On Sunday, newspapers published discoveries from hundreds of thousands of diplomatic cables disclosed by Wikileaks. But the palace intrigue isn’t only for the diplomatic set. It’s also for the business-obsessed. There are plenty of gossipy comments about the people who control business, trade, and currency across the world. Fortune is keeping its eye on those memos so you don’t have to. Check back regularly to see what we dredge up.
Dec. 3, 2010, 1:50 p.m.: Before you take your next trip to Casablanca, be sure to read the State Department’s incredibly thorough description of the city’s economy circa May 2008. It’s a Lonely Planet for the monetary-minded. It starts with this great, incredulous line: “In Casablanca, Morocco’s largest city and economic capital, prosperity is increasingly on display, raising the question of where it comes from.”
One source: the stock market. Even if aspects of it would be illegal under U.S. law.
The tremendous performance of Casablanca’s Stock Exchange is also a factor in wealth-creation. According to Jawad Kerdoudi, an economist who is President of the Moroccan Institute of International Relations, many companies attract investors by listing shares at weak prices for the initial public offering. After a few weeks, prices shoot up, allowing shareholders to sell at a considerable profit.
The real estate market is also ripe, both in cash and ethic violations.
Ninety percent of property transactions in Casablanca are done informally. Of over 30 sites identified, more than 20 fell off the list immediately because the brokers were unwilling to sell in an official deal. Others declined to sell because they are waiting for prices to appreciate. Of those who would sell, many wanted money under the table in addition to the asking price. Whether selling property, running a company or starting a business, the high volume of activity conducted outside of formal channels is part and parcel of doing business, and often enables individuals to skirt regulations and increase financial gain.
Also, a side note: There isn’t one “Here’s looking at you kid,” joke in the entire memo. Do diplomats have no sense of humor?
Dec. 3, 2010, 10:15 a.m.: As of this morning, 667 of the 251,287 cables have been released on Wikileaks’ website. That’s an average of about 133 a day. Which, according to the back of our envelope, means we’re going to be reading Wikileaks cables for the next five years. January 29, 2016 is the day we’ll finally exhaust the Wikileaks archive, if this rate holds. Mark it on your calendars. (Thanks to Wolfram Alpha for the calculation.)
If that’s the case, how are the press and society going to treat Wikileaks going forward? The disclosures have led the news for five days running. But they can’t possibly make the front pages for the next 1,883. Will Wikileaks speed up its disclosures? Or will it keep them to a relative trickle, so journalists, historians, and hobbyists can digest them at a reasonable rate?
Ultimately, we have the same question as the rest of the press corps: What’s Julian Assange’s plan?
The Cable Gate archive has been spread, along with significant material from the US and other countries to over 100,000 people in encrypted form. If something happens to us, the key parts will be released automatically. Further, the Cable Gate archives is in the hands of multiple news organisations. History will win. The world will be elevated to a better place. Will we survive? That depends on you.
Dec. 3, 2010, 9:30 a.m.: You, like us, surely woke up this morning eager to check the latest releases on Wikileaks’ website. Which means that you, like us, were disappointed to find that it had been attacked over night, forcing its domain-name provider, EveryDNS.net, to revoke its domain. Apparently, for a service provider, Julian Assange is more trouble than he’s worth.
But he’s back! As always, the Swiss stayed neutral, and a Swiss domain provider bailed Assange out. Wikilieaks.org is no more, but Wikileaks.ch is alive and well.
Dec. 2, 2010, 6:00 p.m.: This evening’s new stories in the major papers are all about corruption, chiefly in Afghanistan. They don’t have any explicit business implications, but corruption is the kind of thing that keeps foreign investment away from developing countries. (The omnipresent threat of war can also be a factor.) Drawing on the memos, The Guardian has a significant story about Ahmad Zia Massoud, the former vice president of Afghanistan.
In one astonishing incident in October 2009 the then vice-president, Ahmad Zia Massoud, was stopped and questioned in Dubai when he flew into the emirate with $52m in cash, according to one diplomatic report. Massoud, the younger brother of the legendary anti-Soviet resistance leader Ahmad Shah Massoud, was detained by officials from the US and the United Arab Emirates trying to stop money laundering, it says.
However, the vice-president was allowed to go on his way without explaining where the money came from.
But somehow, on a salary of a few hundred dollars a month, he has waterfront property in Dubai.
Dec. 2, 2010, 1:30 p.m.: Late last year, the US was hopeful that they could cooperate with Brazil on some sort of energy deal. After a major blackout in the majority of the country, the Brazilians “were strikingly open to discussing the incident with Embassy personnel, non-defensive in response to questions, and forthcoming with their information and assessments.” That led the US embassy to encourage dialogue about how the US might help. From the memo:
There are, however, electrical distribution issues which need to be addressed at the state and local levels that could benefit from USTDA [US Trade and Development Agency] involvement, possibly offering another means of engagement to help Brazil solve its electrical challenges. Prior to this event, the Energy Ministry had highlighted Smartgrid technology as one area that would be of interest to them in cooperation, perhaps more so now.
