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C O N F I D E N T I A L SECTION 01 OF 02 ABIDJAN 001042 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR AF/W EPLUMB, AF/PD JSCHAMING 
STATE PASS TO USTR C. HAMILTON 
USAID FOR C. GARRETT, S.SWIFT 
COMMERCE FOR MARIA RIVERO 
TREASURY FOR D. PETERS 
ACCRA FOR WARP P.RICHARDSON, K.MCCOWN 
DAKAR FOR FCS S. MORRISON 
LONDON, PARIS FOR AFRICA WATCHERS 
 
E.O. 12958: DECL: 10/04/2017 
TAGS: ECON IBRD IMF EFIN EINV EAGR PGOV IV
SUBJECT: "L'AFFAIRE FULTON" - THE UPSTATE NY CHOCOLATE 
FACTORY SAGA 
 
REF: A. MASSINGA-PLUMB-TOURE-SCHAMING OCT 5 UNCLASS EMAILS 
     ¶B. ABIDJAN 1036 
     ¶C. ABIDJAN 1347 (2006) 
 
Classified By: Pol/Econ Deputy Chief EMassinga, Reasons 1.4 (b,d) 
 
¶1.  (C)  Summary.  A September 18 letter to World Bank 
President Zoellick alleging President Gbagbo and a 
quasi-governmental cocoa regulatory body have manipulated the 
purchase of a Fulton, New York chocolate factory for 
fraudulent purposes has generated substantial interest 
locally (reftel a). The World Bank is preparing a response to 
the letter, and Embassy understands that Jeune Afrique is 
preparing a story on the issue.  Emboffs have contacted the 
Fonds des Ressources de Cacao (FRC), the quasi-governmental 
cocoa regulatory body involved, as well  as the World Bank; 
efforts to contact Lion Capital Management Group, the U.S.- 
firm that made the allegations, have to date been 
unsuccessful.  While the FRC appears to have failed 
spectacularly in executing its fiduciary responsibility to 
invest prudently the proceeds of poor Ivorian cocoa farmers, 
it does not appear at this juncture that lurid accusations of 
tens or even hundreds of millions of dollars being laundered 
through the Fulton chocolate factory are well-founded.  The 
End Summary. 
 
¶2.  (C)  On September 18, 2007, Lion Capital Management wrote 
a six-page letter to World Bank President Robert Zoellick, in 
which CEO Alain Housmann (of Ivorian origin, also known as 
Ousmane GBANE) leveled a series of serious allegations 
against the Government of Cote d'Ivoire, President Gbagbo and 
most specifically the FRC, a quasi-governmental body created 
to invest some of the proceeds of cocoa receipts on behalf of 
cocoa farmers (reftel b).  Housmann alleged that the FRC's 
2003 purchase of a chocolate factory in Fulton was a vehicle 
to defraud the cocoa farmers and launder money on behalf of 
the government of Cote d'Ivoire.  The FRC formed a company 
named NY3C for the purposes of purchasing and operating the 
factory, originally owned by Nestle. 
 
¶3.  (C)  Unknown sources provided the letter to the Ivorian 
daily "24 Heures," a largely independent paper which printed 
a translated text of the letter, adding a note that "CFA 100 
billion was embezzled." The paper most likely took out of 
context a recent World Bank report indicating that the CFA 
100 billion (the equivalent of USD 200 million) that has been 
raised in parafiscal taxes to support the FRC and its sister 
institutions (see reftel b) was laundered via NY3C.  While 
the Fulton factory story has been reported previously, the 
sensational figures involved in the latest iteration, and the 
outright accusation of involvement by President Gbagbo and 
his government have generated substantially increased and 
broader interest.  The story has since been picked up by 
several other papers, and is being pursued by Jeune Afrique, 
the well-read French-language weekly. The World Bank has been 
asked about the affair, and is reportedly preparing a written 
response to Housmann's letter that is currently being vetted 
at HQ in Washington. Embassy expects to receive the text and 
will share it with Washington as soon as it is available. 
 
¶4.  (SBU)  In his September 18 letter to Zoellick, Housmann 
presented several specific allegations of fraud associated 
with money-laundering.  He wrote that: 1) NY3C paid a Jean 
Claude Amon, a Presidential Advisor, $300,000 for services 
never rendered, 2) that NY3C paid the mortgage on a 
Jamesville, NY home for Mr. Amon, 3) that NY3C paid the 
mortgage on a home occupied by a NYC-based Ivorian diplomat, 
Yalle Agbre, and 4) NY3C paid Kemakolam Comas, a FRC 
attorney, USD 250,000.  He strongly implied that IC Trading 
has been used as a vehicle to launder over USD 35 million 
through NY3C. 
 
