Mittal’s ‘Car for Favor’ Deal that Blinded Johnson-Sirleaf and Lawmakers

In Part-III of how Mittal Steel acquired the Nimba Concession, Lyndon J. Ponnie reports on how Mr. Lakshmi Mittal, the steel billionaire who was embroiled in a British Labor Party ‘cash-for-favors’ scandal in 2002, replicated what experts called his game plan in Liberia with a ‘Car-for-Favor’ deal that blinded the eyes of President Ellen Johnson-Sirleaf and the entire members of the 52nd National Legislature of Liberia.

According to a 16-year long investigation conducted by Concord Times, Mr. Mittal and his associates used the influence of former United States Ambassador to Liberia, John W. Blaney to pressure Chairman Charles Gyude Bryant, former Chairman of the defunct Liberia National Transitional Government, LNTG, to overturn a bid proposal won by GIHL in favor of his company, Mittal Steel.

Mittal, who is considered UK’s richest Asian Businessman, replicated what he did with former British Prime Minister, Tony Blair and the former President of Kazakhstan by conjuring President Johnson-Sirleaf to acquiesce a donation of 100 ‘Toyota,’ double cabin pickup trucks to the 52nd National Legislature of Liberia for review in 2008 of the Mittal’s Mineral Development Agreement, MDA, with the subsequent rectification of said MDA in 2013.

The Mittal concession was acquired under the LNTG Government of Gyude Bryant.

Mr. Mittal has a record of inducing or what others allegedly considered bribing, to acquire franchises to concessions in mostly poor countries.

He hits the headlines earlier 2002, when it was discovered he had given the UK Labor Party $125,000.

The donation came just two months before Tony Blair wrote the Romanian Prime Minister supporting Mr. Mittal’s bid to buy the country’s largest steel plant, Sidex.

Mr. Mittal also gave millions in “special commissions” to facilitate the purchase of another steel plant, the BBC’s Money Programmed reported in 2002.

The report indicated that Mr. Mittal gave $100m to the controversial Chodiev group for its help in the purchase of a steel plant in the former Soviet republic of Kazakhstan.

Dr. Johannes Sittard was Mittal’s number two between 1995-2001. He negotiated Mr. Mittal’s purchase of the massive Karmet steelworks in Kazakhstan for $310m in 1995.

He told the BBC Money Program at the time that he used the Chodiev group as the go-between with the Kazakh President, Nursultan Nazarbayev, and admitted paying them a huge commission.

German born Dr. Sittard told the Money Program: “We paid a certain commission over a period of time for the service what they have provided on the beginning of the process, because it was very important to get help with the local authorities.

When asked: “We’ve been told $100m was the figure paid”, Dr. Sittard replied: ‘It was a substantial amount.”

Dr. Sittard who become Chief Executive of the Chodiev’s Eurasia group later, added: “So I mean everybody who hears a figure of what you call $100m is a little astonished for sure.”

The energy company Tractebel was investigated by the Belgian authorities over $55m in commission it paid to the Chodiev group for acting as its intermediaries in Kazakhstan.

Those involved in brokering the deal have told the Money Program the commissions paid were in fact bribes, although Tractebel denies this.

In Almaty, the Kazakh business capital, local businessman and politician, Bolat Abilov, told the BBC: “The Belgian company Tractebel bought a power grid in Almaty with a turnover of $100m. And for that they paid a bribe of $50m. Mr. Mittal’s company has a turnover of a billion and a bit, so you can judge for yourself how much extra he had to pay.”

In Liberia, President Johnson-Sirleaf was the Governance Commission Chair under Bryant for some times when the Mittal Nimba deal was consummated.

But it appears it didn’t go down well with the newly inaugurated President Johnson-Sirleaf. And so when she won the Liberian presidency in 2005, she verbally declared all concession agreements including the Mittal deal, void.

Opponents of Madam Sirleaf at the time, were not shocked that she who vehemently opposed the Mittal deal, would have been made soft so easily on the very issue she opposed, after series of meetings with the Billionaire Indian Businessman.

The donation of the 100 pickup trucks to Liberian lawmakers as gift, tainted the image of the Nobel Laureate.

The Liberian leader knew that Mittal did not win the bid to the Nimba concession, yet she authorized the approval of the Mittal’s MDA and subsequent rectification.

The former Liberian leader bitterness against Mittal, changed as soon as she met the Billionaire owner of the steel giant.

Mr. Mittal donation of the 100 pickup trucks to members of the Liberian legislature were first announced on President Johnson-Sirleaf’s official website.

President Johnson-Sirleaf defended the donation of the pickup trucks to lawmakers, claiming that she made the request to Mittal.

UK based Global Witness in a report on the Mittal deal said it is heavily weighted against the interests of Liberia.

The report dissects the Mineral Development Agreement (MDA) signed on 17 August 2005, five months before democratic elections that was won by Johnson-Sirleaf.

The agreement gives Mittal the right to extract iron ore from Liberia. “The agreement is heavily weighted against the Liberian government, ceding important sovereign and economic rights to Mittal – almost creating a state within a state, said Patrick Alley, Director, Global Witness.

President Johnson-Sirleaf signed several concession agreements. Moore Stephen says an audit of lucrative resource deals in Liberia has found that almost all the concessions awarded by the government since 2009 have not been compliance with the law.
In a damning report commissioned by the Liberian government, international auditors found that only two out of 68 concession agreements worth $8bn (£5.1bn) were conducted properly.
Concessions granted in agriculture, forestry, mining and oil – including a lucrative deal with oil company Chevron – were either wholly or partially flawed, said Moore Stephens in a report.
“These are problems that we have known about for a long time – but the fact that only two of 68 concessions were fully compliance with the law is just mind-blowing,” said Chloe Fussell from the international NGO Global Witness, which has seen the audit.
The management of Mittal Steel in an email response to Concord Times inquiries only said Mittal has a legal concession in Liberia, which was rectified in 2013. Keep reading for Part-IV.

Video of the day

All Liberia Party Standard Bearer Benoni Urey speaking to media executives at his residence in Careysburg.