by Carol Off
Tapé Doh is another very wealthy man who has profited from the reorganization of the filière. The BCC is one of the most impenetrable of the agencies that supposedly manage Côte d’Ivoire’s most important exports. Local people describe him as an uneducated “bushman,” but one who is nonetheless a shrewd and cagey operator. What he does best is to show how the passion of African nationalism can be manipulated to serve any purpose.
The BCC is neither private nor public, he explains, but a unique African mix of the two. These unaccountable agencies that control cocoa are simply “Africa’s solution to Africa’s problems,” a phrase expressing a sentiment that has galvanized nationalist feeling all over Africa since the end of colonialism. Though all of the BCC’s money comes from obligatory taxes and fees, the agency is not a public service, he says. “Transparency is an idea of the foreigners that simply gives an advantage to our competitors,” he explains. “The European Union just wants to get control of us.” Tapé Doh gives the same nationalist line one hears from the filière everywhere, including the mayor of Gagnoa, Roger Gnohite, as well as the Young Patriots who justify the expulsion of immigrants from the farmlands of the region as an act of “masters in our own house.”
The Bourse is in charge of coordinating cocoa and coffee exports and establishing the floor price for beans sold in Côte d’Ivoire. It’s supposed to guarantee a decent income from the exports and to help farmers benefit from higher world cocoa prices. But even at the height of the civil war, when prices were at their best, the farmers didn’t profit. Tapé Doh says the high taxes and fees are necessary to pay for the war effort. Farmers need security, and the weapons are for their own good. If the violence is sometimes directed at the immigrants, well, it’s possibly because they are supporting the rebels.
Billions of West African francs flow into the coffers of the BCC with no public record of where the money goes from there. Ivorian farmers have started to smuggle their beans into Ghana to take advantage of the price that farmers in the Gold Coast enjoy. Tapé Doh chuckles as he dismisses this: “When our price is higher, the Ghanaians smuggle beans into Côte d’Ivoire. This has been happening for decades.” But the recent trade in contraband cocao has cut deep into Côte d’Ivoire’s profits, and the farmers have started to expand their pirating activies. “The important thing is that Ivorians take back the power, that we not be controlled by outsiders,” he says repeatedly. Tapé Doh supports liberalization, claiming it just needs time to take effect. “We had the CAISTAB for forty years. The BCC has existed only for four years,” he says. “Give us time.”
But time is running out for Côte d’Ivoire, and the overwhelming sense one gets from reading the EU audit reports is that the opportunists who run the filière are killing the goose that lays the golden egg. Nowhere is that more apparent than at the third most important cocoa agency, the Regulation and Control Fund (FRC). This is the biggest kitty of money and one that is frequently called “la caisse noire,” the black deposit box of the ruling party of Laurent Gbagbo. The FRC is in charge of all financial regulations regarding cocoa and coffee, and it has absolute control over the cocoa and coffee treasury.
The president of the FRC is a woman named Angeline Zilahou Killi, who is tightly tied to the first family and is the godmother of a movement called Two Million Girls for Gbagbo, a campaign that uses children to mythologize the president as the father of the nation. Killi has few if any ties to cocoa production and little expertise in the area. According to Kieffer’s Network and suggested by the EU reports, billions of West African francs have left the fund to pay for arms, to finance a new agricultural bank and to provide “loans” to Gbagbo and his circle. The EU audit reports conclude that the awarding of grants and loans from the FRC is done with “manifest irregularity.”
Madame Killi was not available for an interview when we visited the offices of the FRC, as she was travelling in the United States.
“Where in the U.S.?” I ask her secretary, who had earlier that day confirmed our appointment.
“New York,” she answers. “Madame Killi has just left.”
I ask, “Has she, by any chance, gone to Fulton, New York?”
The reception area at the FRC suddenly falls into an ice-cold silence.
Dropping the name Fulton has much the same effect as mentioning Guy-André Kieffer. Fulton is a subject no one wants to talk about, a word that can clear a room or shut doors. Michel Yehoun, who babbles away about anything, simply snapped, “It’s none of your damn business,” when I asked if we could discuss Fulton. It turns out, he had good reason to be defensive. Fulton has become a code word for scam.
