I was certain the bidding competition would be fierce. Most of the world’s raw cocoa was now processed by just three companies: MacFinn, V.S. Hope & Company, and Roissy-Doucette. I still called them the Big Three, and while they competed fiercely with one another, any industry with so few actors, with this degree of consolidation, looks much like a cartel. Ghana’s cocoa-processing facilities were attractive, despite the fact they are state-owned. First, much of Portem boasted new, state-of-the-art, German-made equipment that had been just recently installed; it was not your typical state-owned factory with dilapidated, antiquated equipment. Second, given its state-ownership, Portem came with an implied supply line to Ghana’s prized cocoa bean crop—one of the two largest in the world. A bidder could condition its purchase of the factory on a guaranteed supply of cocoa beans from the Ghana’ Cocoa Board, thus assuring sufficient throughput to run the newly divested factory and then some. No one, after all, would construct a cocoa-processing factory in Ghana without gaining assurances that the Ghana Cocoa Board would sell them local cocoa beans at favorable prices. I myself had been through this conversation before.
Once a bean throughput deal had been negotiated, there would be little to stop a multinational corporation from taking some portion of these prized beans offshore, to their highly efficient European factories for processing. Indeed, a previous offshore joint venture partner in Germany was accused of doing just that, resulting in a scandal the Ghanaian press called “Cocoa-gate.” Instead of owning a profit-sharing interest in a local cocoa-processing factory run by an experienced partner, as expected, the Government of Ghana found itself holding worthless shares of a local factory effectively mothballed by its German partner—a partner that preferred to process most of its Ghanaian beans in Europe, where it didn’t have to split the profit with the Government of Ghana. Would divestiture result in a sale to a less-than-transparent offshore majority partner? Would it lead to Cocoa-gate II? Would it lead to the end of Omanhene?
As I saw it, the World Bank’s conditionalities compelled Ghana to sell a demonstrably valuable state asset—an operational factory with shiny, new, stainless-steel equipment worth several million dollars—at a steep discount. Plus, the factory represented a bonus lottery ticket—Portem came with the Omanhene upside, a strategic partner funding an export-focused product development strategy that was beginning to prove successful. Now would not be the time to sell this particular asset. At least not yet.
I decided to take my case right to the top. I asked for a face-to-face meeting in Washington, DC, with Peter Wiggens, who headed the West African Trade, Finance, and Investment division at the World Bank. The World Bank’s headquarters are a structure so opulent, so architecturally striking, with glass and aluminum louvres, that I could scarcely believe it was located in the US; instead, some fashion-forward European capital came to mind, Paris or Stockholm, perhaps. Courtly, with a soft British accent, Wiggens presided over a bevy of fit, well-dressed young staffers who shunted purposefully between their light-suffused offices. Between the élan of the architecture and the employees, I felt I had mistakenly walked into an international modeling agency.
Wiggens could not have been more gracious as I described my predicament. My explication, unintentionally, sounded like dialogue from the film Cool Hand Luke: “What we have here is a classic case of unexpected consequences,” I said. “I concede that divestitures of state-owned enterprises are usually beneficial, but in this case, as a private investor in a value-added manufacturing endeavor, I stand to lose a great deal if our Ghanaian partner company is not excused from the conditionalities list. Indeed, Omanhene is undertaking just the sort of forward-thinking, export-driven, hard-currency-centered investments that the World Bank seeks to encourage! What’s more, the Government of Ghana has recently undertaken a renovation of part of the manufacturing line, installing new equipment that promises to capture greater manufacturing efficiencies in the very near future. And now, inadvertently, the World Bank stands to frustrate the Omanhene experiment, bringing it to ruin just as we are gaining traction.” I couldn’t stop myself.
“Listen, we both know what three companies will likely bid for this asset, and we both know that they will pay pennies on the dollar for virtually brand-new equipment. The Big Three just want to do first-stage processing, make cocoa butter or cake, and secure access to a reliable supply of cocoa beans. They have no interest in producing chocolate in Ghana. Who knows if they will continue with the Omanhene experiment? Is this the sort of story you want to tell? The World Bank puts a fledgling Ghanaian chocolate company out of business in a well-meaning but misguided effort to improve Ghana’s national economy? Mr. Wiggens, you have an unintended-consequences problem on your hands, and I can’t imagine it will play well in the press.”
