Joseph Kabila’s family fortunes

As early as 2015, the signs were growing that Democratic Republic of Congo’s President Joseph Kabila would try to outstay his two-term limit and jeopardise its carefully crafted peace. If Kabila was to be in power beyond December 2016, he would technically be staying beyond his term limit and Congo would stumble into a constitutional crisis. And it was obvious that elections would be seriously delayed. The question was always why someone who didn’t seem to actually want to govern would want to hang on so badly. Many Congolese suspected he was protecting his family’s business interests, but no one knew what they were. No one could name a single one. As three Bloomberg reporters who had each been based in Kinshasa for various periods over the past decade, Michael Kavanagh, Thomas Wilson and I had always wondered the same thing. It so happened that public company records were being digitised and we were able to compile an enormous database of filings. We scoured it for references to Kabila’s relatives (often using variations of their real name) and were able to identify dozens of companies they were involved in. With that in hand, we went out to figure out what the story behind each company was. It was all the usual stuff – speaking with old and new sources, getting information from other organisations that had dealt with the companies and finding references in filings in other countries. We went to see the farms in the east, the copper mines in the south and the diamond mines in the west, all remote places controlled by the president’s personal guard.

The most breath-taking breakthrough came when a whistleblower emerged towards the end of our reporting process. Jean-Jacques Lumumba had worked for Kabila’s brother at a Congolese bank and came forward with credible information on several of the companies and how they operated. He had made it to Europe, but he was literally risking his life. The story was published days before the official end of Kabila’s second term. The mood in Kinshasa was tense. Police were brutally breaking up demonstrations against his rule. When our story came out it immediately became a talking point in the political scene from Congolese opposition politicians to John Kerry, the US Secretary of State, trying to put pressure on Kabila to leave office. Kabila didn’t budge and outmanoeuvred his opponents. After the revelations, a flurry of articles from other major international news organisations and a detailed research report on the Kabila family’s assets followed. An area that had seemed totally impenetrable suddenly started producing fascinating details about the first family. Importantly, everyone now has a deeper understanding of who Kabila is and what he’s protecting. We spent about 18 months on this article and crisscrossed sub-Saharan Africa’s largest country which would’ve been an unthinkable investment for a Congolese organisation. Journalism has next to no funding in the Congo. In most instances, newspapers are as much a platform for the rich and powerful to elevate themselves. That said, there are some publications that are working incredibly hard and on very little money to publish independent news. Snooping around mines with presidential guards patrolling wasn’t riskfree for us, but it’s a world away from the risks faced by Congolese journalists. They would not be operating on the understanding that a Western government or news organisation could intervene should their rights not be respected. During Kabila’s rule, a number of journalists have disappeared or been killed with impunity.

References

Congo Research Group. 2017. ‘All the president’s wealth: The Kabila family’s business’. Available at: http://pulitzercenter.org/sites/default

With His Family’s Fortune at Stake, President Kabila Digs In
Michael Kavanagh, Thomas Wilson and Franz Wild, Bloomberg
News, 15 December 2016

In his only public speech this year, Joseph Kabila, president of the Democratic Republic of Congo, was defiant about his refusal to hand over power when his final term ends on Dec 19. ‘I cannot allow the republic to be taken hostage by a fringe of the political class,’ he told parliament last month as members cheered. His presidency had brought peace and economic growth to Congo, the 45-year-old said, outlining reforms he’d made in telecommunications, mining, energy and banking. What he didn’t say is how some of his own family members are among the biggest beneficiaries of those changes – including his sister Jaynet and brother Zoe, who both listened from the front row as elected members of parliament.

Together the Kabilas have built a network of businesses that reaches into every corner of Congo’s economy and has brought hundreds of millions of dollars to the family, a Bloomberg News investigation has found. The sprawling network may help explain why the president is ignoring pleas by the US, the European Union and a majority of the Congolese people to hand over power next week, though his advisers dispute this. … Kabila and his siblings have assembled an international business network stretching across at least 70 companies, according to a Bloomberg News analysis of thousands of company documents and court filings as well as dozens of interviews with bankers, businessmen, miners, farmers and former government officials.

