BCG settles Angola bribe case with justice, but may face further heat
Global strategy consulting giant Boston Consulting Group (BCG) has settled a case with the US justice department by agreeing to return $14 million worth of profits it gained by paying bribes to officials in Angola.
The case stems from a multi-jurisdiction corruption probe into former Angolan president José Eduardo dos Santos and his eldest daughter Isabel – previously considered Africa’s richest women – which has been ongoing since 2018.
As a former advisor to entities owned by the fallen magnate, the investigation saw Portuguese police raid BCG’s office in Lisbon early last year, which may have uncovered evidence that the firm had also paid bribes to secure work in Angola.
However, BCG has avoided prosecution by agreeing with the US Department of Justice to hand back the $14.4 million in calculated profits – not revenues – it gained by channelling around $4.3 million to offshore accounts held by an agent connected to the ruling party, payments which coincided with BCG winning contracts from the Angolan national bank and economy ministry.
In what could be considered a rather favourable resolution, the leniency shown by the US justice department was primarily due to BCG’s voluntary self-disclosure, and a suggestion that certain of its ‘employees’ in Portugal had acted independently and made efforts to conceal the sizeable backhanders from their office colleagues by falsifying documents once internal questions arose.
Said to have uncovered the misconduct itself via an email dating back to 2014, BCG was also credited for its full cooperation and significant improvements to its compliance function, and for firing those involved and forcing the implicated partners to give up their equity in the firm. In a statement, BCG also said it had since shuttered its office in the Angolan capital Luanda.
The Department of Justice briefing doesn’t specify when BCG first self-reported, be it before or after last year’s raids on its Lisbon office (remarkably, the second visit from corruption investigators in five years), but the consultancy was first publicly tied to questionable conduct in the oil-rich former Portuguese colony following the release of the ‘Luanda Leaks’ in 2020, alongside Big Four firm PwC.
BCG in Angola
Published by the International Consortium of Investigative Journalists, the leaked materials included emails, contracts and other documents which provided insight into how Isabel dos Santos had built and funnelled her estimated $2 billion fortune by exploiting her family’s position of power, often through the support of international advisories despite the obvious red flags.
BCG was seen through the documents to have invoiced companies owned or partly-owned by dos Santos and her husband for at least $4.3 million between 2010 and 2016, at a time when some of the world’s biggest banks were refusing to serve or had already cut ties with the businesswomen and during the same period the strategy firm has now been revealed to have been paying bribes.
Noting that she continues to deny all criminal allegations, suspicions should have at least been raised at BCG by a big chunk of that sum – more than $3.5 million worth – being billed to Wise Intelligence Solutions, an inactive company owned by dos Santos in Malta, for subcontracting work on a restructure of Angolan state oil company Sonangol, where she would soon be appointed chair.
Later it was revealed by the Portuguese news outlet Expresso that BCG was the supposed recipient of more than $31 million worth of modernisation work for Sonangol under her watch, paid, together with a combined ~$37 million to PwC and McKinsey & Company, via a Dubai-based shell company Matter Business Solutions, described as a descendent of Wise and run by a close associate of dos Santos.
According to reports from last year, the most recent search of BCG’s Lisbon base was conducted at the request of the Angolan government, as its prosecutors sought to build an embezzlement and money laundering case against dos Santos concerning the loss of more than $200 million in public funds during her time heading up Sonangol. That indictment dropped at the start of this year.
With the case yet to be prosecuted, media agencies which have seen a copy of the charge-sheet have reported PwC as among the co-accused on two of the twelve counts. Outside of some involvement in the establishment of a parallel management scheme, BCG has escaped further mention, but in admitting its partners had paid bribes in the country may now come under closer scrutiny.
Notably, the Department of Justice in handing down its ruling in the current case, stated that BCG’s “disgorgement” of its “ill-gotten gains” (it’s unclear where the profit portion of the $22.5 million in revenues it scored will be returned), doesn’t indemnify its employees from prosecution or equate to the firm from being off the hook should further information come to light in its “ongoing investigation”.
