16 Jul 2021
Documents submitted to an arbitration procedure in Israel on behalf of Israeli mining magnate Dan Gertler implicate him in paying as much as $360 million in bribes to officials in the Democratic Republic of Congo, going by a request for legal assistance that Britain’s Serious Fraud Office passed to the Swiss government in 2019.
The details of that request are revealed here for the first time, in tandem with a report on Bloomberg and the Africa Confidential online magazine. Insofar as is known, this is apparently the largest sum of money any Israeli has ever been suspected of paying as graft.
The documents, which include an affidavit filed on Gertler’s behalf, were submitted in the course of his defense against the civil suit filed by his former partners, the brothers Moises and Mendi Gertner. The businessmen brothers sued Gertler for 1.65 billion shekels a little over a decade ago. They had invested in Gertler’s businesses and later lent the companies hundreds of millions of dollars over years, starting in 2005. They claim Gertler simply broke agreements with them and defrauded them
According to sources familiar with the case, the purpose of the affidavit was to prove that Gertler’s joint mining ventures with the Gertners were less lucrative than the brothers claimed, because of the need to pay for “the goodwill and cooperation” of the Congolese officials in charge of granting mining licenses to the parties’ joint mining businesses.
The arbitration case, which remains pending, is proceeding with the parties’ agreement to maintain confidentiality regarding their dispute, but some of the documents reached the UK Serious Fraud Office, and the U.S. Justice Department too. Among these documents, the petition reveals, is a list of the Congolese officials who allegedly took the bribes allegedly paid by Gertler’s companies.
The list also specifies the amounts paid to each bureaucrat, though the recipients appear on the list under code names.
Surprisingly, Gertler submitted the documents that got him into trouble while he was receiving legal counsel from top lawyers in Israel. In the arbitration, Gertler is represented by attorneys Dori Klagsbald and Boaz Ben Zur. The latter is also former Prime Minister Benjamin Netanyahu’s defense attorney in the so-called Case 4000, in which Netanyahu is accused of offering favors for positive media coverage.
Goodwill and influence
The British SFO first asked the Swiss government for legal assistance in 2014, since which time it has made several more requests for documents and inquiries. In 2019, the British asked the Swiss to try to obtain documents from a bank in Switzerland that could bolster the evidence in the case, particularly in regard to a new offshoot of the investigation centering on new suspicions of money-laundering.
When the Swiss authorities asked the bank for the information, a company that holds some of the accounts which the SFO suspects were used for the vast bribery scheme appealed the decision. The appeal was heard in Swiss federal court and turned down. The ruling rejecting the appeal exposed the details that were provided in the context of the request for legal assistance.
In the affidavit that the suspect provided in the course of the arbitration, the ruling said, the suspect explained how $360,292,535 in cash was lent to a company that used the money to pay large sums of cash to a senior public figure in Congo, the Congolese president’s right-hand-man. The ruling goes on to say that the funds were later returned to the lender in part via the Gibraltar law firm.
The ruling also says that according to the statements by the suspect himself, these payments were made to the senior official “in order to ensure ‘goodwill and influence’ on his part concerning continued activity in Congo. Other documents show that aside from payments to the president’s right-hand-man, funds were paid to other officials in the Congo government, with the payments to them recorded on a list that uses code names.”
The ruling does not point out Gertler as the suspect, but Haaretz has managed to confirm documents as described by the court were in fact submitted to the arbitration between Gertler and the Gertners.
Gertler’s attorney Ben Zur responded: “In response to your inquiry, we hereby inform you that no affidavit and list are known to be in the arbitration file as claimed in your inquiry and no such things are found there.”
The presidential aide described in the Swiss court ruling is Augustin Katumba Mwanke, who was the chief adviser to the former Congolese President Joseph Kabila, and was considered the most influential government figure in the country’s mining industry until his death in a plane crash in 2012.
By Gur Megiddo, Hagar Shezaf and Daniel Balint-Kurti, Haaretz, 15 July 2021
Read more at Haaretz
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet