November 14, 2017
There is more to offshore companies than tax evasion. Many scrupulous foreign investors in collaboration with corrupt regimes’ cronies of poor countries launder ill-gotten wealth in broad day — bleeding the people around the world yet to be exposed.
When the Panama Paper leaked last year wasn’t enough, Paradise Paper this year leaked 13.4 million more files implicating 10th of thousands of politicians, corporate leaders, investors, celebrities, dictators, drag lords… around the world and show why poor nations are in a mess.
But, noting suprised the world than to find Bono, a native of Ireland, U2 Lead singer and Co-founder of ‘anti-poverty lobby group’ One Campaign to join the ranks of wealthy members offshore tax heaven club while raising fund for the poor of the world particularly in many Africa nations.
With a fellow Irishman and adviser Robert Frederick Zenon Geldof, the Founder of Band Aid Charity Trust, a UK register charity that started 1985 to raise fund for famine relief of Ethiopia and 8 Miles private equity fund investor in Ethiopia as well as member of Africa Progress Panel (APP), a group of ten individuals who advocate at “the highest levels for equitable and sustainable development in Africa”, One Campaign itself with some of its questionable leaders and advisers will be scrutinized for years to come.
According to the Daily Mail, the Paradise Papers’ “documents outlining the tax and financial affairs of hundreds of people and companies connected to Appleby and the 19 tax havens, with many appearing to have invested or sheltered huge amounts of cash in offshore tax havens”. Unfortunately, it didn’t start recently nor will end soon. But, the fact “Bono whose real name is Paul David Hewson is after the leaked Paradise Papers revealed how he used a Malta-based firm to buy a shopping center in Lithuania” that caused him to be ‘extremely distressed’ by the revelation doesn’t square with his other activities in his non-for-profit One Campaign that lacks transparency with some of the assembled leaderships and advisers are all over the map raising fund for the poor, investing in poor countries and working for governments and Medias as if conflict of interest doesn’t mean a thing when it comes in poor countries under authoritarian regime.
It is not clear if Bono is ‘extremely distressed’ because he was exposed for evading his tax obligation for Ireland where he is a citizen or Lithuania where his investment from his untaxed offshore capital where his nonprofit One Campaign despise others not to do.
But, among One Campaign ‘issues’; Trade and investment “that boosts economic growth and creates job opportunities for the poorest people is key to fighting poverty” to Transparency that “gives people in developing countries the information they need to hold their governments accountable and improve their lives” appeared to be important in his non-profit organization not in his for-profit companies.
Thus, Despite the slogan of One Campaign, the Co-Founder and Director Bono himself lacks transparency operating a nonprofit organization that advocate trade and investment in poor countries and more foreign aid for governments that lack transparency. Apparently he is not alone, his fellow Irishman and adviser Geldof that Founded Band Aid Charity Trust in UK to help famine victims in Ethiopia and elsewhere since 1985 is also equity investor in Ethiopia as 8 Miles Fund through Eleni LLC, according to One Campaign’s website list Eleni Gabre-Madhin as member of the Africa Policy Advisory Board stating;
“Eleni Gabre-Madhin is co-founder and chief executive of Eleni LLC, a company with equity investments by Morgan Stanley, and IFC (International Finance Corporation), and 8 Miles Fund”.
It is not clear what transparency means for Bono’s non-for-profit One Campaign, Geldof Band Aid Charity Trust or for profit 8 Miles or Morgan Stanley and IFC where nonprofit, for profit operators and governments officials and multilateral leader make investment and development decisions in poor countries ruled by corrupt regimes where they have direct economic interest in the outcome of their decisions.
In September of 2017 in an article titled ‘When an economist suspend her profession in the midair what can Ethiopians do?” we explore the role of Eleni Gabre-Madhin relationship Geldof running a private Equity Fund 8 Miles in Ethiopia investing among many ventures on “Verde Beef Processing established in 2013 in Adami Tulu and Awash Wine Share Company (Awash) buyout from the Ethiopian Privatization Agency and Eleni Exchange LLC, according to 8 Miles Portfolio.