Wiggens paused to reflect, steepling his hands. He recrossed his legs, and winced. “Tea, Steven?”
Rules are rules. Wiggens calmly informed me that it was too late to delist our factory from the World Bank’s conditionalities list. The divestiture would go forward. And so, to secure production, I had to put together my own bid to buy a multi-million-dollar cocoa processing facility, just six weeks after I’d produced my first Omanhene chocolate bar. Again, it was a defensive move. I just didn’t want anyone else to get their hands on the facility and thereby put an end to Omanhene.
The Government of Ghana made a few more attempts to delay selling state-owned assets as a conditionality of World Bank funding, but talk of factory divestiture resumed on August 19, 1994, and a bid submission date was set for July 10, 1995. Flt. Lt. Bonsu-Mensah gently recommended that I start a new factory with the help of the Ghana Cocoa Board, rather than use their existing Portem factory. This seemed like a waste of existing assets, and in any case, the Ghana Cocoa Board was not willing to invest sufficient money in the venture, so the suggestion was moot. Bonsu-Mensah then suggested an alternative, inventive solution. The Government of Ghana could try to divest only those factory assets related to first-stage cocoa processing (the manufacture of butter, liquor, and cake), which together comprised over 95 percent of the factory’s revenue. With the lion’s share disposed of, the government would then keep for itself the remaining 5 percent of the factory dedicated solely to chocolate production, thus sparing Omanhene from the hardship imposed by the World Bank divestiture. Flight, bless him, wanted to keep one last poker chip on the table, in the hope that Omanhene’s value-added production strategy paid off for the nation.
Bonsu-Mensah’s proposed bifurcation of the Portem factory was brilliant, and it would safeguard our momentum. But unless the Government of Ghana and the World Bank agreed, I’d still be compelled to put in a bid. And under World Bank divestiture rules, once the divestiture list mandating the sale of state-owned companies is set, it is nearly impossible to change it. The reasons are obvious. If the lists could easily be changed, then every country would renegotiate the sale of prized state-owned assets, and the World Bank’s loan conditionalities, intended to improve moribund national economies, would never be enforced. I had no idea where I would find $6 million, but I also had no idea how to protect Omanhene’s supply chain, short of submitting a bid. So I added to my job description that of investment banker and turnaround artist, and I got to work crafting a divestiture bid.
On July 10, 1995, I submitted my sealed bid to the DIC’s supervising clerk, a sunburned Briton, seconded to the DIC from a trade and cultural organization called the British Council, the cultural affairs arm of the United Kingdom Foreign Affairs Office. Kojo Bamford harbored a suspicion—likely borne of his lingering mistrust of the old colonial power—that the British Council routinely engaged in low-level espionage and propaganda work on behalf of Her Majesty’s government. “You can’t be serious,” I countered. “Surely if the UK wants to spy on Ghana, they bloody well have better ways to go about it, don’t you think?”
“Ha! I think they are spies,” Kojo insisted. “Harmless perhaps, but spies. And so is the US Information Service,”
he added, without rancor. “You’re all in cahoots. I’m surprised you can’t see the obvious.” He returned to the back page of his newspaper.
Once again, Kojo proved right. Hours after I submitted the proposal, this same Briton sent me word that ZBN, a German company also bidding for Portem, wanted to meet with me. How? Why? There was only one explanation: Omanhene’s sealed bid was opened prior to the designated public unveiling and immediately shared with at least one of our bid competitors. So much for the integrity of the World Bank’s bidding protocol and those seconded from the British Council.
W de brε brε na w de hunu ne brε bo.
If you dissect the ant with patience, you see its intestines.
“With patience, determination and skill, one can accomplish the impossible.”
