The same banks used by kleptocratic governments to divert state assets can also be used by terrorist financing networks. A new investigative report released this week by The Sentry, "The Terrorists' Treasury," describes how this has taken place at one prominent bank in the Democratic Republic of Congo.
Individuals and companies subject to U.S. counterterrorism sanctions, in connection with Hezbollah, used the bank to move money through the international banking system, despite warnings from bank employees and confirmation from the U.S. Treasury Department that doing so could violate U.S. sanctions.
This was not just any bank. BGFIBank DRC, the institution that processed the transactions, is run by Congolese President Joseph Kabila’s brother and has been mentioned in a recent scandal in Congo involving the alleged diversion of public funds from state-owned mining companies and the national electoral commission.
In 2011 bank employees at BGFIBank DRC raised the alarm with senior officials at the bank, in writing, about a series of transactions. The concern was that the transactions involved companies linked to financiers of Hezbollah, a Lebanon-based terrorist group and political party. The main entities in question were subsidiaries of Kinshasa-based business conglomerate Congo Futur, a company under U.S. Department of the Treasury sanctions. Among the recipients of the warnings was Francis Selemani Mtwale, the bank’s CEO and brother of President Kabila.
But the bank’s relationship with Hezbollah-linked companies continued. BGFIBank DRC even went so far as to request that certain transactions be unblocked by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) after other banks refused to process them. And BGFIBank DRC continued to engage in correspondence with Congo Futur-affiliated company representatives in 2016. This raises major questions about the bank’s ability and willingness to fulfill its sanctions and anti-money laundering compliance obligations.
BGFIBank DRC reportedly was used to divert significant public funds in Congo, including millions of dollars in withdrawals by Congo’s electoral commission, and transfers of $8 million in cash in irregular “tax advances” from Congo’s largest state-owned mining company, Gécamines.
BGFIBank DRC’s approach to enforcing sanctions has allowed Kassim Tajideen—described by the U.S. government as “an important financial contributor” who “has contributed tens of millions of dollars to Hizballah”—and his network to maintain access to the global financial system despite being placed under U.S. sanctions in 2009 and 2010. The documents reviewed by The Sentry also show links between Congo Futur and other firms under Kassim Tajideen’s control. These documents indicate that Congo Futur subsidiaries used BGFIBank DRC to operate accounts and make wire transfers after both Congo Futur and Kassim were placed under U.S. sanctions, despite warnings from bank employees that the bank should not do so. This is despite repeated public assertions from both Kassim and one of his brothers who is not under U.S. sanctions, Congo Futur General Manager Ahmed Tajideen, that the Kinshasa-based conglomerate had no links to any of the Tajideens under U.S. sanctions.
Congo Futur has continued to thrive in Congo despite U.S. sanctions; it even maintains financial ties to the Congolese government and has received government contracts. These continued relations raise serious questions about the Congolese government’s reliability in the fight against global terrorism, transnational crime, and illicit finance. Congo Futur has risen and remained prominent despite facing sanctions and the Kabila regime’s decreasing legitimacy. BGFIBank DRC has been used to facilitate Congo Futur’s access to the U.S. financial system, despite sanctions.
Inadequate anti-money laundering compliance and sanctions enforcement standards at banks can empower a wide range of criminal groups and corrupt actors—and ultimately undermine governance and contribute to instability in Congo and elsewhere. Members of civil society have suggested that business interests could be part of the reason Kabila, who has sparked a violent nationwide political crisis by recently overstaying his presidential term limits, has maintained an iron grip on the presidency.
While the case spotlighted in The Sentry's investigation shows how banks can be exploited by kleptocrats and terrorist financiers alike, the continued reliance on the global financial system by these actors means that the international community has the power to address that dual threat. Until law enforcement and policymakers intervene, exploitative corporate actors and political elites will be able to act with impunity. But there is a clear way forward. Higher-level network sanctions, criminal investigations and prosecutions, anti-money laundering measures, improved banking due diligence, and transparency make for a potent combination. Applied deftly by the United States, European Union, and international banking authorities, these measures can sever the financial lifelines by which corrupt government officials, terrorist financiers, and their business networks operate.
This piece is a compilation of key excerpts from the report, "The Terrorists' Treasury: How a Bank Linked to Congo’s President Enabled Hezbollah Financiers to Bust U.S. Sanctions" by The Sentry Investigative team.