How Eleni ended up in Bono’s runs nonprofit One Campaign’s as member of the official Africa Policy Advisory Board is a mystery by its own. Likewise, how Geldof of Band Aid Charity Trust ended up as investor in the same country he raise fund for the poor remained as well a mystery. But, when Gale Smith (the Former USAID Administrator under the Obama Administration) and the stanch supporter of the Ethiopian ruling party since mid-80s with Geldof’ coming abroad as President of One Campaign few days after she left her USAID Administrator position is another twist in Bono’s revolving door policy from government, to nonprofits and private sector of the same people we see in the top Leaderships of One Campaign — regardless of conflicts of interest of their activities or lack of disclosure.
As the International Consortium of Investigative Journalism sort out Paradise Paper’s files overwhelmed by last year’s Panama Paper leaks; no one knows who else other than the king of advocate for the poor Bono are on the list until the files are organized and released to the public.
But, the devastation for poor countries with little resources available to deal with the massive problem they face while ruling regimes and their cronies launder billions of dollars in plain view of Western donors and foundations that are supposedly spending millions of dollars in foreign aid to see it laundered out of the country is disheartening. The extent of some of the offshore tax heaven or ill-gotten money laundered from poor and rich nations alike is staggering as the Global Financial Integrity data by country reveled.
The Africa News Network 7 TV report on how some African nations are being bleeding by ‘investors’ in collaboration with corrupt government officials and cronies as an example shows the extent of how Africans are trapped between the world financial markets, foreign aid operators, Donors and corrupt government officials colluding with scrupulous foreign investors with no transparency regime to make them accountable.
Unfortunately, mainstream Media caught up by high-profile Western politicians, corporate leaders, celebrities’ offshoring to avoid tax liabilities say little about corrupt government officials of poor nation launderimg ill-gotten wealth offshore with donor governments, multilateral organizations and foundations looking the other way or joining in by financing scrupulous investors without doing due diligence or demanding disclosure.
When Bono, the poster child for more foreign aid to help the world poor — disparaging those calling for accountability and transparency is found listed on the Paradise Paper, it was not a shook for those familiar with how the Aid industry works in poor countries under corrupt regime particularly in Africa. In fact, in the last decade; aid became so lucrative for corrupt regimes, a new creative industry was born in the name of PPP (Public–Private Partnership) followed by a rash of private equity fund investors showing up on the doors with the help of the Donor community.
Public–Private Partnership with the same corrupt regimes’ cronies in partnership with foreign investors can only be possible by donor governments’ approval and multilateral and nongovernmental organizations and corporate foundations’ endorsement and finance.
The recent European Investment Bank’s Press Release dated 12 October 2017 “Ethiopian companies to benefit from EIB backing for USD 100m private equity fund”, reinforces the reality; donors are as guilty as the corrupt regimes they sustain in the name of helping poor countries’ development.
EIB Press Release states;
“Private equity investment will strengthen the growth of leading companies in Ethiopia and create new jobs across the country. This new cooperation with Cepheus demonstrates the European Investment Bank’s commitment to Ethiopia and support for economic growth across the country in the years ahead.” said Ambassador-Designate Johan Borgstam, Head of the European Union Delegation to Ethiopia.”
The Irony European Investment Bank expect private equity investment in a nation with a political crises brought by a corrupt regime in private business, government and non-profit will “strengthen the growth of leading companies in Ethiopia and create new jobs across the country” by investing on less than a year old Cepheus Growth Capital Fund with no or little track record on the principle reviles the source of the probem.
In a previous article titled Crime and No punishment: The tale of TPLF Mafia Inc. and the quest for democracy and accountability we explored what the rational for sudden rush of private equity fund investors under a corrupt regime of Ethiopia in business for itself may be and listed half-a-dozen equity fund investors that were established in Ethiopia since 2008 by expats with little public information available or disclosers.
Apparently, the latest two equity fund that set up shop in Ethiopia are; Cepheus Growth Capital Fund Managing Partners with two individuals by the name Kassahun Kebede and Berhane Demissie in 2016 and Fairfax African Equity Fund 2017 led by newly reviled Chairman Zemdenhu Negatu, the Former Ernest Young East Africa Managing Partner that left EY a few months earlier and undisclosed individual by the name Yarid Berhane that established the firm a decade ago in Virginia, USA that has been investing in Ethiopia and elsewhere since.
