Tag Archives: Global Witness

Narco-a-Lago: Donald Trump Made Millions from Panama Development Used to Launder Drug Money

Narco-a-Lago: Donald Trump Made Millions from Panama Development Used to Launder Drug Money

President Donald Trump has made millions from selling his name to a Panama development used to launder money from Latin American drug cartels, a Global Witness investigation reveals today.

After licensing his name to the Trump Ocean Club in 2006, Trump appears to have turned a blind eye to the source of the buyers’ funds and the background of some of the individual brokers (1). The investigation, Narco-a-Lago: Money Laundering at the Trump Ocean Club, Panama provides powerful evidence that profits from Colombian cartels’ narcotics trafficking were laundered through the Trump Ocean Club. Trump was one of the beneficiaries, since he received a cut of all sales. Trump’s Presidential disclosures show he was still making money from a management contract for the Trump Ocean Club when he took office in 2017.

“This must be investigated. Donald Trump has made millions from a project used by Latin American drug cartels to launder money. The warning signs were there for a responsible businessperson, but it seems Trump didn’t want to know,” said Eryn Schornick, Senior Policy Advisor at Global Witness.

The Trump Ocean Club in Panama was one of Trump’s most lucrative licensing deals: initial projections indicate that he was set to make $75.4 million by 2010. Sources close to the development described it as “Ivanka’s baby”, and confirmed that Trump’s daughter was in overall charge of the licensing venture for the Trump Organization.

The Trump Ocean Club, Panama

The report highlights several warning signs for money laundering in the project, which should have raised the alarm for a responsible businessperson looking to avoid being associated with dirty money. Panama was a major hub for money laundering when Trump signed the licensing and management deal with the Trump Ocean Club in 2006. Global Witness’ sources indicate that many units were bought in bulk, some sales were made with bearer shares, and secretly owned companies were often used, hiding the identities of the buyers.

The investigation also shines a light on several dubious characters that bought units or brokered transactions at the Trump Ocean Club. Those involved include:

David Murcia Guzmán, released from U.S. federal prison after serving a sentence of nine years for laundering millions of dollars’ worth of illicit funds, including narcotics proceeds, through secret companies and real estate.

Murcia Guzmán’s business associate Alexandre Ventura Nogueira, who claims to have brokered nearly a third of all 666 pre-construction unit sales at the Trump Ocean Club. Ventura Nogueira, who has faced accusations of criminal activity including fraud, was critical to ensuring the project’s lift-off and hence Trump’s ability to earn tens of millions of dollars. 

Ventura Nogueira assembled a team of agents and brokers to market Trump Ocean Club units, often targeting buyers of Russian and Eastern European origin. Some of these agents have faced serious accusations of criminal activity. 

Although the extent of Trump’s knowledge of these brokers and buyers is unknown, it is highly likely that the Trump Organization had the right to receive sales reports and demand information on the buyers. Buying high-end real estate through secretly-owned companies is a well-known way for criminals to stash the cash they make through crime and launder it to spend without scrutiny. It’s a tried and trusted method used by organized crime, drug cartels and human traffickers.

 

“Now that Donald Trump is president, his business is the nation’s business. He claims to be tough on crime and drugs, yet he’s earned millions from selling his name to a Panama development used to launder drug money,” said Schornick. “These fresh revelations of unscrupulous business dealings show his public rhetoric is both misleading and hypocritical.”

Global Witness calls upon appropriate law enforcement authorities, including Special Counsel Robert Mueller (see here), and congressional committees (see here andhere) to investigate the allegations raised in this report and, if appropriate, hold President Trump accountable for his actions.

Global Witness’ other recommendations are:

Every country should require all companies and trusts to disclose who ultimately owns and controls them and make this information public.

Every country should require the real estate sector to know who their clients are and the source of their funds to ensure that dirty money is not being laundered into the property market.

Every country should require lawyers who carry out transactions for their clients, including the buying and selling of real estate and the creation of companies, to know who their clients are and the source of their funds.

Global Witness has repeatedly shown how secret companies have been used as vehicles to cover up illicit activities such as corruption, terrorism and money laundering. For more, see here. For the full facts and relevant responses from our investigation, read or download the entire report via Global Witness’ website here.

Paradise Papers: Global Witness Statement on Wilbur Ross’ Offshore Secrecy

Paradise Papers: Global Witness Statement on Wilbur Ross’ Offshore Secrecy

Washington, DC — Leaked documents published today by the International Consortium of Investigative Journalists expose how offshore tax havens, white-collar professionals, and anonymous company owners hide their finances behind a veil of secrecy.  The documents from Bermuda-based law firm Appleby include evidence of dubious deals and holdings involving the Queen of England, Canadian Prime Minister Justin Trudeau’s chief fundraiser, and Trump appointed U.S. Commerce Secretary Wilbur Ross.

