A Nigerian-American oilman, who has become a major backer of President Jacob Zuma, paid R50-million to a wanted Congolese warlord in an illegal gold deal, according to the United Nations.
A UN expert group monitoring compliance with arms sanctions in the Democratic Republic of Congo has identified Kase Lawal, who heads the second-largest black-owned business in the United States, as the financier of the deal. Lawal persisted with the deal even after being told the warlord was the seller, the panel has claimed.
But the transaction imploded last February when security agents in the eastern DRC arrested Lawal's half-brother and some associates, confiscating the gold they had just bought. Lawal and Camac, the oil and gas group he heads, tried to distance themselves from the events at the time, suggesting it was really one of the associates' deals.
It was just seven months later, in September last year, that Lawal took pride of place next to Zuma in Houston when Lawal's alma mater, the Texas Southern University, awarded Zuma an honorary doctorate. Lawal appears to hold some sway at the university — he became its largest alumnus donor in 2009 by pledging $1-million, after which he, too, received an honorary doctorate.
At Zuma's award ceremony a partnership was announced between Camac and Zuma's charitable foundation, the Jacob G Zuma RDP Education Trust, in terms of which the company would sponsor beneficiaries of the trust to study at Texas Southern and another Houston university. That, the trust confirmed to the Mail & Guardian, came on top of a five-year, R1-million-a-year Camac endowment to the trust, effective from 2010.
Zuma founded the trust in the 1990s when he was a KwaZulu-Natal MEC. The trust's website says it is supporting 1 200 young people to get an education.
Zuma's public association with Lawal has raised some eyebrows. At the time of the ceremony in September, Lawal and Camac were already suspected of involvement in the DRC gold affair. But that was not Lawal's first brush with notoriety.
Earlier, he had been implicated in a spectacular fraud in his native Nigeria, where he and others allegedly conspired to "steal" an oil block and pump millions of barrels of oil from it. Despite protracted legal proceedings in Nigeria, Lawal was never prosecuted and has consistently denied the allegations.
In 2003 the Mail & Guardian revealed how Lawal, after becoming close to former president Thabo Mbeki, benefited from "what appears to be a fraud on the South African and Nigerian public".
In that deal Camac had set up a local subsidiary, the "South African Oil Company", with a group of individuals connected to the ANC.
Mbeki wrote to his then-counterpart in Nigeria, Olusegun Obasanjo, supporting the company's request for "a long-term crude oil contract for the Republic of South Africa".
The company got substantial oil allocations at discounted "government-to-government" rates.
But neither the oil nor the profit came to South Africa — it went offshore to a mirror "South African Oil Company" registered in the Cayman Islands, where a mystery co-owner shared the proceeds with Camac.
Even Zuma, deputy president at the time, appeared unaware of the facts. In a parliamentary debate he hailed "South Africa's crude oil allocation".
Lawal's lawyers denied impropriety, claiming the allocations were never meant for South Africa. The presidency at the time claimed that Mbeki had no duty to check up after helping the company get the allocations. Said an aide: "What happens after is a different matter … it is not the responsibility of the president to investigate."
The UN group of experts' report, released in December, puts Lawal at the centre of the DRC gold deal, saying he financed the purchase using Camac funds.
The transaction was set up in late 2010 when Dikembe Mutombo, a Congolese basketball hero formerly with the Houston Rockets, introduced Lawal to the opportunity to buy 475kg of gold supposedly held in Kenya. Lawal roped in diamond trader Carlos St Mary to help. The three men would split the estimated $10-million profit (about R75-million now).
In Kenya, St Mary was introduced to one Eddie Malonga, who was presented as the owner of the gold. However, after $4.8-million was paid to him, Malonga disappeared. When he resurfaced, he proposed completing the transaction in the lawless eastern DRC town of Goma.
At the time there was a ban decreed by President Joseph Kabila on all precious mineral exports from the eastern DRC, in an attempt to stop the financing of arms smuggling and destabilisation.
On February 3 last year Lawal sent Mukaila Lawal, his half-brother and Camac's vice-president in Nigeria, to Goma with the remainder of the purchase price — $6.8-million (R50-million), according to reports — in cash. Mukaila Lawal was accompanied by another Camac employee and St Mary on a Camac Gulfstream jet. In Goma they were introduced to General Bosco Ntaganda as the true owner of the gold.
Ntaganda, a rebel warlord who had switched sides to Kabila and then built himself a new power base in Kabila's notoriously fractious military, goes by the alias "Terminator".
Ntaganda has been wanted by the International Criminal Court since 2006 for war crimes relating to the use of child soldiers and was slapped with a travel ban and asset freeze by the UN Security Council the following year for violating the DRC arms embargo. He and his troops have been linked to ethnic massacres, torture and rape.
The UN group says St Mary told it that both he and Mukaila Lawal had told Kase Lawal about Ntaganda's ownership of the gold. "Nevertheless, Lawal was concerned only to the extent that this presented another twist in the already convoluted deal, but also appeared relieved to finally be engaging directly with the true owner of the gold."
The cash was handed over in two bags — one upfront to Ntaganda, who personally counted it, and the second the next day to one of Ntaganda's men after 25 metal boxes said to contain the gold were loaded on the Camac jet.
Immediately afterwards, a different faction of the security forces, led by a presidential security adviser, arrested St Mary and the Camac men, taking the gold.
The three, according to the UN report, were charged with money laundering and illegal transport of a banned material, but were released seven weeks later, when Camac's Kinshasa representative "officially paid" $3-million in fines.
However, the report cites St Mary saying that Lawal later confessed to him "that he had lost a total of $30-million as a result of the whole ordeal, including transport fees, fines, bribes and the payments made on the gold purchase".
