This from a recent special issue of Africa Confidential:
“Opening the black box of Egypt’s slush funds: investigators chase $9.4 billion siphoned into secret accounts – police accused of stealing records disclosing own corrupt funds, Finance Ministry uses accounting trick to bury the bodies – by Nizar Manek and Jeremy Hodge
One sunny day last March, Egyptian government auditors walked past the concrete barricades surrounding the Ministry of Interior, which oversees the country’s non-military security services. There, they sought to ferret out irregularities from the ministry’s financial records, among them allegations that seven unnamed senior officials used state funds to distribute nearly $12 million in bonuses to themselves. Before the auditors could inspect the records, they were thrown off the premises. Eight months later, the audit chief complained to Egypt’s new President and Prime Minister that Interior Ministry staff burgled a room his auditors used to investigate the ministry, stealing investigative records and notebooks. In a memo, the audit chief told them the ministry justified the break-in with Egypt’s “war on terror”, claiming that how it spends state cash must be kept a state secret.
What the auditors were looking for turns out to have been the tip of an iceberg. In previously undisclosed official records uncovered by The Angaza File in months of investigations, at least US$9.4bn of state funds had been stashed in nearly 6,700 unaudited accounts in the Central Bank of Egypt and, illegally, in a number of state-owned commercial banks, and was spent by the end of the 2012/2013 fiscal year.
And what of that more recent outpouring of Gulf aid into the country? Some, it has become apparent in recent months, was deposited in army-operated accounts at the Central Bank that are said to be used to stash stolen state funds that are never relayed into Egypt’s treasury and serve as the private piggy banks of generals and other senior officials across the bureaucracy. This enables them to collect bonuses off-the-books away from the eyes of regulators and their subordinates.
For me, this report immediately brought to mind the secret funds controlled – and so liberally abused – by South Africa’s chief of SAPS Crime Intelligence, Richard Mdluli, who was hand-picked to head the unit by a committee of ANC ministers (see nose150). He is now in his third year of suspension, after being exposed in the media, on full pay and living the life of Riley on the secret slush funds still believed to be under his control. DA shadow minister of police, Dianne Kohler-Barnard, recently revealed that Mdluli has already received more than R4,2m while on suspension – since 2012 – and still has a full-time driver and bodyguard, a state vehicle, business class flights and newspaper subscriptions – all paid for by the SAPS. He is also still actively politicking: Kohler-Barnard believes he was behind the case that saw Anwa Dramat out of his job.
Africa, it seems, is rotten from top to bottom. And still there are those who complain that the International Criminal Court appears to be targeting Africa. Might others not be justified in seeing it differently – that Africa appears determined to set itself up as an obvious target for criminal prosecution?
Noseweek readers – and most half-intelligent citizens – have long understood the US$10 million “donation” to Jack Warner to have been a bribe to secure votes in Fifa’s selection committee. It’s quite simple, really.
According to Molefi Oliphant’s letter to Fifa, the SA Government had decided to give US$10m to Safa to compensate it for the $10m contribution that it was no longer going to receive from Fifa for its World Cup operating budget – because Fifa was going to pay the money to Jack Warner of Jamaica on South Africa’s behalf, supposedly for youth development in the Caribbean.
The complicated route suggests a clear case of money laundering. Why else did the SA Government not simply donate the money directly to the Caribbean Soccer Federation and proudly announce to the world that it had done so? Why, if Safa was the donor, had it not done the same? (Pity our own soccer youth have come so short on the development front, but never mind.)
And then there’s the silence of those other dignitaries who were members of the Safa committee at the time: the likes of Michael Katz (of ENS and Nedbank fame), Koos Bekker (of Naspers/Media24), Selwyn Nathan and Raymond Hack. Did these larnies approve the payment? Did they even know about it? What say you, gentlemen? Why so quiet?
The US charge sheet states that the US$10m bribe was first promised to Warner shortly prior to the Fifa committee vote in 2004, but was only paid via this devious route much later. As an old practitioner once told me, the smartest bribes are always a thank you, never a please.
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