like 10-year-old Laurent Mbemba in Pointe-Noire. His school has 3,583 students. Its three latrines are broken. Many teachers have not been paid in years -- they get by on donations from parents.
Rain pours in thundering sheets onto the tin roof, dribbling through rust holes onto the children beneath. The classrooms are so packed -- as many as 200 a class -- that many children sit on the cement floor, notebooks perched on their narrow thighs.
“There aren’t enough desks for everyone,” Laurent said.
The school’s principal, Martial Itsouhou, said the school received virtually no assistance from the government.
“Our country exports wood, but we have no desks,” Mr. Itsouhou said. “Our children are literally learning on their knees. We don’t know where the money goes. We just pray for help.”
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