DRC: Trump final gift to mining entrepreneur Dan Gertler?Published by MAC on 2021-02-28
Source: NYT, HRW, The Africa Report
The businessman was sanctioned for corruption and financially blacklisted in December 2017.
Congolese and international organizations shared their deepest concerns with regards to the decision of the Office of Foreign Assets Control (OFAC), dated January 15, 2021 and made public on January 24, 2021, granting a license to businessman Dan Gertler, who was sanctioned for corruption in the Democratic Republic of Congo (DRC) under the Global Magnitsky Human Rights Accountability Act in December 2017.
The license allows him to resume transactions with American entities for a year and unblock his frozen property. "We wish to respectfully request immediate action to reconsider, suspend and reverse this decision. We believe this decision severely undermines US global anti-corruption policies and its foreign policy strategy in the DRC" stated in a letter.
Mr. Gertler, meanwhile, has begun a campaign to rehabilitate his image in Congo, releasing promotional videos detailing his work to support local hospitals and schools there and calling the citizens of Congo “brothers and sisters.” He also started a plan to allow residents of Congo to invest in one of his new mining projects.
2020-11-17 Bribery case judgment leaves nothing for Congolese communities
2020-07-26 DR Congo: When "green energy" mixes with Dirty Dealers
2020-01-31 The Weekend Essay: DR Congo mining victims finally claim global spotlight
The Treasury Department slapped sanctions on the Israeli billionaire Dan Gertler in 2017 for corruption in Africa. In Donald Trump’s final days in office, they were rolled back with no explanation.
Feb. 21, 2021
WASHINGTON — In early December, an Israeli billionaire named Dan Gertler made an unusual request to the Treasury Department.
A mining magnate who had been accused for years of corruption in deals he struck with leaders of the Democratic Republic of Congo, Mr. Gertler had been slapped with stiff sanctions by the Trump administration in 2017, effectively cutting off his access to the international banking system and freezing money held in U.S. banks.
He had unsuccessfully tried since then to get the sanctions rolled back by hiring high-powered lobbyists and lawyers, including Alan Dershowitz, who had represented President Donald J. Trump in his first impeachment trial, and the former F.B.I. director Louis Freeh.
But with time running out on the Trump administration and the incoming Biden administration unlikely to give his pleas much of a hearing, Mr. Gertler put one last offer on the table: He would agree to have outside monitors track his business and submit regular reports on his financial transactions if the United States would lift the sanctions.
The response came in mid-January, with only days left in Mr. Trump’s term: Treasury Secretary Steven Mnuchin granted Mr. Gertler much of what he wanted, signing off, without any public announcement, on a one-year arrangement that gave him access to money frozen in U.S. banks and allowed him once again to do business with financial institutions worldwide.
The decision stunned and angered American diplomats in Washington and Africa and government officials and human rights activists in the Democratic Republic of Congo, where Mr. Gertler had been accused years earlier by the United Nations and other groups of working with the then-ruling family on deals that looted the nation’s mineral wealth and propped up a corrupt regime.
And it has left the Biden administration scrambling to determine how Mr. Gertler managed to pull it off — and whether it can be reversed.
The episode has echoes of Mr. Trump’s last-minute grants of clemency to political and personal allies and people with connections to him, including the involvement of Mr. Dershowitz. It also highlighted Mr. Gertler’s use of high-powered connections in Israel, including people with ties to Prime Minister Benjamin Netanyahu, and an effort to win support from the U.S. ambassador to Israel.
But the outcome was also distinguished by the secrecy of the process, which cut out the American diplomats most directly responsible for dealing with Congo and fighting corruption in Africa and appeared to have been handled largely at the level of Mr. Mnuchin and Secretary of State Mike Pompeo. The decision became public only after Mr. Trump had left office.
The abrupt reversal of policy toward Mr. Gertler was extraordinary in a number of ways, an investigation by The New York Times found.
Among the findings:
The rapid decision to grant Mr. Gertler much of what he wanted defied Treasury Department norms, according to three former agency lawyers, effectively rolling back sanctions with no public documentation justifying the move and without broadly consulting officials at the State Department or the National Security Council. Only last year, some American diplomats and members of Congress in both parties were seeking to expand the sanctions on Mr. Gertler.
