*

Notes made by Samherji executives from the secret meeting at the minister’s ranch highlight two key pieces of information: the quote of the minister offering “comfort” for Samherji, and that the foundations appeared to be laid to help Samherji circumvent the requirement for Namibian asset ownership.

Samherji-files

Shark
payments

Samherji-files

Shark
payments

The policy that Namibians had priority access to the fishing resources was adopted early on and enshrined in law.

Samherji’s solution was tastefully called putting a “black face” on the activities: “get locals to front as owners,” to quote verbatim. The sharks helped. The digital fingerprints of Namibia’s current minister of justice can be seen on the drafts of this manoeuvre.

The manoeuvre meant that Samherji became a minority owner of its own fishing company, Katla, in Namibia. The majority of shares in the company were registered to a company owned by a Namibian.

The documents show that this was not the fact of the matter. The co-owner is described as “a front for James and his guys”. Under-the-table deals are said to guarantee Samherji control of the company and almost 75% “economic share”.

A memo to Þorsteinn Már shortly thereafter states: “Cooperation with the minister is secured and he is a shareholder in the company.

Jóhannes says this was a milestone for Samherji.

“It was a certain turning point to get the fisheries minister and his people as shareholders of the company. None of them are shareholders in writing. They all use fronts, which is commonplace in the corruption down there. This is how Samherji works. You just worked according to that policy and orders,” he says.

Wanted sea freezing quota

Everything revolved around obtaining the valuable sea freezing quota. “Yes, it was the clear policy of my superiors to obtain sea freezing quota as inexpensively as possible, by whatever means necessary. Samherji didn’t just accidentally happen to bribe Namibians,” answers Jóhannes.

Asked to provide examples he says:

“The first bribe to the fisheries minister was following a request from the son-in-law wherein he asked whether we were going to make some payments to the minister, as he had done a lot to support Samherji’s efforts to enter the Namibian market. I ask him how much and he mentions US$60,000. I told him I needed to call my superiors. I called Aðalsteinn Helgason and asked him. His reaction surprised me. He seemed to take it for granted and put it a little something like this: 'If you have the opportunity to pay the fisheries minister, you should do so immediately.' I made sure he got his US$60,000.”

Jóhannes says he delivered the money to the son-in-law in a gym bag at the Hilton hotel in Windhoek.

“I had to leave Walvis Bay and go to Windhoek. I would check in to a hotel, buy a bag, and I had usually already sent a request to the bank to have the cash ready. There is a single bank branch in Windhoek that can deliver such a large amount. You get there, are taken to a security room where you show ID and information before you get the money and put it in your bag. I then went to the hotel, alerted the son-in-law and gave him the bag,” Jóhannes says.

“This was shortly after the ranch meeting.”

According to Samherji’s bank statements in Namibia, a corresponding amount of cash was withdrawn at that time. It is hopeless to trace such a withdrawal further.

Billed Samherji

The same cannot be said about most of the payments Jóhannes claims Samherji made to the group over the next few years.

“For all the bribes we made invoices to justify the payments for the books and the accountants. In some cases, there were consultancy agreements and there was a fictional rent agreement. It was all for show and mostly done for the bookkeepers to avoid raising questions concerning this,” Jóhannes says.

A state-run Namibian company co-founded by Icelanders played a key role in this.

“Fishcor holds the biggest quota in Namibia by far. A few years ago the company had no quota, but because the sharks, the fisheries minister, and others, changed the law, they probably hold a third of the horse mackerel quota,” he says.

In 2014, Fishcor unexpectedly changed its policy. Firstly, and to everyone’s surprise, fisheries minister Esau appointed James Hatuikulipi, his son-in-law’s close relative, as chairman of Fishcor’s board, seemingly in violation of the company’s rules of procedure. Esau followed this up by allocating Fishcor a horse mackerel quota for the first time.

Neither issue raised much attention, though Samherji monitored each step closely.

The minister took the quota from a company that had been in operation in Namibia for years and built up its activities on sea and land. “This company is gone. More than a thousand jobs were lost. This company paid all its taxes in the country and it was sacrificed to get Samherji in and to get the sharks access to fishing,” Jóhannes says.

Changed the law

A year later, Namibia’s supreme court deemed the minister’s quota allocation to Fishcor illegal. The impact of the verdict was that the minister simply started work to change the law.

Communications show that the sharks had been planning to amend the legislation for a long time, in collusion with Samherji, which obviously benefited. “The ongoing changes in relation to possible new rules and regulations in the fisheries are due to the minister, Sacky, James and Katla,” is a quote from Jóhannes’s memo to his superiors; to Þorsteinn Már.

