GOG SACKS GHANA INTERNATIONAL AIRLINES' CEO

C O N F I D E N T I A L SECTION 01 OF 03 ACCRA 000834

SIPDIS

SIPDIS

COMMERCE FOR MARIA RIVERO
DAKAR FOR FAA -- ED JONES
EB/TRA/AN (CARON DEMARS)
EB/TRA/OTP (BMATTINGLEY, ARADETSKY)
STATE PASS DOT (MICHAEL BODMAN)
STATE PASS TRANSPORTATION SECURITY ADMINISTRATION (TSA)
ROME FOR TSA REP JOHN HALINSKI
STATE PASS FAA HEADQUARTERS WASH DC (LARRY KEPHART)

E.O. 12958: DECL: 04/09/2016
TAGS: EAIR EINV GH
SUBJECT: GOG SACKS GHANA INTERNATIONAL AIRLINES' CEO

REF: A. 2005 ACCRA 2382

B. 2005 ACCRA 1280

C. 2005 ACCRA 891

D. 2005 ACCRA 857

E. 2005 ACCRA 678

F. 2005 ACCRA 505

G. 2005 ACCRA 407

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Classified By: EconChief Chris Landberg for Reasons 1.4 c & d.

SUMMARY
--------------

1. (C) Minister for Presidential Affairs and Chief of Staff
Kwadwo Mpiani sacked Ghana International Airlines' (GIA) CEO
Brian Presbury April 7. National Security officers closed
GIA's offices later that evening. Two Amcit employees that
were in the office when National Security arrived and were
permitted to leave the premises with their personal effects
under the observation of Consular staff. High-level GoG
contacts say Presbury's termination was prompted by evidence
of fraud and gross mismanagement on the part of several
members of the management staff, the GoG's partner GIA-USA,
as well as GIA-USA's U.S.-based investors. End Summary.

A NEW BEGINNING
--------------

2. (SBU) After the demise of Ghana Airways in the fall of
2004, the GoG formed GIA with Sentry Financial group of Salt
Lake City Utah (reftels). Sentry Financial, through a
subsidiary known as GIA-USA, invested $2.1 million for a 30%
stake in the new airline in early 2005. The GoG followed
suit a few months later with $4.9 million in equity for its
70%. SkyWest founder Ralph Atkins was named CEO. The MOU
signed by GIA-USA and the GoG stated that GIA, subject to
certain conditions, would have complete control of the
company, despite having only a 30% share. GIA-USA hoped that
their special agreement with the GoG would allow the company
to raise capital by allaying potential investors' fears of
another Ghana Airways. The prospects were initially bright,
as Continental, United, South African, and Ethiopian Airlines
all discussed various arrangements and partnerships with GIA,
with Ethiopian going so far as to complete due diligence on a
deal that would have brought aircraft, training, and equity
to GIA.

FADING PROSPECTS
--------------

3. (C) In July 2005, Ralph Atkins quietly left GIA. Albert
Vitale, who was then GIA's Chief of Operations, explained to
EconOff that Atkins left out of frustration with Sentry
Financial's inability to raise capital. Sentry Financial
sold a portion of its investment in GIA-USA to Utah-based
Baine Capital later that month, and the deal with Ethiopian
fell through in August. Despite these setbacks, GIA managed
to begin daily operations to London (Gatwick Airport) in
October 2005 with a 757 wet leased from US-based Ryan Air.

NEW AIRLINE, SAME SCAM
--------------

4. (C) By the end of January 2006 the situation at GIA began
to unravel. At that time Vitale left the company to become
an advisor to the Board of Directors. According to Vitale,
GIA's new CEO, UK citizen Brian Presbury, had given Vice
President of Public Affairs Sammy Crabbe a free hand in
managing GIA. Vitale reported that Crabbe was giving
inflated contracts to service providers owned by relatives,
friends, and in at least one case, Crabbe himself. At the
same time, GIA was making only sporadic and usually
incomplete payments to Ryan, employees, and other legitimate
service providers. Vitale also claimed that Crabbe had
bypassed many of the computerized accounting checks that had
been put in place to keep sales staff from embezzling funds.
Air cargo transactions, excess baggage charges, and fees for
flight changes were all being conducted on paper and
exclusively in cash.


