photo by jon nicholson

news - From Central Africa to Australia: Following the Kleptocrats' Money

june 28th, 2018

Note: This blog was originally published in Power 3.0, a blog run by the National Endowment for Democracy.

By Holly Dranginis and Debra LaPrevotte

As the former chief of staff of the Sudan People’s Liberation Army, James Hoth Mai is a hardened military general who oversaw troops in one of themost violent armed conflictsin the world. But when law enforcement tracked him down, it was in a posh Melbourne suburb where Australian police moved to seize his family’s $1.5 million USD mansion. Hoth Mai’s official salary before leaving South Sudan was approximately $45,000 USD a year.

International news coverage of East and Central Africa often appears to have little to do with illicit financial flows. In the Democratic Republic of Congo (DRC), millions face starvation and are forced from their homes. In Sudan, a belligerent dictator travels abroad while snubbing his nose at a long-standing international arrest warrant against him for genocide.

But many authoritarian government officials in this region abuse their power for profit, exploiting the same international financial vehicles as more high-profile kleptocrats to hide illegal assets and escape scrutiny. They have unique proximity to the gold, ivory, coltan, and oil endemic to their land. Refiners, export companies, traders, and financial institutions operating all over the world give them the opportunity to turn those resources into cash and park it in faraway locations, obscuring its illicit origins. The damage they cause has an added dimension: not only are they stealing from public coffers in countries with high levels of poverty, but many are also architects of systematic violence against civilians.

Kleptocratic regimes in East and Central Africa rely on global demand fornatural resourcesfound in abundance there, and they often conspire with foreign business partners. Dan Gertler, an Israeli businessman, wassanctionedby the United States under the Global Magnitsky Act for paying millions in bribes to win favorable mining contracts in the DRC. Earlier this month, the US Treasury Department added14 of his companiesto the sanctions list. Gertler isclose friendof Congolese President Joseph Kabila, and suspected oforchestrating corrupt mining dealsand “used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC,” according toTreasury. Kabila has remained in power more than two years beyond his constitutional term limit and oversees security forces responsible forviolence against protestorsasserting their right to elections. Other leaders in the region similarly have their own financial middle men. [end excerpt]

Read the full blog on Power 3.0 here.



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