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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

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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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U.N. report says Houston exec organized illicit gold deal

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CHRONICLE FILE PORT COMMISSIONER: The report said Kase Lawal was to receive 40 percent of the profits of the gold’s sale. Photo: Michael Paulsen / Houston Chronicle

By MIKE TOLSON, HOUSTON CHRONICLE
Published 09:40 p.m., Tuesday, January 3, 2012

Kase Lawal, the politically connected head of a local energy company who also serves as a commissioner on the Port of Houston Authority, was the main organizer of an illicit gold smuggling operation that went awry last February in the Democratic Republic of Congo, according to a United Nations report on the nation’s natural resources and their misuse by various militia groups.

Lawal, chairman of CAMAC International and a prominent Houston philanthropist, used company money to finance a scheme to take approximately 475 kilograms of gold out of Congo for resale despite a national ban on gold exports, which often have been used to finance paramilitary activities and ethnic strife, stated the report, which was publicly released last week. The scheme originally called for the transaction to be conducted in Kenya, where the export of gold is legal, but was belatedly moved to Goma, Congo, at the insistence of the sellers.

Lawal is reputed to be one of the nation’s richest African-Americans, parlaying a chemistry degree from Texas Southern University and an entrepreneurial bent into a billion-dollar company and a place on numerous boards and commissions, including trade advisory groups for Democratic and Republican presidents.

Team sent on jet

The proposal for buying the gold originally came from Dikembe Mutombo, a retired NBA star who played for the Houston Rockets for several seasons at the end of his 18-year career, the report says. Mutombo was born in Congo and is involved in a number of humanitarian projects there, including a hospital. His motivation, those involved said, was to help fund some of his projects.

Lawal involved a family friend, Carlos St. Mary, as a facilitator and go-between among various parties involved in the scheme. St. Mary hired a Kenyan attorney to prepare paperwork and arrange inspection of the gold in Nairobi. When time came to complete the transaction, Lawal sent his brother, CAMAC executive Mickey Lawal, to Congo on a CAMAC corporate jet along with St. Mary and security personnel. Also on board were bags containing about $6 million in cash.

By this time, Kase Lawal had learned that the actual owner of the gold was Gen. Bosco Ntaganda, the leader of a military faction in the Kivu province that is home to much of Congo’s mining industry. Ntaganda was indicted for alleged war crimes by the International Criminal Court. At the time, Ntaganda denied any involvement in the gold deal.

“According to St. Mary, Ntaganda introduced himself as the true owner of the gold and promised to obtain all the necessary paperwork,” the U.N. report states. “St. Mary told (investigators) that both he and Mukaila (Mickey) Lawal had informed Kase Lawal about the General’s ownership, providing his name. Nevertheless, Lawal was concerned only to the extent that this presented another twist in the already convoluted deal.”

The jet was prevented from leaving Congo and St. Mary, Mickey Lawal and several others, including the plane’s crew, were detained in the eastern city of Goma for more than a month while authorities investigated the transaction. The bags of cash that had been given to Ntaganda were turned over to government officials, but the money had been replaced by obviously counterfeit bills, according to the report. St. Mary and others were charged with money laundering, among other crimes.

The crew and airplane were released in mid-March after various “fines” were paid. U.N. investigators claim that Lawal, who did not cooperate in the investigation, ended up paying more than $30 million to extricate himself and his intermediaries from the mess.

Efforts to reach Lawal for comment were unsuccessful. A spokesman for the company offered a brief statement: “CAMAC is a law-abiding company and we disagree with the representations made in the report. We have already answered questions on this and see no reason to address it further.” In a statement released last year, after the detainees and corporate jet were allowed to leave by Congo authorities, the company also stated it had done nothing wrong and that it had no financial interest in the gold transaction.

Thought deal was legal

The U.N. report, however, claims that Lawal supplied the money for the venture and was to receive 40 percent of the profit when the gold was sold.

St. Mary said in a brief interview Tuesday that all involved in the purchase of the gold believed the deal was legal.

