The plundering of Zambian resources by Frederick Chiluba and his friends: A case study of the interaction between national politics and the international drive towards good governance

African Affairs

Volumn 108, Issue 430, 2009, Pages 69-90

  van Donge, Jan Kees ^a  

^a LEIDEN UNIVERSITY   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

CORRUPTION; ELITE POLITICS; GOVERNANCE APPROACH; LEADERSHIP; LOCAL GOVERNMENT; NATIONAL POLITICS;

AFRICA; SOUTHERN AFRICA; SUB-SAHARAN AFRICA; ZAMBIA;

EID: 58249096648     PISSN: 00019909     EISSN: 14682621     Source Type: Journal    
DOI: 10.1093/afraf/adn073     Document Type: Article

References (94)

1. Tobias Hagmann, 'Ethiopian culture strikes back: A rejoinder to J. Abbink', African Affairs 105, 421 (2006), p. 607.
2. John S. Odell, 'Case study methods in international political economy', International Studies Perspectives, 2 (2001), pp. 161-76
3. J. van Velsen, 'The extended case study method and situational analysis' in T. S. Epstein (ed.), The Craft of Social Anthropology (Tavistock Publications, London, 1967), pp. 129-49.
4. Michael Bratton and Nicolas van de Walle, Democratic Experiments in Africa: Regime transitions in comparative perspective (Cambridge University Press, Cambridge, 1997), Chapter 2
5. and Patrick Chabal and Jean-Pascal Daloz, Africa Works: Disorder as political instrument (James Currey, Oxford, and Indiana University Press, Bloomington, IN, 1999) provide a grand theory approach to neo-patrimonialism.
6. Jean François Médard, 'Corruption in the neo-patrimonial states of sub-saharan Africa' in Arnold J. Heidenheimer and Michael Johnston (eds), Political Corruption: Concepts and context (Transaction Publishers, New Brunswick, NJ and London, 2002), p. 386.
7. Morris Szeftel, 'Political graft and the spoils system in Zambia - the state as a resource in itself', Review of African Political Economy 9, 24 (1982) p. 5.
8. For the economic performance: Howard White and Geske Dijkstra, Programme Aid and Development: Beyond conditionality (Routledge, London, 2003), pp. 402-41.
9. For an appreciation of economic stability: Jan Kees van Donge, 'Reflections on donors, opposition and popular will in the 1996 Zambian general elections', Journal of Modern African Studies 36, 1 (1998), pp. 71-99.
10. Closely connected to this are explanations of corruption and graft in everyday life that assume an economic necessity arising from the low pay of government officials. Similarly, it is reasoned in terms of elected officials that they have to accumulate while in office to provide, after a possible fall from power, an income to which they have become accustomed. This overlooks the fact that government employment is usually a privileged position as compared to the people around such officials. Even on low pay they are better off. In the case of elected officials, the amounts stolen bear no relationship to the needs for a comfortable retirement.
11. See also Médard, 'Corruption in neo-patrimonial states', p. 380.
12. Anthony Downs, An Economic Theory of Democracy (Little Brown and Co., Boston, MA, 1957)
13. Mancur Olson, The Logic of Collective Action: Public goods and the theory of groups (Cambridge University Press, Cambridge, 1971).
14. A classic interpretation along these lines is: R. Klitgaard, Controlling Corruption (University of California Press, Berkeley, CA, 1998).
15. A recent widely read statement along similar lines is Francis Fukuyama, State Building: Governance and world order in the twenty-first century (Profile Books, London, 2004).
16. On privatization see Roger Tangri and Andrew M. Mwenda 'Corruption and cronyism in Uganda's privatization in the 1990s', African Affairs 100, 398 (2001), pp. 117-33
17. on decentralization see Vedi R. Hadiz, 'Decentralization and democracy in Indonesia: A critique of neo-institutionalist perspectives', Development and Change 35, 4 (2004), pp. 697-718.
