The Buchanan Iron Ore Deal:
Which Figure is Correct?
By John S.Morlu, II
The Perspective
Atlanta, Georgia
October 4, 2004
I have closely followed the controversy over the sale of iron ore that was stockpiled in Buchanan. The FORUM published an article that was distributed by theperspective.org titled, "NTGL Officials Give Conflicting Figures on Iron Ore." Most Liberians appreciate the efforts that Liberian journalists are making to bring us news. We depend on them. We understand the plight they are facing---lack of equipment, know-how, unstable revenue stream, poverty and chaotic political and judicial environment. But Liberian journalists must be mindful that news reports are not prejudiced by the "Almighty U.S. Dollar." Liberian journalists also have to be very careful that their reporting is fair and balanced, and that it is based on factual investigations that can meet the minimum standard of integrity.
Former U.S. President and
one of the authors of the U.S. Constitution Thomas Jefferson argued, "Information
is the currency for democracy." But I am sure that Mr. Jefferson meant
information that is grounded in facts, which inform the people about how the
leadership is managing the affairs of the country; not information that misinforms
and misleads people. Undoubtedly, Liberian journalism is going to be very
critical as we build a new country. I am afraid that inaccurate reporting
and confusion of facts by Liberian newspapers would undermine the press’ efforts
to keep a watchful eye on government activities. The iron ore issue is just
a case in point. It seems that the journalists missed the boat on this all-important
story. Where we to assume that the iron story is the only known story where
Liberian journalists got it wrong, which I don’t believe to be the case, one
wrong story is too many in the field of journalism.
There is no direct evidence
of a quid pro quo; however, there is a high likelihood that there was an exchange
of some kind. It just boggles the mind to think that journalists would run
with such an important story without doing a simple counterbalancing of the
facts or asking simple logical questions as to the true value of the iron
ore that was sold to the Chinese company. In America, when such an error in
judgment takes place, it is because of the pressure to be ahead of the curve
and be the first news organization to break the news to boost ratings. Ratings
are what drive advertisement dollars in America, which is the single most
significant source of revenue for television and print organizations. Newspapers
also generate a sizeable amount of revenue from circulation. In Liberia, there
are no ratings, and I am told that circulation is very poor. People cannot
afford food and a decent place to live, much less newspapers. And it is not
uncommon for politicians to pay newspapers a few bucks to spin stories that
are biased in their favor or against an opponent. Some presidential candidates
have already mastered the trade, and are believed to be doling out hundreds
of dollars to generate favorable news coverage. I will leave this one for
another day.
Currently,
we have over 14 Liberian dailies and the number of newspaper start-ups is
growing in tandem with the number of presidential candidates. We also have
several Liberian Websites. That’s a good thing! But we will soon ruin the
climate and make journalism the last estate on the block if we don’t begin
to act right. Newspapers are supposed to distinguish between news (fact driven)
and commentaries (opinions). Some of us are amateurs in this game. We write
commentaries, which is nothing more than an opinion. We have a reputation
to uphold so we do our very best to base our opinion on a single known fact
to draw broad conclusions based on available information. We don’t want to
be branded as practicing junk journalism, because some journalists in Monrovia
are facing economic hardships and have decided to put the Almighty Dollar
over facts. Here are the facts as reported by the FORUM:
The FORUM asserted that Bryant’s
NTGL has confirmed that it sold about 50,000 out of 80,000 metric tons of
iron ore to Qingdao Trading Group Corp. The Forum reported that the President
of Liberian Mining Company (LIMINCO) Mr. Ciapha Sahr Gborlie "told this
paper during a telephone interview that indeed, the deal was placed at the
cost of US$10 million. This figure was subsequently confirmed by the Chinese
Embassy through its deputy head of mission, He Meng, told this paper some
time ago." But the FORUM reported that the Minister of Lands, Mines and
Energy Mr. Jonathan Mason, "at a recently held news conference in Monrovia,
said that instead of US$10 million dollars as earlier reported, the stockpile
of iron ore shipped to China was purchased from the Liberian Government at
US$500,000." Who is correct? A simple checking of the facts would have
provided the FORUM that answer. But
the FORUM clearly failed to perform rudimentary background research or asked
simple logical questions.
