Obama-appointed US trade adviser linked to illegal deal in Congolese gold

UN report says Kase Lawal knew he was dealing with the wanted warlord Bosco Ntaganda

Congolese warlord Bosco Ntaganda has been wanted by the international criminal court since 2006. Photograph: Reuters

A US trade adviser appointed by Barack Obama orchestrated a deal to buy gold worth millions of dollars from a wanted Congolese warlord, according to a UN report.

Kase Lawal, a Nigerian-born US oil tycoon, transferred millions of dollars to the notorious rebel leader Bosco Ntaganda between December 2010 and February 2011 as part of the deal, the report by the UN’s Group of Experts on the Democratic Republic of the Congo (DRC) states.

If true, this would be a contravention of UN resolutions banning individuals or organisations from financing illegal armed groups in the wartorn eastern DRC.

The UN report says Lawal, the chairman and chief executive of the Houston-based oil firm Camac, was aware he was paying Ntaganda.

Obama put Lawal on the US advisory committee for trade and policy negotiations in September 2010, just months before the deal with Ntaganda.

All efforts to reach Lawal failed. Camac said it had no comment on the allegations, but said: “Camac is a law-abiding company and we disagree with the representations made in the report.” The White House did not respond to a request for comment.

Ntaganda has been wanted by the international criminal court (ICC) since an arrest warrant was issued in 2006. He funds his exploits by smuggling natural resources in the mineral-rich country, and faces allegations of recruiting child soldiers and presiding over mass rapes and murder of civilians by his troops in the National Congress for the Defence of the People (CNDP).

The CNDP militia has since integrated into the Congolese national army but its soldiers continue to obey rebel command structures.

Ntaganda, like many rebel leaders in eastern DRC, funds his activities by smuggling natural resources.

The UN says “gold is among the sources of financing most readily available to armed groups”.

According to the report, while Lawal was initially under the impression that he was buying gold from an owner in Kenya, he did not abort the deal when he learned Ntaganda was the true owner.

Instead, the UN report says Lawal merely “appeared relieved to finally be engaging directly with the true owner of the gold”.

The report says Lawal financed the deal while Edward Carlos St Mary, a Houston businessman and friend of Lawal’s, carried out the transaction in DRC. The deal was proposed to the two men by Dikembe Mutombo, a Congolese former NBA player with the Houston Rockets, and three of his relatives.

Despite paying, Lawal never received the gold. St Mary flew to Goma in DRC to finish the deal in a Camac-leased jet, but the passengers were arrested by Congolese presidential security officers as they tried to take off with the gold in February 2011.

St Mary and two Camac employees were charged with money-laundering and illegal transport of a banned material, because at this time the Congolese government had banned mining of gold, tin and coltan in the provinces where the minerals trade was affected by illegal armed groups. The three men were released in late March after Camac’s Kinshasa representative paid $3m (£1.9m) in fines.

Substantial sums of money were involved from the start. The report says Lawal told St Mary he had lost “$30m as a result of the whole ordeal, including transport fees, fines, bribes” and the payments for the gold.

Jason Stearns, a former Group of Experts co-ordinator, said: “This is a fine example of the rank disregard of international law by major international companies and businessmen.

“Lawal knew Bosco Ntaganda was involved in the deal, so he was knowingly doing business with a man wanted by the ICC. On top of that, there was a Congolese mining ban in place at the time. And finally, he’s probably violating a UN arms embargo on the region.”

A source close to the UN who asked to remain anonymous said: “The whole thing was a scam. It’s likely the Congolese were always going to arrest [St Mary and the others] and keep the money and the gold. The charge of illegal transport of a banned material was a pretext for the arrests.

“In reality, the Congolese authorities and Ntaganda worked together to ensure full payment was made for the gold, that the gold never left the DRC, and that the arrested men would have to pay a series of heavy fines to secure their release.”

St Mary agrees. Speaking to the Guardian from Houston, he said that at one stage he nearly pulled out of the deal, only to be put on the phone to Zoé Kabila, the president’s brother, who reassured him the gold dealers were “legitimate”. That was before he knew Ntaganda was involved.

Later, in Goma, St Mary said Ntaganda was arguing with Joseph Kabila, DRC’s president, on the phone. “They were arguing over how to split the cash,” he said. “Even when I first met Ntaganda, he told me he’d just spoken to Kabila and that we’d be able to leave with the gold with no problem.”

When the story first broke in early 2011 Lawal tried to pin the blame on his friend St Mary. Since then, relations have soured between the two men, yet St Mary defends Lawal’s decision to push ahead with the deal. “Mickey [Lawal – Kase Lawal’s brother, also in Goma] and I told [Kase] Lawal that the owner of the gold was Bosco [Ntaganda].

“But by the time we found that out I think our lives were in jeopardy. To try to pull out then could have cost us our lives. In those circumstances, what else can you do? There was no out.

“There was only one way to go: try to do a deal and get the hell out of there. The problem was the authorities and Bosco were partners in this, and we didn’t know that until it was too late.”

Conflict persists in eastern DRC, despite a 2003 peace agreement to end a bloody war. Numerous rebel groups and militias operate in the region and there are regular attacks on civilians, including massacres and mass rapes.

Collaboration between Kabila and Ntaganda during the recent presidential and legislative elections lends weight to the accusations.

“Bosco and the CNDP have allegedly been involved in election fraud while campaigning for Kabila’s Majorité Présidentielle [coalition],” said Stearns. “Allegations include ballot-stuffing, stealing people’s identities and intimidation. It’s all been happening in CNDP-controlled areas.”

A Goma resident who wished to remain anonymous said: “Bosco and his men are a very visible presence … they put a lot of pressure on people to vote for their favourite candidates.”

Fraud was so rife that the Congolese electoral commission annulledelection results in some areas.

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