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Secretive International Network Attempted to Take Over a Quarter of DR Congo’s Banking Sector

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Secretive International Network Attempted to Take Over a Quarter of DR Congo’s Banking Sector

Posted by Enough Team on May 22, 2019

The Sentry’s latest report reveals activities of investment bank linked to former President Joseph Kabila

May 22, 2019 (Washington, D.C.) – A new investigation by The Sentry reveals family members and allies of Joseph Kabila, the former President of the Democratic Republic of the Congo, attempted to capture stakes in three separate banks that together made up over one quarter of Congo’s $5 billion banking sector.

The investigative report published today details the activities of Kwanza Capital, a secretive investment firm controlled by the former president’s brother Francis Selemani Mtwale. The investigation discovered a network of international businessmen and companies linked to Kwanza Capital, including a Swiss-Angolan financier, a Chinese conglomerate, and an attorney who at the time was a board member and head of France’s headquarters for the global law firm Orrick.

The report, “Covert Capital: The Kabila Family’s Secret Investment Bank,” which follows a series of exposés on the shadowy financial activities of corrupt and violent leaders in Central and East Africa, is produced by The Sentry, an investigative organization co-founded by George Clooney and John Prendergast.

George Clooney, Co-Founder of The Sentry, said: “In our ongoing efforts to track money laundering, our investigative report exposes how former president Joseph Kabila and his family sought to infiltrate the banking system through Kwanza Capital and apparently collected millions along the way. Our report also identifies the corporate players from around the world who sought to profit.”

John Dell’Osso, Senior Investigator at The Sentry, said: “Kwanza Capital ran roughshod over the Congolese banking and finance sector with minimal apparent resistance from the very authorities charged with protecting against such abuses. Worse, some of these same authorities seemingly benefited from its operations. But this is not purely a Congolese issue, as corporate players from around the world sought to profit from weak rule of law and rampant corruption.”

John Prendergast, Co-Founder of The Sentry and Founding Director of the Enough Project, said: “Something is deeply wrong when the private interests of Congolese political leadership, regulatory authorities, and international businesses so seamlessly converge as they did with Kwanza Capital. The activities of Kwanza Capital show just how little interest Congolese kleptocrats had in a healthy, transparent and well-governed banking system. International regulatory authorities and banks should urgently investigate these activities and other cases where money laundering may be occurring.”

Click here to read the full report and recommendations.

Selected report highlights:

  • According to documents reviewed and interviews conducted by The Sentry, Kwanza Capital and its allies sought to control banks that together amounted to around 28 percent of the country’s roughly $5 billion banking sector.
  • Over one hundred million dollars circulated through accounts held by Kwanza Capital at a bank linked to the family of Joseph Kabila.
  • Financial records reviewed by The Sentry reveal several indicators of money laundering as well as signs some companies may have received millions of dollars in misappropriated funds.

Key recommendations in The Sentry’s report:

  • Anti-Money Laundering Measures: The U.S. Department of the Treasury and European financial intelligence units should investigate the banking relationships described in this report and, if warranted, issue advisories to banks and other institutions. In particular, these entities should consider whether to issue advisories in relation to the past conduct of BGFIBank DRC—discussed throughout this report—and more broadly related to overall money laundering risk present in the Congolese banking sector.
  • Targeted Sanctions: The United States and European Union should investigate and, if appropriate, impose and implement targeted sanctions pursuant to existing Congo sanctions authorities against members of former President Kabila’s network and others in connection with the transactions described in this report.
  • Bank Due Diligence: U.S. and international financial institutions should employ a range of actions to improve due diligence on transactions involving Congolese companies and politically exposed persons or individuals known to operate on their behalf. The Sentry also recommends that these institutions take appropriate follow-up actions if they have processed transactions in connection with the individuals and entities outlined in this report and that these same institutions should, where appropriate, emphasize that Congolese correspondent banking partners more robustly conduct enhanced due diligence.
  • Internal Reforms and Accountability Measures: The Sentry is also recommending a range of internal actions by the Congolese government and other partners. Specifically, The Sentry recommends the current government take concerted steps to empower Congo’s financial intelligence unit, investigate potential malfeasance by the Central Bank of Congo and state-owned enterprises, enforce a public asset declaration by government officials, and boost beneficial ownership transparency with a complete and accessible corporate registry. The Sentry further recommends that the U.S. government encourage the Congolese government to ask the International Monetary Fund (IMF) to restart an Extended Credit Facility in Congo to improve financial transparency.

Click here to read the full report and recommendations.

For media inquiries or interview requests, please contact: Megha Swamy, +1 202-580-7671, mswamy@thesentry.org.