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By Michael J. Kavanagh
(Bloomberg) — 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.
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.
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.
“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.
The case is A. LTD versus Ministère Public du Canton de Geneve RR.2020.242 at the Cour des Plaintes of the Tribunale Penale Federale.
–With assistance from Ellen Milligan.
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