Maltese reporter who exposed high-level political corruption killed in car bomb

Daphne Caruana GaliziaMalta’s best known investigative journalist, whose reporting about offshore tax evasion prompted a major political crisis in the European Union member-state, has been killed by a powerful bomb near her home. Daphne Caruana Galizia, who died Monday, aged 53, gained international prominence last year, when she used information from various sources, including the leaked “Panama Papers”, to accuse senior members of Malta’s government of implication in tax-evasion schemes. Her reporting led to the resignation and eventual re-election of the country’s Labor government last year.

Caruana Galizia began her career in the late 1980s as a regular columnist for The Sunday Times of Malta, before being appointed associate editor of The Malta Independent. She eventually launched her personal English-language news blog, called Running Commentary, which became one of Malta’s most influential websites. The site’s popularity was only augmented by the fact that it reported scandals affecting both of Malta’s main political parties, the governing Labor Party and the opposition Nationalist Party. In April of 2016, following the release of the so-called Panama Papers, Caruana Galizia accused senior members of the Labor government, as well as the prime minister’s wife, of being involved in large-scale tax-evasion schemes and receiving bribes from oil-rich Azerbaijan’s ruling family. The allegations led to the resignation of the government and national elections, which the Labor Party won.

On Monday, Caruana Galizia died instantly when the rented Peugeot 108 car she was driving exploded near her home in the village of Bidnija, near Mosta, in central Malta. Eyewitnesses said that the explosion was so powerful that it tore apart the vehicle and was heard from several miles away. Subsequent reports in the Maltese media alleged that the investigative journalist had recently filed reports with the police, claiming that she was receiving threats against her life from persons unknown.

The bomb attack shocked Maltese society and immediately threw the European Union member-state’s political life into disarray. The country’s Prime Minister, Joseph Muscat, said in a statement that he was “devastated” by Caruana Galizia’s assassination, adding that he had instructed the island country’s police and intelligence agencies to “take all necessary steps to investigate” the murder and uncover its culprits. The killing was also condemned by nearly every senior European Union official and by the International Consortium of Investigative Journalists, the international arm of the Washington-based Center for Public Integrity, which uncovered the existence of the Panama Papers.

Author: Joseph Fitsanakis | Date: 17 October 2017 | Permalink | Research credit: J.A.

Advertisements

French-Swiss firm allegedly bribed Islamic State to keep its factory working in Syria

LafargeHolcimThe world’s largest building materials manufacturer, LafargeHolcim, which is headquartered in France and Switzerland, allegedly bribed the Islamic State to keep its factory working in Syria, according to court witnesses. The company specializes in the manufacture of building materials such as cement, concrete and various byproducts. It was formed in 2015 by a merger of France-based Lafarge and Swiss-based Holcim, and currently employs an estimated 120,000 employees in nearly 100 countries around the world.

In 2011, soon after the Syrian Civil War broke out, various militant groups began operating in the area around one of LafargeHolcim’s plants, located in in north-central Syria, 10 miles south of the Syrian-Turkish border. In June of 2016, French newspaper Le Monde published allegations that LafargeHolcim’s subsidiary, Lafarge Cement Syria (LCS), which owns the plant, bribed various militias to stay away from its factory. According to the paper, at least €20,000 (approximately $24,000) went to the Islamic State, which eventually conquered the area around the LafargeHolcim plant. The article further claimed that LCS managers in Syria sent detailed emails to LafargeHolcim executives in Europe about their dealings with various militias, including the Islamic State. LafargeHolcim approved the use of funds to bribe the militias, said Le Monde, in order to allow the factory to remain operational and to avoid having their employees taken hostage.

The newspaper’s allegations prompted the Office of the Public Prosecutor in Paris to launch a preliminary investigation in October of the same year. Eventually, an official complaint was filed by the French Ministry of Finance, which argued that the activities of LCS may have constituted illicit financial relations between a French-owned company and a terrorist group. An official investigation was opened in June of 2017 into whether LafargeHolcim illegally financed terrorist groups through its subsidiaries, Lafarge and LCS. Investigators are also examining claims that the company presented the French government with forged accounting documents in order to hide the bribes it gave to various Syrian armed groups.