“We all acted to put together a legitimate deal,” St. Mary said. “We all went there with that intention, which is why I went to see a lawyer and the ministry of mines. I’ve known (Kase) Lawal for 31 years. Anything that seems like it’s going to be a public detriment to him, he’s going to walk away from. He wants no part of public scandal.”

Mutombo could not be reached for comment.

mike.tolson@chron.com

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The US power grab in Africa

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By Pepe Escobar

Beware of strangers bearing gifts. Post-modern Amazon and United States Secretary of State Hillary Clinton finally landed in Tripoli – on a military jet – to lavish praise on the dodgy Transitional National Council (TNC), those pportunists/defectors/Islamists formerly known as “North Atlantic Treaty Organization rebels”.

Clinton was greeted on Tuesday “on the soil of free Libya” (her words) by what the New York Times quaintly described as an “irregular militia” (translation: a heavily armed gang that is already raising hell against other heavily armed gangs), before meeting TNC chairman Mustafa Abdel-NATO (formerly known as Jalil).

The bulk of the US gifts – US$40 million – on top of the $135 million already disbursed since February (most of it military “aid”) is for a missile scramble conducted by “contractors” (ie mercenaries) trying to track the tsunami of mobile anti-aircraft rockets that by now are already conveniently ensconced in secret Islamist warehouses.

Clinton told students at the University of Tripoli, “We are on your side.” She could not possibly connect the dots and note that the shabab (young people) who started demonstrating against Muammar Gaddafi in February have absolutely nothing to do with the TNC’s opportunists/defectors/Islamists who hijacked the protests. But she did have time to unveil another US foreign policy “secret” – that the US wants Gaddafi “dead or alive”, George W Bush-style (or as the beneficiary of targeted assassination, Barack Obama-style).

The new Fallujah
In her exhausting six-and-a-half hours on “free Libya” soil, Clinton couldn’t possibly find the time to hitch a helicopter ride to Sirte and see for herself how NATO is exercising R2P (“responsibility to protect” civilians).

A few hundred soldiers and no less than 80,000 civilians have been bombed for weeks by NATO and the former “rebels”. Only 20,000 civilians have managed to escape. There’s no food left. Water and electricity have been cut off. Hospitals are idle. The city – under siege – is in ruins. Sirte imams have issued a fatwa (decree) allowing survivors to eat cats and dogs.

What Gaddafi never did to Benghazi – and there’s no evidence he might have – the TNC is doing to Sirte, Gaddafi’s home town. Just like the murderous US offensive in Fallujah in the Iraqi Sunni triangle in late 2004, Sirte is being destroyed in order to “save it”. Sirte, the new Fallujah, is brought to you by NATO rebels. R2P, RIP.

It gets much nastier. Libya is just one angle of a multi-vector US strategy in Africa. Wacko presidential candidate Michelle Bachmann, during Tuesday’s Republican debate in Las Vegas, may have inadvertently nailed it. Displaying her geographical acumen as she referred to Obama’s new US intervention in Uganda, Bachmann said, “He put us in Libya. Now he’s putting us in Africa.” True, Libya is not in Africa anymore; as the counter-revolutionary House of Saud would want it, Libya has been relocated to Arabia (ideally as a restored monarchy).

As for Obama “putting us in Africa” (see Obama, King of Africa Asia Times Online, October 18, 2011), those 100 special forces in Uganda billed as “advisers” should be seen as a liquid modernity remix of Vietnam in the early 1960s; that also started with a bunch of “advisers” – and the rest is history.

Murderous mystic crackpot Joseph Kony’s Lord’s Resistance Army (LRA) is now a rag-tag bunch of no more than 400 warriors (they used to be over 2,000). They are on the run – and not even based in Uganda, but in South Sudan (now a Western protectorate), the Central African Republic and the long border with the Democratic Republic of Congo.

So why Uganda? Enter London-based Heritage Oil, and its chairman Tony Buckingham, a former – you guessed it – “contractor” (ie mercenary). Here’s Heritage’s modus operandi, described by Buckingham himself; they deploy “a first mover strategy of entering regions with vast hydrocarbon wealth where we have a strategic advantage”.

