Analysis of the Sentry’s Report on Corruption in South Sudan

War Crimes Shouldn’t Pay, a report by The Sentry
War Crimes Shouldn’t Pay, a report by The Sentry

The Sentry, an initiative spearheaded by the Enough Project, publishes its first ever report which focuses on war-time corruption practiced at the highest levels of South Sudan’s government and security services, including President Salva Kiir.

On 12 September 2016, the Sentry, a US based initiative which “seeks to disrupt and ultimately dismantle the networks of perpetrators, facilitators, and enablers who fund and profit from Africa’s deadliest conflicts” released a report focusing on South Sudan entitled: “War Crimes Shouldn’t Pay”. This analysis looks at the allegations raised by the report, the evidence it presents, the reaction to the report from South Sudanese and the wider international community, and asks the question – what may happen next.

What are the allegations?

The core allegations amount to misconduct in a public office, directed against President Salva Kiir, his former deputy Dr Riek Machar and four SPLA generals including Paul Malong, the serving Chief of General Staff. The report suspects that these six senior officials used their public office for personal enrichment by trading in influence, bribery, misappropriation of public funds and money laundering.

Allegations are also directed against multinational businesses and banks, most notably Kenya Commercial Bank (KCB), for either “knowingly or unwittingly” enabling the misconduct by facilitating cross-border money laundering.

President Salva Kiir is alleged to have used public funds to transform his private residence in Luri into a substantial covert military base, complete with its own paved airstrip that once housed four Mi24 attack helicopters.

The President is suspected of involvement in trading in influence and corrupt rent-seeking:

  1. While securing the land for his residence in Luri;
  2. By “aggressively” advocating on behalf of ABMC, a construction firm allegedly linked to the President, and from which he is suspected of personally benefiting; and
  3. By securing significant stakes for his immediate family, including a 12 year old child, in over two dozen business ventures “especially in the extractive and financial sectors” and ensuring those companies received preferential treatment.

Dr Riek Machar is alleged to have demonstrated an abuse of function by wilfully neglecting to take appropriate action when directly informed of his nephew’s (Bading Machar) unlawful and violent seizure of assets belonging to KK Security, a Kenya-based company that has ceased operating in South Sudan as a consequence. The former Vice President’s family continue to reside in relatively expensive properties, in Nairobi and Addis Ababa, which can’t be reconciled with his official salary whilst serving in office.

Gen. Paul Malong is suspected of trading in influence and corrupt rent-seeking by securing significant stakes for his immediate family “in companies that appear to operate in a wide range of business sectors” including construction, mining and telecommunications, while using his position and political access to ensure those companies received preferential treatment. The General also owns several relatively expensive properties, in Kenya and Uganda, whose acquisition can’t be reconciled with his official salary. The General is alleged to have paid US$ 1.5 million in cash when purchasing one particular US$ 2 million home.

Gen. Gabriel Jok Riak is suspected of misappropriation of public funds and money laundering. Cash transfers into his private bank account can’t be reconciled with his official salary or his role as a field general in the SPLA. It’s worth noting that the general was under international sanction when some of these payments were made.

Gen. Malek Reuben Riak Rengu is suspected of accepting bribery. He received substantial and inexplicable cash deposits into his private bank account from several companies including New Era Group and Skyline Construction, both construction companies operating in South Sudan.

Gen. James Hoth Mai is suspected of misconduct in a public office. The General owns a property in Melbourne, Australia, worth US$ 1.38 million. The acquisition of this property can’t be reconciled with his official salary.

How strong is the evidence?

Some of the evidence presented is circumstantial. This type of evidence doesn’t point directly to corruption. Instead, an inference must be made that links the circumstantial evidence to the allegation of corruption.