¶5.  (C)  According to the FRC's Director General Firmin 
Kouakou, who received Emboff at FRC HQ Oct 3, the FRC was 
originally informed of the opportunity to purchase the Fulton 
facility from Nestle in 2003 by Lion Capital CEO Housmann. 
According to documents from a dossier produced by the FRC and 
reviewed by Emboff, the FRC, through its Delaware-based 
investment arm IC Trading, agreed with Lion to purchase the 
 
ABIDJAN 00001042  002 OF 002 
 
 
Fulton facility and operate it under the "NY3C" corporate 
name, with an 80/20 percent ownership split (FRC/Lion). 
According to GM Kouakou, IC Trading put up the purchase price 
of the Fulton facility, but Lion never provided the 20 
percent of the operating capital as had been agreed, 
abrogating, from the FRC's perspective, Lion's claims of 
partial ownership.  To date, according to the FRC dossier 
(which contains numerous documents from and pertaining to the 
FRC and the Ministry of Finance), the FRC has, through IC 
Trading, spent USD 19 million on the venture. 
 
¶6.  (C)  GM Kouakou readily admits that so far, NY3C has not 
produced a single bar of chocolate.  Claiming ignorance, 
Kouakou said that Nestle sold the factory's chocolate-making 
equipment prior to the factory's sale without the FRC's 
knowledge.  Emboff questioned FRC staff about the business 
acumen and due diligence associated with such an oversight; 
Kouakou and his staff obliquely acknowledged a lapse in 
judgment, and said that they have since been trying to 
restore NY3C's ability to make chocolate, paying utilities 
and salaries while acquiring, slowly, the expensive equipment 
needed for manufacture. 
 
¶7.  (C)  Emboff attempted to contact Hausmann at Lion Capital 
Management directly to get the company's 
perspective on its public allegations.  To date, Lion has not 
responded.  Emboff shared this with World Bank Country 
Representative Barnard Harbone, who is personally directing 
the Fulton investigation, and who said he was not surprised. 
Given the questionable nature of the original letter and 
several inconsistencies in the way the overall set of 
allegations were presented, World Bank staff have some 
misgivings as to the overall bona fides of Housmann and Lion 
Capital.  However, Harbone did concede that a number of the 
specific allegations, such as those related to the mortgages 
and car payments noted in para 4, were cause for concern.  To 
avoid making judgments on the merits of the conflicting 
accounts, we understand that the World Bank's letter back to 
Housmann will focus almost exclusively on the efforts of the 
Bank and its sister institutions (IMF and AfDB) to encourage 
the FRC and the other Ivorian quasi-governmental cocoa 
institutions to invest in prudent instruments. 
 
¶8.  (C)  The legal wrangling between Lion and the FRC appears 
to be ongoing, and the FRC's Kouakou told Emboff that the 
group was "considering" a defamation lawsuit to respond to 
Lion's accusations of money laundering and fraud.  Concerning 
a relatively small issue (given the extent of the legal 
issues involved), Emboff did receive a copy of a September 13 
Superior Court of California (County of San Francisco, case 
number CGC-06-459078) ruling in favor of NY3C against Lion 
over USD 565,479 in tax credits provided by the State of New 
York.  The court ruled that Lion improperly took control of 
the tax credit check, and, moreover, "the Defendant's 
(Lion's) conduct... constitutes a misuse of the discovery 
process... and (the Defendant's) conduct was willful, 
tactical, egregious and inexcusable." 
 
¶9.  (C)  Comment:  The upcoming Jeune Afrique story will give 
the "Affaire Fulton" story more legs. (And it may tie this 
development to allegations made by Housmann regarding the 
Andres Kieffer mystery, in which a French-Canadian journalist 
engaged in investigating shenanigans in the cocoa sector 
disappeared in 2004.  Fresh accusations that the Presidency 
was involved in Kieffer's kidnapping and alleged murder have 
rekindled interest in that episode.)  From what Embassy has 
been able to glean thus far, the facts indicate that this 
sems to be a case of rank investor incompetence (and some 
level of corruption) rather than a massive scheme to defraud 
the cocoa farmers of Cote d'Ivoire out of tens or hundreds of 
millions.  End Comment. 
NESBITT