The United States Geological
survey reported the following market prices per metric ton of iron ore:
Unlike most commodities, iron
ore is not traded on the publicly traded exchanges in the United States. Iron
ore is a bulk commodity and prices are usually quoted in short, long or metric
tons. The price differential between the various quotes is minimal when dealing
with large quantities. Transactions are usually a private contract between
the buyer and the seller based on several factors, including shipping costs
and the quality of the ore. Based on the pricing scheduled above and the information
provided by the FORUM, it is highly improbable that the Chinese company would
pay $10 million. For example, 50,000 metric tons times a price of US$30.95
per metric ton is equal to US$1.5 million; not $10 million.
Assuming that the amount in
metric tons sold is correct, Mr. Gborlie needs to check his simple multiplication.
His math does not add up on this one. It is fuzzy math. It is fuzzy logic.
The $10 million can only be correct if the FORUM and Mr. Gborlie restate the
amount of metric sold from 50,000 to 500,000.
It is unfortunate that the
FORUM even went so far as to give the public a detailed breakdown on how the
$10 million was distributed. The FORUM reported, "it was further reported that the amount
in question had been apportioned according to the order of importance:"
It stated that the Chairman of the Movement for Democracy in Liberia (MODEL)
Thomas Nimly Yaya received US$4.5 million because he controlled the territory;
Gyude Bryant received US$2.5 million; and LIMINCO, the Ministries of Justice,
Commerce, Labor, Lands, Mines and Energy took US$3million – "with LIMINCO
taking an attractive amount." Give me a break! $10 million divided? Is
the FORUM adding extra zeros to come up with an inflammatory number?
How much did Mr. Gborlie’s LIMINCO actually receive from the sale of
the iron ore? How does the FORUM define an attractive amount? As one can see,
the FORUM conveniently neglected to state how much whistleblower, Mr. Gborlie,
actually got. Doesn’t the FORUM think that knowing the amount that Mr. Gborlie
received would have been a good indicator whether Mr. Gborlie had an ulterior
motive? I am sure the FORUM will tell us the next go round. I will surely
like to know how much LIMINCO received and how has Mr. Gborlie used those
funds.
Unfortunately, as I was finishing this commentary, I received
an e-mail from the Liberian Community News Magazine informing me that it is
the "one stop for news and information in the Liberian Community. Now
you can read the Monrovia weekly newspaper The Vanguard online. Coming Soon:
THE LIBERIAN STANDARD NEWSPAGE Free listing of free community events and death
announcements." First, I thought great, the more news outlets out of
Monrovia, the better! I still believe in the basic economic axiom that "the
more, the better." But I found this disturbing! In that day's Headlines,
Liberian Community News Magazine wrote, "-GOVERNMENT DENIES US$10 MILLION
'CHOPPING'. Whether the Liberian government officials have placed millions
of dollars in escrow accounts from the sale of iron ore to a Chinese firm
or converted some into private accounts is the debatable issue at stake."
I hope the Liberian Community News Magazine is going to give Liberians information
that is based on facts, and not innuendos.
Let’s look at another website, Monrovianet.org. In its news from Monrovia,
courtesy of the VANGUARD newspaper, Monrovianet.com reported, "NTGL Officials
‘Chop’ US$10 Million Iron Ore Money In Private Accounts." I am not going
to repeat what the VANGUARD reported. But here goes the $10 million now being
placed in escrow accounts or converted into private accounts. Where are these
people getting that US$10 million? This controversy is about dollar and cents;
I mean common sense.