While Congolese law doesn’t prohibit politicians or their families from having business interests, the scope of that empire has only recently become visible, in publicly available corporate and government records that Congolese regulators have computerized and made searchable in just the past few years. Bloomberg News, with support from the Pulitzer Center on Crisis Reporting, traced the Kabilas’ interests by amassing an archive of hundreds of thousands of pages of corporate documents that shows his wife, two children and eight of his siblings control more than 120 permits to dig gold, diamonds, copper, cobalt and other minerals. Two of the family’s businesses alone own diamond permits that stretch more than 450 miles across Congo’s southwestern border with Angola. Family members also have stakes in banks, farms, fuel distributors, airline operators, a road builder, hotels, a pharmaceutical supplier, travel agencies, boutiques and nightclubs. Another venture even tried to launch a rat into space on a rocket. In Congo’s largely informal, cash-based economy where the family stakes are almost all in privately held companies, the exact value of the businesses isn’t known. The few figures available in publicly accessible documents show investments worth more than $30 million in just two companies. Estimated revenue for another company exceeds $350 million over four years – in a country where World Bank data show that nearly two-thirds of the 77 million people live on less than $1.90 per day.day. While some of the businesses are owned directly, the family also has dozens of joint ventures and shell corporations through which it holds stakes to varying degrees in all manner of industries. That creates a system so pervasive that even seemingly innocuous payments – such as rent paid by the UN for a police station – end up finding their way to the Kabila family, an analysis of the network shows. It can be a ham-handed operation: Perhaps in its eagerness to tap the country’s resource wealth, the family has sometimes driven away outside investment that would have made some of its members even more money. Government spokesman Lambert Mende said he couldn’t comment on issues concerning the president’s family, which he considered a private matter. When asked how Bloomberg News could direct questions to Kabila, he said the president does not talk to Western media. Theodore Mugalu, who handles the family’s personal affairs, didn’t respond to a series of phone calls and text messages requesting comment …

After their father became president in 1997 by overthrowing Mobutu with the help of a coalition of African governments, he immediately set about making money for his government – and for family and friends, according to Kennes’s biography. The places he’d fought in the bush as a young rebel became the names of commercial interests. Hewa Bora, the rebel base where his twins Jaynet and Joseph were born, became an airline, a fuel station, a farm and a mining site. Wimbi Dira, another rear base, gave its name to a second airline. Since then, the Kabila family’s businesses have grown with Congo’s developing economy. And they now enjoy a perk of presidential power: the protection of the Republican Guard, an elite army unit that is supposed to protect Kabila himself. In July 2015, guard members accompanied his wife, Olive, after she had bought a cattle farm in the grassy hills of North Kivu. According to three laborers who were displaced, she demanded they remove their makeshift homes or watch soldiers destroy them. Olive didn’t respond to multiple phone calls and text messages sent to her assistant.