Mr. Gertler tested the limits of federal law by hiring lawyers who also worked as lobbyists in Washington to push his case, including Mr. Dershowitz, who was instrumental in winning clemency from Mr. Trump for an array of clients, and Mr. Freeh. Treasury rules generally prohibit people under sanctions from spending money on lobbyists in the United States.
The Treasury Department’s decision to grant Mr. Gertler a special license was based in part on an assertion that there was a “national security interest” for the United States in Mr. Gertler’s business dealings in Africa, lawyers involved in the effort and Israeli officials said. But some State Department officials were skeptical that his security value could outweigh the human, economic and moral damage contained in the allegations against him. It is also unclear how the balance could have shifted since sanctions were imposed in 2017.
Pressure also came from Israel, where Mr. Gertler is represented by prominent lawyers including Boaz Ben Zur, whose client list also includes Mr. Netanyahu. David M. Friedman, then the U.S. ambassador there, was targeted in the push, and then notified Mr. Mnuchin and Mr. Pompeo that he supported the sanctions relief Mr. Gertler wanted, assuming the Treasury Department could work it out.
“I am astounded by this,” said John E. Smith, who served as the director of the Treasury Department’s Office of Foreign Assets Control at the time the sanctions were imposed on Mr. Gertler. “It appears to be an abuse of the process.”
Mr. Mnuchin and Mr. Pompeo, who was also said to be supportive of the decision, both declined to comment.
Mr. Gertler, in a statement, said the decision was not a result of any special influence campaign in Israel or the United States, but instead his promise to be more transparent about his business operations worldwide.
“We will be adopting and implementing the most stringent anti-bribery and anti-corruption policies and measures across all our global practices,” Mr. Gertler said.
But diplomats and human rights activists said they could see no justification for giving a break to Mr. Gertler, who was described by the Treasury Department in 2018 as “engaged in the looting of natural resources and the humanitarian consequences” that followed in poor, strife-torn Congo.
Senior State Department officials in the Trump administration — including Michael Hammer, the U.S. ambassador to Congo; J. Peter Pham, a special envoy; and Tibor P. Nagy, the assistant secretary of state for African affairs — were not informed ahead of time of the move to grant Mr. Gertler the license, contrary to normal practice.
“Here you have one of the most poverty-stricken nations, with a population that has suffered incredibly over the last several decades, and we have worked to turn that around, so why do this?” said Mr. Pham, who until Jan. 20 served as a senior State Department adviser on Africa.
Mr. Gertler arrived in Congo in 1997 as a 23-year-old diamond dealer, determined to challenge the global giant in supplying raw diamonds, the South African-based De Beers.
One of his first big breaks came about three years later, when Laurent Kabila, then the president of Congo, needed weapons to wage a war that would last for more than a decade.
Offering monopolies to foreigners looking to tap into Congo’s rich mineral resources was a way for Mr. Kabila to raise cash needed to fight the war. Among them was a deal to export diamonds with Mr. Gertler, who was considered an appealing intermediary because of his ties to generals in the Israeli Army that could help Congo procure weapons, according to two reports issued by the United Nations in 2001. (Mr. Gertler disputed the findings.)
But the U.N. concluded that Mr. Kabila used money gained selling access to the nation’s mineral wealth — including his deal with Mr. Gertler — to expand the Congolese military forces, a move that helped popularize the terms “conflict diamonds” and “blood diamonds.”
“Conflict diamonds are exchanged for money, weapons and military training,” a U.N. report describing Mr. Gertler’s work said.
Mr. Gertler was also indirectly accused, in a Justice Department court filing in 2016, of paying more than $100 million in bribes to government officials in Congo on behalf of a company named Och-Ziff “to obtain special access to and preferential prices for opportunities in the government-controlled mining sector.”
