On 16 October, Alex Saab, a Colombian businessman who is also a Venezuelan diplomat, was extradited to the United States from Cape Verde in West Africa.
He is accused of siphoning about US$350 million out of Venezuela through the United States as part of a bribery scheme linked to Venezuela’s state-controlled exchange rate. The US Department of Justice alleges that between 2011 and 2015, Saab and an associate laundered money through a scheme involving building low-income housing in Venezuela.
They allegedly submitted “false and fraudulent” documents for items that were never imported. They allegedly bribed Venezuelan government officials, to secure payment in US dollars at a favorable rate via the government-controlled currency exchange rate.
Saab’s lawyers argue that Saab is a Venezuelan diplomat and is thus entitled to immunity. His crime, they argue, was busting United States sanctions on Venezuela by importing much-needed food for Venezuela.
US journalist, Ben Norton, says “if you evade illegal, criminal, murderous US sanctions you are supposedly corrupt and you are supposedly engaged in money laundering”.
Saab is due in court in Miami on 15 November.
The story of Saab is so similar to that of Zimbabwean businessman Kudakwashe Tagwirei that one is tempted to agree with Norton that media organisations funded by US billionaires are targetting Tagwirei simply because he has been busting US sanctions against Zimbabwe, thus defeating Washington’s objective to see Zimbabwe’s economy screaming.
There has been an onslaught on Tagwirei by publications that receive funding from foundations that are funded by United States billionaires who are also strong proponents of regime change, since the beginning of this year.
The onslaught also comes when there are increasing calls for the West to lift sanctions on Zimbabwe from the Southern African Development Community, the African Union and now the United Nations special rapporteur, Alena Douhan, who was in the country last month to assess the impact of sanctions on the Zimbabwe.
Tagwirei is back in the spotlight following the publication of the Pandora Papers last month by the International Consortium of Investigative Journalists (ICIJ) which described the project as “the largest investigation in journalism history”.
ICIJ says it obtained more than 11.9 million financial records with secret offshore holdings of more than 130 billionaires from 45 countries but does not say from whom. More than 600 journalists in 117 countries and territories worked on the investigation.
Ironically no United States billionaire is named in the papers though the latest count shows that there are 3 204 billionaires in the world, 927 of them from the United States.
Sam Pizzigati, writing for Inequality.org, said this was probably because US billionaires have no reason to hide their fortunes since they pay very little taxes.
Another reason, he said, was that: “The relative absence of US billionaires in the Pandora Papers has nothing whatsoever to do with nobility. We’re talking accessibility here. The US super rich have plenty of financial agents — the tax attorneys, accountants, and wealth managers, as my Institute for Policy Studies colleague Chuck Collins puts it, ‘paid millions to help billionaires sequester trillions’ — close to home. They don’t need to partake of the services provided by wealth advisory firms in places like Samoa, Cyprus, and Singapore, or any of the other 11 offshore locales from where the Pandora Papers leaked.”
South Dakota is now reported to be the best tax haven in the world.
But Norton and another US journalist Max Blumenthal have a different view. They argue that US billionaires are not named in the Pandora papers because they fund the organisations running the stories including the ICIJ.
Though ICIJ has several funders, they single out Luminate which is financed by billionaire Pierre Omidyar of eBay, and Open Society funded by the better known George Soros. The two billionaires, the two journalists claim, work with United States intelligence and fund media organisations across the globe that promote regime change under the guise of advocating for democracy.
The first story on Tagwirei this year, for example, was published by the Daily Maverick in South Africa in February and was entitled: Report on cartel power dynamics in Zimbabwe.
The Maverick said this was an explosive cartel report that uncovered the anatomy of a captured state. It was an exclusive report which provided a post mortem of the cancer that killed the Zimbabwean dream of freedom and independence. The Maverick claimed that the report was being published in South Africa because it was not safe to do so in Zimbabwe because of attacks on the media and activists in Zimbabwe.
“The 64-page report details the scale of the theft – among others, illicit cross-border financial transactions cost Zimbabwe up to a staggering US$3-billion a year and billions in gold and diamonds smuggled out of the country. It is estimated that Zimbabwe may lose up to half the value of its annual GDP of US$21.4bn due to corrupt economic activity that, even if not directly the work of the cartels featured in the report, is the result of their suffocation of honest economic activity through collusion, price fixing and monopolies,” the Maverick said.
“Ironically, President Emmerson Mnangagwa, who has been a public critic of illicit financial transfers, is identified by the report as one of the cartel bosses whose patronage and protection keeps cartels operating,” it went on.
The second report also published by the Daily Maverick was in June. The Maverick said Africa Risk Consulting had published a 50-page report, titled Zimbabwe Political Economy Stakeholder Map. It said the report was confidential and was not available online but it talked about how Zimbabwe was rapidly moving toward a Russian-style oligarchical system and how it was becoming a regional hub for laundering illicit wealth that was fuelling violent conflict. The report, the Maverick said, listed nine top “business acolytes” as Kudakwashe Tagwirei; Nic Van Hoogstraten; Billy Rautenbach; the late John Bredenkamp; Zunaid Moti; Tafadzwa Musarara; Kamlesh Pattni; the Macmillan family and Simon Rudland.
