A call for an international jurisdiction competent for economic/corruption crimes: Africa looted


DRC – Gertler: the one public funds embezzlement scandal too many?

Today, another article[1] was released on a shocking corruption scandal hitting one the world’s poorest countries: DRCongo. The Bloomberg website denounced a shady deal passed between the Israeli so called businessman Dan Gertler, and the Congolese so called Government, in which 149.5 million USD were embezzled from the DRC State budget in a single contract. There is no mention of the whereabouts of this money, one can only assume that Gertler and top Government officials including Joseph Kabila are currently purchasing properties in DRC, South Africa and Tanzania with it.

In its article, Bloomberg further mentions that DRC lost 1.36 billion USD between the years 2010-2012 from selling assets to Dan Gertler at prices below market value, according to Kofi Annan’s Africa Progress Panel[2]. Notice we are talking about part of the embezzled State money during these years (the one concerning deals between Kabila and Gertler), and not the total (which should include deals with other foreign and local businessmen). For reference, the total budget of the DRC for 2013 was 8 billion USD[3], a significant part of it coming from international donors.

What is further shocking is that this embezzlement of billions of dollars by a handful of Congolese and foreign men takes place in a country ranking 186th on the Human Development Index, where people die daily in the dozens due to lack of healthcare or access to drinking water –to mention only these uncovered basic human needs-.

In DRC, the government doesn’t have 500 USD to pay a doctor in villages, or 60,000 USD to build health centres or schools[4], but its President can buy properties worth millions all over the country, thanks to his embezzlements of billions resulting from the looting of State assets.

Is it therefore possible to dissociate the deaths of mothers and children because of poor development, and such acts of greediness perpetrated by the highest representation of the State that ultimately block national development? It isn’t. The mafia-like management of the country by Kabila, and the backstage moves of foreign businessmen like Gertler took DRC down to its knees in an economic colonialism fashion with no-one caring since nearly 10 years.

Who is Dan Gertler? Is he isolated?

Dan Gertler is an Israeli businessman born in 1973 and President of the Dan Gertler International (DGI) company, which has large interests in diamonds and copper in DRC. He recently also started investing in petrol, banking and oil[5]. He is close friends to Katanga’s Governor, and to the Congolese President. In 2013, Forbes listed him the 670th richest man on earth, with a fortune estimated at 2.2 billion USD. Looking at the data provided by the Koffi Annan report, this figure probably is highly underestimated as it doesn’t take all the embezzlement of State assets (mines, agricultural land, oil field) he took part to.

It’s interesting to note that Gertler created his company in 1996, the year the first war of Congo started, and that his initial business plans were already controversial – buying diamonds in Sierra Leone in exchange of military training and arm deliveries.- Since then, Gertler managed to get close to Joseph Kabila, and his company took shady interests in tens of mining deals, only some of which are mentioned on the Wikipedia page dedicated to him.

He claims not to work against the Congolese population, a position he illustrates with the few Health Centers constructed locally by his company. Dust to the eye, as with the 1.3 billion embezzled in two years only according to the Annan report, the Government could have built no less than 13,000 health centres throughout the country[6]!

Dan Gertler has a long history of passing illegal deals with the DRC Government, deals which have huge negative effects on the countries politics and population. International private business meddling with African politics in the dirtiest manner. But is he isolated in this case?

Unfortunately not. In DRC, everyone remembers the name of Bilal Heritier, a Lebanese businessman strongly suspected by all observers to have played an important role in the assassination of former Congolese President Laurent Desire Kabila. The later broke the monopoly he had on the selling of diamonds in Congo. After the assassination, Bilal Heritier went to make business in Kigali for a while, and now happily lives the life of a millionaire in South Africa. He never was even interrogated by policemen for his alleged role in the assassination of a Head of State in exercise. As of today, it remains difficult to determine the exact consequences (and resulting number of deaths) this political storm created in DRC.

In other poor countries of Africa where corruption scandals regularly happen, the path is usually the same: top government officials, often going as high as the Presidency or Prime Minister, involved in business deals with shady local or foreign businessmen, getting substantial back payments for the preferential and often bargained selling of State assets they obtain. The victim States hardly ever press charges due to a accomplice executive and non independent judiciary, culprits are therefore guaranteed impunity in the absence of international mechanisms to answer these economic –but with tragic human consequences- crimes.

Who is hurt by these acts?

The local populations

The first victims are obviously the local populations of the concerned States. Most countries in which these scandals happen (DRC, Uganda, Kenya, Somalia to name only those) suffer from a lack of provision of basic services, and host NGOs trying to cover the gaps with humanitarian programmes.

The humanitarian funds being usually insufficient to cover the whole scale of local needs, tens of thousands of Congolese, Ugandan, Kenyan, Somalis and other Africans don’t have access to healthcare –even primary-, school, water, sanitation, and security, for a basic lack of money at State and international level.

