The cellphone message from the Israeli businessman was blunt and vulgar: The Canadian mining company must be “screwed and finished totally,” he told an associate as they negotiated a massive bribe to Congolese court officials to guarantee that the Canadian company would lose control of its copper mine.
Within hours of that 2008 message, the businessman and his associate had arranged a bribe of $500,000 (U.S.) to judges and other officials in the Democratic Republic of the Congo, according to court documents released in a U.S. corruption case.
A day later, the Israeli businessman obtained assurances that Congolese officials would ensure the Canadian company would lose its court fight against a local takeover of the copper mine, the U.S. documents say. Then, a week later, the Israeli won majority control of the company and the valuable asset.
The documents were released on Thursday in the settlement of a corruption case against Och-Ziff Capital Management, a U.S. hedge fund that manages $39-billion.
Och-Ziff agreed to pay $412-million in criminal and civil penalties, one of the biggest payments ever approved under the U.S. Foreign Corrupt Practices Act.
The U.S. documents show the hedge fund paid more than $100-million in bribes to officials in Congo, Libya, Chad, Niger and Guinea – including Congolese president Joseph Kabila – to gain corrupt influence and mining assets.
The Canadian company was Africo Resources Ltd., listed on the Toronto Stock Exchange and based in Vancouver at the time of the 2008 dispute. It owned a copper asset in Congo, but a Congolese official had orchestrated a local takeover of the mine and made it available to the Israeli businessman, the documents say. When Africo went to court to challenge the local takeover, the Israeli arranged the bribe, and later gained a majority stake, the documents say.
The documents say the businessman is an Israeli with “significant interests in the diamond and mineral mining industries” in Congo. Although the documents do not name him, they make clear that they are referring to Israeli billionaire Dan Gertler, a mining tycoon with vast holdings in Congo who gained a 60 per cent stake in Africo in 2008. He has denied the U.S. allegations.
The U.S. court documents note that Africo’s shareholders approved the purchase by the Israeli businessman in June, 2008, just a week after the bribes were allegedly paid.
The hedge fund, Och-Ziff, went into partnership with the Israeli businessman and was involved in using intermediaries and business partners to funnel large bribe payments to officials in Congo and other African countries, according to the U.S. Securities and Exchange Commission. Och-Ziff was directly involved in financing the businessman’s acquisition of Africo, including his “legal expenses” in the case, the U.S. documents say.
The SEC found that Och-Ziff executives “ignored red flags and corruption risks and permitted illicit transactions to proceed.” It said the hedge fund “engaged in complicated, far-reaching schemes to get special access and secure significant deals and profits through corruption.”
In the Africo case, the court documents say the Israeli businessman and an associate arranged to pay $500,000 to the Congolese officials, including judges, around June 4, 2008.
The documents quoted cellphone text messages to the Israeli businessman from his associate on that date, disclosing that the Congolese officials were seeking more than $1-million in bribes in exchange for a favourable ruling in the Africo case.
Less than a minute after he received one of the text messages about the bribery negotiations, according to the U.S. court documents, the Israeli businessman sent back a blunt message to his associate, saying: “We can’t accept a mid result … . Africo must be screwed and finished totally!!!”
A day after the $500,000 payment was arranged, the documents say, an associate told the Israeli businessman that the Congolese officials had given “clear instructions” to “rewrite” the court ruling.Report Typo/Error