U.K. Fraud Unit Finds Alleged Bribe Network Behind Cobalt Hub
U.K. prosecutors have told Swiss authorities they have proof of an alleged money-laundering ring spanning from Africa to Europe that paid almost $380 million in cash bribes to authorities in the Democratic Republic of Congo.
Companies repeatedly bribed officials to further their
business interests in the mineral-rich nation, according to the Swiss court
judgment that cited information from U.K. prosecutors. Congo is Africa’s
biggest producer of copper and supplies about 70% of the world’s cobalt, a
critical input for the batteries that power electric vehicles.
The $379 million that was allegedly siphoned off in bribes
over a five-year period is more than Congo’s total spending on health care last
year. According to the World Bank, about one of every six people living in
extreme poverty in sub-Saharan Africa is in Congo, a country the size of
Western Europe with a population of more than 90 million.
The evidence of alleged bribery was presented when an
unidentified company tried to block the transfer of its banking records, which
were requested in a U.K. investigation into allegedly corrupt mining deals in
Congo and a related money-laundering network. The ruling on March 30 by
Switzerland’s Federal Criminal Court has since been posted on its website, with
coded initials to shield the identities of individuals and entities mentioned.
Joseph Kabila
The U.K.’s Serious Fraud Office has been investigating the
transactions with help from Swiss authorities, according to the judgment, which
provides the most extensive account yet of alleged bribery in Congo. The SFO
told Swiss officials that individuals and entities in Congo, Gibraltar, the
U.K. and Switzerland were involved in the alleged money-laundering ring between
2006 and 2011, according to the ruling.
The U.K. prosecutors have records and affidavits showing
that the alleged cash bribes went to “people in senior positions” in Congo’s
government, as well as to “the right-hand” adviser of former President Joseph
Kabila, 50, the Swiss court decision said. It refers to Kabila as “President
M.”
A spokesman for the SFO and Congo’s government declined to
respond to requests for comment. Kabila, who does not have a spokesperson, did
not respond to messages requesting comment sent via an associate.
Kabila ruled the country for 18 years, taking over from his
father when he was assassinated in 2001. He is currently a senator-for-life in
the Congolese parliament.
The Swiss court rejected the appeal by the unidentified
company to block the transfer of its records.
Individual “C”
Also making an appearance in the court decision is “C,” an
individual alleged to be the main source of cash for the bribes. Information
provided suggests that it’s Dan Gertler, an Israeli billionaire active in Congo
who’s been sanctioned by the U.S. for alleged corruption there.
A lawyer for Gertler said his client was not aware of the
Swiss court case and emphatically denies involvement in any corruption, payment
of bribes or other such wrongdoing. Gertler has never been charged with a crime
and was not party to the Swiss lawsuit.
The SFO letters say that “C” made the payments for a
Gibraltar-registered group of businesses in Congo, according to the Swiss
judgment. The court said the SFO felt it had reasonable grounds to believe that
the large payments to Congolese officials were “tainted by corruption.”
“C” worked with a “local financial entity” to collect cash
from various companies in Congo that generated large sums of U.S. dollars,
according to the court, citing the SFO. “C” would then use it to pay government
officials locally, and later repay those companies using the client account of
a law firm in Gibraltar and bank accounts in Switzerland, the SFO said,
according to the judgment.
Stealth Transfers
“These companies in the DRC did not necessarily know what C
was doing with this cash and are therefore not considered to be knowingly
complicit in this system of corruption,” the SFO told Swiss authorities,
according to the decision. The companies benefited by avoiding Congolese
controls on electronic money transfers outside the country, it said.
“It seems that dozens of DRC-based companies have put
massive amounts of cash at the disposal, possibly willy-nilly, of corrupt
businessmen in Congo and were paid back offshore in an effort to dodge
currency-export controls,” said Elisabeth Caesens, an expert on Congo’s mining
industry and founder of Resource Matters, a Brussels-based research and
advocacy group. “The SFO investigation suggests that Congo doesn’t only have a
huge corruption problem but also a gigantic money-laundering problem.”
The SFO first requested assistance from Swiss authorities in
2014 as part of its investigation into mining deals in Congo, and again in 2019
as part of the related money-laundering probe, the decision says.
More broadly, U.K. anti-corruption campaigners have
criticized the SFO for failing to secure high-profile convictions and for
agreeing to settlements with companies without prosecuting individuals for
wrongdoing. It recently dropped its probe into former Airbus SE directors and
was dealt a humiliating setback when its trial against two former Serco Group
Plc directors fell apart.
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