{"id":4848,"date":"2017-07-17T00:00:00","date_gmt":"2017-07-17T00:00:00","guid":{"rendered":"https:\/\/amabhungane.org\/amabhungane\/stories\/the-almighty-dollar-a-guptaleaks-game-changer\/"},"modified":"2024-09-22T18:04:37","modified_gmt":"2024-09-22T18:04:37","slug":"the-almighty-dollar-a-guptaleaks-game-changer","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/the-almighty-dollar-a-guptaleaks-game-changer\/","title":{"rendered":"The almighty dollar \u2013 a #GuptaLeaks game-changer?"},"content":{"rendered":"

Many kickbacks paid to the Guptas and subsequent money movements were in US dollars. Some washed through US accounts and a US-listed corporation has been implicated. This means the entire alleged conspiracy could be exposed to US investigation and prosecution, according to stringent anti-corruption laws there.<\/em><\/p>\n

To date, the apparent efforts of the Hawks, South Africa\u2019s priority crime-combating unit, to investigate any of the voluminous allegations made against the Guptas have been minimal to non-existent.<\/p>\n

But the Guptas\u2019 repeated use of US dollars to move their kickbacks around the globe, along with previously hidden ties to US companies, may render the Hawks\u2019 efforts (or lack thereof) irrelevant.<\/p>\n

Under American anti-bribery and anti-money laundering laws, one link to the United States could expose all members of any broader conspiracy to the jurisdiction of American courts.<\/p>\n

In addition to personal US criminal liability, ill-gotten gains are also at risk.<\/p>\n

The US Department of Justice\u2019s Kleptocracy Asset Recovery Initiative recently seized billions of dollars of assets \u2013 including bank accounts, real estate, art, jewelry, aircraft and yachts \u2013 located around the world.<\/p>\n

When announcing the latest such seizure\u00a0last Friday<\/a> \u2013 stemming from contracts corruptly obtained by bribing Nigeria\u2019s former oil minister \u2013 a senior official at the US Department of Justice remarked: \u201cCorrupt foreign officials and business executives should make no mistake: if illicit funds are within the reach of the United States, we will seek to forfeit them and to return them to the victims from whom they were stolen.\u201d<\/p>\n

US-listed companies<\/strong><\/h4>\n

The Guptas\u2019 dealings with software giant SAP potentially provides US authorities with a clear means of getting their foot in the door.<\/p>\n

Although headquartered in Germany, SAP\u2019s stock trades on the New York Stock Exchange, thus making the company subject to various US laws, including the Foreign Corrupt Practices Act (FCPA).<\/p>\n

Last week, amaBhungane and Scorpio\u00a0revealed<\/a> that SAP paid R100-million to Gupta-linked CAD House.<\/p>\n

By the end of the week, SAP had replaced its executive team in South Africa and had launched both internal and external investigations, the latter being led by US law firm Baker McKenzie.<\/p>\n

To receive maximum credit for cooperating \u2013 thereby potentially reducing recommended fines by half \u2013 companies are expected to thoroughly investigate and self-report FCPA\u00a0violations<\/a> to US authorities.<\/p>\n

To be eligible for any such credit, companies are further\u00a0required<\/a> to hand over \u201call relevant facts about individuals involved in corporate misconduct\u201d to the US Department of Justice.<\/p>\n

US Dollar and Gmail snares<\/strong><\/h4>\n

Forthcoming instalments of the #GuptaLeaks will further detail the Guptas\u2019 frequent transactions in US dollars \u2013 the Guptas\u2019 currency of choice of when moving hundreds of millions of dollars to and from its Dubai bank accounts.<\/p>\n

For instance, the #GuptaLeaks reveal that much of cash sloshing through the Dubai accounts are the proceeds of so-called \u201cconsulting\u201d contracts such as the China South Rail-Transnet contract\u00a0previously detailed<\/a> by amaBhungane.<\/p>\n

The #GuptaLeaks also reveal that communications related to the CSR kickbacks were carried out using US-based email providers.<\/p>\n

Major US law firm, White & Case,\u00a0explained<\/a> how such US-dollar transactions and even emails can put someone within the very long reach of US laws, including anti-bribery laws.<\/p>\n

\u201cMany US laws \u2014 including the Foreign Corrupt Practices Act in certain circumstances and various antifraud statutes \u2014 may establish jurisdiction over a crime whenever it involves the use of any \u2018means or instrumentality of interstate or foreign commerce\u2019.<\/p>\n

\u201cThe term is broadly defined by US authorities and may cover any communication or movement that crosses state or international borders, including wire transfers, emails, phone calls, mail and travel.<\/p>\n

\u201cGiven the reach of US commerce, from free email servers to correspondent banks that clear US dollars for non-US based banks, such a broad definition can significantly increase the reach of US law.\u201d<\/p>\n

Beyond transferring many millions of dollars through US-based correspondent banks, the Guptas, their associates and many political figures linked to them frequently used US-based email providers, such as Gmail, Yahoo and Hotmail.<\/p>\n

These US-based email accounts were used to communicate on a wide variety of topics including the Sun City wedding expenses, the near-daily US dollar movements to and from Dubai, as well as to make arrangements with parties in the United States who received funds from the Guptas\u2019 accounts in Dubai.<\/p>\n

US money laundering Laws<\/strong><\/h4>\n

Regarding US anti-money laundering laws, White & Case notes: \u201cUS law makes it a criminal offense to engage in or attempt to engage in a financial transaction involving funds that are known to be the proceeds of certain unlawful activities, or to engage in a financial transaction that provides funds for the commission of a crime (such as terrorist financing or sending a bribe payment).<\/p>\n

\u201cThis offense is called \u2018money laundering,\u2019 and non-US corporations and foreign nationals may be subject to prosecution under US federal anti-money laundering statutes if they are involved in the transfer or attempted transfer of illegally obtained funds or funds used to further criminal activity.\u201d<\/p>\n

The Guptas\u2019 forwarding their ill-gotten gains to a US-incorporated company could potentially run afoul of such laws.<\/p>\n

AmaBhungane and Scorpio revealed that over US$1-million paid by Swiss crane manufacturer Liebherr ultimately ended up in a US company, Brookfield Consulting, owned by apparent US-citizen relatives of the Guptas.<\/p>\n