According to the documents, Wilbur Ross used a constellation of companies, some with their ownership undisclosed. The companies were set up by Appleby to retain shares in Navigator Holdings, a shipping firm with business ties to a Russian oligarch subject to American sanctions.

Ross’ stake has received more than $68 million in revenue since 2014 from Sibur, a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin.  The documents also report that Appleby has administered some 50 companies and partnerships set up in the Caymans and other tax havens that are connected to Ross, whose net worth is estimated to be more than $2 billion dollars.

“This is yet another instance of conflicts of interest within the Trump administration. Wilbur Ross influences US trade and sanctions, yet he is still making millions from a Russian company that could be targeted by these decisions. This is highly problematic for an administration at the center of investigations into collusion with the Russian state,” said Mark Hays, Anti Money Laundering Campaign Leader at Global Witness.

The deals outlined in the Paradise Papers underscore the importance of transparency measures, such as Beneficial Ownership Transparency legislation [S. 1454, S. 1717, and H.R. 3089] , which would help prevent public officials and companies involved in potentially criminal or corrupt activities from using the offshore system to hide their dealings behind a veil of secrecy.

“This new leak demonstrates once again how it’s all too easy to use anonymous companies to game the system,” said Hays.



Note to Editors

Experts from Global Witness, an internationally recognized organization for bold, tenacious campaigns to expose and break links between natural resources, conflict and corruption, are available for comment or interview by emailing Andy Stepanian at andy@sparrowmedia.net and can provide insight in the following areas:

Offshore Corruption
Anonymous Corporate Vehicles
Beneficial Ownership Transparency Legislation
Corruption Involving Property & Real Estate
Corruption in Extractive Industries
Money Laundering
Conflict Resources

Trump’s Afghanistan Strategy will Fail if it Does not Take on Corruption

Trump’s Afghanistan Strategy will Fail if it Does not Take on Corruption

Tonight at 9pm EST President Trump announced his new Afghanistan strategy, Global Witness’ Stephen Carter highlights what is needed for a real change in direction:

“The United States is Afghanistan’s key partner and has real potential to help break the cycle of violence there. But its continued presence will change nothing unless the US and the Afghan government also tackle the root causes of instability. That means fighting the corruption that allows insurgents and strongmen to reap the benefits of the country’s resources, and maintain their grip on power. ‘Nation-building’ in that sense is vital to what President Trump called ‘principled realism’ – not separate from it.

“Corruption is at the heart of insecurity in Afghanistan. It deeply undermines the effectiveness of Afghan forces and the legitimacy of the Afghan government, and is a huge obstacle to any realistic path to stability. Despite successive American military and political leaders acknowledging this challenge, in practice they have rarely treated it as a priority: it is ironic that it is now seen as impossible. If President Trump wants to turn Afghanistan around, there needs to be a real change in the way the US and the Afghan government’s approach governance issues, putting them on a par with military concerns and using levers of support and influence much more effectively.

“The Afghan mining sector is one obvious place to start. It is the second largest source of funding for the Taliban and a major driver of corruption and conflict. Global Witness’ own research, for example, shows how competition over illegal mining in Badakhshan has undermined the stability of an entire province and made it a hotbed of the insurgency. Despite this, basic transparency measures have yet to be put into effect, the Mining Law is missing key safeguards against corruption and conflict, and the Afghan government has struggled to produce basic information on contracts and production. The US has done relatively little to press for stronger action, even though the sector is central to hopes of building up Afghanistan’s economy – and for its ability to fund their own security forces and secure their territory without endless expenditure of American lives and money.

“Under President Ghani and CEO Abdullah the Afghan government has shown itself willing to contemplate serious reforms and to agree anti-corruption benchmarks, even if implementation has so far been slow. America has a partner in Afghanistan, but they need to seize the chance to work with them, and push hard for serious action. The call for ‘real reforms’ is welcome, but it has been made before, and is lacking specifics. President Trump’s Afghan strategy will stand or fall on how well he turns those words into action.” said Carter.

New Leaks Show Shell Oil Executives at the Center of a Scheme to Steal $1.1 Billion from Nigeria’s People

New Leaks Show Shell Oil Executives at the Center of a Scheme to Steal $1.1 Billion from Nigeria’s People

Oil giants Shell and Eni knowingly took part in a vast bribery scheme for one of Africa’s most valuable oil blocks which deprived Nigeria and its people of $1.1billion, an exposé by Global Witness and Finance Uncovered reveals.

New leaked internal emails seen by Global Witness and Finance Uncovered show that Shell’s most senior decision-makers knew that the money they paid for oil block OPL 245 in 2011 would go to convicted money launderer and ex-Nigerian oil minister Dan Etete – rather than to benefit the Nigerian people.