The purchase or lease of expensive properties in Kenya, Uganda, Ethiopia and Australia, when compared to official salaries, is referenced to infer corruption. Many of the properties are demonstrated to be worth in excess of US$ 1 million and some to have been purchased outright without mortgage and even paid for in cash. Social media is also used to demonstrate a “lavish lifestyle” enjoyed outside of South Sudan by relatives of these public officials. It is presented as indicative of the “acquisition of wealth” by holders of public office, precisely at a time of acute economic stress for ordinary South Sudanese. The link to corruption is made through President Kiir’s own words from a recent interview on Kenyan TV in which he acknowledged the misappropriation of public funds: “I chide the ministers to return what they have taken or else … I will take measures against them. Some of these ministers have bought apartments, have bought very beautiful houses, villas … they are hiding it in Kenya and they refuse to reveal it.”

The Sentry report also references more direct evidence. For example, the Sentry make use of corporate records as evidence of shareholding in multiple businesses by Gen Rueben Riak and his family as well as members of President Kiir’s and Gen Malong’s families. It uses corporate filings to confirm that these firms are active and infers their association with “rent-seeking”. It also uses the testimony of General Malong’s step-son, Mr Lawrence Lual Malong, to directly implicate President Kiir and General Malong in regular involvement in mining ventures by “expediting anything needed from the South Sudanese government”. This is presented as demonstrative of the granting of preferential access to family members’ ventures and their business associates. It’s worth noting here the distinction between corrupt rent-seeking and legitimate lobbying.

“Corrupt rent-seeking is a parochial form which does not allow potential entrants in the political competition to enter into the bidding process. In contrast, legitimate lobbying is open to everybody and provides clear and transparent rules for becoming a participant.” (Jain, 1998)

The Sentry also reference bank documents to highlight irregular deposits into personal bank accounts. For example, Sentry investigators have seen documents that prove General Gabriel Jok Riak received payments into his private bank account amounting to slightly over $360,000 in 2014 alone. He paid out $360,000 to a Ugandan national in Kampala between November 2014 and February 2015. The investigation couldn’t reconcile these payments, involving a substantial deposit from Dalbit International, a Kenyan firm petroleum and fuel company, with his role as a field commander in the SPLA.

Testimony from the directors and employees of KK Security are used to highlight Dr Machar’s failure to take action after being informed of a criminal act perpetrated by a family member against KK Security’s operation in South Sudan. Corporate filings are also used to link other members of Dr Machar’s family with “the hostile takeover of KK Security attempted to create a new corporate vehicle to run the company’s operations”.

Taken together, the circumstantial and direct evidence point to irregularities that are highly suggestive of corrupt practices.

What’s been the reaction?

The reaction among South Sudanese, both in the homeland and in Diaspora, to the Sentry report has been mixed, running from outright rejection to complete acceptance. There was almost universal disappointment at the scope. Prior to publication, expectations among South Sudanese were running high that the report, a culmination of two years’ worth of investigations, would expose the corrupt practices of a larger number of officials over a longer period of time, with some expecting it to have gone back as far as 2005.

Dyed in the wool supporters of President Kiir are, on the whole, dismissive of its findings. In social media posts, the report has been variously describe as a “witch hunt”, “lacking proof”, “politically motivated” and “intended for regime change”. On the other hand, opponents of the president, and South Sudanese who haven’t declared for one side or the other, generally accept the report’s conclusions. It’s interesting to note that some supporters of Dr Machar have interpreted the report as exonerating him of allegations of corruption. They neglect the fact that the report’s terms of reference, mostly limiting the investigation to the war-time period, provides little opportunity to fully explore his conduct during his long term as Vice President prior to him taking to the bush – something that was acknowledged in the report.

Perhaps the most noteworthy and cogent South Sudanese critique of the Sentry report was written by Peter Biar Ajak, who is well known for his persistent criticism of the performance of South Sudan’s authorities. Along with disappointment at the report’s scope and its focus on Nuer and Dinka leaders, he contends that the report represents weak research and betrays its political motivations. Among other criticisms, Biar Ajak notes that:

  1. The focus on official salaries incorrectly describes “take home pay” by ignoring the generous expenses & allowances that officials are known to receive;
  2. Home ownership doesn’t necessarily imply corruption. It can only imply wealth, which may have been legitimately earned; and
  3. Depositing public money in officials’ personal accounts is a regular occurrence. This may be bad practice, but in itself isn’t proof of misappropriation.