A spokesman for Mr. Gertler, Aron Shaviv, said Mr. Gertler was never interviewed or charged in the case and he denied any wrongdoing. Instead, Mr. Shaviv said, Mr. Gertler’s companies have directly invested more than $1.5 billion in Congo, becoming one of the nation’s largest employers and taxpayers, starting when no other foreigners were willing to take the risk of doing business in the middle of a war.
“He did buy cheap and he may sell at a much, much higher price because he made the investment when no one else did, no one else would dare go to Congo,” said Mr. Shaviv, a political consultant who served as Mr. Netanyahu’s campaign manager in 2015.
Mr. Gertler first came onto the radar of White House officials in 2002, when Joseph Kabila, who took over the nation after his father was assassinated the prior year, sent a letter to President George W. Bush, looking for help to end the war.
“Please accept my appointed emissary, Mr. Dan Gertler, a respected and well-known international businessman, to speak on my behalf for the needs of the Democratic Republic of Congo,” Mr. Kabila wrote in the April 2002 letter to Mr. Bush, a copy of which was obtained by The New York Times.
“He played a very pivotal role in not only advising Kabila, but also sort of speaking with authority and definitely carrying the United States’ message,” Jendayi E. Frazer, who then served as an adviser to Mr. Bush for African affairs, said in an interview.
Mr. Gertler’s work helped lead to a peace deal in 2003. And it also cemented his relationship with Joseph Kabila. The Congolese government began to grant new deals to Mr. Gertler and his growing empire of companies, which expanded from diamonds into copper, cobalt, oil, gas and gold.
In just five deals negotiated between 2010 and 2012 to sell copper and cobalt through offshore companies linked to the Fleurette Group, which is controlled by Mr. Gertler and his family, the citizens of Congo lost an estimated $1.36 billion because the nation’s resources were being sold at one-sixth of their value, according to a report prepared in 2013 by Kofi Annan, the former U.N. secretary general, and other prominent African officials.
The forgone revenues to Congo from the deals “were equivalent to more than double the combined annual budget for health and education,” the report concluded.
In Congo, over 70 percent of the population lives in extreme poverty, with an income of less than $1.90 a day. But the profits generated for Mr. Gertler were extraordinary, averaging 512 percent, according to the study, turning him into one of the 29 youngest billionaires in the world, according to Forbes.
It was not just Mr. Gertler who was reported to be becoming tremendously wealthy through these deals.
Joseph Kabila, who had called Mr. Gertler “an old and trusted friend,” was also taking a cut, according to a 2017 report by the nonprofit Congo Research Group, which found that Mr. Kabila and his family ended up as owners in part or whole of at least 80 companies. Among them was one mining deal with a business linked to Mr. Gertler that drew so many questions from the International Monetary Fund that the fund canceled disbursement of more than $200 million in loans it had planned to make under an agreement with Congo.
The corruption and exploitation inherent in these types of deals were just the sort that a new appointee at the Treasury Department named Sigal P. Mandelker was determined to confront when she was confirmed as the top official in charge of sanctions enforcement in 2017.
“Our objective is to change behavior, inspire democracy and freedom, and disrupt the ability of kleptocrats, human rights abusers and others from stealing the wealth of their country,” Ms. Mandelker said in a 2019 speech.
Ms. Mandelker drew bipartisan praise for her effort to take advantage of new authority Congress granted to the Treasury in 2016. The Global Magnitsky Human Rights Accountability Act, as the law is known, is named after a Russian tax lawyer, Sergei Magnitsky, who died in a Moscow prison in 2009 after he exposed corruption by Russian officials.
The new law allowed the Treasury to freeze the assets of individuals or businesses operating anywhere in the world that were engaged in “gross violations of internationally recognized human rights.”
Working with the State and Justice Departments, Ms. Mandelker’s team included Mr. Gertler in the first round of individuals penalized in December 2017, citing his record of “opaque and corrupt” mining and oil deals in Congo. A second round of sanctions in 2018 targeted more companies affiliated with Mr. Gertler.
The sanctions on Mr. Gertler severely constrained his ability to do business around the world by cutting off his access to the United States banking system and limiting his access even to non-U.S. financial institutions concerned about running afoul of the American law.
But less than a year after the sanctions were imposed, Mr. Gertler began his campaign to roll them back.