The Sentry, a United States-based non-profit, which says it is an investigative and policy team that follows the dirty money connected to African war criminals and transnational war profiteers and was founded by actor George Clooney and John Prendergast, came up with a 38-page report entitled: Shadows and Shell Games-Uncovering an Offshore Business Empire in Zimbabwe.
In its introduction to the report it says Kudakwashe Tagwirei’s business empire of more than 40 companies has mostly been hidden from the public eye.
“By analyzing hundreds of company documents, court filings, and communications, The Sentry’s investigation shows how Tagwirei used complex corporate structures to build and hide his wealth, potentially benefiting from preferential government treatment along the way,” it says.
“Tagwirei has invested in gold, nickel, platinum, and chrome mines by hiding behind South African businesspeople and offshore structures in Mauritius and the Cayman Islands and by using lawyers and financiers who are seemingly happy to turn a blind eye to accusations of cronyism and corruption.”
Last month, the Organised Crime and Corruption Reporting Project which is headquartered in Sarajevo, Bosnia, released another expose on Tagwirei entitled: How a Zimbabwe Tycoon Made a Fortune from a Trafigura Partnership and Spiralling National Debt.
The report says Kudakwashe “Tagwirei, who is close to Zimbabwe’s President and his inner circle, leveraged his privileged access to fuel and mining markets to strike a lucrative partnership with commodities giant Trafigura. Sanctioned by the US and UK for corruption, Tagwirei continued to do business by relocating his network to Mauritius.”
It says: “Tagwirei has earned at least US$100 million in fees from a partnership with Swiss-based Trafigura. Together, they have profited extensively by dominating Zimbabwe’s fuel market since 2013.
“Trafigura quietly extended $1 billion in loans to the Zimbabwean government, at exorbitant interest rates.
“As controversy grew, Tagwirei moved his business network offshore to Mauritius, where he secured a new near-monopoly fuel deal with the government. He is still active in mining and fuel deals in Zimbabwe.”
The common thread among the stories is that of State capture, of how Tagwirei used Trafigura and the Command Agriculture Programme to milk Zimbabwe of billions of United States dollars.
But what is not talked about is that though Tagwirei might be corrupt, his businesses that are under scrutiny are primarily sanctions busting operations, one to provide fuel essential to keep the country running, and the other to help feed the nation, something Zimbabwe has now achieved though one Western news agency tried to give credit to returning white farmers.
The sanctions angle becomes apparent when one looks at two other businessmen named in the Pandora papers-Martin Rushwaya and Billy Rautenbach.
Rushwaya was involved in a germ operation obviously meant to enable the country to sell its diamonds after a concerted effort to thwart Zimbabwe from selling them. The concerted effort even involved declaring the diamonds “blood diamonds” when the original definition did not include diamonds like those mined in Zimbabwe.
Rautenbach was also involved in trying to reduce the cost of fuel imports through his ethanol project and his story was published by a South African-based non-profit organisation Amabhungane.
Though it is not clear who funds the Daily Maverick, some media reports have named Anglo-American Corporation, one of the biggest investors in Zimbabwe at independence, as one of the funders.
The Sentry receives funding from the Open Society of Southern Africa and also from “government agencies”.
OCCRP receives funding from both Luminate and Open Society.
Amabhungane receives funding from both Omidyar and Sorors but Amabhungane is a lot more transparent as it even gives the amounts it got- R3 million from Open Society of South Africa from April 2019 to April 2021 and US$375 000 from Luminate for the period June 2020 to June 2023.
Tagwirei, therefore, might be corrupt and has benefitted immensely from his association with the State, but his biggest crime was to sustain a regime which the United States wants to go to pave way for a friendlier government which will allow US corporations like Caterpillar, Boeing and General Electric to come back to Zimbabwe.
While sanctions on Zimbabwe are generally regarded to be under the Zimbabwe Democracy and Economic Recovery Act, the stiffer sanctions that Tagwirei is busting are under the International Emergency Economic Powers Act (IEEPA) and are administered and regulated by the US Treasury Department’s Office of Foreign Assets Control (OFAC).
According to OFAC violating sanctions issued under the IEEPA carries steep civil and criminal implications. Section 1705 of IEEPA provides that it is unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, or prohibition issued under this Chapter.
Section 1705C provides that a person who willfully commits, attempts to commit, conspires to commit, or aids or abets in the commission of an unlawful act described in subsection A shall be fined not more than US$1 000 000, be imprisoned for not more than 20 years, or both.
Additionally, 50 USC §1705 Title X provides that a civil penalty may be imposed on any person who commits an unlawful act defined in subsection A in an amount not to exceed the greater of $250 000 or twice the amount of the prohibited transaction. This penalty applies per-violation, so the total fine can be steep.
Source: The Insider