Many of the companies are run by Jaynet, Joseph Kabila’s twin sister. After their father’s death, documents show, she set up companies across Congo, as well as in the US, Panama, Tanzania and on the South Pacific island of Niue. Company filings show she is or has been a shareholder or director in at least 28 companies. In some, she controlled a majority of shares while in others she held minority stakes, the filings show. It’s unclear how many of those companies are still active. The lack of transparency in some of the family’s dealings has hurt Congo’s economy. In 2012, the International Monetary Fund cut its half-billion dollar loan program with Congo after the government declined to publish contracts related to a 2011 deal for a copper mine known as Comide. One of the companies involved in the deal, Goma Mining, was at least 10 percent owned by the family and chaired by Kabila’s sister, Josephine, according to court records from 2013. The family’s involvement in mining – diamonds, cobalt and copper – comes in part through a company called Acacia, which was majority-owned by Jaynet; younger brother Masengo; Joseph Kabila’s 16-year-old daughter, Sifa; and his financial assistant, Emmanuel Adrupiako, based on corporate records from September 2014. In the remote southern town of Tembo, people haven’t heard of Acacia or another family-controlled company called Kwango Mines that together hold 96 mining permits. But they seem to know who controls the diamonds in the river. ‘All the documents for this project are now in the hands of Jaynet Kabila, the twin sister,’ said diamond trader Jauvin Manzaza, pointing to the wide Kwango River that tracks the border with Angola. Kabila-controlled companies first arrived here in 1998, Manzaza said, armed with tractors and machinery to dig for diamonds 15 miles south of the town. In 2003, a company controlled by Selemani and Kabila’s younger brothers Zoe and Masengo sold more than $12 million of gems, export data show. Diamonds accounted for three-quarters of Congo’s export revenue that year, which also marked the end of the country’s civil war, attracting international diamond companies. Once there, those firms found they had no choice but to negotiate with the Kabila clan, said Mike De Wit, head of exploration in Congo from 2003 to 2007 for the world’s largest diamond producer, De Beers. In 2006, De Beers signed an agreement to explore with permits belonging to a company controlled by Olive Lembe, a few months before she married the new president, De Wit said. That company is now called Olive Sifa Laurent, or Osifal for short, named after its shareholders: Olive, the couple’s daughter, Sifa, and eight-year-old son, Laurent-Desire. ‘When Kabila came to power, he looked like an honest guy and business was actually doable, so that’s why De Beers went into there,’ De Wit said in an interview. ‘With time, it became obvious that that wasn’t the case’ …

Acacia turned its attention some 500 miles southeast of Tembo in 2010, when the prices of copper and cobalt, now Congo’s biggest exports, surged. The region, known as Katanga, is bursting with copper and other metals. Hundreds of thousands of men, desperate for work, use spades, picks and hammers to scrape ore out of the bottom of tunnels that at times descend more than 130 feet below ground. Near the town of Luisha, about 4,500 diggers work an area of six mines that officially belong to state-owned miner Gecamines. Teams of four diggers each produce an average of about half a ton of copper and cobalt ore per day, according to a 2014 World Bank-funded report. Three of the mines are run by Acacia, the 2014 report said, even though Gecamines has never announced any partnership with the company. Soldiers on the sites force diggers to sell their minerals only to Acacia at below-market prices, according to the report, which was written by French consulting firm Sofreco for a World Bank program on improving governance in Congo’s mining sector. A Gecamines spokesman declined to comment for this story … In the Congolese capital of Kinshasa, behind the reflecting windows of the BGFI bank, the Kabila family has built its most sophisticated investment: the country branch of a Gabon-based banking group. BGFI in Congo is dominated by the presidential family. When the lender set up in the country in 2010, Kabila’s sister Gloria Mteyu took a 40 percent stake, then worth $10 million, according to company registration documents from that year. Gabon-based Groupe BGFI Bank SA, which has ventures in 11 countries, holds 60 percent.

April, according to a term sheet reviewed by Bloomberg. A 32-year-old fashion designer, Gloria said in a telephone interview that she returned to Congo in 2012 to launch Kinshasa Fashion Week after studying in New York, Milan and Paris. Asked about her businesses, she said she was a private person and didn’t want to talk about ventures that weren’t related to fashion. She said she didn’t have a stake in BGFI. At a November press conference in Kinshasa, though, Abdel Kader Diop, deputy managing director of the Congo unit, said Gloria was a shareholder. An outside spokesman for BGFI in Gabon said the chief executive officer of the bank was too busy to comment for this story. BGFI’s Gabonese parent hired PricewaterhouseCoopers to audit BGFI in 2015. The audit found that the Congolese bank had failed to follow internal controls 19 times and paid middlemen for business without knowing who would ultimately receive the funds. Jean-Jacques Lumumba, head of credit at the bank, found suspicious transactions soon after he started working there in 2014. Lumumba discovered that the nation’s central bank – which isn’t allowed to make commercial loans – had lent a food distribution company $43 million and transferred the money to an account at BGFI. The food company’s incorporation documents show that it’s run by business partners of President Kabila, whose brother Selemani is the bank’s CEO.