Last week, investigators heard from the first time from witnesses, three of whom were LCS employees in 2014, when the company first made contact with Islamic State militants. They allegedly told prosecutors that the French-Swiss company paid approximately $20,000 a month to various armed groups, including al-Qaeda, al-Nusra Front, and the Islamic State. Prosecutors did not discuss details about the witnesses’ testimonies, but Le Monde said it spoke to individuals with direct knowledge of the investigation, who said that the witnesses’ testimonies were particularly damning for LafargeHolcim. The probe continues.

Author: Joseph Fitsanakis | Date: 25 September 2017 | Permalink

South African spy agency can’t account for over $100 million in expenses

National Treasury of South AfricaSouth Africa’s National Treasury threatened to terminate all funding for covert operations last year, after the country’s spy agency refused to account for tens of millions of dollars in expenses, saying the money had been put to “secret use”. An investigation by two leading South African news outlets, the Afrikaans-language weekly newspaper Rapport and the English-language online news portal News24, has revealed the existence of a major bureaucratic spat between the National Treasury and the State Security Agency (SSA), the country’s primary civilian intelligence organization.

The investigation cited “seven independent sources” with direct involvement and knowledge of the National Treasury and the South African intelligence services. According to the report, National Treasury officials contacted the SSA last year, demanding to know how it used 1.5 billion rand (approximately US $114 million) that it took from government coffers between 2012 and 2016. But the spy agency refused to provide a detailed answer, and said instead that most of the money had been used to fund unspecified “secret operations”, and that its use was therefore classified.

However, the SSA did not realize that National Treasury officials have the same level of security clearance as senior SSA officials, said sources. Consequently, a Treasury probe was launched by Treasury investigators with access to SSA’s activities. The probe uncovered several instances of irregular expenditures and serious mismanagement, said the report. There were repeated instances when funds assigned to non-covert operations were “inexplicably moved to the covert fund” and SSA officials were unable to explain why. There were also numerous cases of abuse of procurement procedures. One source told the News24/Rapport team that “Treasury officials kept asking [SSA officials] how they tender for goods and services, and they kept saying that they can’t tell us, because it is classified information”. At that point, the National Treasury threatened to terminate all funding for intelligence operations unless answers were provided by the SSA leadership. After a series of frantic and tense negotiations, the SSA agreed to change its procurement practices and “at least submit [to National Treasury] a list of suppliers so that there could be a degree of oversight”.

The SSA’s reputation has not emerged unscathed from the broader crisis that has been plaguing South African politics in recent years. In 2014, the Johannesburg-based newspaper City Press alleged that the SSA maintained a secret unit used to target domestic political opponents of South African President Jacob Zuma. The paper also said that senior SSA official Thulani Dhlomo, a close ally of President Zuma, had been placed at the head of the secret unit in 2012. Another leading Johannesburg-based newspaper, The Mail & Guardian, repeated these claims earlier this month.

Author: Ian Allen | Date: 18 September 2017 | Permalink

Ex-spy chief jailed as elite power struggle widens in oil-rich Kazakhstan

The Tengiz oil refinery in KazakhstanA former director of Kazakhstan’s feared intelligence agency has been given a lengthy prison sentence, as a ruthless power struggle between rival factions surrounding the country’s president widens. From 2001 to 2006, Nartai Dutbayev directed the Kazakh National Security Committee (KNB), a direct institutional descendant of the Soviet-era KGB. Founded in 1992, the KNB is today directly controlled by Kazakhstan’s authoritarian President, Nursultan Nazarbayev. Many officials serving in senior KNB positions are members of the president’s family, or close friends.

For many years, Dutbayev enjoyed unchallenged power, which was afforded to him by way of his close links to the presidential palace. But in 2006, he resigned from his top KNB post in the aftermath of the murder of popular Kazakh opposition politician Altynbek Sarsenbaev. Ten members of a specialist commando unit within the KNB were found guilty of Sarsenbaev’s murder. He was killed soon after he announced his decision to compete electorally against President Nazarbayev. But Dutbayev was never personally censured by the government. Then, in December of last year, Dutbayev was arrested on charges of “divulging government secrets”. The former spy chief’s trial began in July of this year, but was conducted in its entirety behind closed doors.