18. See also Médard, 'Corruption in neo-patrimonial states', p. 380.
19. Gatian F. Lungu, 'The church, labour and the press in Zambia: The role of critical observers in a one-party state', African Affairs 85 340 (1986), pp. 385-410
20. Cherry Gertzel, 'Dissent and authority in the Zambian one-party state', in Cherry Gertzel (ed.), The Dynamics of the One-Party State in Zambia (ManchesterUniversity Press, Manchester, 1984), pp. 79-115.
21. Jan Kees van Donge, 'Kaunda and Chiluba: Enduring patterns of political culture in Zambia' in J.Wiseman (ed.), Democracy and Political Change in Sub-Saharan Africa (Routledge, London, 1995), pp. 193-219.
22. Jan Kees van Donge, 'The EU observer mission to the Zambian elections 2001: The politics of election monitoring as the construction of narratives', Commonwealth and Comparative Politics 46, 3 (2008), pp. 296-317.
23. World Bank, Assessing Aid: What works, what doesn't, and why (Oxford University Press for the World Bank, New York, NY, 1998).
24. White and Dijkstra, Programme Aid and Development, pp. 402-41.
25. Lise Rakner, Political and Economic Liberalisation in Zambia 1991-2001 (Nordiska Afrikainstitutet, Uppsala, 2003).
26. However, this interpretation can be challenged: Jan Kees van Donge, 'Flexible SWAPs for strategic policy-making: Reflections on the Zambian experience', Development Policy Review 25, 4 (2007), pp. 473-95.
27. The material in the following pages is based on quarterly overviews of Zambian political developments that I wrote for a Dutch periodical, Zambia Nieuws Brief. These were mainly based on newspaper reporting in the Times of Zambia and The Post newspapers. Further reference can be made through the search command in the archive of the website allAfrica.com. The article could not have been written, however, without the information provided on the judgement of the London civil trial against Chiluba and his accomplices, as published in the Saturday Post (Lusaka) pullout of 5 May 2007. This article is also informed by numerous informal conversations held in Zambia with officials and embassy personnel. However all facts and alleged facts mentioned are in the public domain.
28. 'Cobalt cash', African Confidential 43, 9 (3 May 2002), p. 8
29. 'Cobalt crunch', Africa Confidential 43, 12 (14 June 2002), p. 8.
30. A valuable description of the network is 'Analysis of Zambia's world of theft and abuse of public resources', Alexander's Oil and Gas Connections 7, 14 (12 July 2002), (accessed 7 June 2006).
31. The lawyers IqbalMeer and his partner Naynesh Desai were ordered to pay back US$11 million in the London trial of Chiluba and his co-accused. On appeal, the court decided that they had been negligent. They could have known that the funds they handled were obtained in a fraudulent manner, but it concluded that they themselves had not been fraudulent. 'Mandela lawyer wins fight to clear name over Σ23 million fraud', , 31 July 2008 (accessed 20 August 2008).
32. The London judgement has a long list of dramatis personae showing this. For example, Industrial Equipment Ltd, a company registered in Zambia, made payment to the Access Finance ledger via Cave Malik and Co. in London. The money was then transferred to Irene Kabwe (Faustin Kabwe's wife) in New York on Kabwe's instruction. Some foreign companies turned up that are not mentioned in the London trial. A company named Odys Oil was seeking money involving claims from the ZAMTROP account and a transaction surrounding the Black Velvet nightclub involving Chiluba: 'Odys Oil sues George Kunda, Mark Chona', Times of Zambia, 6 April 2005.
33. Faustin Kabwe, Aaron Chungu, Irene Kabwe, and Francis Kaunda appeared also to be involved, together with Jean Pierre Kozan from France, in Comecim SA, a Swiss company. 'Swiss company sues BOZ over Access Financial Services', The Post (Lusaka), 10 October 2004.