The push started with a seemingly innocuous request: Grant Mr. Gertler permission to use some of his money to make charitable donations to hospitals, libraries and schools in Congo.
But even that plan drew concern from some State Department officials, who were worried that the donations would allow Mr. Gertler to bolster his standing in Congo and help supporters of Mr. Kabila, by then out of office, challenge efforts by the new, democratically elected president, Félix Tshisekedi, to assert control.
By last year, Mr. Gertler was also battling to rebut a report by two human rights groups citing what they said was evidence that he was evading the sanctions by using a network of shell companies, frontmen and proxy bank accounts to move millions of dollars in and out of Congo and even to acquire new mining rights there.
Mr. Gertler sued both the human rights groups and the Israeli newspaper Haaretz, which published reports detailing the allegations. Lawyers working for Mr. Gertler and a bank in Congo claimed the reports were based on documents that were stolen and then tampered with. The paper and the human rights groups have defended the accuracy of their reporting.
Instead of supporting Mr. Gertler’s bid for permission to make charitable donations, State Department officials responsible for Africa pressed the Treasury Department to expand the sanctions.
But by the end of 2019, key players at the Treasury, including Ms. Mandelker, had started to leave the Trump administration, and State Department officials like Mr. Pham said they found it more difficult to get new Magnitsky sanctions imposed.
The officials turned to the Senate Foreign Relations Committee for help in keeping up the pressure on Mr. Gertler. In August, members of the committee sent the Treasury Department a bipartisan letter that did not mention him by name but carried a clear message.
To help build democracy and fight corruption in Congo, the letter said, the United States “should designate additional officials and companies responsible for or complicit in high-level corruption, including the misappropriation of state assets, for targeted financial and travel sanctions.”
But Mr. Gertler’s team, including Mr. Dershowitz and Mr. Freeh, had a different message. They had solicited a letter from Ms. Frazer attesting to Mr. Gertler’s role in the peace negotiations nearly two decades earlier and distributed it to Trump administration officials. As far back as 2019, they set up meetings with State Department officials, making the case that his activities had helped the interests of the United States.
“His first effort was a lobbying effort,” Mr. Shaviv said of Mr. Gertler’s campaign.
But Treasury rules state that “professional services such as lobbying, public relations, government affairs, consulting and business development are not legal services, and are generally not covered” by an exemption that allows people under sanctions to hire lawyers.
Mr. Dershowitz said the meetings were permitted because he did not lobby the White House or others on this matter.
“My role was purely limited to the legal issues,” Mr. Dershowitz said.
But with time running out on Mr. Trump’s tenure and the sanctions still not lifted, Mr. Gertler decided to make a strategy shift. While not admitting any past wrongdoing, Mr. Gertler’s lawyers told the Treasury Department in early December that he was prepared to take any reasonable steps to assure the United States that he would abide by the law, including hiring outside monitors and submitting detailed periodic reports on financial transactions.
“Our entire approach was to assure them that going forward, there would be no problem,” Mr. Shaviv said.
At the same time, assertions were being made that Mr. Gertler had been of value to U.S. intelligence agencies.
“It’s absolutely the case that the national security interests of both Israel and the United States were implicated in this,” Mr. Dershowitz said, although he and others declined to provide any specifics. Mr. Shaviv declined to discuss whether Mr. Gertler had undertaken any such activities, but said that if they did take place, they would be described as “services rendered to the United States of America.”
Whatever Mr. Gertler did that benefited the United States was sensitive enough that Israeli officials said they were aware of it but declined to comment on its nature. Two Israeli officials told The Times that the United States had informed Israel that in line with a decision by Mr. Mnuchin and Mr. Pompeo, the terms of the sanctions imposed on Mr. Gertler would be eased “out of reasons of American national security.”
But several former State and Treasury Department officials said that while as a foreigner operating in Congo Mr. Gertler might have had information the United States considered valuable, keeping him on the sanctions list also had a value to Washington by helping to promote the anti-corruption effort.
“The only value to national security that Gertler has comes from him being placed in the box that he was put into with the sanctions,” Mr. Pham said.