This past Monday it was reported that Dutbayev was sentenced to 7 ½ years in prison for espionage on August 24. It is not known why Dutbayev’s sentence was announced to the country’s media more than two weeks after it was formally imposed by the court. Additionally, Kazakh authorities have said nothing about who Dutbayev is believed to have divulged government secrets to, or why. Three alleged accomplices of Dutbayev, including former senior KNB officials Erlan Nurtaev and Nurlan Khasen, were also sentenced to between three and five years in prison for espionage.

Many observers believe that the jailing of the KNB officials is part of a broader power struggle that is currently taking place between rival factions competing to succeed President Nazarbayev. Kazakhstan’s leader has ruled the former Soviet Republic with an iron fist since before its independence from the USSR in 1991. The KNB appears to be a central player in the unfolding power struggle between the country’s governing elites. Almost exactly nine years ago, a Kazakh intelligence officer tried unsuccessfully to abduct another KNB former director, Alnur Musaev, who was living in self-imposed exile in Austria at the time. Many believe that he was acting under Nazarbayev’s direct orders. In 2014, two Kazakh men, believed to be KNB officers, tried unsuccessfully to abduct Viktor Khrapunov, Kazakhstan’s former Minister for Energy and Coal, who also served as mayor of Almati, before leaving Kazakhstan for Switzerland.

Dutbayev is reportedly already in prison. He is believed to be sharing a cell with Serik Akhmetov, Kazakhstan’s former prime minister, who is serving 11 years for alleged corruption.

Author: Joseph Fitsanakis | Date: 12 September 2017 | Permalink

Probe uncovers massive $3 billion secret bribe fund in Azerbaijan

Ilham AliyevAn investigation by a consortium of European newspapers has uncovered details of a massive slush fund worth nearly $3 billion, which was allegedly used by Azerbaijan’s governing elite to bribe officials, business leaders and journalists at home and abroad. The fund was operated out of Baku, the capital of the former Soviet state, which is routinely accused of human-rights abuses. Western countries, including the United States, censure the government of the oil-rich state for its role in systematic abuses. These involve high levels of public- and private-sector corruption, vote-rigging, politically motivated disappearances, and wide curtailment of basic civil liberties. This new information is bound to add to Azerbaijan’s image as a secretive oil-rich state ruled by corrupt elite connected to the country’s President, Ilham Aliyev, and his family.

The existence of the slush fund was revealed by the Organized Crime and Corruption Reporting Project (OCCRP), an international investigative consortium. The OCCRP’s report was published in Tuesday, following a lengthy investigation by members of 17 European news media, including publications in the United States, Britain, Germany, France, Denmark and Belgium. The report states that the fund, which it nicknames “the Azerbaijani Laundromat”, was operational for over two years, from 2012 to 2014. During that time, it participated in “over 13,000 transactions”, many of which were carried out through companies based in the United Kingdom but registered in the British Virgin Islands, Belize and the Seychelles. Payments were processed by the Estonian branch of Danske Bank, a major European banking institution.

According to the OCCRP report, most of the fund’s recipients were politicians, business executives, reporters and other influential people in Western Europe, as well as Turkey and Central Asia. Other recipients included wealthy families in Azerbaijan, who used the funds to finance a luxurious lifestyle, according to the report. Some foreign recipients of the funds were politicians, journalists or lobbyists who have been vocal in supporting Azerbaijan’s government and its policies. Most of the funds are believed to have originated from Azerbaijani-based companies, primarily Baktelecom MMC. But Russian-based companies, including Rosoboronexport, Russia’s state-operated exporter and importer of defense-related technologies, also contributed over $30 million to the slush fund.

Perhaps most controversially, the OCCRP report alleges that some of the secret slash funds originated from senior cabinet members in Azerbaijan, as well as some intelligence officials. It also states that investigators uncovered “ample evidence of [the fund’s] connection to the family of [Azerbaijan’s longtime] President Ilham Aliyev”. Late on Tuesday, a statement issued by President Aliyev’s office rejected the report as “baseless, malicious and […] provocative in nature”. More reactions to the OCCRP report are expected in the coming days.