I am not going to dispute how the money was divided, nor I am going to defend a corrupt Interim Administration. I have no doubt that Gyude Bryant and his associates have no problem dividing government revenues amongst themselves. As a matter of fact, who can blame Liberians for not believing this businessman turned politician. Chairman Bryant has refused to operate the Interim Government on a budget. Instead Gyude Bryant prefers to operate an entire government on "allocation basis," which is nothing but a cover up for lack of transparency and a clandestine way to loot the treasury without much accountability. A budget would clearly lay out the sources of government revenues (in flows) and expenditures (out flows). Allocation is based on a buddy system, which is predicated on giving people money on an as needed basis. Chairman Bryant has made a mockery of the phrase, "no more business as usual."
It is also unfathomable that various ministers and heads of independent bureaus are not only collecting revenue but are also reporting them, when in fact the Ministry of Finance should be responsible for collecting and reporting revenue numbers. Mr. Mason of Land and Mines and Mr. Gborlie of LIMINCO quibbling over the amount of revenue collected beats me. Where is the Minister of Finance Losenee Kamara in all of this debate, because it is Mr. Kamara’s sole responsibility to account for government revenue and expenditure? Can anyone imagine the President Bush or Congress of the United States asking Secretary of the Interior Gale A. Norton about how much government land was sold instead of asking the Secretary of the Treasury Mr. John W. Snow? Secretary Norton is responsible for managing the land and resources of the United States, but in the final analysis, the Secretary of the Treasury Mr. Snow is responsible for managing and reporting government revenues. But in Liberia, anything goes. Finance Minister Losenee Kamara is appears to be "missing in action" when it comes to the iron ore issue. Maybe a Liberian newspaper should pay him a visit, and ask him about what is the real story. Anyway, Chairman Gyude Bryant’s Administration has also engaged in wasteful and conspicuous spending to a degree of magnitude not matched by any Interim Government in Liberia. We even have the head of UNMIL, Mr. Jacques Klein, crying foul for the level of corruption and jockeying for government jobs that have paralyzed Chairman Bryant and his interim government. Chairman Bryant’s administration will be looked upon as a missed opportunity to set Liberia straight. I will leave that to the historians!
We have a whole lot of things to investigate and inform the public about when it comes to how the Monrovia based politicians are running the government. But we need to be fair. The $10 million value is an unreasonable amount for 50,000 metric tons of iron ore. We have plenty to criticize about Gyude Bryant and the government officials in Monrovia. But we don’t need to make up stuff and produce allegations that no reasonable person would believe. Perhaps Qingdao Trading Group Corp went to Liberia, because they felt that they could buy iron ore on the cheap. China has become the biggest importer of iron ore.
Why in the world would they pay
more than the fair market value of iron ore? To make matters worst, the FORUM
does not even tell us the quality of the iron ore. How do we know it was not
a lesser quality iron ore with little value? I hope the FORUM can ask Mr.
Gborlie to tell the world the quality, the actual price per metric ton and
the amount of metric tons sold, if different from what is reported. Better
yet, Mr. Gborlie’s LIMINCO sold the iron ore and so, Mr. Gborlie can just
release the documents for the public to see, assuming he wants to expose corruption
and not throw mud on people he disagrees with on whatever grounds. A few months
ago, the Chief Revenue Agent of the Ministry of Finance Mr. Bennie did just
that. Let the public be the judge.
We are entering a new era
in Liberian journalism. We must stay away from writing with the intention
to inflame. Sensationalism is not good journalism. Tabloid journalism is gossip.
I don’t want to presuppose Mr. Gborlie’s intentions for providing such a ludicrous
amount to a newspaper. But I hope Mr. Gborlie is not trying to create chaos
in Monrovia. Newspapers make mistakes! But testament of one’s character is
measured by the willingness to correct one’s story and make a public apology,
if necessary. U.S. CBS News anchor Mr. Dan Rather just recently publicly apologized
for not thoroughly vetting the information about U.S. President George Bush’s
checkered National Guard Service during the Vietnam War before running with
it and broadcasting it on the highly rated 60-Minutes Two. The New York Times,
one of America’s premier newspapers, also made a public apology for not doing
a better job checking the sources of one its staff writers Mr. Jason Blair.
Other news organizations in America have retracted and apologized for
misleading information.