34. 'Access finance was used for plunder, reveals BOZ', The Post (Lusaka), 5 June 2003.
35. 'Op bought Chungu shares in Access Financial Services', Times of Zambia, 24 November 2004
36. 'Access Finance was used for plunder, reveals BOZ', The Post (Lusaka), 5 June 2003.
37. 'Chiluba's judgement pullout', Saturday Post (Lusaka), 5 May 2007, pp. vi-vii.
38. 'I'm innocent, maintains Francis Kaunda', Times of Zambia, 19 March 2008
39. 'Francis Kaunda, Kabwe go to jail', 14 August 2008 (accessed 18 October 2008).
40. This scandal broke with a story in the New York Times.
41. See Alan Cowell, 'Draft audit faults Zambia's mining deals', 16 February 2001. The issue was closed on 5 November 2002 with a statement by Emanuel Kasonde, then Minister of Finance. He estimated the loss caused by the marketing deal at more than US$100 million. Shamutete's name was central in the affair. Dipak Patel MP asked in Parliament when Shamutete would be arrested.
42. 'Zambia lost $120m in ZCCM Cobalt scam, reveals Kasonde', The Post (Lusaka), 6 November 2002.
43. See also or for the ministerial statement. The firm of auditors put a disclaimer in their report, among other reasons because 'it could not conduct the audit investigation to international standards'. The cobalt buyers, MRG, denied any impropriety.
44. Georges Timmerman, 'Portret van Katebe Katoto, zakenman met Belgische connecties', De Morgen (Belgium), 10 May 2005.
45. 'Katoto has abandoned his lodge - witness', The Post (Lusaka), 16 January 2003.
46. 'Ex OP chief was caught with a briefcase of money headed for the Bahamas', The Post (Lusaka), 29 March 2002
47. 'I feel emotionally attacked - Chungu', The Post (Lusaka), 29 June 2002
48. 'I was hired to pick up Chungu, pilot tells court', The Post (Lusaka), 10 October 2002
49. 'Chungu and two others granted K5 million bail', The Post (Lusaka), 30 March 2004.
50. 'Former intelligence chief Xavier Chungu has "disappeared"', The Post (Lusaka), 4 March 2004
51. 'Xavier Chungu visits Portugal', The Post (Lusaka), 6 March 2006
52. 'Chungu will have to face justice in Zambia, says DRC ambassador', The Post (Lusaka), 1 July 2004.
53. 'Chiluba's judgement pullout', The Saturday Post (Lusaka), 5 May 2007, pp. vi-vii.
54. 'Zambia govt borrowed funds from Zanaco through Op', The Post (Lusaka), 2 March 2006.
55. 'Analysis of Zambia's world of theft and abuse of public resources', Alexander's Oil and Gas Connections 7, 14 (12 July 2002), (accessed 7 June 2006).
56. 'Ex-President Chiluba laughs at his charges as he pleads not guilty to theft of K19 billion', The Post (Lusaka), 15 August 2009.
57. 'Chiluba in trouble', The Post (Lusaka), 11March 2005
58. 'Chiluba doesn't seem to learn', The Post (Lusaka), 15 March 2005.
59. Neo Simutanyi, 'Levi versus Fred: A popularity contest', The Post (Lusaka), 9 May 2005.
60. Dipak Patel, whose whistle blowing had provided early momentum for the cases, did not stand as anMP in the 2006 elections. He came back forcefully, however, with a condemnation of Sata when he teamed up with Chiluba. He talked about a regrouping of the vultures.
61. 'Chiluba and his crooks must be stopped', The Post (Lusaka), 20 September 2006.
62. 'Michael Sata, leader Patriotic Front Zambia', (30 January 2008).
63. 'Give Levy the credit he deserves', The Saturday Post (Lusaka), 5 May 2007.
64. 'Chiluba's judgement pullout', The Saturday Post (Lusaka), 5 May 2007, pp. v.
65. Two striking examples concern lawyers: 'Silwamba, Malambo never benefited from K280m', Times of Zambia, 22 April 2004.
66. During 1991-5, Musonda was the manager of the London branch of the Zambian National Commercial Bank (ZANACO), which was a lynchpin in the financial constructions of Chiluba and his accomplices. From December 1996 to June 2002, he was the general manager of ZANACO.
67. 'Ex-ZNCB chief pleads for innocence', Times of Zambia, 9 August 2006.