Global Witness has investigated and exposed this case for six years and Shell has consistently denied any wrong-doing, saying it only paid the Nigerian government. The newly leaked emails show this denial is misleading. Emails which went to then CEO Peter Voser reveal that they knew this massive payment would go to Etete. Other emails show Shell execs were told money was likely to flow to some of the most powerful people in the country, including to then President Goodluck Jonathan.

These revelations come shortly after moves by the Trump administration and House Republicans to derail a critical rule, section 1504 of the Dodd-Frank Act, which requires U.S. listed companies like Shell and Eni to disclose payments just like these. U.S. Secretary of State, Rex Tillerson himself lobbied against this payment disclosure provision while serving as Exxon CEO.

 

Simon Taylor of Global Witness, said: “This is one of the worst corruption scandals the oil industry has ever seen, and this is the biggest development so far. Today’s new evidence shows senior executives at the world’s fifth biggest company knowingly entered a corrupt deal that deprived the Nigerian people of $1.1billion. That is more than the country’s entire health budget for 2016.”

Shell and Eni’s corrupt deal has huge consequences for ordinary Nigerians. Right now five million Nigerians face starvation and one in ten children don’t live to see their fifth birthday. The money paid for the block equates to one and a half times what the UN says is needed to respond to the country’s current famine crisis.

Law enforcement raided Shell’s headquarters in February 2016; six countries including the U.S. have investigated the deal. An Italian court will begin hearings on 20 April to determine whether Shell will face trial on international corruption charges. Several Shell executives from the time of the deal may face proceedings in their personal capacity.

Most alarmingly for investors, when the OPL 245 deal was being negotiated Shell had already been charged for violating provisions of the Foreign Corrupt Practices Act for paying bribes in Nigeria. Five months before the deal was struck, Shell had entered into a deferred prosecution agreement – the equivalent to being under probation – with the U.S. Department of Justice. This agreement was still in place when the deal went through. Today’s news suggests Shell may have violated this agreement by entering into a bribery scheme. It is hugely concerning that the company’s most senior executives went anywhere near this deal given the company had such serious sanctions hanging over it.

An excerpt from an intercepted email from Shell’s Guy J. Colegate to Guy Outen, Shell’s Executive Vice President Commercial, New Business & LNG detailing their intent to offer money launderer Dan Etete $1.2 billion. Read this email exchange and other Shell Oil email intercepts HERE

Ben Van Beurden has been Shell’s CEO since 2013. In 2015 he told Global Witness that payments for the block were “morally OK” and “in accordance with the law of Nigeria and international practice”. The leaked emails tell a very different story. Van Beurden, in a phone call wire-tapped by Dutch authorities with Shell’s CFO, Simon Henry, refers to “really unhelpful emails”. One internal email copied to then CEO Peter Voser, stated: “Etete can smell the money. If at nearly 70 years old he does turn his nose up at nearly $1.2 bill (sic) he is completely certifiable. But I think he knows it’s his for the taking.”

Shauna Leven, Anti-Corruption Campaigns Director, said: “This is a huge scandal – it must trigger change. For too long the world’s most powerful and profitable oil companies have masqueraded as leaders of responsible business, while robbing countries of their most precious assets.We could save countless lives across the world if ordinary people were able to benefit from the wealth of their own natural resources.”

“Those responsible at Shell could go to jail for these decisions. The company and its individual decision makers in this case need to face justice. Law enforcement in Italy, Nigeria, the UK, the US, the Netherlands and Switzerland need to cooperate to ensure that this happens.”

However accountability is only one part of the solution, says Global Witness. This Shell scandal is not an isolated case – the oil, gas and mining industry is the most corrupt on the planet according to the OECD. Corrupt deals like this can be prevented through strong enforcement of bribery laws together with strong transparency laws that make it impossible to conduct such deals in secret.

Leven continued: “Over 30 major economies including the U.S, UK, Canada, Norway and all EU countries now have laws in place that require oil, gas and mining companies to disclose what they’re paying any government on a project-by-project basis. Had these laws been in place at the time of the deal, Shell would have had to put these payments on public record. It is highly unlikely that they would have wanted to do that. Shining a light on corrupt deals like OPL 245 prevents multinational companies from scheming with greedy government officials to get rich at the expense of ordinary people.”

A Shell spokesperson told Finance Uncovered: “Given this matter is currently under investigation, it would be inappropriate to comment on specifics. However, based on our review of the Prosecutor of Milan’s file and all of the information and facts available to Shell, we do not believe that there is a basis to prosecute Shell. Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee.” If it was ultimately proved that Etete’s company made bribe payments relating to the OPL 245 deal “it is Shell’s position that none of those payments were made with its knowledge, authorisation or on its behalf”, the company said.

