Uganda’s Foreign minister, Mr Sam Kutesa. PHOTO | NMG
Ugandan Foreign Affairs minister Sam Kutesa has been cited, in
the United States, for soliciting and receiving a $500,000 bribe to
secure business deals for a Chinese energy firm.
In a
criminal complaint filed by US prosecutors in New York on Monday, two
former top government officials, from Hong Kong and Senegal, are charged
with leading a multimillion-dollar bribery scheme in Africa on behalf
of the Chinese conglomerate through a charity organisation.
Mr
Chi Ping Patrick Ho, the head of the charity firm, is said to have
wired the half a million dollar bribe through an “account designated by
the Minister of Foreign Affairs of Uganda, who had recently completed
his term as the President of the UN General Assembly”.
Mr
Ho, Hong Kong's former Home Affairs Secretary, is further accused of
giving “gifts and promises of future benefits including offering to
share the profits of a potential joint venture” to Ugandan President
Yoweri Museveni and Mr Kutesa, the US Justice Department said.
The benefits also included a proposal by Mr Ho to partner with the family businesses of both Mr Museveni and Mr Kutesa.
“In
exchange,” the Justice Department complaint said, “the Ugandan foreign
minister assisted [the Chinese energy company] in obtaining business in
Uganda, including potential acquisition of a Ugandan bank.”
Money laundering
Neither
President Museveni nor his Foreign Affairs minister are charged with
crimes. The are cited in regard to charges filed against Mr Ho and
former Foreign Affairs minister of Senegal, Mr Cheikh Gadio.
Mr
Gadio is accused of having arranged a $2 million bribe for the
President of Chad, Idriss Deby, "to obtain valuable oil rights".
Mr
Ho, 68, and Mr Gadio, 61, were arrested in New York over the weekend.
They are each charged with violating the US Foreign Corrupt Practices
Act and international money laundering. They each face jail terms of up
to 20 years if convicted.
The charges were based on their use of the US banking system to process the payoffs, sent under the guise of donations.
The
Chinese energy company said to be involved in both the Uganda and Chad
bribery schemes is not named but details in the complaint point to CEFC
China Energy, a Shanghai-based firm described as an increasingly
powerful component of China's energy industry.
The firm
blew onto the scene in just a few years, taking major stakes in global
projects, including a 14 per cent chunk of Russia's Rosneft, and playing
an important role in Chinese President Xi Jinping's ambitious One Belt
One Road initiative.
Ugandan scheme
Discussions
between Mr Ho and Mr Kutesa first took place in New York in October
2014 when the Ugandan minister was the President of the United Nations
General Assembly.
“Mr
Ho’s Ugandan scheme was hatched in the halls of the United Nations in
New York,” the US prosecutors said, adding “and then continued unabated
upon his [Mr Kutesa’s] return to Uganda.”
Mr Kutesa,
68, serves a one-year term, from September 2014 to September 2015, as
the President of the United Nations General Assembly.
In
early 2016, Mr Kutesa, with assistance from his wife Edith Gasana, is
alleged to have solicited the $500,000 payment from Mr Ho, “purportedly
for a charitable foundation that he wished to launch.”
“In
reality,” the criminal complaint alleges, “this payment was a bribe to
obtain business advantages for the Energy Company in its efforts to
secure contracts and ventures in Uganda’s financial and energy sectors.”
Mr Ho wired the payoff to an account in Uganda designated by the foreign minister, US officials contend.
“In
his communications, Mr Ho variously referred to this payment as a
'donation' to the re-election campaign of the president of Uganda (who
had already been re-elected) and as a 'donation' to 'support' the
Ugandan foreign minister,” the prosecutors added.
The complaint notes that Mr Kutesa referred to Mr Museveni as his brother-in-law.
'Job creation for youth'
The
Ugandan foundation that was the purported recipient of the payment was
described in a February 2016 email from Mrs Kutesa to Mr Ho as an
expression of “our commitment to job creation for youth in our
constituency.” Asking Mr Ho to confirm the “contribution” promptly, Mrs
Kutesa told him, “As you know, youth are impatient.”
The foundation does not appear to exist, according to an affidavit by an FBI agent filed as part of the complaint.
A
letterhead that features a purported email address for the foundation
includes a domain name that is “currently unregistered,” the FBI
affidavit states. A physical address in Kampala listed for the
foundation was found by US federal agents to have no signage or other
indications that the foundation is actually located at that address, the
affidavit adds. Internet searches also did not reveal any website for
the foundation, the FBI notes.
The complaint also suggests that Mr Kutesa may have used his UN position to further the bribe scheme.
In
a three-hour meeting in the General Assembly leader's office in New
York on October 19, 2014, Mr Ho persuaded Mr Kutesa to make “an official
PGA trip to China during his one-year term,” the complaint says. Mr
Kutesa “also agreed to stay an extra day to visit” officials of the
Chinese energy company, US prosecutors added.
In
agreeing to pay the bribe, Mr Ho had emphasised that the Chinese energy
firm expected assistance from Mr Kutesa with respect to "major projects,
from infrastructure, energy, agriculture, to finance and banking" in
Uganda.
“The Ugandan foreign minister and his wife
assured Mr Ho that the president of Uganda would meet with the Energy
Company's officials and that the Ugandan government would 'work
together' with the Energy Company on various projects, including the
potential sale of a Ugandan bank to the Energy Company,” the complaint
adds.
‘Private meetings’
After
the bribe was paid in May 2016, Mr Ho and energy company executives
travelled to Uganda bearing gifts for Mr Museveni and Mr Kutesa, and
also “attended private meetings with the president and other high-level
officials, including officials with the Ugandan central bank and the
Ugandan Ministry of Energy and Mineral Development, in an effort to
secure business for the Energy Company,” the complaint states.
Just
prior to the Chinese delegation's departure for Uganda, Mr Ho had sent
an email, copied to Mrs Kutesa, with an “urgent request” for “special
assistance with your customs procedures,” the complaint recounts.
Mr
Ho noted in the message that “we are preparing to bring with us some
very 'nice' gifts to your president and to [Mr Kutesa],” the message
said. Mrs Kutesa replied to Mr Ho, promising, “We will be there at your
arrival,” the complaint says.
In October 2016, Mrs
Kutesa presented Mr Ho with the opportunity to acquire a particular
Ugandan bank, the complaint adds, without specifying the bank in
question. Mrs Kutesa said she would guide Mr Ho through the “very
confidential and urgent process” of acquiring the bank.
That deal was not consummated, however.
The
complaint cites press reports indicating that on October 20, 2016, the
Bank of Uganda took over the bank that had been earlier on offer to the
Chinese firm. A Ugandan commercial bank ultimately acquired the bank in
question in January 2017, the complaint notes.
That
narrative coincides with the announced acquisition of Crane Bank by DFCU
Bank. Crane Bank had been put under receivership in October 2016 for
lack of adequate capital.
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