5. (C) Ghanaian Sammy Crabbe is a member of the ruling NPP
and was recently elected Party Regional Chairman for Greater

ACCRA 00000834 002.2 OF 003


Accra. He is the former Human Resource Director for ACS, a
Utah-based company with a large data entry operation in
Accra. Crabbe left ACS when he was implicated in a scam
involving the abuse of ACS' duty-free computer importing
license.


6. (C) After leaving GIA, Vitale convinced Chief of Staff
Mpiani and GIA's Board of Directors to abrogate GIA-USA's
contract and take over the company on the grounds of fraud
and gross mismanagement. Vitale provided documents in
support of his case, including bank statements showing that
Sentry's original investment via GIA-USA may have been a
sham. Vitale also provided a copy to Post. The documents
show GIA-USA's entire stake being deposited and withdrawn
from GIA's joint account with the GoG every day for many
months. Vitale contended that this ensured the investment
was never actually at risk, and that only the GoG's money was
ever spent.


7. (C) Vitale also claimed that very little, if any, of the
money from the "American investors" came from either Sentry
or Baine Financial. He believed the vast majority of it
belonged to Sammy Crabbe. Other sources have made the same
claim. (NOTE: Sentry official Kirk Heaton admitted to
EconOff that Sentry had Ghanaian investors during a
discussion in December of 2004, although he would not
disclose the names of any specific investors. END NOTE.)

GIA GETS GROUNDED - PRESIDENT CLEANS HOUSE
--------------

8. (C) On April 2, Ryan Air informed GIA management that
GIA's flight to Accra, which was approaching boarding time at
Gatwick, would not leave the ground until Ryan received the
$1.3 million it was owed. Ryan received $400,000 within two
hours, and agreed to make the flight as long the balance was
paid by April 8. (NOTE: It was paid April 7. END NOTE.) The
damage was already done. The delay caused the flight to miss
its take-off slot, and subsequently its flight slot over
France. A new flight plan was filed, but by then the
passengers had been sitting on the aircraft for several
hours.


9. (SBU) According to GIA's Security Chief, Amcit Ladislao
Diaz, when the aircraft began to taxi for take-off,
passengers were refusing to stay in their seats and obey
instructions. As a result, the pilot made the decision to
return to the terminal. Diaz told EconOff that several
passengers became belligerent when they realized the plane
would not be taking off and attempted to break through the
locked cockpit door. Two flight attendants were injured
before the two Ghanaian air marshals onboard were able to
restore order and disembark the passengers.


10. (C) Chief of Staff Mpiani told EconOff in a telcon April
7 that he had met with Presbury and Crabbe earlier that day
to discuss the situation at GIA. At that meeting he decided
to fire Presbury on the spot, and dispatched National
Security officers to close the GIA offices in Accra and send
the employees home. While the offices were being cleared,
Crabbe arrived with his legal counsel, members of the press,
and several dozen "protestors." Two Amcit GIA employees on
the scene called the Embassy and reported they were being
detained and their personal property was being confiscated.
ConChief, ConOff, and ARSO went to the scene to investigate
and found that the Amcits were not being detained or
molested. EmbOffs and Amcits departed soon thereafter.
Details will be reported septel.

COMMENT - WHY DO WE CARE?
--------------

11. (C) The presence of Americans on both sides of what could
potentially be another investment dispute with the GoG merits
careful attention. Post has seen evidence of possible
malfeasance by some members of GIA's management team, and we
have also seen copies of contracts Crabbe is accused of
granting to cronies that were approved and signed by Vitale
while he was still employed by the Airline. Now Vitale
expects the GoG to reinstate him to a position of authority

ACCRA 00000834 003.2 OF 003


at GIA.


12. (C) While we have maintained close contact on the issue
of GIA since the demise of Ghana Airways, Post has not
commented outside our oft-stated desire to see the number of
reliable air connections to Accra increase. At this time,
the evidence suggests that GIA may indeed have violated their
MOU with the GoG, and there may be grounds for abrogating the
contract. What is clear is that GIA's management has burned
through $10 million in 10 months with little to show for it.
Regardless, Post will continue to insist that American
citizens and companies receive fair treatment under Ghanaian
law in this, or any other dispute and that the GoG take
action against corruption. End Comment.
LANIER