The son of Congo-Brazzaville’s president has misappropriated $50m (£41m) of public money by routing it through shell companies and secrecy jurisdictions, according to a new investigation.
Six countries in the EU, the US state of Delaware and the British Virgin Islands all played a key role in Denis Christel Sassou-Nguesso’s scheme, according to Global Witness. The campaign group said the money was siphoned off through an apparent sham contract Congo-Brazzaville had with a Brazilian infrastructure company.
The money-laundering scheme said to have been used by Sassou-Nguesso, an MP as well as the son and namesake of the man who has spent 35 years as president, is similar to the one his sister Claudia allegedly used to steal $20m of state funds, part of which she used to buy a luxury apartment in Trump Tower in New York, allegations she has denied.
Investigators obtained documents that they said showed $675m left Congo-Brazzaville’s treasury, and that sums totalling more than $50m subsequently went through companies in Delaware and the British Virgin Islands before reaching Cyprus. Cypriot companies secretly owned by Sassou-Nguesso received the money, Global Witness said, and he used it to make payments to companies based in Poland, Portugal, Spain and Switzerland. The alleged embezzlement dates from 2013 and 2014.
“As we followed the trail of money we found that it was funnelled through several jurisdictions which pride themselves on having strong anti-money laundering regimes, such as the EU and the US,” said Mariana Abreu, who led the investigation.
The global financial system is supposed to prevent kleptocrats from robbing their citizens, but there are significant loopholes. An estimated $90bn is laundered through the UK every year. Congo-Brazzaville has large oil reserves, but almost half of its people live in poverty.
A Portuguese businessman who is already under investigation for corruption, José Veiga, allegedly facilitated part of the money-laundering, by helping secure public works contracts in Congo-Brazzaville for the Brazilian company Asperbras.
According to Global Witness, Asperbras was contracted to carry out a geological survey, and subcontracted part of the work to a Cypriot company called Gabox Limited, despite the fact that Gabox had been set up just two days before the deal was signed, and had no employees or capital. Gabox was to receive 25% of what Asperbras got from the Congolese government – $50m of the $200m that the Swiss NGO Public Eye said the project was worth.
In a written response to the Guardian, Asperbras rejected any claim of overpriced contracts and irregularities in Congo-Brazzaville’s public procurement process.
“All public work contracts concluded by Asperbras with various and different ministries have been legally approved and scrupulously comply with all procedures provided for in Republic of Congo’s law,” the response said.
Veiga, who is a former director of Benfica football club and was reportedly known as the “Portuguese wizard” of the Congolese president, was briefly arrested in 2016 as part of an investigation, still ongoing, into money laundering and international corruption. He was released after three months in jail and a further two under house arrest. IN 2017, responding to the Public Eye investigation, Veiga denied all the allegations against him, saying everything he had done was legal.
Documents obtained by Global Witness allegedly show that in November 2013 a department responsible for managing Congo-Brazzaville’s treasury transferred roughly $675m to a Delaware-based Asperbras subsidiary called Asperbras LLC, seemingly for major public works contracts.
According to Global Witness, 11 days later, Veiga set up a company in Cyprus called Gabox Ltd. Two days later, said Global Witness, this company signed a contract with Energy & Mining, an Asperbras LLC subsidiary based in the British Virgin Islands, ostensibly to carry out part of a geological mapping project in Congo-Brazzaville.
Various Asperbras accounts at the now defunct Banco Espírito Santo (BES) channeled funds to Energy & Mining’s BES bank account in Cape Verde, the campaign group said, and these were then disbursed to companies fronted by Veiga in Cyprus and Congo.
Corporate documents obtained in Cyprus and notarised contracts from Congo-Brazzaville show that Sassou-Nguesso was the real owner of the Cypriot companies, Global Witness allege, and that the companies he owned received about $50.5m. The campaign group claims other documents showed that Veiga was a frontman for Sassou-Nguesso in a Spanish and an Estonian shell company as well.
Global Witness, which has long campaigned for public registers of beneficial ownership in jurisdictions where it is difficult to ascertain who really owns companies, said the investigation showed that there were major gaps in the implementation of anti-corruption measures in European countries.
“All of the jurisdictions involved urgently need to address the ways in which shell companies can move funds around at ease, facing no tough questions on provenance or legitimacy despite multiple corruption warning signs,” said Abreu.