68. 'I can come back as Finance Minister, says Diangamo' The Post (Lusaka), 27 January 2006.
69. 'Chiluba's judgement pullout', The Saturday Post (Lusaka), 5 May 2007, p. iv.
70. 'Cheap demagogy', The Post (Lusaka), 22 September 2006.
71. For the concept of a lifeworld see Peter L. Berger and Thomas Luckmann, The Social Construction of Reality: A treatise in the sociology of knowledge (Anchor Books, Garden City, NY, 1966). A lifeworld is a shared interpretation of the world that constructs social practices.
72. Admittedly, this may be apocryphal.
73. Daniel Jordan Smith, Everyday Deception and Popular Discontent in Nigeria (Princeton University Press, Princeton, NJ, 2007), pp. 133-4.
74. 'UK lawyers helped Zambia's ex-president launder Σ23 million', The Guardian, 6 February 2008.
75. This has not always been the case, as private enrichment from public office has long been seen as an inherent aspect of underdevelopment that belonged to transitional political cultures. Fred W. Riggs, Administration in Developing Countries: The theory of prismatic society Houghton Mifflin, Boston, MA, 1964). A logical consequence is then to declare corruption as non-controversial in such contexts. Although nowadays the plea for intervention is widespread, cultural explanation can still be heard.
76. J.-P. Olivier de Sardan, 'A moral economy of corruption in Africa?' Journal of Modern African Studies 37, 1 (1999), pp. 25-52.
77. Department for International Development, 'Eliminating world poverty, making governance work for the poor' (Government of the United Kingdom, London, 2006).
78. Susan Rose-Ackerman, 'Governance and corruption' in Bjorn Lomborg (ed.), Global Crises, Global Solutions (Cambridge University Press, Cambridge, 2004), pp. 301-22, provides a comprehensive and detailed overview of these issues from a vantage point that is associated with theWorld Bank.
79. The associations of good governance, including human rights and democracy, with positive economic outcomes are challenged by Dani Rodrik, One Economics, Many Recipes: Globalization, institutions and economic growth (Princeton University Press, Princeton, NJ, 2007), pp. 166-83.
80. Tangri and Mwenda, 'Corruption and cronyism', p. 133.
81. Nicolas van de Walle, African Economies and the Politics of Permanent Crisis, 1979-1999 (Cambridge University Press, Cambridge, 2001).
82. Alan Doig and Stephen Riley, 'Corruption and anti-corruption strategies: issues and case studies from developing countries' in Corruption and Integrity Improvement Initiatives in Developing Countries, available at (15 July 2006).
83. Carolien Klein Haarhuis, Promoting Anti-Corruption Reforms: Evaluating the implementation of a World Bank anti-corruption program in seven African countries (1999-2001) (Interuniversity Centre for Social Science Theory and Methodology, Utrecht, 2005).
84. Roger Tangri and Andrew M.Mwenda, 'Anti-corruption institutions in Uganda', Journal of Modern African Studies 44, 1 (2006), p. 122.
85. Tangri and Mwenda, 'Corruption and cronyism', p. 133.
86. At time of writing, September 2008.
87. 'Zambia court jails Kaunda', Times of Zambia, 19 August 2008
88. 'Court grants Kaunda K50 million bail', The Post (Lusaka), 19 August 2008.
89. See , 'Moses Katumbi makes peace with taskforce', posted 18 April 2008 (23 April 2008).
90. 'Katele, Chungu hug in court', Times of Zambia, 17 September 2003.
91. Scott D. Taylor, 'Divergent politico-legal responses to past presidential corruption in Zambia and Kenya: Catching the "big fish", or letting them off the hook?', Third World Quarterly 82, 2 (2006), pp. 281-301.
92. 'Govt admits ordering DPP to forgive Bulaya', The Post (Lusaka), 20 May 2008.
93. 'Chiluba protests against French envoy', The Post(Lusaka), 12 December 2005
94. 'Levy, George found with a case to answer', The Post (Lusaka), 20 April 2006.