Controversial billionaire Dan Gertler appears to have used suspected international money laundering network to dodge US sanctions and acquire new mining assets in DRC
Controversial billionaire Dan Gertler appears to have used a money laundering network stretching from Democratic Republic of Congo (DRC) to Europe and Israel to evade US sanctions against him, funnel millions of dollars abroad, and acquire new mining assets in DRC, Global Witness and PPLAAF reveal today in a joint investigation, Undermining Sanctions.
The groundbreaking evidence shines a light on the workings of Gertler’s complex business empire and a system apparently designed to conceal the movement of millions of dollars. This scheme would allow Gertler to continue reaping the vast financial benefits of his business deals in DRC, despite being sanctioned by the US in December 2017 for “opaque and corrupt mining and oil deals”.
The sanctions against Gertler, a close personal friend of DRC’s long-time former President Joseph Kabila, prohibit him from doing business with US citizens, companies, or banks. PPLAAF and Global Witness today reveal evidence indicating that despite this, Gertler may have found a way to continue to handle US dollars, consolidate his fortune and even acquire new assets in DRC.
“This investigation offers an unprecedented insight into the intricacies of what appears to be a major international sanctions evasion and money laundering scheme,” said Margot Mollat, Campaigner at Global Witness.
The revelations highlight critical loopholes and lapses in international sanctions enforcement and anti-money laundering frameworks, with lax banking regulations, lawyers and corporate secrecy enabling the scheme.
“PPLAAF and Global Witness’ analysis, based on documents provided by whistleblowers despite great risks to their personal safety, uncovers a complex web of shell companies, secret bank accounts and proxies apparently put in place to assist Gertler and his accomplices,” said Gabriel Bourdon-Fattal, project manager at PPLAAF.
The investigation lays bare the ways in which the loopholes of the international financial system may have been exploited by Gertler to dodge sanctions.
“Our investigation appears to show how the machinery of the global economy can be employed by bad actors for their own personal profit, and in this case to the detriment of the Congolese population, over 73% of whom live on less than $2 a day,” said Mollat.
The report also shows how two major international mining companies operating in DRC, Sicomines and ERG, appear to have made payments to customs and logistics agencies controlled by Gertler or his associates while Gertler was already under US sanctions. The multinational commodities giant Glencore, which has ties to Gertler stretching back to 2007, has also continued to make highly controversial royalties payments to him, despite US sanctions.
The report’s findings suggest that Gertler relocated his business interests from secretive offshore tax havens to DRC with the help of proxies. Gertler and his network of proxies then set up bank accounts at the Congolese branches of Cameroon-based Afriland First Bank. New names started to appear on both companies and bank accounts connected to Gertler in a variety of subtle ways, including the name of someone implicated in a VAT carbon tax fraud costing the EU €5 billion.
In total, between June 2018 and May 2019, at least $100 million flowed through bank accounts associated with this network. Much of it was denominated in US dollars, despite the US sanctions, and almost 70 percent of it was deposited in cash into accounts apparently connected to Gertler or his associates.
Among the various transactions revealed today, at least $21 million was sent to unknown accounts held outside DRC and $25 million was sent to DRC’s controversial state-owned mining company Gécamines. Gertler seemingly used proxies to make these payments to Gécamines in exchange for new mining licences, just before the 2018 elections. This is reminiscent of deals Gertler did with the state miner before the 2011 elections – a scheme that contributed to the imposition of sanctions for “corruption”.
While the election of new President Félix Tshisekedi in 2018 might have been expected to put an end to the long and lucrative alliance between Kabila and Gertler, DRC’s elections were marred by irregularities and rumours of a deal with the ex-President. Kabila appears to have retained political power and influence over many of the countries’ institutions, which could have helped his old friend Gertler to continue operating freely in DRC, despite sanctions.
“Under the new President Félix Tshisekedi, the Congolese government has vowed to prioritise the fight against corruption. If the administration is serious about this commitment, it must start by freezing Dan Gertler’s assets and auditing all his deals with state-owned companies,” said Bourdon-Fattal.
Gertler and other individuals and companies about whom Global Witness and PPLAAF have found evidence indicating concerted efforts to undermine US sanctions have all strenuously denied any such endeavour. Each claims to have been engaged in its own legitimate business activities and not to have operated on Gertler’s behalf. There has not been, they argue, any attempt or conspiracy to evade sanctions. Glencore, Sicomines and ERG also deny any wrongdoing, including doing business with Gertler in violation of US sanctions. More detailed responses to PPLAAF and Global Witness’ investigation can be found here.
Relevant competent authorities, including in the US, Switzerland, Israel and DRC, should investigate the individuals and companies named in this report to determine whether they have aided and abetted Gertler’s evasion of sanctions, and, if so, hold them to account.
Global Witness and PPLAAF are also calling on the EU to ensure that its proposed ‘Magnitsky sanctions regime’ includes provisions to impose penalties for corruption, as well as human right abuses, to ensure that Europe does not become a safe haven for dirty money.