FINCEN FILES: JB, ZUMA COZY TIES WITH ARMS SUPPLIER FLAGGED

Former President Joyce Banda and South African counterpart Jacob Zuma may have left office long ago but secret banking reports have exposed US government fears that the two may have been allegedly benefiting from a relationship with an arms supplier.

Banda—who became President in line with constitutional order in April 2012 following the death of Bingu wa Mutharika—is the highest profile Malawian to be named in FinCen Files—is fingered through confidential details of her administration’s award of patrol boats to South African leading arms manufacturer, Paramount Group.

Banda and Zuma are named as possible beneficiaries of funds from a South African arms supplier, Paramount Group which had been awarded a contract by the Banda administration to supply patrol boats on Lake Malawi.

The FinCEN Files, a 16- month-long investigation of the International Consortium of Investigative Journalists, BuzzFeed News and partners including The Nation based on top-secret bank reports filed to the U.S. Treasury Department’s intelligence unit, the Financial Crime Enforcement Network, other documents and dozens of interviews.

The reports were turned over to the U.S. Congress as part of the investigation into Russian interference in the 2016 presidential election provide a unique, bird’s-eye view of illicit money flows that supported worldwide corruption and criminality

The specific report that touches on Banda was written by Baclays Banks which earlier had commissioned Orbis Business Intelligence—owned by Christopher Steele a former British spy famous for his role in investigating Russia’s meddling in the election of US President Donald Trump.

The report says Paramount and its founder Ivor Ichikowitz benefited from their cozy ties to African leaders by being awarded major contracts and cites Banda alongside former South African president, Jacob Zuma, as some of the leaders.

In particular, the report cited the fallout from Malawi’s $145 million (around K108 billion) patrol boat contract, saying it was cancelled by the incoming government for three main reasons.

Stated the report: “Political rivalry (least important), expense and corruption allegations.”  

The corruption allegations were strengthened in the Orbis report by the existence of several links to Bell Pottinger, internal bank records show.

Bell Pottinger was the United Kingdom Public Relations Firm that was propping up Banda’s image abroad with funding from the Ivor Ichikowitz Family Foundation belonging to the owner of defence firm Paramount Group.

The Banda administration confirmed in 2013 that Bell Pottinger had been engaged “to assist the President and Government to ensure that their work in fighting corruption is accuracy reflected in the international media.”

The Banda administration later cut ties with the firm after the exposure of her government’s three-some links to the public relations firm and Paramount Group.

Paramount Group is said to have made 29 payments totaling about $585,245 to controversial British public relations firm, Bell Pottinger between January 2012 and December 2013, at a time the Malawi government awarded the patrol boat contract to the arms supplier.

Both the PIJ and The Nation could not independently confirm whether the payments were to honour service rendered to the former president.

In an e-mailed comment to The Nation/PIJ and ICIJ, Banda said she did not break any law in awarding of the contract to Paramount Group, emphasizing that she was not personally involved in the procurement of the boats.

Banda said she been informed that Bell Pottinger “certainly did not play any role in the awarding of the boat contract” hence “any such suggestion is malicious and false.”

She added that she could not comment on the relationship between Bell Pottinger and Paramount.

She added: “Allow me to make it very clear once again, Presidents do not award contracts in Malawi. The Patrol Boat Contract was not awarded by me as a sitting president at the time and I again refer you to what I have quoted above as to the official statement of the government of Malawi following on the advice of its Attorney General. Please ensure that your publication does not make any malicious allegations against me, the government of Malawi and our officials

Said Banda: “Allow me to say that my findings are that these same narratives appear to be revisited by people and so I encourage you to go and look at the explanations of what happened according to those persons involved during the events which have been fully ventilated on numerous platforms. The questions that you have raised regarding the defence contract approximately seven years ago with Paramount have been addressed in detail by successful governments of Malawi.

She added: “Statements have been issued to the media and interviews were granted over several years. I refer you to the statements issued by the ministry of finance and a joint statement by the government of Malawi and The Paramount Group. In particular I want to highlight the following section from the joint statement.

“The Paramount group contract with the government of Malawi was concluded according to Malawian governmental processes and was signed by both the Ministry of Finance and the ministry of Defence. At the time of signing, a legal opinion was secured from the Malawian Attorney General confirming both the legality of the agreement and its validity under Malawian law.”

Following a change of power in 2014, then Finance Minister Goodall Gondwe threatened to cancel the contract but following discussions in cabinet and negotiations with the supplier, the contract was honoured.

In an interview, Gondwe this month said he still stand by his concerns that the contract was unnecessary and too expensive for the country.

Said Gondwe: “It’s a long time ago…the re-negotiation happened but we only renegotiated the period of payment and not the sum of the contract. We paid the whole amount. They delivered everything.

“Yes, I was not happy with the contract, I don’t think we needed it. The President (Peter Mutharika) was not happy (with the contract). The Attorney General however advised us to proceed with the contract.”  

As to the comment of Minister Goodall Gondwe, Banda responded as follows: “These comments were made at a time when several cabinet ministers made sentiments that have turned out to be completely false and malicious examples are as follows.”

Ivor Ichikowitz the chairperson of Paramount Group did not speak to ICIJ or The Nation/PIJ but in a written response to questions submitted by the ICIJ his lawyers refused to respond to the questions unless the ICIJ or its partners explained how it had sourced the confidential details.

Reads part of the response: “since your letter is a selective copy and paste of their letter, we put the same questions as we did with them and we raise the same certainty of legal action if and to extent any confidential information has been improperly obtained. For avoidance of doubt we require that you tell is (sic) how you believe yourselves to have lawfully obtained the confidential information alluded to in your letter and the legal basis for your intended use—by reference to the US state and federal law. If you do not provide unambiguous lawful basis for such intended use and we shall act accordingly.”

Apart from Banda, scores of world leaders, businesspersons, celebrities, sports stars have been named in FinCen Files which are being published across the world in the largest cross boarder collaboration.