Translation: wherever there’s foreign invasion, civil war, total breakdown of social order, there are big bucks to be made. Thus Heritage’s presence in Iraq, Libya and Uganda.
Profiting from post-war fog, Heritage signed juicy deals in Iraqi Kurdistan behind the back of the central government in Baghdad. In Libya, Heritage bought a 51% stake in a local company called Sahara Oil Services; this means it’s now directly involved in operating oil and gas licenses. Pressed about it, TNC honchos have tried to change the conversation, alleging that nothing is approved yet.

What’s certain is that Heritage barged into Libya via a former SAS commando, John Holmes, founder of Erinys, one of the top mercenary outfits in Iraq apart from Xe Services, former Blackwater. Holmes cunningly shipped the right bottles of Johnnie Walker Blue Label to Benghazi for the right TNC crooks, seducing them with Heritage’s mercenary know-how of enforcing “oil field security”.

Got contractor, will travel
Obama’s Uganda surge is also a classic Pipelineistan gambit. The possibly “billions of barrels” of oil reserves discovered recently in sub-Saharan Africa are located in the sensitive cross-border of Uganda, South Sudan, the Central African Republic and the Democratic Republic of Congo.

Believe it or not, Heritage was the top oil company in Uganda up to 2009, drilling on Lake Albert – between Uganda and the Democratic Republic of Congo – and playing one country against another. Then they sold their license to Tullow Oil, essentially a spin-off, also owned by Buckingham, bagging $1.5 billion in the process and crucially not paying 30% of profits to Washington’s bastard, the government of Ugandan President Yoweri Museveni.

Enter Libya’s state oil company, Tamoil, which was part of a joint venture with the Ugandans to build a crucial oil pipeline to Kenya; Uganda is landlocked, and badly needs the pipeline when oil exports start next year. The NATO war on Libya paralyzed the Pipelineistan gambit. Now everything is open for business again. Tamoil may be out of the picture – but so may be other players.

Trying to sort out the mess, the parliament in Uganda – slightly before Obama’s announcement – decided to freeze all oil contracts, hitting France’s Total and the China National Offshore Oil Corporation, but especially Tullow oil.

But now, with Obama’s special forces “advising” not only Uganda but also the neighbors, and linking up with Heritage – which is essentially a huge oil/mercenary outfit – it’s not hard to fathom where Uganda’s oil contracts will eventually land.

The Amazon rules
Unified Protector, Odyssey Dawn and all other metaphors Homeric or otherwise for the Africom/NATO 40,000-plus bombing of Libya have yielded the desired result; the destruction of the Libyan state (and much of the country’s infrastructure, to the delight of disaster capitalism vultures). It also delivered the lethal unintended consequence of those anti-aircraft missiles appropriated by Islamists – a supremely convincing reason for the “war on terror” in northern Africa to become eternal.

Washington couldn’t care less about R2P; as the Libyan Clinton hop shows, the only thing that matters is the excuse to “securitize” Libya’s arsenal – the perfect cover story for US contractors and Anglo-French intel ops to take over Libyan military bases.

The iron rule is that “free” Libya should be under the control of the “liberators”. Tell that to the “irregular militias”, not to mention the Abdelhakim Belhaj gang and his al-Qaeda assets now in military control of Tripoli.

It’s useful to remember that last Friday, the same day the US State Department announced it was sending “contractors” to Libya, was the day Obama announced his Uganda surge. And only two days later, Kenya invaded Somalia – once again under the R2P excuse of protecting civilians from Somali jihadis and pirates.

The US adventure in Somalia looks increasingly like a mix of Sophocles and the Marx Brothers. First there was the Ethiopian invasion (it failed miserably). Then the thousands of Ugandan soldiers sent by Museveni to fight al-Shabaab (partially failed; after all the Washington-backed “government” barely controls a neighborhood in Mogadishu).

