UN alleges 'plot' to steal Somali assets
Report reveals attempts to steal Somali assets abroad, implicating the
president and a US law firm.
<
http://www.aljazeera.com/profile/malkhadir-m-muhumed.html> Malkhadir M.
Muhumed
Last updated: 07 Sep 2014 17:00
Nairobi, Kenya - A confidential UN report alleges that Somalia's President
<
http://www.aljazeera.com/indepth/opinion/2013/10/how-win-war-against-al-sha
bab-201310119652136824.html> Hassan Sheikh Mohamud, his former foreign
minister and an American law firm conspired to steal public funds by
engaging in secret contracts that gave them hefty percentages from the
country's recovered overseas assets.
The report, compiled in July and obtained by Al Jazeera, urges the UN to
call on member states and financial institutions to freeze Somali assets
under their jurisdiction until "a genuinely transparent and accountable
recovery process can be established".
"Continuation of a recovery process in secret ... risks further exposure of
overseas assets to misappropriation," said the report, urging the Somali
government to disclose the original list of identified assets, which now is
only known to President Mohamud and the Maryland-based law firm
<
http://www.shulmanrogers.com/> Shulman Rogers as well as two other
individuals.
The Somali government said it would only respond to the report in detail
when it is officially released. Others accused of wrongdoing denied the
allegations levelled against them.
Shulman Rogers dismissed the allegations as "false" and "malicious," with
Jeremy Schulman, the law firm's man in charge of the Somalia project,
saying, in a statement sent to Al Jazeera, that the report's intention is
"to discredit the Somali government, our law firm, and the individuals who
have worked hard to support the asset recovery project for the people of
Somalia".
<
http://www.choices.edu/resources/scholars_Chopra.php> Jarat Chopra, the
coordinator for Somalia and Eritrea Monitoring Group who presented the
report to the UN Security Council's sanction committee, said his group
stands by its findings, but refused to comment further.
Terms challenged
The group's mandate includes monitoring misappropriation of public funds as
well as reporting on the arms embargo imposed on Somalia in 1992.
The report says attempts to steal assets were thwarted after former Central
Bank Governor Yussur Abrar challenged the terms of Shulman Rogers. Abrar
quit after seven weeks in office. Her action generated an international
scrutiny that later enabled her successor to protect some of the recovered
assets.
The report, however, alleges there is still "a secret architecture of
misappropriation," involving President Mohamud, former Foreign Minister
Fawzia Yusuf Adam, Shulman Rogers as well as Musa Haji Mohamed Ganjab and
Abdiaziz Hassan Giyaajo Amalo. The report says Ganjab and Amalo, who
vehemently deny the allegations, served as government advisors as well as
facilitators for Shulman Rogers.
"What Yussur said is baseless," Adam said in a recent interview with the
satellite TV station, Somali Channel.
The July report said its findings "reflects exploitation of public authority
for private interests and indicates at the minimum a conspiracy to divert
the recovery of overseas assets in an irregular manner".
Mohamed Husein Gaas, Horn of Africa analyst at the Oslo, Norway-based Fafo
Institute for Applied International Studies, told Al Jazeera the UN
allegations against President Mohamud will definitely disappoint many
Somalis who thought that "his regime would be a fresh start towards
restoring a credible Somali government".
"President Mohamud would have better reassured the Somali public if he had
admitted his administration's shortcomings and started to fix them," he told
Al Jazeera.
The report cites Shulman Rogers as saying that $12,326,971.63 worth of
assets held in the United States was transferred to its custody, with the
firm retaining $2,711,125.97 for "fees, expenses and set asides," including
its five percent bonus, $616,348.63 and six percent for "expense set aside,"
$739,618.30.
"A final amount of USD 9,001,092.25 was transferred on 2 and 5 December 2013
to a Central Bank account at the Ziraat Bankasi (Agricultural Bank of the
Republic of Turkey)."
The current governor of the central bank of Somalia, Bashir Issa Ali, did
not receive any indication of the source of $9,001,092.25, or which assets
the transfer related to or an accounting of recovered assets, said the
report.
It also alleges that a total of $922,913.38 was withdrawn, between July 30
to August 31, 2013, from the central bank of Somalia to defend
<
http://www.aljazeera.com/news/africa/2013/07/2013721144559477920.html>
Abdusalam Omer, the former central banker whom the UN accused of corruption
last year.
The report says the move further exacerbated allegations of using public
funds for private interests. The 2013 allegations concerned Omer himself and
not the government as a whole, says the report.
The report alleges that Shulman Rogers conducted a "counter-investigation"
to preserve its control over the effort to recover overseas assets and
counter any perceived opposition to it.
"'Pie-cutting' of overseas assets by those involved in the project entailed
retention of excessive percentages and direct payments from recovered assets
as well as attempts to circumvent deposits in the Central Bank of Somalia,"
Chopra said.
Frozen assets
But Jeremy Schulman from Shulman Rogers countered: "Instead of
misappropriating assets, the records show a careful attempt to safeguard
assets and place them under the control of the Central Bank and the
president."
Foreign countries and financial institutions have frozen Somalia's overseas
assets following the implosion of that country's central government in 1991,
but feverish efforts to recover such assets - including cash, gold and ships
- have restarted after the election of President Mohamud in 2012.
In 2009, however, the Shulman Rogers won an exclusive contract with
Somalia's Central Bank for the recovery of the country's oversea assets.
The contract allowed the firm to retain six per cent of all recovered Somali
assets for unnamed costs and expenses, in addition to the five per cent of
all recovered assets as a bonus additional to its fees. The deal also did
not oblige the firm to transfer the assets, when recovered, directly to the
central bank, but instead put them under the control of President Mohamud.
As per the central bank's law, the bank is autonomous and should not take
instructions from government entities, including the president.
But the UN report alleges that Shulman Rogers "consistently exploited the
authority of the president and the authority of the Central Bank Governor
intermittently as levers of convenience, placing the assets under the
control of the president pursuant to a contract signed by the Central Bank
Governor".
"While the contract relied on the authority and the name of the Central Bank
as the client, control over the assets was intended to be exclusively
retained by the president, thereby exposing the recovered assets to
misappropriation by those involved in the recovery project," said the
report.
According to the report, Abrar, the ex-governor, was appointed in part to
exploit her banking background in order to get her open bank accounts whose
aims were to divert public funds after her predecessor was discredited in an
earlier UN report.
"From the moment I was appointed," she said in her resignation letter, "I
have been continuously asked to sanction deals and transactions that would
contradict my personal values and violate my fiduciary responsibility to the
Somali people as head of the nation's monetary authority."
During her brief time on the job, Abrar was rebuked for raising corruption
issues in her first encounter with President Mohamud and subjected to
threats, pressure and abusive language, said the report, disclosing that
President Mohamud rejected Abrar's repeated requests to get the original
list of identified overseas assets as well as summary statements of
recovered assets from Shulman Rogers.
"Ms. Abrar was expected to either join the group of individuals working with
the president or be controlled so she silently acquiesced to them," said the
report.
Abrar finally decided to leave the country for the United Arab Emirates
under the pretext of signing off on a Dubai account whose aim would have
been to deposit diverted funds and other bilateral assistance with no
control from the central bank.
Ali, the current central bank governor, eventually revoked the bank's
contract with Shulman Rogers on May 13, 2014. But Jeremy Schulman told Al
Jazeera that the firm is "in continuing discussions with the Federal
Government of Somalia regarding renegotiating our contract".
Received on Sun Sep 07 2014 - 17:44:46 EDT