Congo Anti–Graft Chief Says $530 Million Mining Payments Missing
The Democratic Republic of Congo’s central bank has failed
to account for $530 million that state mining company Gecamines says it paid to
the government mostly during former President Joseph Kabila’s final term in
office, the nation’s top anti-corruption official said.
The disappearance of the so-called tax advances was flagged
by Inspector General of Finance Jules Alingete in a letter to a consortium
known as Congo Hold-up that’s investigating the biggest leak of financial
information from Africa. The consortium is made up of 19 media outlets,
including Bloomberg News, and five non-governmental organizations.
“None of this amount has yet been traced to the general
treasury account, despite incessant requests” to the central bank, Alingete
said in response to questions from the consortium.
The missing payments may represent one of the largest
misappropriations of funds documented in Congo, should they remain unaccounted
for, Belgium-based anti-corruption group and consortium member Resource Matters
said in a separate report published on Thursday.
Gecamines is a key player in the mining industry of Congo,
the world’s largest source of cobalt and Africa’s biggest miner of copper --
two of the critical metals in the electric-vehicle revolution. The company is a
junior partner in joint ventures with many of the biggest copper and cobalt
miners in Congo, including Glencore Plc, Eurasia Resources Group and China
Molybdenum Co.
Some of Gecamines’ payments were made immediately after
receiving funds from these companies, according to Resource Matters.
China Moly said in a response to questions sent by Resource
Matters that while it’s committed to corporate social responsibility and
transparency of governance, it’s unable to provide information about the
internal affairs of Gecamines. Glencore didn’t answer questions about a
particular payment by one of its subsidiaries to Gecamines in 2018, while ERG
didn’t respond to requests for comment.
Tax Advances
Most of the payments by Gecamines were initiated by Kabila’s
finance ministers, who sent letters, reviewed by the consortium, requesting tax
advances from the company. Gecamines would then transfer funds to accounts held
by the central bank at Congolese commercial lenders.
In total, the state miner paid almost $592 million in
advances and loans to such accounts from 2012 through 2020, with more than 95%
of the funds leaving Gecamines before the end of Kabila’s presidency in early
2019, according to a document provided by Gecamines to the Inspector General
for Finance, or IGF, and reviewed by the consortium.
Gecamines and the central bank didn’t respond to requests
for comment on the payments.
The state miner’s chairman since 2010 was Albert Yuma, who
until this year also served on the board of the central bank. Congo President
Felix Tshisekedi fired him from Gecamines earlier this month. Yuma didn’t
respond to questions sent by the consortium.
During most of Kabila’s second term, his sister owned 40% of
Groupe BGFIBank SA’s Congo unit, while one of his brothers was its chief
executive officer. The bank’s Gabonese headquarters forced both of them out of
the subsidiary amid accumulating corruption allegations in 2018. The following
January, Kabila stood down after 18 years in power.
Neither Kabila, his family members nor BGFI responded to
requests for comment sent by the consortium.
In a statement posted on its website on Nov. 23, after the
consortium published its first stories on the leaked documents, BGFI said that
while it decried the leak and questioned the authenticity of the documents, it
“strongly condemns acts contrary to law and ethics that may have been committed
in the past” at its Congolese subsidiary. The bank said it restructured its
ownership of the Congo unit in 2018 and conducted an internal audit to identify
methods that may have been used to circumvent controls.
The 3.5 million leaked documents were obtained by
Paris-based anti-corruption group Platform to Protect Whistleblowers in Africa
and the French news organization Mediapart and coordinated by the European
Investigative Collaborations network.
The final destination of the transfers made by Gecamines
remains unknown, the IGF said. The investigation by the consortium into the
leaked financial data showed what happened to some of the money, including
millions of dollars that were withdrawn in cash.
Some transactions bypassed the central bank altogether,
according to the leaked documents.
Hezbollah Financing
They show that in December 2015, Gecamines instructed BGFI
to allow $8 million in tax advances to be taken out in cash. Most of the money
was taken out in two transactions, both through parties linked to entities that
have been sanctioned by the U.S. government for financing Hezbollah, according
to Resource Matters. In one, BGFI transferred $2.15 million from Gecamines to
the account of a company then owned by a Lebanese businessman named Saleh Assi,
from where it was immediately removed in cash.
Assi, who was sanctioned by the U.S. Treasury in December
2019, told the consortium he was unaware of the use of his account by the bank.
“What I know is that we did not withdraw this money,” he
said.
Other accounts were in the name of the central bank but
appear to have been controlled by Gecamines, according to Resource Matters. One
sent about $10 million to Gecamines’ external lawyers and more than $12 million
to companies controlled by Israeli billionaire Dan Gertler, who was sanctioned
by the U.S. government in late 2017 for alleged corruption in Congo.
Gertler, who has previously denied any wrongdoing and has
never been charged with a crime, declined to comment.
Kabila’s family may also have directly benefited. Shortly
after receiving two apparent tax advances worth $80 million from Gecamines in
mid-2016, the central bank wired almost half this amount to a firm owned by the
then-president’s sister and sister-in-law, the documents show.
Alingete, one of the most influential political appointees
under Tshisekedi, who succeeded Kabila in 2019, is currently investigating the
Gecamines payments.
“Somewhere at the central bank they used this money for
something else,” he told the consortium.
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