Fulton is actually a small town in upstate New York that all but shut down in 2003, when Nestlé, one of Fulton’s principal employers at the time, closed its century-old chocolate factory, moving some of its production to other locations, including Brazil, and putting five hundred Fultonians on the street. Nestlé said at the time that the plant wasn’t viable, but apparently the experts at Côte d’Ivoire’s cocoa filière felt differently. Soon after, the FRC bought the plant and declared it was about to put Fulton, New York, back to work.
Americans cheered the Africans when they arrived. New York Senator Charles Schumer helped to broker the deal (Michel Yehoun was apparently a major player in arranging American support), and the senator’s picture appears in a number of promotional photos featuring the plant, now called the New York Chocolate and Confection Company (NY3C). Federal agencies provided $850, 000 in loans and much more in tax breaks to help the Ivorians revive the operation. Then things got complicated.
Months and then a year passed with not a whiff of the familiar cocoa smell in the air of Oswego County. The economic development agency for the county told the New York Times that the company had funds “in the high seven digits” in its bank account and was paying its taxes. But the people of Fulton and the chocolate company creditors were getting nervous.
So what was the holdup? The Ivorians initially claimed they were having trouble getting cocoa beans out of Côte d’Ivoire because of the civil war. This seemed like a plausible explanation. Except that other cocoa corporations importing from Côte d’Ivoire weren’t having any supply problems. According to the records of the San-Pédro Port Authority, exports of cocoa surged in 2003 and 2004.
Accountability has never been a strength of the Ivorian cocoa filière, and when U.S. politicians and financial agencies started to ask questions, the FRC had few answers. Lion Capital Management, a San Francisco–based investment company, is listed as the Ivorian chocolate company’s U.S. partner with twenty per cent ownership. Lion Capital’s creditors were making it clear that they were unhappy with what appeared to be unorthodox business practices and a conflict of interest involving two Ivorian advisors to NY3C. The African treasurer appointed by the FRC, Yalle Agbre, wasn’t following the established rules governing American business and the company was slow in paying its bills. The African legal advisor to the company, Kemakolam Comas, had been practising law in the United States since 1997 but his licence was indefinitely suspended, according to the New York Law Journal, after clients complained about him.
Over time, the truth about the Fulton chocolate factory would begin to emerge. After Nestlé had closed the plant in 2003, it had stripped and auctioned off the equipment. After much arm-twisting, local politicians convinced the Swiss chocolate company to at least leave the county the building, in case investors wanted to get the operation rolling again. Nestlé subsequently sold the sprawling red brick factory to Oswego County for a nominal $100. Lion Capital Management bought it from the state for the same price and transferred it to the New York Chocolate and Confection Company. Soon, the owners were retrieving the chocolate-making equipment and hiring employees, filling Fulton with optimism, if not the smell of baking chocolate. The African purchasers, for their part, made the altruistic claim that the factory was for the benefit of Ivorian cocoa farmers. The whole arrangement had a kind of story-book gloss to it.
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p; In principle, African ownership of a chocolate company made sense. Côte d’Ivoire’s president said they were just trying to get some added benefit from the country’s primary commodity. Financing for the factory came from taxes and levies that farmers had to pay, but profits would be returned to them. Revenue from the New York plant would allow the FRC to open schools, build water wells and improve the lives of the farmers. Meanwhile, Fulton would get exclusive access to a farm-gate price for beans, much cheaper than cocoa purchased on the open market. What could be wrong with any of this? Plenty, as Jerry Lamphere discovered.
Lamphere is a native of Fulton, who worked at the Nestlé plant for twenty-six years before it closed. He was retained by the new owners of the chocolate plant to be the manager. Lamphere was happy to get the job but even keener to start hiring back the people he had been obliged to fire for Nestlé. His happiness was short-lived.
