Ugandan Foreign Affairs minister Sam Kutesa has been cited, in the United States, for soliciting and receiving a $500,000 bribe to secure business deals for a Chinese energy firm.
In a criminal complaint filed by US prosecutors in New York on Monday, two former top government officials, from Hong Kong and Senegal, are charged with leading a multimillion-dollar bribery scheme in Africa on behalf of the Chinese conglomerate through a charity organisation.
Mr Chi Ping Patrick Ho, the head of the charity firm, is said to have wired the half a million dollar bribe through an “account designated by the Minister of Foreign Affairs of Uganda, who had recently completed his term as the President of the UN General Assembly”.
Mr Ho, Hong Kong's former Home Affairs Secretary, is further accused of giving “gifts and promises of future benefits including offering to share the profits of a potential joint venture” to Ugandan President Yoweri Museveni and Mr Kutesa, the US Justice Department said.
The benefits also included a proposal by Mr Ho to partner with the family businesses of both Mr Museveni and Mr Kutesa.
“In exchange,” the Justice Department complaint said, “the Ugandan foreign minister assisted [the Chinese energy company] in obtaining business in Uganda, including potential acquisition of a Ugandan bank.”
Neither President Museveni nor his Foreign Affairs minister are charged with crimes. The are cited in regard to charges filed against Mr Ho and former Foreign Affairs minister of Senegal, Mr Cheikh Gadio.
Mr Gadio is accused of having arranged a $2 million bribe for the President of Chad, Idriss Deby, "to obtain valuable oil rights".
Mr Ho, 68, and Mr Gadio, 61, were arrested in New York over the weekend. They are each charged with violating the US Foreign Corrupt Practices Act and international money laundering. They each face jail terms of up to 20 years if convicted.
The charges were based on their use of the US banking system to process the payoffs, sent under the guise of donations.
The Chinese energy company said to be involved in both the Uganda and Chad bribery schemes is not named but details in the complaint point to CEFC China Energy, a Shanghai-based firm described as an increasingly powerful component of China's energy industry.
The firm blew onto the scene in just a few years, taking major stakes in global projects, including a 14 per cent chunk of Russia's Rosneft, and playing an important role in Chinese President Xi Jinping's ambitious One Belt One Road initiative.
Discussions between Mr Ho and Mr Kutesa first took place in New York in October 2014 when the Ugandan minister was the President of the United Nations General Assembly.
“Mr Ho’s Ugandan scheme was hatched in the halls of the United Nations in New York,” the US prosecutors said, adding “and then continued unabated upon his [Mr Kutesa’s] return to Uganda.”
Mr Kutesa, 68, serves a one-year term, from September 2014 to September 2015, as the President of the United Nations General Assembly.
In early 2016, Mr Kutesa, with assistance from his wife Edith Gasana, is alleged to have solicited the $500,000 payment from Mr Ho, “purportedly for a charitable foundation that he wished to launch.”
“In reality,” the criminal complaint alleges, “this payment was a bribe to obtain business advantages for the Energy Company in its efforts to secure contracts and ventures in Uganda’s financial and energy sectors.”
Mr Ho wired the payoff to an account in Uganda designated by the foreign minister, US officials contend.
“In his communications, Mr Ho variously referred to this payment as a 'donation' to the re-election campaign of the president of Uganda (who had already been re-elected) and as a 'donation' to 'support' the Ugandan foreign minister,” the prosecutors added.
The complaint notes that Mr Kutesa referred to Mr Museveni as his brother-in-law.
'Job creation for youth'
The Ugandan foundation that was the purported recipient of the payment was described in a February 2016 email from Mrs Kutesa to Mr Ho as an expression of “our commitment to job creation for youth in our constituency.” Asking Mr Ho to confirm the “contribution” promptly, Mrs Kutesa told him, “As you know, youth are impatient.”
The foundation does not appear to exist, according to an affidavit by an FBI agent filed as part of the complaint.
A letterhead that features a purported email address for the foundation includes a domain name that is “currently unregistered,” the FBI affidavit states. A physical address in Kampala listed for the foundation was found by US federal agents to have no signage or other indications that the foundation is actually located at that address, the affidavit adds. Internet searches also did not reveal any website for the foundation, the FBI notes.
The complaint also suggests that Mr Kutesa may have used his UN position to further the bribe scheme.
In a three-hour meeting in the General Assembly leader's office in New York on October 19, 2014, Mr Ho persuaded Mr Kutesa to make “an official PGA trip to China during his one-year term,” the complaint says. Mr Kutesa “also agreed to stay an extra day to visit” officials of the Chinese energy company, US prosecutors added.
In agreeing to pay the bribe, Mr Ho had emphasised that the Chinese energy firm expected assistance from Mr Kutesa with respect to "major projects, from infrastructure, energy, agriculture, to finance and banking" in Uganda.
“The Ugandan foreign minister and his wife assured Mr Ho that the president of Uganda would meet with the Energy Company's officials and that the Ugandan government would 'work together' with the Energy Company on various projects, including the potential sale of a Ugandan bank to the Energy Company,” the complaint adds.
After the bribe was paid in May 2016, Mr Ho and energy company executives travelled to Uganda bearing gifts for Mr Museveni and Mr Kutesa, and also “attended private meetings with the president and other high-level officials, including officials with the Ugandan central bank and the Ugandan Ministry of Energy and Mineral Development, in an effort to secure business for the Energy Company,” the complaint states.
Just prior to the Chinese delegation's departure for Uganda, Mr Ho had sent an email, copied to Mrs Kutesa, with an “urgent request” for “special assistance with your customs procedures,” the complaint recounts.
Mr Ho noted in the message that “we are preparing to bring with us some very 'nice' gifts to your president and to [Mr Kutesa],” the message said. Mrs Kutesa replied to Mr Ho, promising, “We will be there at your arrival,” the complaint says.
In October 2016, Mrs Kutesa presented Mr Ho with the opportunity to acquire a particular Ugandan bank, the complaint adds, without specifying the bank in question. Mrs Kutesa said she would guide Mr Ho through the “very confidential and urgent process” of acquiring the bank.
That deal was not consummated, however.
The complaint cites press reports indicating that on October 20, 2016, the Bank of Uganda took over the bank that had been earlier on offer to the Chinese firm. A Ugandan commercial bank ultimately acquired the bank in question in January 2017, the complaint notes.
That narrative coincides with the announced acquisition of Crane Bank by DFCU Bank. Crane Bank had been put under receivership in October 2016 for lack of adequate capital.