The List

Glencore: What the Documents Tell Us

Read Ken Silverstein's riveting investigation of Glencore, the "biggest company you never heard of." Below are some of the documents he uncovered in his year of reporting on the hyper-secret, shady global commodities giant.

It is big, very big. The 1,637-page initial public offering (IPO) prospectus Glencore released last year revealed just how vast its reach is: The company controls more than half the international tradable market in zinc and copper and about a third of the world's seaborne coal; is one of the world's largest grain exporters, with about 9 percent of the global market; and handles 3 percent of daily global oil consumption. All of this, the prospectus says, helped the firm post revenues of $186 billion in 2011. Click here to see the prospectus document.

It is not afraid of operating in high-risk "frontier" regions. In a report on the IPO, Deutsche Bank says the company "benefits directly from the volatility" in global commodity prices -- especially in poor countries. Consider what the bank identifies as Glencore's "key drivers" of growth: copper in the Democratic Republic of the Congo (DRC), coal in Colombia, oil and natural gas in Equatorial Guinea, and gold in Kazakhstan. Deutsche Bank delicately calls these places "frontier regions" or "challenging political jurisdictions" -- put simply, they all offer a dangerous mix of extraordinary natural wealth and various degrees of instability. (See page 12.)

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It is well-connected in failed states. Glencore has managed to do business in the DRC, the poster child of the resource-cursed failed state, with the help of Dan Gertler, a diamond businessman from Israel who is known for his intimate ties to President Joseph Kabila. (He even reportedly has lent Kabila his private jet.) Glencore and Gertler are, through subsidiaries, shareholders in Katanga Mining. In 2009, Glencore sold stock in Katanga at roughly 60 percent of its market value to Ellesmere Global Limited, a British Virgin Islands firm whose "ultimate owner is a trust for the benefit of the family members of Dan Gertler," according to Canadian insider-trading records. Ellesmere quickly sold the stock back to Glencore at close to full market price, netting a profit of about $26 million.

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It pays associates in unusual deals. In another example, detailed in this March 2011 contract, Samref Congo Sprl, a subsidiary 50 percent owned by Glencore, waived its rights of first refusal to acquire an additional stake in Mutanda Mining, a copper and cobalt producer, from Gecamines, Congo's state-owned mining company. Samref instead recommended that the shares be sold to Rowny Assets Limited, one of the offshore firms owned by Gertler's family trust. (See clauses C and D on pages 3-4 of the Gecamines contract.) It's not clear why Samref would have passed on the Gecamines offer, because business records and documents suggest that Gertler's trust picked up the Mutanda shares for a fraction of their value. Plus, the president and vice president of the Panama-registered Samref Overseas S.A., which owns Samref Congo Sprl, are both Glencore officials, and the vice president, Aristotelis Mistakidis, is even one of the handful of Glencore executives who became billionaires after the IPO. "We preferred to invest our money in developing Mutanda -- building the mines and the plant," Glencore spokesman Simon Buerk said in an e-mail explaining why the firm did not buy the shares.

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It knows how to look the other way. In Congo-Brazzaville, Glencore bought oil from shell companies set up by the state oil company's head, Denis Gokana (conveniently trained at its London office), according to a lawsuit by Kensington International, a Cayman Islands-based corporation. Glencore complied with court orders and was not charged, but the ruling judge wrote that he "did not consider that Glencore's personnel ... could not have appreciated that Sphynx Bermuda [another company named in the suit that had contracted with Glencore] was somehow linked to the Congo (although ignorant of the exact nature of the link) and that payment would ultimately go to the SNPC [National Petroleum Company of the Congo].)

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It has a criminal past. Leveraging ties to dictators has always been at the heart of the business empire built by famous fugitive Marc Rich. Although Rich left the firm in the 1990s, Glencore profited handsomely by dealing with Saddam Hussein under the 1996-2003 U.N. Oil-for-Food Program, which allowed the Iraqi dictator to trade limited quantities of oil in exchange for humanitarian supplies. The U.N.'s Independent Inquiry Committee reported in 2005 that Hussein had awarded special "allocations" to companies and individuals who were friendly to the regime -- including Pakistani businessman Murtaza Lakhani, a Glencore agent and conspicuous regime sycophant. The Iraq Survey Group, the U.S.-led fact-finding mission sent after the invasion, concluded that Glencore was "one of the most active purchasers" of oil under the Oil-for-Food Program and had paid $3,222,780 in "illegal surcharges." Glencore was not charged in the scandal. It claimed it was unaware surcharges were being paid and that Lakhani's high fees reflected the extra risk of doing business with Iraq, not slush money for bribes. (See page 144.)

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It stashes money in tax havens. Another reason Glencore is so rich: Its effective global tax rate for 2010 was just 9.3 percent, in large part because nearly half its 46 subsidiaries are incorporated in "secrecy jurisdictions," opaque financial havens like the Netherlands, according to a report by the NGO Publish What You Pay.