Dec. 1, 5:30 p.m.: And we’re back. Or, rather, Wikileaks is. After a morning of attacks from hackers trying to overload its servers and a move from Amazon’s US servers to its new Swedish hosts, Wikileaks.org is again online. We’ll have a full rundown of new business revalations tomorrow. But in the meantime, two snippets to tide you over.
The Guardian is reporting tonight that Russian gas supplies to the EU and Ukraine have deep ties to the mafia. Per the Guardian:
In a secret memo the ambassador, William Taylor, wrote: “He [Firtash] acknowledged ties to Russian organised crime figure Semyon Mogilevich, stating he had needed Mogilevich’s approval to get into business in the first place.” Taylor said the “softly spoken” Firtash had come to see him on 8 December 2008 and “spoke at length about his business and politics in a visible effort to improve his image with the USG [United States government]”.
From Russia to Germany, where there was some anger back in 2009 when GM–then controlled by the US government–chose not to sell 55 percent of its European unit, Opel to car parts manufacturer Magna. The diplomatic cable that followed was titled, “GM DECISION NOT TO SELL OPEL GREETED BY SHOCK AND ANGER IN GERMANY.” From the memo:
“Merkel herself was reportedly highly upset over GM’s flip flop.
“A high-level source indicated that Chancellor Merkel is furious over the GM move and refuses to talk to GM’s leadership. It is likely to be only a matter of time before critics will call Merkel herself into account for her strong support of the now collapsed Magna deal. The Cabinet has been called into session and is likely to confirm the withdrawal of all financial support and a demand that GM repay the government’s 1.5 billion Euro bridge loan by the end of the month.”
Dec. 1, 12:00 p.m.: Loyal Leakhawks: We have not been neglecting you. Wikileaks’ servers have been neglecting us. They’ve been down all morning, so we can’t scrape through the newly released memos for their business implications. We’ll be back when they’re back. Promise.
Nov. 30, 2:41 p.m.: Maksat Idenov was once the man in charge of Kazakhstan’s foreign energy partnerships. He resigned in May, but while he was in charge, he was as mercurial as could be. Especially with foreign companies looking to profit off of Kazakhstan’s rich oil reserves. In one episode, he asserted his power by throwing two Chevron executives out of a meeting because the Chevron official didn’t have his cell phone number immediately at hand. Chevron is currently the largest private oil company in Kazakhstan. From the 2008 memo:
In press reports, an unnamed source stated that the two were thrown out of the meeting because of “improper comments on Kashagan negotiations and disrespectful conduct towards KazMunaiGas management.” Johnson told us later that the incident occurred at the end of a meeting that had gone generally well, and resulted from an innocent issue over the newly-arrived Johnson not having his cell phone number handy to exchange with Idenov.
His volatility also made him a great dinner guest. In 2010, again before he resigned, he sat down for dinner with American ambassador Richard Hoagland. As Hoagland arrived, Idenov was on the phone. From the memo:
When the Ambassador arrived, Idenov was barking into his cell phone, “Mark, Mark, stop the excuses! Mark, listen to me! Mark, shut up right now and do as I say! Bring the letter to my office at 10:00 pm, and we will go together to take it to (Minister of Energy and Mineral Resources, MEMR) Mynbayev at his house.”
And in a section of the memo labeled “HOW TO ORDER LAMB,” it recounts Idenov’s eating habits:
Idenov insisted the Ambassador order a bottle of wine for their dinner but then never touched his first glass. Instead, he gulped three cans of Coca-Cola while inhaling his food. When both he and the Ambassador ordered lamb chops, Idenov advised, “Well done, never rare — this is Astana, not London!”
Next time you’re in Astana, don’t get the steak tartare.
Nov. 30, 12:45 p.m.: Kim Jong-il’s successor, his son Kim Jong-un, appears unlikely to vastly change the country’s economic policy. Even before the country revalued its currency in 2009, which wiped out much of North Koreans’ savings, American diplomats knew that Kim Jong-un favored a system that made North Koreans heavily dependent on the government for economic assistance. From the memo:
The most important reason for the recent DPRK currency reform, according to XXXXXXXXXXXX, is to uncover political opposition, particularly against Kim Jong-il’s younger son. Controlling inflation, leveling the wealth gap, controlling domestic currency and access to foreign currency, are all part of this strategy. XXXXXXXXXXXX believes that the third son, Kim Jong-un, favored the currency revaluation, and that going forward Kim Jong-un leans toward a Vietnamese-style of economic reform.
Nov. 30, 12:15 p.m.: Apparently, North Korea doesn’t mind selling its country for some new condos. It’s hard to attract foreign investment when you’re a rogue state, so North Korea sweetened a deal to get China to buy-in to some new apartments in downtown Pyongyang. From the memo:
As part of this project, it is planning to build 100,000 residential apartments in Pyongyang by 2012. In order to encourage Chinese investment, the DPRK is offering Chinese investors mining and ocean rights for their injection of cash into the project.