Camac declined a request to co-operate with the UN investigation but said in a statement this week: "Camac is a law-abiding company — We are enormously proud of the work we do, and of the wide range of charitable causes we support. We dispute many of the allegations and statements made in that small portion of the recent UN report that mentions Camac and the incident in the Congo, most especially those that allege a connection between Camac and Bosco Ntaganda, who is wanted for war crimes. We join with the world community in condemning his actions and await the day when he can be brought to justice.
"In addition — Dr Kase Lawal and Camac deny that Camac funds were a part of any illegal payment. It is important to remember that the Congolese government filed no charges and that neither Camac nor Dr Lawal have made any admission of wrongdoing."
Camac also trumpeted its work "to improve the lives of those in the African community", saying it was pleased to continue its partnership "with the many who know of the character and integrity we represent", including the Zuma education trust.
Zuma trust responds
The presidency referred questions to the Zuma education trust, which maintained that the United Nations allegations against Kase Lawal remained untested: "They are allegations and would remain as such until proven otherwise through a legal process."
The trust also suggested that there was no reason to doubt Lawal's integrity as he "has served, in an advisory capacity, various United States presidents including the incumbent. As you would know, the United States of America has one of the most advanced democracies globally. Anyone serving the presidency has to go through a rigorous vetting process."
As for President Jacob Zuma's honorary doctorate from Lawal's alma mater, the trust said Zuma "was invited to Houston by the president and council of Texas Southern University, and not by Dr Lawal" and that government structures would have performed the necessary check regarding the integrity of the "institutions to be visited".
The trust confirmed that it and Lawal's company, Camac, signed a memorandum of understanding in 2010 to collaborate in the education of, especially, young rural people. Camac had already donated R2-million of five annual grants of R1-miillion each.
The trust also said its "strategy and objectives are not based on rumours, allegations and innuendoes, but rather, they are based on the realities faced by underprivileged young people in the rural areas of South Africa".
The players: Power broker, sports star, gems dealer and warlord
Kase Lawal's schmoozing of Jacob Zuma is consistent with his business model, which appears to be based on access to power. He served on former US president Bill Clinton's Africa trade advisory committee, did fundraising for Hillary Clinton in her failed bid for the US presidency and was appointed by President Barack Obama to a key trade policy committee in 2010.
In his native Nigeria, Lawal's fortunes have depended on who was in power. During much of Olusegun Obasanjo's 1999-2007 rule he was a wanted man who had allegedly conspired to forge papers to win offshore drilling approvals and illegally pump more than 10-million barrels of crude — charges he has consistently denied.
In 2008, the year after Umaru Yar'Adua replaced Obasanjo, Lawal hosted the new president's wife in Houston in spite of his "fugitive" status, then still in place.
Around that time Lawal's company, Camac, scooped new oil allocations from Nigeria's national oil company. Two years later, when President Goodluck Jonathan took over from Yar'Adua in an acting capacity, he appointed Lawal to a 26-member presidential advisory council to assist him.
Camac's website boasts pictures of Thabo Mbeki, then South Africa's deputy president, with Lawal in 1996. By 1997 Lawal was vice-chair of a company in the African Renaissance group, which comprised businesspeople regarded as particularly close to Mbeki.
The basketball star
Until the gold scam hit the headlines, Dikembe Mutombo, the former Houston Rockets basketball all-star, was known simply as one of the best players in National Basketball Association history. He was known as much for his signature finger wag (which he used to scold his opponents on the court) as for his humanitarian work.
Born in 1966 in Kinshasa, the 2.18m-tall Mutombo arrived at Georgetown University in Washington, DC in 1987 on a pre-med scholarship. The school's basketball coach soon lured him to the team. The Washington Post reported that by the time he retired in 2009 he had brought in more than $100-million over his two-decade career.
Now Mutombo appears to be the mastermind of the gold deal, meeting with Lawal and diamond dealer Carlos St Mary in a New York hotel in December 2010.
The Houston Chronicle reported that one of Mutombo's nephews was also on the aeroplane in Goma. But instead of being arrested with the others, he left the airport with soldiers. Mutombo declined to comment.
The diamond dealer
Houston diamond dealer Carlos St Mary appears central to information gathering for the UN report. The Houston Chronicle — which has been following the story since St Mary's arrest in Goma in February 2011, where he was detained for almost two months — quoted him thus earlier this week: "I'm not sure what [happened] but this was a calculated, devious plan."
But the newspaper's earlier reports indicate that St Mary is hardly an innocent victim. They reported in 2011 that the 41-year-old married father of two, who was a cadet at the prestigious West Point military academy, has been involved in dodgy deals in the past.
The paper detailed a 2008 deposition from a lawsuit brought by Houston investors he had failed to repay in which St Mary "explained why he no longer had the $700 000 three investors had given him, or the diamonds the money was supposed to pay for". Meanwhile, an Arizona loan agent claimed that St Mary cheated him, too. The agent sued and was awarded a default judgment of $1.4-million by a Texas court.
From his base in the lawless eastern DRC Bosco Ntaganda became the recipient of millions of dollars in the gold deal that never happened, according to the UN report — in a country where dozens of multinationals were implicated by the UN for their dealings with warlords like Ntaganda, who are paid to smuggle natural resources.
Some believe Ntaganda was in on an elaborate plan to knock the buyers. St Mary told the Guardian earlier this month that Ntaganda was on the phone with President Joseph Kabila after the arrest. "They were arguing over how to split the cash."
Though Ntaganda is wanted by the International Criminal Court for using child soldiers in the early 2000s when he was head of the rebel army, he lives openly in Goma and has worn the government's uniform ever since a peace deal merged the rebel army with the national army in 2009. — Stefaans Brümmer and Tanya Pampalone
* Got a tip-off for us about this story? Email [email protected]
The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.