Author: Joseph Fitsanakis | Date: 06 September 2017 | Permalink

South Korean former spy chief sent to prison for meddling in elections

Won Sei-hoonThe former director of South Korea’s main intelligence agency has been sent to prison for organizing a large-scale illegal campaign to influence the result of the country’s 2012 presidential election. Won Sei-hoon headed the NIS from 2008 to 2013, during the administration of conservative President Lee Myung-bak. During the 2012 presidential election, Won ordered a group of NIS officers to “flood the Internet” with messages accusing liberal political candidates of being “North Korean sympathizers”. One of those candidates, Moon Jae-in, of the left-of-center Democratic Party of Korea, is now the country’s president. Mr. Moon succeeded his main right-wing rival, Park Geun-hye, who resigned in March of this year following a series of financial scandals. She is now facing charges of bribery, abuse of power, leaking government secrets, and corruption.

In February 2015, the Seoul High Court upheld an earlier sentence of 2.5 years in prison, which had been imposed on Won by a lower court. But his conviction was overturned on appeal. Earlier this August, an internal inquiry conducted by the NIS found that many its officers were tasked by Won to manipulate the outcome of the 2012 presidential election with 30 dedicated teams of officers —some of whom were hired specifically for that purpose. A number of teams were in charge of creating fake social media accounts and using them to post negative views of Mr. Moon and positive views of his conservative rival, Mrs. Park. Other teams were tasked with creating the false impression that South Korea’s rival, North Korea, was supportive of Mr. Moon’s candidacy. The probe also found that the NIS launched similar —though on smaller scale— efforts to influence the outcome of parliamentary elections in 2011 and 2012.

On Wednesday, based on new evidence provided by the government, including the results of the NIS’ internal investigation, the Seoul High Court sentenced Won to four years in prison for political meddling. Two other former senior officials in the NIS were sentenced to 30 months in prison each. In delivering his sentence, the judge said Won assembled a team of NIS operatives “with the specific intention to sway public opinion”. Throughout the operation, said the judge, Won was “regularly briefed” and exercised precise control over it. Won was transferred directly from the court to prison, where he will serve his sentence.

Author: Ian Allen | Date: 30 August 2017 | Permalink

South Korea spy agency admits secret plan to influence 2012 election result

Moon Jae-in and Suh Hoon in South KoreaAn internal investigation has found that the intelligence agency of South Korea tried to steer the result of the 2012 presidential election in favor of the conservative candidate, and placed liberal politicians under surveillance in the run-up to the election. South Korea’s intelligence agency, the National Intelligence Service (NIS) has fallen into disrepute in recent years, after it was found to have secretly sided with conservative political candidates for public office.

In 2015, the NIS’ former director, Won Sei-hoon, was jailed for directing his staff to use social media to spread negative views of liberal politicians. He is now facing a second trial, after his conviction was overturned on appeal. Mr. Won headed the NIS from 2008 to 2013, during the administration of conservative President Lee Myung-bak. During the 2012 presidential elections, Won ordered a group of NIS officers to “flood the Internet” with messages accusing liberal political candidates of being “North Korean sympathizers”. One of those candidates, Moon Jae-in, of the left-of-center Democratic Party of Korea, is now the country’s president. Mr. Moon succeeded his main right-wing rival, Park Geun-hye, who resigned in March of this year following a series of financial scandals. She is now facing charges of bribery, abuse of power, leaking government secrets, and corruption.

An internal inquiry has now found that the NIS tried to manipulate the outcome of the 2012 presidential election with 30 dedicated teams of officers —some of whom were hired specifically for that purpose. A number of teams were in charge of creating fake social media accounts and using them to post negative views of Mr. Moon and positive views of his conservative rival, Mrs. Park. Other teams were tasked with creating the false impression that South Korea’s rival, North Korea, was supportive of Mr. Moon’s candidacy. The probe also found that the NIS launched similar —though on smaller scale— efforts to influence the outcome of parliamentary elections in 2011 and 2012. Additionally, the NIS placed a number of opposition politicians under surveillance.

Since his ascendance to power last spring, Mr. Moon has pledged that the NIS will be reformed and that it will stay out of domestic politics. In June of this year, Mr. Moon announced that the domestic intelligence wing of the NIS would be dissolved.

Author: Ian Allen | Date: 07 August 2017 | Permalink