Unfortunately, it seems the
folks at The News in Liberia probably believe that making a public apology
for getting a news story wrong is only an American thing. I disagree. Recently,
The News reported that the National Election Commission (NEC) had proposed
a rule requiring that presidential candidates would be required to pay US$2
million; senators would pay US$600,000 and so on. The News mentioned that
the NEC justified these requirements based on 1986 election laws. I was surprised
that the NEC would demand such a large amount of money per candidate in a
country where a typical person lives on US$1 a day. Fortunately, The News
carried another article on the same topic. The News reported, "The National
Elections Commission (NEC) has clarified that it has set US$2 million dollars
as spending limitation per presidential candidate in the ensuing elections
and not US$2 million dollars as payment required per contestant as was reported
in the Tuesday, September 21, 2004 edition of this Paper. NEC's clarification
was prompted by the Paper's lead story captioned, "NEC Proposes US$ 2
M For Presidency."
Great! But wait a minute,
I pondered. Did the NEC make such a colossal mistake by providing erroneous
information to The News, and now they are clarifying the information? Or The
News blew it but its staff is too big to apologize for the mistake? Based
on information obtained from a reliable source, it was The News that got it
wrong, so it needed to make the clarification; not the NEC. But The News conveniently
blamed it on the NEC, by saying that it was the NEC that was making the clarification.
I wonder why The News did not conduct a basic research such as reviewing the
1986 election laws, which it reported the NEC based its proposal. Better yet,
why didn’t The News ask simple questions such as how could the NEC required
US$2 million per presidential candidate in a poor country like Liberia? This
is no different from the iron ore debate, where newspapers ran with hearsay
without double-checking the facts or asking simple questions. Anyway, I am
sure The News had a slip-up and will return with full explanation. Blaming
the NEC for an obvious gaffe is not going to work.
I also hope that the FORUM
can go back to Mr. Ciapha Sahr Gborlie and get its story correct. Or Mr. Gborlie
needs to get his facts straight. Right now, the information that the FORUM provided does not hold water. I am not going to
say that the FORUM’s information is baseless, but at the moment it does not
pass the test. No reasonable person can agree that 50,000 metric tons of iron
ore is valued $10 million, especially since the highest recorded price per
metric ton is US$30.95. I am sure the FORUM and other newspapers in Liberia
will clean up their act and do a better job of reporting the facts. We all
need money to feed our families, but we don’t have to compromise and starve
our character in the process. I will rest my case with the following quote,
"The lowest form of popular culture – lack of information, misinformation,
disinformation, and contempt for the truth or the reality of most people's
lives – has overrun real journalism. Today, ordinary Americans are being stuffed
with garbage." - Carl Bernstein. This equally applies to Liberians.
We can do better! It is a
tall order! But we must! Information is the foundation for democracy. U.S.
Former President and author of the U.S. Declaration of Independence Thomas
Jefferson has told us that; however, the information must be accurate with
the ultimate goal to inform the citizenry and not to create pandemonium. Liberia
is at a critical crossroads. We are going to need the free press to inform
Liberians so that they don’t make the wrong turn again. They made the wrong
turn under William R.Tolbert, Samuel K. Doe, Amos Sawyer, Charles Taylor,
and now Charles Gyude Bryant. Any mistake in 2005 as to the choice for President
and Congress will be more catastrophic in comparison to the past. In my humble
judgment, the election in 2005 is the last chance Liberians have to remake
the country’s image. This means electing a President that will serve all the
Liberian people, by building functioning democratic institutions and creating
a 21st Century economic agenda. I hope we can all agree on that.
About the Author: Mr. John S. Morlu, II is a founder, Liberian Institute for Public Integrity. He holds an MBA in Finance from Johns Hopkins University, MA in International Commerce and Policy from George Mason University, and BA’s in Economics and Foreign Affairs from The University of Virginia. He is also Certified Management Accountant (CMA), Certified Internal Auditor (CIA), Certified Financial Manager (CFM), Certified Masters in Business Administration (CMBA) and Certified Government Auditing Professional (CGAP). He can be reached at jmorlue@yahoo.com
