Former Minister Jailed for Four Years

24 May 2011

Maputo — Mozambique’s Supreme Court has sent a former Minister of Transport and Communications, Antonio Munguambe, to jail for four years.

On 27 February 2010, judge Dimas Marroa, of the Maputo City Court sentenced Munguambe to 20 years imprisonment for his part in massive corruption at the publicly owned airports company, ADM, involving the draining of around 91 million meticais (over three million US dollars at current exchange rates) from the company’s coffers.

Munguambe and his fellow accused appealed against Marroa’s ruling, and on Monday the Supreme Court ruled on the appeal, maintaining the verdicts, but reducing the sentences.

Unlike the other four accused, Munguambe, who was Transport Minister from February 2005 to March 2008, was not held in preventive detention, but was allowed to await the trial in freedom. On Monday that freedom came to an end, when he was served with an arrest warrant at his Maputo home, and taken to Maputo Central prison.

The person who received the longest jail term was the former chairperson of the ADM board, Diodino Cambaza. The Supreme Court reduced his prison term from 22 to 12 years.

The former ADM financial director, Antenor Pereira, sentenced to 20 years by Marroa, will now serve only four years. Antonio Bulande, former head of Munguambe’s office, had been sentenced to four years, but the Supreme Court cut this to a suspended sentence of two years.

Deolinda Matos, former chief executive of the Mozambique Services Company (SMS), the catering company 50 per cent owned by ADM, saw her sentence reduced from two years and 15 days to twenty one months. She has already served most of this sentence, and will leave prison next Monday.

In sentencing the five accused, Marroa said it had been proven that in 2007, the ADM board illicitly altered the privileges enjoyed by board members, and gave them the right to buy ADM houses at a mere 60 per cent of their value.

Any such change should have been approved by the Minister of Transport, but the new set of privileges was never sent to the Ministry. Instead, the ADM board decided to allot 800,000 US dollars to buying houses – which the board members themselves would then be able to buy at a 40 per cent discount.

In fact, much more than 800,000 dollars was spent. The central Maputo house that Cambaza wanted for himself cost a million dollars. ADM obtained this house in March 2008, and Cambaza expressed an interest in purchasing it April – through a letter which he apparently sent to himself.

Pereira approved the sale of the house to Cambaza – but since he was Cambaza’s subordinate, he had no power to do so. Only the Minister of Transport could have approved the deal, and it was not brought to his notice.

Worse still, the value of the house was given, not as the million dollars that it had cost ADM, but as a mere 350,000 dollars (which was only the deposit). This meant that Cambaza would only have to pay ADM 210,000 dollars for the house, rather than 600,000.

Cambaza arranged for the estate agent to draw up two sales contracts – one of which was phoney and valued the house at 350,000 dollars. Marroa noted that the phoney price also allowed Cambaza to pay much less than was owing in tax on the property transaction.

The other three houses which ADM purchased for directors cost a total of around 700,000 dollars. Marroa noted that the procurement rules in force for state purchases had been ignored, there were no receipts, and there was no independent valuation of the houses.

Cambaza also used ADM funds to buy another central Maputo house for 950,000 dollars – but for tax purposes the value was stated as 450,000. More funds from ADM were drained by Cambaza and Pereira to refurbish their houses.

Munguambe abused his ministerial position to ask ADM, in January 2007, for money to pay for his children’s South African school fees.

A total of 33,000 dollars was involved, in two instalments – the second, and larger instalment, for 25,000 dollars was disguised as a loan from Pereira to Munguambe. But a close look at the accounts showed that the money was transferred from ADM to Pereira’s account, and then was immediately passed on to Munguambe.

Marroa said that Munguambe was well aware that his children had no right to scholarships paid for by ADM. He had abused his authority, because when a minister makes such a request to a company which his ministry supervises, then the request is likely to be understood as an order.

Munguambe also ensured that Bulande was given a fictitious job as legal advisor to SMS. On instructions from Cambaza, Bulande was put on the SMS payroll, and Matos paid him every month for doing precisely nothing.

The money for Bulande’s wages came from ADM, and was transferred every month to SMS. The salary started out at 1,100 dollars a month, but a few months later Cambaza raised it to 1,750 dollars a month. From this sinecure, Bulande earned a total of 28,250 dollars.

Marroa noted that the only work Bulande ever did for SMS was at the request of the SMS chairperson (and ADM commercial director), Maria Coito, in late 2008, after criminal investigations had already begun.

Bulande had no connection with either ADM or SMS, and had no right to money from either company, Marroa said. Furthermore, SMS already had a contract with a law firm and so had no need to hire a legal advisor.

Marroa noted that Bulande was entirely unrepentant – even to the extent of complaining that SMS still owed him two months’ wages.

On Cambaza’s demand, Matos also wrote out an SMS cheque for 25,000 dollars in the name of a certain Josseldo Massango. Cambaza hinted that this was cloak and dagger work – he said the money was to pay “confidential expenses” for the ruling Frelimo Party, a claim that might have gained some credibility from the fact that Massango did once work at the Frelimo head office.

But investigations soon showed that none of this money went to Frelimo. Instead, Cambaza use it to buy a property in Marracuene district from Massango. But Massango had only asked for 20,000 dollars – Cambaza made an arrangement with Massango whereby he pocketed the extra 5,000 dollars.

However, some of the money looted from ADM did find its way to Frelimo. Thus, on Cambaza’s instructions, ADM paid the building company Kaluminio to rehabilitate the Frelimo Central School in the southern city of Matola. The initial payment was five million meticais – but Kaluminio claims the total bill that Cambaza agreed to pay was for seven million meticais.

Marroa was highly critical of Frelimo’s attitude to this money. The director of the party school, Arlindo Chilundo (now Deputy Minister of Education), told the court he had understood the money as “a gift” from Cambaza, implying that he had no idea it came from ADM coffers. Marroa asked whether Frelimo did not have a duty to verify the origin of the funds, and suggested that the law on funding for political parties had been broken.

In passing sentence, Marroa said that those most deeply involved in looting ADM were Cambaza and Pereira, and Cambaza had to take the greater responsibility, since he was Pereira’s superior.

As a minister, Munguambe had “set a bad example for society”, said Marroa. He stated explicitly that he had imposed long prison sentences as a deterrent “to anyone else who wants to lay their hands on state funds”.

Munguambe’s lawyer, Abdul Gani, is still dissatisfied, despite the 80 per cent reduction in his client’s sentence. He told reporters he was thinking of making a further appeal, this time to the Supreme Court plenary – but the likelihood that the Supreme Court plenary will overrule a Supreme Court section must be rated as very slender indeed.

Gani said he could not see anything illegal in Munguambe’s behaviour. “He asked for a scholarship for his children and benefitted from it”, he said. “When they told him it was illegitimate, he returned the money”.

Thus Gani finds nothing inappropriate in a government minister seeking money for private purposes from a company that is supervised by his Ministry.

The Supreme Court reduced the sentences because its interpretation of the relevant laws differs from that of Marroa. The main law concerned dates from 1979, and covers theft and diversion of state funds and assets.

But in 1979 there were no such things as public companies, and so one legalistic interpretation of the law is that it only covers the state itself and state companies. Marroa rejected this, and pointed out that ADM manages assets that are part of the state’s public domain, and that its chairperson is appointed by a government body to represent the interests of the state.

The much narrower interpretation of the Supreme Court is that, in order to commit the offence of the theft of state funds, the accused must be a state functionary. This creates a distinction between state and public companies which is most unlikely to have been in the minds of the legislators of 1979.

The Supreme Court took the position that a different law, dating from 1987, was applicable – and which involves much milder sentences.

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