Lamphere had seen a lot of strange things over his nearly three decades of making chocolate in upstate New York, but as the manager of New York Chocolate and Confection Company, he came up against things he couldn’t quite fathom. “These were definitely not businesspeople,” says Lamphere of the directors from Côte d’Ivoire. Or at least they were not engaged in any kind of business the fifty-two-year-old Fultonian could understand. Lamphere says that the board of NY3C was dominated by people who also served on the board of the FRC. There were only two members of Lion Capital among the directors but Lamphere says eventually the Ivorians found a way to have them removed.
In the spring of 2004, the Ivorian managers announced that money would soon start to flow into the factory. But Jerry Lamphere was struggling to keep the wolf from the door and his employees paid. He later learned that funds were coming from Côte d’Ivoire but going directly into another account—that of a company called IC Management which was owned and operated by Yalle Agbre, who just happened to be the treasurer for New York Chocolate and Confectionary Company, and one of the directors of the FRC.
Lamphere sent the bills to Lion Capital Management, who sent them to Agbre, who paid them out of his company’s account (if they were paid at all). Lamphere has no idea how much money rolled through the operation in this fashion; he heard that the Ivorian media had reported tens of millions of dollars had been doled out to the Fulton plant. If that was the case, Lamphere says, he never saw any of it. “It was just rotten,” says Lamphere. “Something stunk.”
What was even more peculiar for Lamphere was how the company purchased the beans. Contrary to the claim that they would get cocoa directly from the Ivorian farm gate, NY3C was obliged to buy its beans from U.S. brokers at a premium prices. And the man who was doing the buying was none other than Yalle Agbre. Lamphere wasn’t sure the company could really make a go of it without cheaper beans but what was even more vexing was that the beans were of such poor quality. Lamphere couldn’t figure it out. Even though his technicians inspected the lots of beans they were buying and tested them, the product that would eventually arrive at the factory was inferior to what they thought they had purchased. Lamphere had contracts to sell cocoa butter to companies such as Hershey, but he was often stuck with bad beans. Who was making money from all of this? Lamphere often asked himself.
Lamphere had managed to hire as many as seventy people and he was actually producing bulk chocolate powder and butter. His profits were just enough to pay the staff. But in March 2006, the employees found their cheques were bouncing. Soon after, the city shut off the factory’s water. The company’s unpaid tax bills amounted to US$450,000. By the spring of 2006, NY3C was seven million dollars in arrears. A high-level delegation of Ivorians arrived for a tour of the plant at the end of March, and then retreated to Côte d’Ivoire, promising to review the situation. Embarrassed politicians, who had taken part in ribbon-cutting ceremonies and had helped to finance loans and grants to the African company, urged the Ivorians to get their collective act together and at least reimburse the employees for their wages.
Another European Union audit report on the Ivorian filière was released in the spring of 2006. It paints a damning picture of the FRC and its cavalier attitude towards even the notion of accountability. The European auditors got hold of Côte d’Ivoire government records revealing that the FRC directors voted to purchase the old Nestlé plant for nine billion West African francs (about US$10 million) without even investigating the plant’s viability. The FRC controllers along with their friends in the banks, Bouhoun Bouabré and Victor Nembellisini, went ahead anyway and bought the Fulton plant, investing as much as US$26 million in the doomed chocolate company over the next year (though the Ivorian press claims several times that amount flowed to the chocolate company).
For Kieffer’s Network, the purpose of the plant was obvious. The American company, with its veneer of legitimacy, provided a way to transfer money to other concerns, including financing “the war effort.” The chocolate makers of Fulton, New York were just hapless pawns.
Now hanging around his home in Fulton, Jerry Lamphere is looking for a new job, or hoping that some serious investors will come to put the plant back on its feet, something he’s is convinced is possible. But he shakes his head and wonders about the encounter with the FRC. “I don’t know what went on behind the scenes or what they did with the money,” says Lamphere. “I don’t think the plant was ever supposed to come on line, personally. I think we did things in spite of them and got it operational.… I guess they got the wrong people involved in their project. Because all of the staff was just simply dedicated to making chocolate.”
