Did Tolbert Violate the Law? Act Offers Clarity; Conflict of Interests Detailed

- Rodney D. Sieh

Source: FrontPage Africa

SHARES OR NO SHARES: “I should as a Liberian have a share but I do not have any now but I still maintain relations with the company. Tolbert said in keeping with the charter of the NIC he disclosed his ties to Mano before he took on the post. “I have recused myself from the proceedings. Advisor to the company, I had options.”

Richard Tolbert, Chairman, National Investment Commission

Monrovia –

An investigation by FrontPageAfrica has unearthed a series of conflict of interest issues linking the head of the National Investment Commission, Richard Tolbert to a number of companies currently investing in Liberia.

Tolbert has been dogged by controversies regarding his purported ties to several companies currently investing in Liberia since he accepted a post in the Sirleaf administration.

Now new revelations have surfaced that Tolbert is a major shareholder in Mano Resources Corporation, an exploration company on the Toronto Stock Exchange whose firm African Aura own 30 percent of the Putu Mining deal in Liberia.

Tolbert, responding to a FrontPageAfrica inquiry declared to FPA that acknowledged the ties to Putu but explained that he had recused himself from all dealings regarding the Mano deal in Liberia. “I should as a Liberian have a share but I do not have any now but I still maintain relations with the company. Tolbert said in keeping with the charter of the NIC he disclosed his ties to Mano before he took on the post. “I have recused myself from the proceedings. Advisor to the company, I had options.”

Eligibility for mineral rights

According to Section 4.1 Mineral Rights of the Mining Laws of Liberia:

No person shall conduct exploration mining or operations except in accordance with the mineral rights provisions under this provisions under this law.

4.2: States that the following persons or individuals shall not be eligible to be holders of mining licenses:

(a). an individual who is less than eighteen years old.

(b). a person or individual who has been adjudged insolvent or bankrupt during the prior seven years under the laws of Liberia., or of any other country, except under a plan of reorganization approved by the courts of Liberia, or of such other country and permitted by the laws of Liberia, and with respect to which such person of individual is in compliance.

(c). a person or an individual who is not lawfully qualified to conduct business in the Republic.

(d). an individual who has been convicted of a felony in Liberia or who has been convicted elsewhere of, or has pleaded nolo contendere to a crime, the elements of which would constitute a felony in Liberia.

(e)A person whose application does not meet the requirements of this law.

(f) The President of Liberia, the vice president of Liberia, any member of the national legislature, justices of the Supreme Court and judges, directors of public corporations during the tenure in office. However, in the event that any of the foregoing persons was already a Holder of a Mineral Right prior to assuming the functions of the office, then such person may either dispose of such Mineral Right or place such Mineral Right in a Blind Trust.

Tolbert told FrontPageAfrica recently that he was very proud that to be associated with Mano and Putu and was instrumental in keeping them in Liberia even after war and destruction.

Said Tolbert: “They’re not only involved in minerals but also gold and I feel very proud to have a multi-million dollar company doing business in Grand Gedeh which will help to bring jobs and other benefits to Liberia.” Tolbert added that he will work to make sure that Liberia reaps all of the financial benefits deserves from the Mano-Putu operations.”

It is not clear whether Tolbert put his Mineral Rights in a Blind Trust prior to becoming head of the NIC.

Tyler and Tolbert in Russia of all places

FrontPageAfrica had earlier gathered that both Tolbert and House Speaker Alex Tyler had been heavily involved in pushing the interests and ratification of the Putu mining deal and were spotted in Russia recently discussing a deal with some investment firms. Tolbert admitted that he was in Russia but was there to attend an investment forum while Speaker Tyler was attending a parliamentarian forum.

Senior administration officials have expressed concerns about Tolbert’s travels, particularly his coincidental trip to Russia the same time Speaker Tyler was there. Tolbert did not state the name of the parliamentarian or investment conference he and Tyler attended when FPA sought inquiries recently.

Elenilto and Western Cluster Ties to Russia

Interestingly, Speaker Tyler and the Bomi Caucus have ties to Elenilto Minerals and Mining Corporation, a company recently granted the Western Cluster Iron Ore Deposits. It was while both Tyler and Tolbert were in Russia, was when the company sought to present a Russian bank guarantee as a security for the 25 million dollar signature bonus which was roundly rejected by international lawyers advising the President. According to Executive Mansion sources, the Russian bank guarantee did not have a prime money center bank as a backer. Elenilto, incidentally has been requested by Government of Liberia negotiators to provide a financial and technical guarantee on its ability to make the 2.5 billion dollars investment in the Western Cluster. Experts say a two year old company with no assets, no financial statement and certainly no experience in the iron ore industry must be required to prove that it can bring a major partner to the table. But sources told FrontPageAfrica that the industry is abuzz with questions on how a company such as Elenilto, with no record of success anywhere on the globe could capture the coveted Western Cluster Iron ore deposits in a process overseen by Mr. Richard Tolbert, as head of the Inter Ministerial Concession Committee (IMCC). (FrontpageAfrica is currently investigating the process and will report in subsequent editions).