In 2016 when Kasahun (kasaye) Kebde (Pictured left) set up Cepheus Growth Capital Fund in Ethiopia with the little known Partner Berhane Demissie (pictured right) the same year they become member of the London based African Private Equity and Venture Capital Association. And, in April of the same year the Association’s Newsletter interviewed the two about their Cepheus venture. Besides Kassahun’s revelation “I have lived in New York, London and Hong Kong during my professional life” and Demissie’s “I have worked in Ethiopia for many years, both on private equity projects and financial sector reform, on behalf of the government” the two didn’t revile their experience and track record nor where and from whom and how a-less-than-a-year old established firm plan to raise what Kassahun referred as “the first Ethiopia focused fund, targeting US$100mn with a first close planned at circa US$45mn”. https://www.avca-africa.org/media/1436/avca-member-interview-cepheus-growth-capital-partners.pdf
Paradoxically, what Kassahun failed to disclose for the unnamed interviewer of the Newsletter and possibly for European Investment Bank was; he is the Founder, Principal, and Managing Partner of PANTON Capital Group, LLC, a Foreign Limited Liability Company registered in Delaware and based in New York in 2004 and a Director of a separate offshore PANTON Alternative Fund, Ltd. firm registered c/o Citco Fund Services in Cayman Islands, according U.S. Security and Exchange Commission (SEC) Notice of Exempt Offering of Securities FORM D application.
The application form reviles; PANTON Alternative Fund, Ltd. c/o Citco Fund Services (Cayman Islands) Director of the Issuer Kassahun Kebede signed 3/11/09) to 110 investors with Total Amount Sold $941,043,750 USD with minimum investment accepted from any outside investor$2,000,000 USD Date of First Sale 2/1/04.
The question is, how did Kassahun (Kassay) failed to disclose; he sold securities for 110 unnamed ‘investors’ totaling $941,043,750 from 2004-2009 as Founder, Principal, and Managing Partner of PANTON Capital Group, LLC, a Foreign Limited Liability Company based in New York and registered in Delaware and as a Director of an offshore PANTON Alternative Fund, Ltd. Registered c/o Citco Fund Services in Cayman Islands? And, why did he surrender PANTON Capital Group, LLC, and rather successful firm in New York to establish Cepheus Growth Capital Partners in Ethiopia and, who may be the 110 individuals or entities that came up with a minimum of 2 Million dollar for a company with no public track record?
Again, the question begs answer. How two individuals that set up a less-than-a year old private equity firm Cepheus Growth Capital in Ethiopia “demonstrates the European Investment Bank’s commitment to Ethiopia and support for economic growth across the country” to benefit EIB backing for USD 100m? Could it be incompetency not to do due diligence in the part of the Head of the European Union Delegation to Ethiopia that mislead Ambroise Fayolle, Vice President of the European Investment Bank to misspeak about a less than one year old Cepheus Growth Capital Fund company good enough to receive USD 100mil?
Though it demands high-level investigation by concerned government agencies as well as European Investment Bank’s internal investigators and independent organizations and mainstream Media, one thing remained a mystery. How little known individuals pull such a high-steak heist of this magnitude on EIB operating in Ethiopia without being discovered?
The European Union or all Donor nations must reexamine their accountability mechanism and policy whether the cost of financing corrupt regimes’ crony investors and scrupulous nonprofits organizations to make the responsible parties accountable or take responsibility for the political and economic crises that come with it.
Incidentally, since our last report on September 29, 2017, PANTON Capital Group, LLC – ‘Surrender of Authority’ on Oct 10, 2017, according NYS Department of State Division of Corporations, coincidence?
At the meantime, nonprofit organizations and foundations in the business of helping poor countries must come to grips; what they preach under corrupt regimes doesn’t much what they practice on the ground. Weather Bono of One Campaign, Geldof 8 Miles LLP and Band Aid Charity Trust or Bill Gates of Gates Foundation… that preach what they don’t practice in the comfort of their safe havens to poor countries ruled by corrupt regimes may need help themselves to learn transparency where; their non-for-profit and for-profit ventures and conflicts of interest begins and ends.
Bono may be ‘extremely distressed’ for being exposed for what he is in the comfort of his new Manhattan penthouse or French Riviera villa on the expenses of the poor ‘extremely distressed’ by ruling regimes’ atrocities and corruption made possible by lack of accountability and transparency he preaches on his non-for profit One Campaigns as oppose what he does with his for profit ventures like many of his partners.
It is time to clean house from all sides that made the poor countries peoples’ lives a living hell in 21st century.