CHAPTER 12
Opening Bids
On August 1, two days before the scheduled public opening of the Portem divestiture bids, I arrived at the heavily guarded compound of Hanspeter Schieber, located in a leafy, secluded part of Accra. Schieber was the face of ZBN, a closely held, global, family business run by an octogenarian German. ZBN was active in the chemical, agro-processing, and fertilizer sectors—an intimidating product list that, upon reflection, sounded as if ZBN could be the Walmart for terrorists. Schieber’s compound, the former Italian ambassador’s residence, was surrounded by a high concrete wall, frosted with concertina wire and framed by two guard towers, one at either end of the roof. Private security guards in navy-blue jumpsuits, white military webbing cinching their narrow waists, kept watch from the flat roof of the house, rifles slung over their shoulders. Another guard walked the perimeter with a ferocious-looking German shepherd tightly by his side, straining at the short leash.
If the house bore the appearance of an armed fortress or a Bond villain’s lair, Hanspeter Schieber, by contrast, was the picture of calm relaxation. He wore white cotton slacks, sandals, and a loose, open-collared shirt. Schieber oversaw ZBN’s successful milling operation in Ghana, and I had heard he enjoyed especially close ties to the Rawlings Government. In fact, Schieber reputedly gave the Head of State an ultralight aircraft for his birthday—the perfect gift for a flight lieutenant.
There was no way Omanhene could compete with this sort of influence peddling (and it would be illegal under the Foreign Corrupt Practices Act for Omanhene even to try). I was dejected—and demoralized by the stink of corruption at every level: first, my bid was evidently leaked to Schieber, and second, the World Bank seemed indifferent to companies like ZBN snuggling up to the Head of State in advance of divestitures. It would be all too easy for ZBN to snap up valued state assets for pennies on the dollar—or should that be pfennigs on the deutschemark?
Schieber ushered me into a capacious living room, all white marble and modern, Italian-leather furniture, floor-to-ceiling glass on one side overlooking an outdoor swimming pool, the water shimmering in the moonlight. Schieber walked over to a bar.
“May I get you some pilsner? I have it flown in fresh every week from Dortmund. In barrels,” he said, tipping a schooner under the tap. This was an extravagance. There was plenty of locally brewed, cold beer here in Accra, but to fly in barrels of Germany’s finest every week! I felt insignificant in the presence of this muscular Teuton.
His wife joined us. She sported the build of a field hockey player, the better to withstand the rigors of the expatriate life, I thought. She didn’t look like she needed the pampered protection of this air-conditioned enclave. She sipped her beer languidly.
“Shall we talk some business?” Schieber began, stating the fact rather than asking the question. His wife rose from the couch and left. “You have been working on this project a long time, no? I have been running ZBN’s facility here for five years. This is a tough place to do business.”
If Schieber had any flair for the cinematic, this was the moment when he would have cast a nod at the armed guards patrolling the pool area. Schieber was trying to be affable rather than menacing. But the attempt was clumsy, and he couldn’t disguise the fact that he was a rapacious Karslruhe cat playing with a cornered, corn-fed field mouse—and a Jewish one at that. I found myself trying to remember which Bond villain was played by Klaus Maria Brandauer—and how Bond got the better of him.
“I know of your bid and suggest you consider withdrawing it,” Schieber said.
“I don’t think I can,” I said. “It’s already been submitted.”
“Well, I know that. I’ve seen it,” Schieber admitted.
Ever the careful lawyer, I added, “The World Bank has a bidding protocol. Rules are rules.”
Schieber changed tack. “Fine, but let me ask: Why do you think you can run this factory here?”
It was a question for which I had no convincing answer. It’s true that I’d been producing chocolate for several months, but Schieber had been running ZBN’s operation in Ghana for years. Our résumés were not equally matched. Neither were our funds and resources. And that led to another question: If Schieber was so well-connected—to the Head of State, to the Brit who leaked my proposal—why did he even need me to withdraw my bid? Was my proposal a compelling one? Sufficiently strong to win the day? A threat? I contemplated the foam atop my beer, as if the delicate carbonation might augur a way forward.
“This is very good beer, by the way.”
He must think I’m an idiot. Of course, it’s good beer. It’s from Dortmund, dummkopf!
