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In Liberia, trying to end a culture of theft

The dramatic overhaul of the state-owned oil company, where corruption once ruled, gives hope to reformers.

December 21, 2006|Robyn Dixon | Times Staff Writer

MONROVIA, LIBERIA — When Harry Greaves walked into the state-owned Liberian Petroleum Refining Co. less than a year ago, the excess was almost comical: There were 165 security guards to protect two gates. There were offices with a dozen or more people slouching or sitting around, doing nothing.

The company had soccer and basketball teams on its payroll. Most of the more than 650 employees came into the office only on payday. Its fleet of cars, many of them ancient jalopies, supposedly cost $11,000 each.

One of the six layers of management was composed entirely of political appointees.

"Not much work was going on here, to be honest with you," Greaves said.

In fact, he said, the company he is now managing provided a textbook example of how to steal.

"People never thought there would be consequences, because for 25 years there have been no consequences," he said. "It was a sort of game: If you don't bother my folks, I won't bother your folks."

It's not unique to Liberia, or Africa, but the state of the company's books offer a glimpse into the looting that often goes on in failing states.

With the toppling of Liberia's kleptocrats and the election of President Ellen Johnson-Sirleaf, a former World Bank official, there is hope that the nation's entrenched culture of theft and corruption will be swept away.

In the 11 months since Greaves took over, the company's balance sheet has improved dramatically.

Last year, it listed operating income of $1.5 million and costs of $6.1 million.

For the first 11 months of this year, it earned $6.5 million and its operating costs were $3 million.

New management slashed the payroll by 400, cut the number of departments from 16 to six and eliminated all of the political appointees.

It borrowed $1.5 million from a local bank for severance payouts, which were so generous that workers didn't complain. The average package was $4,000, but some employees got $20,000 or $30,000.

"Our costs have just dropped like a rock," Greaves said. The company has already repaid half of the loan.

Greaves, 57, an accountant who occupied senior financial positions in several U.S. newspaper groups and at the accounting firm KPMG before returning to Liberia in 2002, started making a difference at the oil firm just by showing up.

After his first few 12-hour days, he recalled, one of his subordinates told him, "Chief, you have caused a stir."

"Why?" he asked.

"Because they see you come to work in the morning."

Greaves works in a modest office in a squat building on the oil company's grounds. His exuberance leaves the impression that turning the company around has been fun.

When local newspapers accused company officials of pocketing money in a deal with Nigeria that Greaves said actually earned the company $500,000, he responded with a scathing, full-page rebuttal.

Greaves has known Johnson-Sirleaf for about 35 years, was a key member of her campaign team and is close enough to her that when he wants a meeting, he drops in at her house for breakfast.

Despite its name, the company has not refined crude for 20 years. Instead, it imports fuel. Greaves has found plenty of profit in that.

Previously, fuel was pumped from arriving ships into tanks, which had illegal runoff pipes that allowed fuel to be siphoned and stolen. There was only one major private and licensed importer, which controlled 89% of the business.

The siphoning has been stopped, import licenses have been granted to other competitors, tariffs and other barriers have been removed, and gasoline prices have fallen to about $3 a gallon. Gas is $5 a gallon in Ghana and about $4 in Sierra Leone.

Fuel taxes are low and prices are so competitive that Liberia is beginning to export fuel.

Greaves first served as an advisor to a transitional government after the country's long civil war and the ouster of President Charles Taylor in 2003.

But the transitional administration of businessman Gyude Bryant included warlords of all factions in the civil war. It trod the well-worn path of kleptocracy, and Greaves resigned in disgust.

European Commission audits of the oil company, airport, port, central bank, forest and maritime authorities under the transitional government found that the workings of the companies and agencies were so opaque that it was impossible to determine what was going on. Massive amounts of money were unaccounted for.

The international community in September 2005 forced Liberia's transitional government to submit to foreign oversight of its finances.

The stealing was frenzied in the transitional government's final days. Furniture, carpets and fittings in government offices were carted away, leaving bare shells. People took home government SUVs.

Some transitional government officials are facing charges over the missing money.

One advocacy group, the Center for Democratic Empowerment, has called for an investigation of Greaves' predecessor at the oil company, Edwin Snowe, who is now speaker of the parliament.

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