One day in Abidjan, Ange Aboa takes me to see the boss of one of the most successful, and legitimate, cocoa cooperatives in the country. The man will not let me use his name or refer to anything that might identify him. We’ll call him Mr. X.
Mr. X meets us in his garden, a walled and fortified compound that is protected by his security specialists. Even here, in his own yard, he whispers as we talk and he glances over his shoulder from time to time. The fear is palpable. Mr. X was a farmer before he became a successful businessman; he has little education, and despite his fashionable suit he comes across as a bit of a country bumpkin. But he is also one of the most knowledgeable, and reputably honest, people in the business. I ask him to explain how the filière really works. Where does the money go? His jaw drops and he emits a little sound, like a squeal. “You want me to tell you how these guys run cocoa? Where is Guy-André Kieffer right now?” he asks wide-eyed, his whispered voice barely audible. “Where is Jean Hélène? [the reporter from Radio France who was shot]. That’s what they do to people who ask questions. Can you imagine what they do to those who answer them?”
Ange is able to persuade Mr. X that we are on the level, and the cocoa manager finally agrees to describe the filière as he sees it. He explains the evolution of the cocoa hierarchy through the ancient clan system of Côte d’Ivoire. The former president, Houphouët-Boigny, he says, put control of cocoa into the hands of farmers he knew and trusted. These farmers cultivated the land and developed their cocoa expertise while working in the countryside. Other clans, principally the Cru people, functioned as bureaucrats, while still others became experts in commerce. All of this worked, and for many decades there was a system of checks and balances; opportunities for corruption were limited by a widely dispersed control system. It was the genius of Le Vieux, but he is gone and times have changed. “Now the Cru have all the power,” says Mr. X. “They invent phony co-ops, they have all the connections to the minister of finance, but they produce nothing. We [the producers] are afraid. We have no power. But we grow all the cocoa.”
Money appropriated from the producers in levies is supposed to help them by providing infrastructure and soft loans. But once that money disappears into the network of fictitious agencies, they lose track of it. They no longer have access to subsidies or loans, as they did in the old days. There is no money for basic maintenance of their resource, not even for chemicals and new trees.
“Why don’t the farmer
s refuse to pay the fees?” I ask.
“They try to do that. But they have no choice.”
“What would happen to you if you reported all of this?”
“They would kill me,” he says. The words are hardly audible. Sweat beads on his forehead.
It’s hard to understand the extent to which the state machinery has been undermined by opportunists. A French NGO worker who has lived in Côte d’Ivoire for many years but who also wants to remain anonymous confirms the bitter, frightened analysis of Mr. X. The NGO worker has been all through the country, taking care of migrant workers and trying to shield them from the excesses of the Gbagbo regime. “Think Mafia,” he says, simply. “Think Sicily.”
Going from one office tower to the next in Abidjan and in the cocoa district, setting up appointments for interviews with secretaries and exchanging official business cards, you get the impression that you are moving within conventionally legitimate state machinery. But outward appearances are misleading. “These are Bushmen who have taken over the levers of power and authority,” my NGO friend explains, betraying some of his French chauvinism. He says their veneer of credibility, with all of their rhetoric and official trappings, is false. A foreign businessman who has been in the country for just as long says much the same thing: “There is corruption all over this continent, but here it goes beyond even what is normal in Africa. This is criminal.”
GAK became convinced that Côte d’Ivoire’s cocoa business had been systematically criminalized. Other foreign observers have been reluctant to embrace his grim analysis. The World Bank and the IMF have suspended funding to Côte d’Ivoire in the past, but as long as the Gbagbo regime keeps up to date on its obligations to international lenders—and allows the cocoa companies to export their precious goods—these bodies seem intent on ignoring evidence of government corruption. Diplomats say privately that there is another reason for international tolerance of obvious corruption in Côte d’Ivoire: As bad as the situation seems to be, it is at least politically stable. Overt criticism might alter that, and West Africa can ill afford another Liberia or Sierra Leone.