“I am serious, Steven. Do you really think you can run this factory here?”
I had a few questions of my own, such as how did he get hold of my bid? What happened to the vaunted World Bank confidentiality protocols? In whose pocket was the Brit? To these questions, I had no answers.
To Schieber’s question, I suddenly knew exactly how to reply.
“Running the factory, making the chocolate, is the easy part. Selling the chocolate, that’s a lot tougher.”
Schieber was growing impatient. He got right to the point. “So, will you consider withdrawing your bid?”
I rose, extending my hand. “Thank you for your hospitality. I am not in a position to withdraw the Omanhene bid.” I would play my hand to the end.
* * *
Later that evening on Kojo Bamford’s veranda, while enjoying a bottle of South African wine and a platter of grilled prawns, I conducted a postmortem of my Schieber meeting. Swirling the wine in his glass, Kojo listened and reflected. “This much is clear: Hanspeter Schieber is a serious badass. And Steven, you don’t want to mess with these people, not at-TALL!”
* * *
On August 3, 1995, the divestiture bids were officially opened. Omanhene’s bid must have been resealed to better comply with the public theater aspect of the spectacle: I imagined the obconic Brit sweating over his desk with a glue gun in one hand and a steam iron in the other, meticulously covering his tracks. Mine might not have been the only bid he resealed: Given the fact that my bid had already been shared with the ZBN group, I had no way of knowing what other bids were leaked. I’m probably the only person of interest in Ghana who does not already know the rankings, I thought. The highest bid, $23 million, was submitted by an Italian firm that, like fireworks in Turino, made a big noise but was of no lasting consequence. In the weeks to come, the Italian company failed to produce the required bid bond. With the Italians out of the way, Schieber’s ZBN bid was the next highest. Omanhene’s bid ranked fourth. As it happened, none of the top three bids could produce a bid bond acceptable to the Ghanaians, indicative either of the gossamer nature of their bids, or of Ghana’s institutional intransigence. I wondered whether the Government of Ghana wasn’t resorting to its playbook of delaying tactics—including futzing over the sufficiency of the bid bond—simply to draw out the divestiture process because it had no desire to sell Portem in the first place.
As for me, the divestiture issue alternated between a minor annoyance and the black hole of my universe, a gravitational vortex that consumed inordinate time, attention, and, most of all,
enthusiasm. I feared the growth of Omanhene was suffering for it. For months, whenever I recounted the latest developments in this ongoing divestiture saga, Linda would listen patiently and then ask, “How many cases of chocolate did you sell today?”
Four days after the bids were opened, Kojo called me in Wisconsin. “Steven! Your friend is in jail. Ha!” What friend? Who? Kojo relished telling a story. “Your friend, Steven … Flight Leff-ten-ant Bon-su Men-sah,” he said, drawing out each syllable for effect. “Jerry has the man locked up. These are some times here!”
Joseph Bonsu-Mensah was indeed under investigation by Ghana’s Committee on Human Rights and Administrative Justice, at the request of Head of State Jerry Rawlings himself. I was beside myself: Bonsu-Mensah was one of my most highly placed government supporters. Bonsu-Mensah’s proposal—that the government retain its slender holding in the chocolate production part of Portem—would be far and away the best outcome for Omanhene. What would become of my bid, what becomes of my company, now that Bonsu-Mensah was sidelined?
Kwasi Ahwehwε nnya nkdw Boaboa no, na εh nknsn didi.
Before Kwasi Ahwehw built his farm at Boaboa, the monkeys there had something to eat.
“Used to show a sanctimonious benefactor that you can survive without his assistance.”
CHAPTER 13
Amsterdam Makes an Offer
In the bone-chilling cold of Wisconsin, the warmth of Accra seemed so far away. That was never more true than when the trill of the fax machine cut through the house at 2:00 am. I’d roll out of bed, trying not to wake Linda, tiptoe past the sleeping twins, and make my way to Omanhene’s headquarters, which the family called “the room above the garage,” more frigid than the rest of the house because the garage was unheated and uninsulated.
Obroni and the Chocolate Factory Page 16
