Open Secrets calls on NPA to urgently probe ‘looted Congolese funds’ funnelled into SA properties

The nonprofit Open Secrets has called for the National Prosecuting Authority (NPA) to urgently investigate a criminal complaint setting out how funds looted by corrupt Congolese politicians have been used to purchase South African properties.

The complaint was submitted to the NPA in April 2023 by Open Secrets, Plateforme de Protection des Lanceurs d’Alerte en Afrique and the Congolese organisations Congo Nouveau, Afrewatch and CDC/RN. The subject of the complaint was Francis Selemani, the adopted brother of the former president of the Democratic Republic of the Congo (DRC), who procured 13 properties in South Africa between 2016 and 2018, allegedly using funds looted from the Congolese government.

According to Open Secrets, there has yet to be any action by law enforcement to seek accountability for the money laundering offences, 19 months after the complaint was lodged.

“The hope was that an NPA investigation into Selemani would lead to the seizure of his South African assets and the proceeds returned to the Congolese people. Despite numerous attempts requesting updates on the status of the investigation, the NPA has provided no formal updates on the matter since 9 April 2024,” said Open Secrets.

“South Africa’s failure to hold the corrupt accountable is one of the key reasons behind its greylisting by the FATF. It is imperative that cases like these are addressed by law enforcement agencies like the NPA. South Africa cannot be the playground of the world’s corrupt criminal elites.”

Daily Maverick has previously reported on Selemani’s money laundering activities in South Africa, which featured prominently in an investigation by a consortium of journalists and civil society groups, called Congo Hold-Up, in 2021.

Read more in Daily Maverick: $138m later: The Sentry reveals Kabila’s brother laundered $2.4m through Joburg properties

The Congo Hold-Up investigation explored how BGFIBank was used to plunder the DRC public funds and natural resources, largely for the enrichment of former president Joseph Kabila’s inner circle — including Selemani. Open Secrets stated that evidence from this investigation was used in its criminal complaint.

Six of Selemani’s South African properties have already been sold off, meaning the money he put into them has become unrecoverable, according to Open Secrets.

A spokesperson for the NPA said that the Director of Public Prosecutions in Pretoria was not aware of the complaint. The article will be updated with a further response once it becomes available.

SA’s property laundromat

Selemani’s money laundering activities form part of the DRC case study in Open Secrets’ new report, ‘For Sale: South Africa’s Property Laundromat’, which details how politically elite families from the DRC, Mozambique and Equatorial Guinea have bought South African property with money from the proceeds of corruption.

The report stated that the combined value of the properties Selemani bought in South Africa was more than R30-million. The money was funnelled through a network of companies owned by him and his wife.

Other prominent African families included in the report were those of Filipe Nyusi and Armando Guebuza, former presidents of Mozambique, and of Teodoro Obiang Nguema Mbasogo, the president of Equatorial Guinea.

Members of the Nyusi and Guebuza families reportedly benefited from the “hidden debt scandal”, which saw $2-billion in illegal bank loans from Switzerland’s Credit Suisse and Russia’s VTB bank paid to three Mozambican state-owned companies in 2013. None of the money went into public services, disappearing instead into the pockets of Mozambican political elites.

Filipe Nyusi’s son, Jacinto Nyusi, bought a R17.5-million property in Johannesburg shortly after his father’s campaign allegedly began accepting bribery money linked to the scandal, according to Open Secrets.

“When the Mozambique government guaranteed the secret loan in 2013, President Armando Guebuza was the man in charge of the state. His eldest son, Ndambi, was convicted, in 2022, in Maputo for accepting $33-million in bribes related to the scandal. Ndambi bought two properties in Gauteng, South Africa, with a total purchase price of over R20-million in 2013,” stated the report.

Obiang has been president of Equatorial Guinea for more than 40 years, with his son Teodoro Nguema Obiang Mangue currently filling the role of vice-president. After the discovery of large oil reserves in the country in the 1990s, the family is believed to have diverted public funds from the oil boom into their own pockets.

According to the report, “In the early 2000s, the US Senate published an investigation into a massive money laundering operation at US-based Riggs Bank, which helped the Obiang family move money out of Equatorial Guinea and use the proceeds of corruption to purchase assets in the United States and elsewhere.”

Vice-President Obiang owned two luxury properties in Cape Town worth more than R58-million. These were seized by South African authorities in 2023 after South African businessman Daniel Janse van Rensburg won a lawsuit against him for unlawful arrest and torture and was awarded R39-million in damages.

In an act that made national headlines in South Africa, the Obiang family responded by arresting two South African oil engineers who were working in Equatorial Guinea, Frik Potgieter and Peter Huxham, on drug possession charges. The arrests took place two days after Obiang’s assets were seized.

Read more: Families of jailed engineers in Equatorial Guinea stage Cape Town protest against 634-day incarceration

The enablers

Speaking at the launch of the report on Thursday, Open Secrets investigator Ra’eesa Pather emphasised that the crime of money laundering harmed the most vulnerable people in society. She referenced the greylisting of South Africa by the Financial Action Task Force (FATF) in 2023, which was a result of the country’s failure to comply with the FATF’s benchmark recommendations to combat illicit financial activity such as money laundering.

Read more: SA faces another year on the Financial Action Task Force grey list

“[Being greylisted] was essentially a message to the world, to say that South Africa is a high-risk country to invest in. What does this mean? It means that when we have international transactions through banks or other institutions, there’s a little red flag to say when you bring money into South Africa, you’re doing something dangerous. What is the effect of this on people like us? Well, essentially, it means that … the rand could weaken, and when the rand weakens, everything else becomes more expensive,” said Pather.

The report highlighted that certain private sector actors, such as lawyers and estate agents, acted as enablers for political elites seeking to launder money through property in South Africa. Among the institutions that were specifically named were the estate agents Pam Golding, Greeff and RE/MAX, as well as the law firms Cliffe Dekker Hofmeyr, Herold Gie and Van Zyl Hertenberger Inc.

All these companies denied any wrongdoing or ethical breaches in their handling of property purchases on behalf of the families named in the report.

Read more: How real estate bosses, conveyancers and Deeds Office officials allegedly stole state land

“The South African Financial Intelligence Centre [FIC] throughout this year has been begging estate agents and lawyers to actually start practising what’s required of them — if they see anything suspicious, then they need to report that,” said Abby May, an investigator at Open Secrets.

At the beginning of 2023, the FIC issued a directive asking these estate agencies and lawyers to submit their risk and compliance returns to the agency. However, in July of this year, only 60% of real estate agents and 66% of lawyers had submitted their reports, according to Open Secrets. DM