Now the Kenyan invasion. A measure of the Central Intelligence Agency’s brilliance is that operatives have been on the ground for months alongside bundles of mercenaries. Soon some counter-insurgency hotshot in Washington praying in the altar of new CIA head David Petraeus will conclude that the only solution is an army of MQ-9 Reapers to drone Somalia to death.

The big picture remains the Pentagon’s Africom spreading its militarized tentacles against the lure of Chinese soft power in Africa, which goes something like this: in exchange for oil and minerals, we build anything you want, and we don’t try to sell you “democracy for dummies”.

The Bush administration woke up to this “threat” a bit too late – at Africom’s birth in 2008. Under the Obama administration, the mood is total panic. For Petraeus, the only thing that matters is “the long war” on steroids – from boots on the ground to armies of drones; and who are the Pentagon, the White House and the State Department to disagree?

Italian geographer and political scientist Manlio Dinucci is one of the few to point out how neo-colonialism 2.0 works; one just needs to look at the map. In Central Africa, the objective is US military supremacy – on air and in intel – over Uganda, South Sudan, the Central African Republic and the Democratic Republic of Congo.

In Libya, the objective is to occupy an absolutely strategic crossroads between the Mediterranean, northern Africa and the Middle East, with the added (nostalgic?) benefit of the West – as in Paris, London and Washington – finally getting to hold military bases as when King Idris was in power (1951 to 1969). As a whole, control must be established over northern Africa, central Africa, eastern Africa and – more problematically – the Horn of Africa.

The trillion-dollar question ahead is how China – which plots strategic moves years in advance – is going to react. As for Amazon Clinton, she must be beaming. In Iraq, Washington meticulously destroyed a whole country over two long decades just to end up with nothing – not even a substantial oil contract. Clinton at least got a private army – the “advisers” who will be stationed in the bigger-than-the-Vatican US Embassy in Baghdad.
And considering that Obama’s new African “advisers” will be paid by the State Department, now Clinton’s also got her own African private army. After November 2012, Clinton might well consider a move into the contractor business. In the sacred name of R2P, naturally.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

Uganda: Minister aims to present oil bills this year

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By Elias Biryabarema

KAMPALA (Reuters) – Uganda‘s energy minister said she expects to send three petroleum bills to parliament by the end of the year as the government moves quickly to put laws in place to regulate the country’s nascent oil sector before the start of production.

Earlier in the week, President Yoweri Museveni said he would discuss a parliamentary vote to delay UK exploration company Tullow Oil‘s planned sale of stakes in local oil fields, pledging to defend the country’s interests in the case.

Earlier this week, Uganda’s parliament passed a resolution urging the government to withhold consent for Tullow‘s proposed deal with France’s Total and China’s CNOOC until laws were in place to regulate the industry.

“We’re working very hard, and we expect that by the end of this year we’ll have brought the three bills — Resource Management Bill, Revenue Management Bill and Value Addition Management Bill — to parliament,” Energy Minister Irene Muloni told a news conference on Saturday.

“The problem is that I can’t control the process thereafter. So how fast the bills will be debated and passed into law will depend on parliament, but at least on my side we’re moving very quickly.”

Last year, Tullow agreed to sell stakes in its Ugandan assets to Chinese group CNOOC and French oil company Total for $2.9 billion.

In March, Tullow said Uganda had assessed taxes of $472 million on its earnings from the sale, and it was disputing that figure. It has since begun an arbitration process before a tax appeals tribunal in Kampala.

The company, meanwhile, has been awaiting final government approval for the partnership, which would allow it to move ahead with a project to develop oil reserves.

Endorsement of the deal is expected to kick start a $10 billion investment to develop the country’s oil fields and start production.

Muloni said government officials expected to extract more favourable terms from companies in future oil deals because the discovery of oil has diminished the exploration risk for oil firms.

“Before the discovery we didn’t know what we had. We didn’t know whether we had oil or not, and for an oil company to bring in a big investment they needed stabilisation clause,” she said.

“Now we’re operating with certainty, we have the oil. So when we’re negotiating new deals, we’ll put up tough positions on the table.”

Hydrocarbon deposits were discovered along Uganda’s border with the Democratic Republic of Congo in 2006.

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