Eni told Global Witness that it was not appropriate to debate the merits of the allegations as proceedings were pending. They noted “inaccurate statements and mischaracterizations of the record, including, for example, your description of the structure of the acquisition OPL 245”, continuing “none of the contracts relating to the 2011 transaction was executed secretly or designed to ‘hide’ any party’s transaction”.

Both companies said they had commissioned separate, independent investigations. “No illegal conduct was identified,” Eni has said, claiming that it “concluded the transaction with the Nigerian government, without the involvement of any intermediaries”. Shell said it had shared key findings of its OPL 245 investigation with relevant authorities and that “we do not believe that there is a basis to prosecute Shell”.

In January Goodluck Jonathan released a statement saying he “was not accused, indicted or charged for corruptly collecting any monies as kickbacks or bribes” in the OPL 245 affair.

Documents

  1. Read the full report from Global Witness HERE
  2. Transcript of Ben van Beurden & Simon Henry wiretap HERE
  3. Read Shell Oil email intercepts HERE
  4. Read the Nigerian charge sheets HERE
  5. Read the Milan prosecutors letter HERE (Italian)
  6. Read the Milan prosecutors letter HERE (English)
  7. Read the Abuja Federal Court letter HERE 

Notes to editors

  1. In 2011, Shell and Italian oil giant Eni paid $1.1 billion for an oil block, knowing the money would go to a front company secretly owned by a notorious former Nigerian oil minister, Dan Etete, who had been convicted for money-laundering. Etete had awarded himself the block while in office under the former military dictator Sani Abacha, via Malabu Oil and Gas, a company he secretly owned.
  2. Shell’s annual reports have given scant details about the OPL 245 deal, despite the oil block’s huge potential. But with nine billion barrels of “probable reserves,” the block could increase Shell’s global “proven oil reserves” – a key figure for shareholders – by a third.
  3. In December 2016 money laundering charges were filed by Nigerian law enforcement against Dan Etete and the former Nigerian Attorney General and Justice Minister Mohammed Adoke. In a statement in December 2016, Mohammed Adoke said: “I hope to at the appropriate time make myself available to defend the charge for whatever its worth.” He also emphasised that he did not benefit from the deal, which he said saved the government from a breach of contract suit in which Shell was claiming $2 billion. He called the charges “orchestrated plans to bring me to public disrepute in order to satisfy the whims and caprices of some powerful interests on revenge mission.” The full statement from Mohammed Adoke is available at http://thenationonlineng.net/malabu-will-come-defend-adoke/
  4. Goodluck Jonathan’s full statement is available at http://www.premiumtimesng.com/news/headlines/220059-breaking-malabu-oil-deal-jonathan-breaks-silence-bribe-allegation.html
  5. Eni has issued several press releases on the OPL 245 deal, available at https://www.eni.com/en_IT/media/2017/02/eni-further-forensic-investigations-confirm-no-illegal-conduct-in-acquisition-of-opl-245-licence
  6. Dan Etete’s response is available at: https://www.thisdaylive.com/index.php/2017/02/08/etete-government-did-not-invest-a-dime-in-malabu-oil/
Leaked Trump Executive Order Easing Conflict Mineral Regulations a ‘Gift to Warlords & Corrupt Businesses’

Leaked Trump Executive Order Easing Conflict Mineral Regulations a ‘Gift to Warlords & Corrupt Businesses’

Washington, DC — In response to reports that the President Trump is planning to issue an executive order targeting the US conflict minerals provision, also known as Section 1502 of Dodd-Frank, Carly Oboth Policy Adviser at Global Witness said: 

“Any executive action suspending the US conflict minerals rule would be a gift to predatory armed groups seeking to profit from Congo’s minerals as well as a gift to companies wanting to do business with the criminal and the corrupt. 

“This law helps stop US companies funding conflict and human rights abuses in the Democratic Republic of Congo and surrounding countries. Suspending it will benefit secretive and corrupt business practices. Responsible business practices are starting to spread in eastern Congo.  This action could reverse that progress.

“It is an abuse of power that the Trump Administration is claiming that the law should be suspended through a national security exemption intended for emergency purposes.  Suspending this provision could actually undermine US national security.”

The conflict minerals law, known as Section 1502 of the Dodd Frank Act, aims to help stop mineral trading fuelling conflict in Central Africa by requiring companies to check whether they are funding conflict or human rights abuses through their purchases of minerals, including tin, tantalum, tungsten and gold. These minerals are crucial parts of many products manufactured and sold in the US, from jewelry and airplanes to laptops and mobile phones.

For over a decade, Global Witness has exposed the role of minerals in fuelling conflict and human rights abuses in eastern Congo and played a leading role in securing passage of the conflict minerals provision.