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Its business partners have been investigated for bribery. Glencore's shady dealings reach around the world. To take just one example, a 2008 U.S. Senate report revealed that an unidentified client of the LGT Group, a bank owned by Liechtenstein's royal family, discussed setting up a Panamanian shell corporation and bogus foundation to pay bribes on Glencore's behalf. "A small portion of the payments go ... to the USA and Panama and may be classified as bribes," reads an internal LGT memo. The client, a Glencore agent, had set up the account in 2002; prior to that, Glencore had made such payments directly, the memo says. An LGT executive refused to testify to the Senate about whether the bank had set up the Panamanian corporation or foundation as requested.

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It has worked with Romanian criminals. In the mid-2000s, Glencore used an Israeli agent named Yoav Stern, who also represented the Romanian interests of Yakov Goldovsky, who had previously been convicted in Russia for asset-stripping state-run enterprises. Another Glencore business partner here was Romanian businessman Marian Iancu. Glencore sold him crude oil through an offshore company he controlled, Faber Invest & Trade, for processing at the Rafo refinery in Romania. Iancu was indicted for tax evasion and money laundering in 2006 and convicted in late 2011. A WikiLeaked U.S. State Department cable described Rafo as "embroiled in a web of corruption, money laundering, fraud and criminal charges" and included Faber among its "shady entities."

It has done deals with oligarchs. Glencore funneled roughly $2 billion through an offshore company to the oligarch Mikhail Gutseriev, described in a WikiLeaked cable as "not known for his transparent corporate governance." Reportedly booted by the Kremlin as chief of the state-owned oil firm Slavneft for resisting the company's privatization, Gutseriev made a comeback with Glencore's help. The cash infusion allowed Gutseriev to establish RussNeft, now one of Russia's largest oil companies. Glencore owns nearly half the equity of four of RussNeft's oil production subsidiaries and has sole rights to market its oil.

It has high-level political protection:  In Kazakhstan, Glencore owns slightly more than half of Kazzinc, a huge gold, lead, and zinc producer. Because corruption can make the country treacherous terrain for foreign investors, they often require a powerful local sponsor with close contacts to the resident, Nursultan Nazarbayev. Glencore's is one of the best: Bulat Utemuratov, a major investor in Verny Capital, Kazzinc's second-largest shareholder with a 42 percent stake. In March 2011, a group of opposition politicians issued a public letter complaining that Kazzinc and other former state firms had been privatized under murky conditions that allowed Utemuratov and other insiders to pick up vast stakes thanks to their ties to the ruling family. Glencore could be stripped of its assets in the country, said the letter, adding, "Upon any change of regime in Kazakhstan to a democratic one, any acquisition of any shares in Kazzinc ... will be subject to review."

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Sex and the Single Mullah

Islamic scholars are prepared to answer questions and issue fatwas on almost any realm of modern life. Sometimes, it can get a little kinky.

Geologically induced accidental incestuous penetration

Ayatollah Gilani, Iran

As Karim Sadjadpour recounts in his new article for Foreign Policy, an obscure cleric known as Ayatollah Gilani had a popular television show in the early days of the Iranian revolution during which he would opine upon the halal or haram status of various outlandish scenarios. His best-remembered went like this:

Imagine you are a young man sleeping in your bedroom. In the bedroom directly below, your aunt lies asleep. Now imagine that an earthquake happens that collapses your floor, causing you to fall directly on top of her. For the sake of argument, let's assume that you're both nude, and you're erect, and you land with such perfect precision on top of her that you unintentionally achieve intercourse. Is the child of such an encounter halalzadeh (legitimate) or haramzadeh (a bastard)?

(It's halalzadeh in case you were wondering.)

In another famous broadcast, Gilani allegedly recalled being sexually aroused in the back seat of his chauffeured car after catching site of a few inches of a woman's exposed ankle on the street. Naughty.

Eating your animal sex partner

Iranian Supreme Leader Ayatollah Ruhollah Khomeini

In his 1961 book, A Clarification of Questions, the supreme leader aimed to set out his position on 3,000 questions of everyday life, though "everyday" might be pushing it for some of them. Most famously, the ayatollah ruled that "If a person has intercourse with a cow, a sheep, or a camel, their urine and dung become impure and drinking their milk will be unlawful."

The ayatollah also ruled that "Industrial alcohol used for painting doors, tables, chairs, etc., is clean if one does not know it was made of something inebriating" and, as apparently a fan of rudimentary in vitro fertilization, that "It is not unlawful to introduce a man's semen into the uterus of his wife with devices such as suction cups."

Workplace Breastfeeding

Dr. Izzat Atiya, lecturer at Cairo's al-Azhar University

In 2007, Atiya was responding to a question of whether it's permissible for a woman to work alone with a man in an office setting, or reveal her hair in front of him. His not-so-elegant solution was that such an arrangement would be acceptable if the woman fed the man "directly from her breast" at least five times, thus making them essentially family members.

