Fraud, bribery linked to China-Congo 'deal of the century': Report

Washington DC [US], December 1 : A massive deal between Chinese state-owned engineering firms and the Democratic Republic of Congo (DRC) to trade mineral wealth to fund urgently needed infrastructure projects concealed a multimillion-dollar embezzlement and bribery operation, according to a new investigative report.
A 90-page report by The Sentry details how critical funds meant to rebuild roads, hospitals, and schools wound up in the pockets of former DRC President Joseph Kabila's inner circle in a scheme orchestrated by David Du Wei, a middleman with high-level connections in DRC and China.
The report titled "The Backchannel: State Capture and Bribery in Congo's Deal of the Century,"
said that Du Wei moved USD 65 million through his shell company's accounts at BGFIBank DRC with help from a tight network of individuals representing private industry and government. Du's million-dollar payments were subsequently routed through the global financial system via correspondent banks - including Citibank and Commerzbank.
The Sentry's investigation has found evidence of corruption showing that Chinese corporations colluded with power players in the DRC to secure access to billions of dollars' worth of natural resources--all with an assist from the world of global high finance.
According to the report, Du was an ideal intermediary to ensure the success of the high-risk Sino-Congolese minerals-for-infrastructure project.
The Sentry probe showed that Du favored less-than-legitimate means to advance the Chinese enterprises' cause: moving millions of dollars through Congo Construction Company (CCC), a shell company, with phony justifications and sometimes even using apparently forged consulting agreements and invoices.
The leaked banking records show that Du also apparently made use of a blunt instrument: bulk cash. This coincided with efforts to keep the deal on track. Several years and millions of dollars later, when international banks finally began asking questions, it was already too late.
The files show that the shell company at the center of the scheme--Congo Construction Company (CCC)--received USD 55 million from foreign sources apparently intended for Kabila and his entourage. CCC later funneled USD 10 million back out to safety as the Kabila family faced losing both political power and control over the bank.
John Dell'Osso, Senior Investigator at The Sentry, said: "When unscrupulous corporations want to secure lucrative projects and make obstacles disappear, they sometimes outsource their dirty work to middlemen. These are the shady agents who deliver the proverbial sacks of cash to pay off local officials."
Dell'Osso said that their investigation uncovered middleman David Du Wei, and details every step of his corrupt operation to keep a multibillion-dollar mining deal on track. "The deal was meant to help rebuild critical infrastructure in the DRC, improving the lives of everyday citizens," he added.
Justyna Gudzowska, Director of Illicit Finance Policy at The Sentry, said: "The report demonstrates the consequences of allowing the politically-connected to run a financial institution like their own piggy bank."
The Sentry's findings add to an array of investigative reports released in the "Congo Hold-up" series by an international consortium of non-profit organizations and media outlets, according to the report.
The millions of leaked bank records obtained by the Platform to Protect Whistleblowers in Africa (PPLAAF) and the French news group Mediapart and shared with The Sentry and other consortium partners by PPLAAF and European Investigative Collaborations (EIC) represent the largest confidential data leak in African history.
J.R. Mailey, Director of Investigations at The Sentry, said: "One of the biggest deals in the history of the Democratic Republic of the Congo is also one of the dirtiest. With access to billions of dollars' worth of mineral wealth at stake, two Chinese companies pumped millions into accounts controlled by the president's family."
None of the companies behind the minerals-for-infrastructure deal responded to requests for comment, nor did former President Joseph Kabila or any members of his family, according to The Sentry. Furthermore, the bank at the center of the leak - BGFIBank DRC - did not respond to detailed questions about the matters discussed in the report.