Official reaction has been scathing and dismissive. In an interview with Radio Tamazuj, the government spokesman, Ateny Wek Ateny, also described the report as politically motivated and intended to “tarnish the personality of the president”. Separately, he threatened legal action against the Sentry, ostensibly for defamation. While the South Sudan ambassador to Kenya, Jimmy Makuach, noted that the “South Sudan Government knows who has taken the money out of our economy and the people mentioned in this report are not those we would want to go to”.

Meanwhile, The Nation Mirror, a daily newspaper operating in Juba, has been shut down indefinitely by the country’s national security service, following the paper’s publication of an article about the sentry report. The Nation Mirror was the only South Sudanese publication to carry the report on its front page.

Internationally, the report has been taken at face value. George Clooney and John Prendergast are reported to have attended a meeting at the White House following publication of the report. The US State Department later issued a statement welcoming the report. In the statement they noted that the US “is pursuing measures it can take to deter corruption by South Sudanese officials. We are working closely with The Sentry to ensure the information it has collected is used to that end.”

What will happen next?

Given the political dynamics in South Sudan, characterised by a powerful Presidency flanked by a weak and subordinate Legislature and Judiciary, it’s almost certain that authorities won’t take any action as a consequence of this report, something the Sentry would have been conscious of.

Instead, this report is clearly intended to nudge policy makers among the international community, and especially the US, towards taking firmer action against South Sudanese officials at the highest levels. It proposes a series of measures that could be used to frustrate efforts by officials to export their misappropriated funds out of the country. These include using existing legislation, originally intended for use against organised crime and international terrorism, to target assets held in foreign countries and shutdown suspected cross-border money laundering channels. Pressure has been mounting on US authorities to take bolder action following the perceived failure of the diplomatic effort. This pressure is likely moderated by the US election cycle. A new US president is due to be elected in November and take office in January. It’s doubtful, but not improbable, at this late stage that the Obama administration will take substantive action.

Financial institutions are sensitive to accusations of facilitating money laundering, bearing in mind the complex regulatory framework they’re required to observe in order to operate internationally. KCB has been called out as a favoured channel for South Sudan’s officials, and issued a statement reaffirming its commitment to anti-money laundering regulations. It is likely to be reviewing its policies towards its business in South Sudan to insulate itself from further incrimination.

Perhaps more worrying for ordinary South Sudanese is the hardening of attitudes from taxpayers in donor countries currently providing much needed support to South Sudan – in the form of humanitarian assistance, development assistance and capacity building. Although direct budgetary support for South Sudan’s authorities has already been cut by most donors, unease is likely to grow for any kind of support for South Sudan. A recent article in the UK’s influential Daily Mail newspaper asks the question: “So why DO we give £200m to this Cowboy Dictator’s regime?” The article goes on to raise concerns about what it calls the “fungibility factor” whereby “even if aid is not misappropriated, by helping the South Sudan government with resources in the shape of staff or expertise frees up money which might have been spent on those services, so effectively increasing the spending power of a corrupt regime.”

Put in context, the Sentry report is indicative of the increasing isolation of South Sudan’s leaders among the international community. The momentum for some sort of action is growing. Given the diplomatic quagmire that’s developed around military intervention and targeted sanctions, unilateral action or action by a ‘coalition of the willing’ is likely to follow. It remains to be seen how much of the Sentry’s recommendations aimed at applying direct pressure on South Sudan’s leaders will be incorporated in that action.

1 Comment on "Analysis of the Sentry’s Report on Corruption in South Sudan"

  1. Excellent analysis editor!
    Please forward to your social media contacts.

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