Questionable Large Scale Investments without Bankable Feasibility Studies

International industry experts contacted by FrontpageAfrica say announcements by Mr. Tolbert on most of the large scale projects, especially in iron ore production are farcical. They say a company cannot know the size of its investment in any project without a bankable feasibility. A bankable feasibility is a business plan that tells the company the financial prospects in a project and forms the basis for managers to approve one that is on the drawing boards. For example, a company cannot know the size of an iron ore reserve without years of exploration, especially for green field projects. Only drilling over a period of years would determine the quantity and commercial value of the reserves.

So then the question is how do Mr. Tolbert and his team know the size of the investments, how many jobs they will produce and whether environmental and social impact assessment would indicate that the projects are even “feasible”? Therefore to announce to the public that a company will invest billions in the absence of a completed exploration program, and a bankable feasibility that includes environmental and social impact assessments is delusional according to a retired mining engineer. Projects are not certified as approved by companies as doable until a comprehensive feasibility has been conducted.

Buchanan Renewable Project Roundly Condemned by International Partners

Insiders at the Executive Mansion say Tolbert’s flagship project which he has boasted will provide cheap energy has been roundly condemned by the country’s international partners including the World Bank, EU and the Norwegian Government. They say the project is an environmental disaster waiting to happen. BR’s use of rubber wood, a cheap source of energy for 99 percent of Liberians is not such a good idea after all. Some say the price of a bag of coal could jump a 100 fold if BR starts production since the company would be in competition with local producers of charcoal for rubber wood, the preferred source of charcoal.

There has been a lot of pulling and tugging between the President’s office and the line ministries. The company has changed management twice, since the “cowboy” Martin Greenwood was booted out by new investors. The loud talking, impression making Greenwood was a close confidante of Mr. Tolbert when the company announced that they would ship chipped rubber wood out of Liberia. That company has since transformed itself into an energy producing company even though it has not participated in a biomass project anywhere on the planet. The jury is still out on BR and it is widely believed that inside politics would eventually decide if the project is a go or no go.

“I should as Liberia have a share….” Rings Hollow

Liberian business people say Tolbert’s over concentration on large scale mega projects to the detriment of providing support to small Liberian businesses is laughable. Tolbert and his team of Liberian negotiations routinely agree to foreign companies’ demands of no Liberian private or official equity participation in most of concession deals concluded, even if in most cases, they are required to do so by law. Experts wonder how can Mr. Tolbert say he as a Liberian is entitled to own shares while at the same time negotiating those rights away in concession agreement?

Bob Johnson LEFDIC Fund Squandered

The first attempt by Mr. Tolbert to provide support to Liberian businesses has been marred by a messy quality control process that has led to many defaults. Insiders say Tolbert was successful in attracting funds to support Liberian businesses, but he should not have stopped there. He should have insisted upon a quality team and a process that would ensure a high repayment ratio. Currently, most of the loans made initially are seriously overdue and almost bankrupted the fund. If indeed, Mr. Tolbert puts the same amount of energy in mega projects into supporting Liberian businesses, the probability of creating thousands of jobs would be real, now and not in the distant future.

Tolbert’s Links to Companies

This is not the first time that Tolbert has been linked to companies with investment ties to Liberia. When FrontPageAfrica sought inquiry from Tolbert in November 2008 regarding his purported interest in the Buchanan Renewable Energies, Tolbert flatly denied that he had any shares or interest in BRE.

Said Tolbert:

“BRE has not given $100,000 to any Charity of mine nor do I have any share in BRE.BRE made a loan of $100k to the Loan Star Mobilization Committee of the National Football Team when they did not have money to travel to Senegal for a match (which was well publicized in the local papers). In fact, they have only got back half of the money. BRE made a paltry contribution of $1,500 to the Clara Tay Foundation, a charity I founded almost 10 years ago which has this year paid the school fees of almost 100 refugee children who returned to Liberia from the Buduburam Refugee Camp in Ghana.

Tolbert continued: “And finally, NO I do not have any share in BRE....but I can tell you frankly I wish I did. This is one of the most innovative investments we have attracted to Liberia which in addition to creating hundreds of jobs in a very short period of time is revolutionizing our rubber sector by creating a whole new business out of exporting waste rubber wood chips. And now , we are in the process of concluding a separate $150 million deal with them by which this company could be producing 35 megawatts of power to electrify the entire environs of Monrovia at LESS THAN HALF THE CURRENT COST OF ELECTRICITY BY 2010!.”

Tolbert said at the time that Liberians need to have an equity stake in some of these ventures that are coming to Liberia and furthered that although it is not required for Liberians to own shares in any foreign business in Liberia, the National Investment Commission do encourage foreign companies to look at including Liberians not only in the management but also in ownership of these businesses for the mutual long term benefit of both the investors and the country. “Under the charter creating the Investment Commission, I am not barred from owning shares in businesses but would have to disclose my ownership in any business that came before the Commission for incentives and recued myself from any deliberations concerning that business.”

Of late, several foreign companies have been fighting for rights to mining areas in Liberia. One of those firms is Severstal, a the Russian company which bought a sizeable percentage of Putu from Mano Resources, where Tolbert is believed to be large shareholder and sits on the Board.