Communications show direct Samherji involvement in lawmaking, among other things by proposing partner organisations adopt the Icelandic law on individual transferable quotas. Jóhannes says Samherji was more than a mere observer. “Samherji was meddling with domestic policy, by involving themselves in legislation and amendments,” Jóhannes says.

When the law had been amended, Jóhannes sent an email to Þorsteinn Már telling him that the amendment had gone through and that James had promised a long-term deal. They needed to start a new company with them and share out the percentages. The amendment resulted in valuable quota, up to 80 thousand tons every year, that now went to Fishcor from the minister, and from there to Samherji, for a very favourable price.

Circumvented payments

When the minister illegally allocated quota to the state-run company a year before, the quota was dividedbetween Samherji and another unrelated company, except that Samherji’s price was 20% lower. The terms became even more comfortable after the amendment: up to half the market price. A big part of the quota price bypassed state-owned Fishcor altogether.

A payment of 20 million ISK to a company called ERF 1980, at the same time as Samherji and Fishcor’s first quota trade, is an example of this.

At first the payments were invoiced as “consulting services,” but those invoices were revoked and replaced by two new ones, accredited to rent on the one hand and to housing renovation expenses on the other. The housing was supposed to be a freezer storage unit in Walvis Bay.

“I never saw this storage and when I was working on behalf of Samherji it was obvious that this was just a dummy deal to cover the payments,” Jóhannes says.

The real purpose of the payments was then openly discussed in email communication between Samherji’s CFO in Namibia and Jóhannes. The CFO claimed to have forgotten what ERF 1980 was, but that it had to do with “James and them.”

“It’s 1.5 million for the party and 500 thousand for the Seaflower (Fishcor) -quota”, Jóhannes replied.

The beneficial owners of ERF 1980, through an associaed fund, are Sacky Shanghala and James, Fishcor’s chairman of the board.

Payments like these, alongside quota trading with the state-run company, would only increase with time. Most often referred to as consulting expenses, based on the son-in-law’s deal with Samherji, witnessed by Fishcor’s chairman of the board.

A portion goes to the sharks

The connection of Samherji and Fishcor’s quota trade to such consulting payments is interesting.

Early in2016, Samherji received a quota of 5,000 tons from Fishcor and paid 50 million ISK less than a similar deal shortly before. Concurrently, a company called JTH Trading received a payment of 30 million ISK from Samherji, reportedly for consulting services.

This company is owned by the minister’s son-in-law. According to a proposed consultancy agreement, the company was meant to assist Samherji getting projects in exchange for undefined performance-related payments. The company has repeatedly received payments concurrently with Samherji’s quota deals with Fishcor.

In March 2017, Samherji paid 25 million ISK to the state-run company and 30 million to JTH Trading. In August of the same year 40 million ISK went to Fishcor and 50 million ISK to JTH. A similar pattern can be seen for the year 2018 and into the current year.

For the past three years Samherji has paid JTH Trading close to 300 million ISK in this manner. Despite being registered to the son-in-law, payments out of the company can be traced to companies owned by the other two sharks.

Jóhannes says that part of the price was actually paid to circumvent the state-owned company. “Instead of paying 100% of the correct price to Fishcor, Fishcor received only 65%, for instance, while 35% was deposited on the sharks’ accounts. We paid less than market price after all our expenses. Fishcor is losing money on this and the State as well,” he says.

Consulting fees like these are a connecting theme in the Namibia operation for the past few years. In five years, Samherji has paid the equivalent of 600 million ISK to four of the Namibian sharks’ companies, either in relation to deals between Samherji and the State or as a result of facilitation by the minister and his people.

Well-known method

International bodies like the OECD define such payments as clearly illicit.  Daniel Balint-Kurti,  a senior investigator for Global Witness, has read the evidence leaked to WikiLeaks that this coverage is partly based on.

“The use of the term consultancy to describe payments made to well-placed middle men, in natural resource deals, is classic boilerplate corruption, essentially. Time and again you see, you see intermediaries getting corrupt pay offs and these are described in the books as, as consultancy. But often you’ll see that there was no real consultancy work done whatsoever, those intermediaries there are to make things happen, to get the people and power to do the things that you need to get done.”

“This, erm, looks very much like bribery. I think, erm, Samherji has some very difficult explaining to do to show how this could be anything but. One has to look at the very way in which Fishcor got the rights to sell on quota for horse mackerel, the law had to be changed for Fishcor to get that right and who was involved in getting that law changed? It was those same sharks. And then it’s those same sharks who get paid afterwards, so certainly my point-of-view is that this looks like classic bribery.”

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