When looking at the shocking amounts revealed in the Bloomberg article regarding one businessman only, I can’t help but think that a substantial part of those gaps could be filled was this money used properly, meaning as part of national budgets supposed to cover the basic needs of their population.

The European and American population

The European and American population are also sharing the financial burden of these scams. Their Governments significantly contribute to the budgets of the concerned African countries, with tax money, to fill essential gaps. The more money is embezzled, the larger the gap, and the larger the external contributions.

This is simple maths, but some that should shock –and strangely doesn’t seem to- most European and American readers, in a period where many struggle to meet both ends while constantly paying taxes, some of which end up in African dictators and foreign billionaires pockets.

The world economy

The current world economy is based on free and fair competition between companies. By nature, shady deals involving back payments passed between State authorities and private companies flaw this competition, as it guarantees the ownership of given resources even if a higher bidder is also interested. In other words, when Gertler buys a 20th or 30th mine in DRC, this means that a Canadian or South African company, possibly more generous, is not getting the market.

Worst, as Gertler became overly influent, dominant and rich in DRC, he now has the capacity to “kill” competition should he want to have a higher share of a market. This was recently illustrated in the BCDC banking authorization saga.

BCDC, created as early as 1909, is DRC’s oldest and most reliable bank. Ever since its creation, it never faced problems renewing its banking authorization from the executive. This is until Gertler decided to invest into a competing bank. Suddenly, in 2012, Kinshasa  questioned BCDC’s banking authorization. After months of institutional and financial struggle –and illegally operating in country without a banking authorization-, the BCDC finally received the document, but the group was severely shaken by the events, with possible consequences still to follow.

This is not just for the story. Looking at the amounts of companies, mines, and assets Gertler bought in DRC since 2006, a significant part of the countries economy is simply not accessible to any competition anymore.

Regional peace and world security

In these parts of the world, shady business interests are regularly linked to illicit military activities. Two main examples come to mind: Bemba using the wealth his father accumulated in preferential deals with Mobutu to create his MLC rebellion, and the previous Vice-Governor of North Kivu Eugene Serufuli, who always danced on three feet at the same time: business, politics and rebellions.

The problem with corruption and State asset embezzlement is that a large part of the sums concerned by the transaction goes off official records through back payments (to others and to one self). It then becomes difficult to track the use of this money, whether it’s laundered through mining/banking activities, or spent on local/international rebel/terrorist groups.

This statement may not worry occidental leaders when made about DRC, a country and population against which they have demonstrated a total carelessness so far. It should become more worrying to them placed in the perspective of countries like Somalia, known to be one of the most corrupt States in world, and where local rebellions have exotic names like Al-Shabaab, with official links to Al Qaeda.

A call for a competent and neutral international jurisdiction

As demonstrated above, State corruption in partnership with local and international business interests has devastating consequences at local, regional and international levels. Not only economic, but ones reflected in dramatic human situations brought by a lack of development and security. A financial scandal that practically makes the development of countries like DRC or Somalia impossible when practiced at such a large scale, with such limited existing local resources to somehow compensate losses.

As further substantiated, the current legal system does not enable any accountability for these crimes even though they should be considered with the outmost seriousness. In the current legal framework, responsibility exclusively depends on the good will of national jurisdictions, in countries where they lack independence from their accomplice governments.

In today’s legal system, individuals are fare more protected than States when it comes to certain crimes. The ICJ has the mandate to sentence countries for looting other countries, as exemplified by Uganda’s condemnation for the looting of DRC in 2005[7]. Kabila and Gertler on the other hand benefit from a free pass on DRC looting, as the only competent organs to ask accountability, Congolese jurisdictions, are under direct Kinshasa control and influence.

Worst, corruption creates its own vicious circles. It is very unlikely that leaders like Museveni from Uganda or Kabila from DRC will ever voluntarily and democratically step down from power, in the fear that the following government might launch investigations, and ultimately actions, against their mismanagements. Corruption brings dictatorships, and, one way or the other, dictatorships usually end up in bloodbaths.

I therefore view it urgent that the international community recognizes this crucial gap in international justice, and takes action to fill it by creating a new international jurisdiction competent to investigate and condemn economic crimes with high-level State authority implication. Only this can put an end to this scandalous vicious cycle that has lasted long enough. I often hear the expression “economic colonialism” used around me. If this isn’t a tragic example of what needs to be fought with all strength and resource, I fail to understand what the notion means anymore.

I don’t have high pretentions for this blog, other than expressing my thoughts and ideas on issues I have at heart. I however can’t help but wish for a diplomat or advocacy group representative to go through the idea and initiate action for this question to be promptly and seriously examined by the international community.

The need is urgent. Social injustice is boiling and on the rise around the world. As popular pressure is mounting, leaders have to consider all ways, including international jurisdictions, to fight its illicit and abusive causes. The sooner, the better.


1 Comment

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