In any case, the decision to grant him the one-year license was unusual in a number of respects, they said.
The Treasury Department traditionally agrees to revoke sanctions only after individuals have proved they have already changed their behavior, not simply agreed to make such changes in the future, said Mr. Smith, the former head of the sanctions unit, who is now a national security lawyer at the law firm Morrison and Foerster. Mr. Gertler had not previously provided the United States such evidence.
Furthermore, if Mr. Gertler’s assets in U.S. banks were going to be unfrozen and his corporate entitles allowed to once again do business with United States financial institutions, as the license allowed, that kind of deal would almost certainly need to be made public, not issued in secret as this one was. This kind of review also typically takes months of effort, not the six weeks that it took in this case.
“This is a unique, one-of-a-kind response that you don’t see with the United States government,” Mr. Smith said of the so-called specific license that Mr. Gertler received. “It is the most shocking license I have ever seen in a few decades of working on economic sanctions.”
When word of the decision to grant Mr. Gertler the one-year license eventually trickled out after Mr. Trump left office, it set off a firestorm of criticism from officials who said it would undercut efforts by the United States to fight corruption.
Mr. Hammer, the U.S. ambassador to Congo, was at first so confused at the news, according to one State Department official briefed on the matter, that he called officials in Washington to figure out if a mistake had been made.
“This has made my job much tougher,” an angry Mr. Hammer told colleagues.
House and Senate Democrats fired off letters to the Treasury and State Departments. A coalition of 30 Congolese and international human rights groups assailed the move, with one of the letters calling the move a “terrible blow to the heart of one of the most lauded and effective anti-corruption programs of the last decade.”
The Biden administration is now investigating why the license was issued, and if it could be revoked, although Mr. Gertler’s team said that it would have no justification to take such a step.
Mr. Gertler, meanwhile, has begun a campaign to rehabilitate his image in Congo, releasing promotional videos detailing his work to support local hospitals and schools there and calling the citizens of Congo “brothers and sisters.” He also started a plan to allow residents of Congo to invest in one of his new mining projects.
Activists in Congo were not impressed.
“How can someone who has done so much harm to Congo for 20 years suddenly say he’s an angel?” said Jimmy Kande, a leader in the nonprofit group Congo Is Not for Sale. “If Congolese authorities would finally look at Gertler’s past, he shouldn’t have much of a future in Congo.”
Secretary of State
Washington, D.C. 20520
Secretary of the Treasury
Washington, D.C. 20220
February 2, 2021
Re: Mr. Dan Gertler’s license (No. GLOMAG-2021-371648-1)
Dear Mr. Secretary,
Dear Madam Secretary,
We write to you as members of Congolese and international civil society organizations.
We would like to share with you our deepest concerns with regards to the decision of the Office of Foreign Assets Control (OFAC), dated January 15, 2021 and made public on January 24, 2021, granting a license to businessman Dan Gertler, who was sanctioned for corruption in the Democratic Republic of Congo (DRC) under the Global Magnitsky Human Rights Accountability Act in December 2017. The license allows him to resume transactions with American entities for a year and unblock his frozen property.
We wish to respectfully request immediate action to reconsider, suspend and reverse this decision. We believe this decision severely undermines US global anti-corruption policies and its foreign policy strategy in the DRC, which notably supports current President Felix Tshisekedi’s anti-corruption policy. Over the past years, the US Embassy in Kinshasa has been instrumental in putting the fight against corruption front and center on the political agenda in the DRC.
The sanctions against Mr. Gertler and his entities are the embodiment of that policy: they attest to the fact that the US is ready to take concrete and effective action against those who deprive the Congolese people of the means to rebuild the country. This has provided a crucial stepping stone to Congolese civil society groups determined to bolster the fight against corruption.
It has come to our attention that this extraordinary license was issued opaquely and in haste during former President Donald Trump’s last days in office. It appears that standard consultations both within the Treasury Department and the State Department had not taken place prior to the issuance of the license, completely catching off guard a wide range of US officials who had worked hard to enact, uphold, and publicly defend the sanctions. This decision came after months of extensive lobbying on Mr. Gertler’s behalf, including by well-known lawyers close to then-President Trump.