"Breast feeding an adult puts an end to the problem of the private meeting, and does not ban marriage," he ruled. "A woman at work can take off the veil or reveal her hair in front of someone whom she breastfed."

Atiya was widely mocked for the ruling and withdrew the fatwa after he was disciplined by his university, blaming it on "bad interpretation." The controversy prompted Egypt's minister of religious affairs to call for future fatwas to "be compatible with logic and human nature."

Getting Naked

Rashad Hassan Khalil, former dean of Islamic law at Cairo's al-Azhar University

"We don't have to take our clothes off to have a good time," promised a U.S. pop hit of the 1980s. Khalil would apparently agree. In 2006, the scholar ruled that being completely naked during sex would invalidate a couple's marriage.

Other scholars quickly disputed the ruling, saying that "anything that can bring spouses closer to each other" should be encouraged. Yet another scholar suggested it was OK for the couple to be naked -- as long as they avoided looking at each other's genitals.

Oral sex


There seems to be a vigorous debate among scholars about oral sex, both for men and women. The popular Egyptian cleric Yusuf al-Qaradawi has declared that "it is lawful for the husband to perform cunnilingus on his wife, or a wife to perform the similar act for her husband [fellatio], and there is no wrong in doing so. But if sucking leads to releasing semen, then it is makruh [blameworthy], but there is no decisive evidence [to forbid it] … especially if the wife agrees with it or achieves orgasm by practicing it."

Other clerics disagree, such as Muhammed Saeed of the popular South African Islamic advice website Madressah Arabia Islamia, arguing that "It does not behoove a Muslim to use for such a filthy purpose the same mouth that he/she uses for the tilaawat of the Qur'aan."

In response to a question from a reader about the permissibility of oral sex with a condom, the website IslamWeb noncommittally advises that, "We cannot authoritatively say that this act is forbidden or that the person who does so is sinful, especially with the use of a condom which prevents the impurity from touching the mouth."

Men can't masturbate … unless they really, really want to

TV theologian Yusuf al-Qaradawi

According to Qaradawi, a man is permitted to masturbate under two conditions: If he doesn't have the means to marry, or if he fears that he might otherwise commit fornication or adultery.

One could be cynical about this advice and assume it amounts to "don't masturbate unless you want to." But Qaradawi advises that before masturbating, young men with wondering minds should first try fasting or admiring "natural things such as flowers and beautiful scenery, which do not stimulate one sexually."

Getting frisky in the vegetable aisle

Imam Abdelbari Zemzami

This Moroccan cleric has become well known in recent years for weighing in on matters of the flesh. But he recently raised some eyebrows among both secularists and religious conservatives with a fatwa on female masturbation, which he said was permissible for women who are widowed, divorced, or had lost hope that they would ever have sexual relations with a man.

"A woman can get much benefit from these vegetables and other elongated objects," the imam said, listing pestles, bottles, and root vegetables among other suggested implements.

Girls on bikes

Mufti Arshad Faruqui, Darul Uloom fatwa department, Lucknow, India

A scholar at Saudi Arabia's top religious council got a lot of attention last year for warning that allowing women to drive cars would lead to the "end of virginity."

But the chairman of a renowned Islamic seminary in India took aim last year at an even more insidious threat: Girls on bicycles. "When a grown-up girl goes cycling outside her house, it is bound to result in bepardagi [undue exposure]," he said. "Even medical science has given us evidence to believe that cycling is not good for adolescent girls, physically. Apart from affecting their femininity, it is harmful for their body structure."

In response, Lucknow's main imam urged Faruqui to "desist from issuing such impractical advice."

Too sexy for this tennis court

Haseeb-ul-hasan Siddiqui of India's Sunni Ulema Board

India's best ever female tennis star and the first Indian to ever win a World Tennis Association event, Sania Mirza, became a huge celebrity in her home country. But, as Mirza came from a devout Muslim family, the standard women's tennis attire of short skirts and tight T-shirts vexed religious authorities, and in 2005, a group of Muslim clerics issued a fatwa urging her to cover up.

"The dress she wears on the tennis courts not only doesn't cover large parts of her body but leaves nothing to the imagination," said Siddiqui. The board suggested that she wear long tunics and headscarves like those sported by Iranian badminton players.

Mirza got in trouble with secular authorities as well in 2011 when a court complaint was filed against her for disrespecting the Indian flag by putting her bare feet near it


Cholil Ridwan, the Indonesia Council of Ulema

Lady Gaga might not be the first pop star to upset religious conservatives, but her condemnation from Indonesia's top religious authority prior to a planned concert in the country was notable for its specificity. "She is from the West, and she often shows her aurat [genitalia] when performing," Ridwan said, taking offense to the "Bad Romance" singer's "revealing outfits and sexualized dance moves."

Just in case you were wondering how such a pious religious authority came to know so much about Gaga's routine, he claimed he had never seen one of her performances … but was aware of her "reputation."

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