The Dan Gertler case had illustrated how impactful the Magnitsky sanctions can be. A longtime friend of DRC’s former President Joseph Kabila, he was added to the very first Global Magnitsky sanctions list in December 2017 for “opaque and corrupt mining deals in DRC.” This long-awaited sanction came following years of public reporting, both from international media and non-governmental organizations, who sought to expose how DRC’s public mining revenues had been diverted.
The scale and nature of the corruption Gertler facilitated had a significant impact on the human rights of many Congolese. One of the bases for the sanctions, according to the press release announcing them, was Gertler acting as a middleman for deals between Kabila and oil companies that reportedly resulted, between 2010 and 2012 alone, in a loss of US$1.36 billion to the state. This amounts to nearly half of the country’s health budget over those three years, which falls far below both the regional average and the per capita spending a World Health Organization-supported study identified as the minimum to provide adequate health care in DRC.
OFAC’s move to sanction Mr. Gertler was the first instance in which the tireless efforts of Congolese and international organizations were recognized. They took a major toll on the Israeli billionaire's financial dealings that according of OFAC itself had enabled and facilitated significant corrupt activities during the administration of former DRC president Joseph Kabila.
Evidence published in July 2020 by PPLAAF and Global Witness, who are signatories to this letter, suggests that Gertler and his associates set up a highly complex system of proxies, shell companies, and an international money laundering network to evade US sanctions, as a means to allow him to continue to operate in the DRC and funnel millions of dollars abroad. The ingenuity and complexity of this apparent network indicates that his access to financial networks had been essential to his previous operations. Mr. Gertler has denied any knowledge of or connection with this network as well as rejecting all allegations of wrongdoing and corruption.
In November 2020, a US judge sentenced a subsidiary of New York hedge fund Och-Ziff for corruption in DRC. Although Mr. Gertler was not charged in this case, the court documents include information about the alleged role played by Gertler in the corruption, including the arrangement of bribes to DRC officials and judges, which further strengthens the need to keep sanctions in place.
While one could have expected an expansion of US sanctions following these revelations last year, the January 15 license sends a worrying signal to those who are looking to undermine the US sanctions regime. It sets a dangerous precedent and largely undercuts efforts to fight overseas corruption as part of the Global Magnitsky program, which has been an example for much other legislation around the world as an effective way to put pressure on those responsible for corruption and human rights abuses.
Last but not least, this license thwarts the critical and challenging work of civil society organizations and activists in DRC and beyond to bring accountability to those who had plundered their country’s resources and risks creating additional victims of corruption. According to a report by civil society organizations Raid and Afrewatch, which are signatories to this letter, in just one mining deal involving Mr. Gertler, an estimated 32,000 local residents were deprived of clean drinking water, plagued with ongoing air and water pollution, sickness and lack of educational opportunities due to corruption. Mr. Gertler denies any corruption in this instance.
The Congolese civil society organizations signing this letter take tremendous risks to fight corruption in DRC and have greatly appreciated support for their efforts from international actors, including the US government. In his most recent video following President Biden’s inauguration, US Ambassador to the DRC, Michael Hammer, said, “It is in the interest of the American and the Congolese people to reinforce democracy, to fight corruption and to put an end to impunity.” We take Ambassador Hammer at his word: we remain ready and willing to work with the US government to reinforce democracy, fight corruption and put an end to impunity. We hope you will stand with us.
We urge the Biden administration to immediately investigate this last-minute license, and, subject to relevant information, reverse its decision. The US needs to ensure that the proceeds of alleged corruption are not being accessed and unblocked during the transition, or for political motives.
We therefore respectfully request that the Treasury Department inform banks and financial institutions that the license is under review and that they should not unblock or allow further activities pursuant to the license until the new administration has had a chance to review both the reason for granting the license and its due process.
Thank you in advance for your attention.
We remain at your disposal if you have any questions or require any further information.
Agir pour des élections transparentes et apaisées
Cadre de concentration sur les ressources naturelles de l’Ituri (CDC/RN)
Coalition pour la gouvernance des entreprises publiques du secteur extractif (COGEP)
Congo n’est pas à Vendre (« Congo is not for sale »)
Initiative bonne gouvernance et droits de l’Homme (IBGDH)
Justice pour tous
Observatoire citoyen des droits et de lutte contre la corruption en RDC (OCIDC)
Observatoire de la dépense publique (ODEP)
Observatoire d’études et d’appui à la responsabilité sociale et environnementale (OEARSE)
UNIS – Plateforme panafricaine de lutte contre la corruption
Human Rights First
Human Rights Watch
Never Again Coalition
The ONE Campaign
Open Society Foundations
Platform to Protect Whistleblowers in Africa (PPLAAF)
Publish What You Pay – U.S.
Rights and accountability in development (RAID)
DRC : A final gift from Trump to the Israeli billionaire Dan Gertler?
Joël Té-Léssia Assoko
26 January 2021
Dan Gertler has a one-year respite – until 31 January 2022 to be precise – to continue doing business with US companies.
This is due to a “licence” that was granted to the mining magnate by the US Department of the Treasury on 15 January – five days before the handover of power between the Donald Trump and Joe Biden administrations.
In a letter addressed to the Washington-based law firm Arnold & Porter Kaye Scholer LLP, Andrea M. Gacki, director of the Office of Foreign Assets Control, informed the Israeli tycoon’s lawyers that “based upon, inter alia, of information dated December 3, 2020, submitted on behalf of Mr. Dan Gertler, to the Office of Foreign Assets Control, the transactions described herein are authorised.”
DRC: Embattled Dan Gertler tries communication blitz
What follows is a long list of companies linked to the billionaire and one of his associates, the Belgian national Pieter Albert Deboutte, which were sanctioned in December 2017 under the Global Magnitsky Act. This is a law that allows the US government to sanction and freeze the assets of individuals and companies it considers to be complicit in acts of corruption or human rights violations.
“Gertler used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state. As a result, between 2010 and 2012, the DRC reportedly lost more than $1.36bn in revenue from the underpricing of mining assets that were sold to offshore companies linked to Gertler,” the US Treasury Department said at the time.
A light regime before a total exoneration?
Three years later, the tone changed. In addition to Gertler and Deboutte, a total of 35 companies sanctioned in two waves (December 2017 and June 2018) – including Fleurette Properties, Oil of DR Congo and Moku Mines d’Or SA – are again allowed to carry out transactions with firms based in the US. These include financial institutions such as Citibank, Bank of New York Mellon, but also Deutsche Bank and Bank of China Limited.
The easing of these sanctions, initially reported by The New York Times, allows financial transactions and access to previously blocked accounts. However, this lighter regime is accompanied by various restrictions on certain transfers of property. The one-year period granted is supposed to allow the US administration to continue to examine the information provided by Gertler before deciding on the lifting of the restrictions.
“The licence does not remove Gertler and his network from the sanctions list, but it effectively undermines the sanctions by allowing all transactions and activities moving forward with Gertler and his network and by authorising a group of named banks and financial institutions to unblock, i.e. unfreeze, any accounts/funds/property they have held. The licence shows that, in the end, the [law] firm helping Gertler was one of DC’s biggest and most prestigious,” said The Sentry, an NGO that fights corruption in Africa.
The Trump administration provided no details regarding the nature of the “information dated December 3, 2020”, which led it to ease the sanctions regime imposed on Gertler and his associates.
It should be noted however, that one of the lawyers and lobbyists associated with Gertler is Alan Dershowitz, who also represented former president Trump. Furthermore, the outgoing team had been particularly criticised for the list of controversial people, often accused of financial wrongdoing, who were granted presidential pardons in the final hours of the Trump administration.
READ MORE Dan Gertler and Afriland First Bank start legal fight in Paris
“This licence may be revoked or modified at any time. If this licence was issued as a result of willful misrepresentation it may be declared void from the date of its issuance or from any other date,” states the document from the Office of Foreign Assets Control.
Neither the Biden administration nor the Kinshasa authorities have reacted officially since the easing of sanctions.