Investigative report: South Sudan's military leaders - money laundering, corruption red-flagged

As Nation Faces COVID-19 with Corruption-Gutted Healthcare System:

South Sudan Military Leaders’ Wealth Raises Red Flags for Corruption, Money Laundering

The Sentry’s Investigative Report “Making a Killing” Details Shady Contracts, Currency Schemes, and International Connections

May 27, 2020 (Washington, D.C.) – As the Covid-19 pandemic hits hard across Africa and billions of dollars are being deployed in response, a new report published today by The Sentry raises red flags on risks of major corruption and money laundering by high ranking military leaders in South Sudan, a country with more generals than doctors.

The Sentry’s report, “Making a Killing: South Sudanese Military Leaders’ Wealth, Explained,” reveals that South Sudan’s last four army chiefs of staff, four of the highest-ranking military leaders, and three opposition militia leaders engaged in business activities demonstrating red flags for money laundering and corruption. The report comes as South Sudan faces a first wave of COVID-19 cases with medical infrastructure and response capacities already stressed by civil war and weakened by corruption that has benefitted military officials and top political leaders.

Shannon Mizzi, Investigator at The Sentry, said: "Many of South Sudan's senior military leaders have amassed enormous wealth. Their posts provided easy access to government funds that appear to have financed luxurious lifestyles for relatives overseas in some instances, instead of desperately needed infrastructure, economic development, education, and health services at home. South Sudan's security sector desperately needs major reforms promoting transparency, oversight, and anti-corruption measures, both to stop diversion of public funds and to prevent the conflict from reigniting."

John Prendergast, Co-Founder of The Sentry, said: “With three times as many generals as physicians, South Sudan’s medical system is completely unprepared for COVID-19. In South Sudan, service infrastructure has been gutted by the greed-fueled schemes of its leaders and their international business networks.  The impact of ongoing corruption and money laundering will be even more devastating if left unchecked.”  

The Sentry’s investigative report examines the commercial and financial activities of former Army Chiefs of Staff Gabriel Jok Riak, James Hoth Mai, Paul Malong Awan, and Oyay Deng Ajak, along with top-ranking military chiefs Salva Mathok Gengdit, Bol Akot Bol, Garang Mabil, and Marial Chanuong. Militia leaders linked to major instances of violence both before and during the civil war -- Gathoth Gatkuoth Hothnyang, Johnson Olony, and David Yau Yau -- are also profiled in the report.

J.R. Mailey, Director of Investigations at The Sentry, said: “To help protect funds and resources meant for pandemic response, we have all the tools at the ready including network sanctions, anti-money laundering measures, asset seizure and recovery, and domestic and international investigations. A proactive response now by the international community—especially the African Union, European Union, United Nations, United Kingdom, and United States—will help ensure that billions of dollars deployed to counter the pandemic don’t simply vanish into offshore accounts and luxury real estate abroad.”

The formation in South Sudan of a power-sharing government in February 2020 marks a significant step in the peace process. However, the nation still faces a long road to becoming a stable, prosperous country. The new report is part of a series of investigations by The Sentry detailing corruption pervading nearly every major economic sector, linked to the highest levels of power and international profiteering networks.

Selected highlights from the report

• More generals than doctors: There are approximately 700 military figures with the rank of general in South Sudan. Nationally, that’s about three times as many generals as physicians.
• Preferential state contracts and currency access: The companies of some current and former military leaders received major state contracts or preferential access to foreign currency, among other apparent conflicts of interest. Such conduct constitutes a threat to peace, stability, and transparency.
• Red flags for money laundering: South Sudan’s last four army chiefs of staff, four of the highest-ranking military leaders, and three opposition militia leaders have engaged in business activities demonstrating red flags for money laundering and corruption.
• International banks and business partners: Each of the military figures featured in the report has corporate holdings in South Sudan with possible conflicts of interest, connections to the international financial system, or indicators of corruption and/or money laundering. Nearly every case examined features significant international connections in the form of foreign business partners, funds transiting through international banks, property purchased abroad, and/or immediate relatives -- many holding shares in the same companies -- living outside South Sudan. International shareholders come from such diverse countries as China, Kenya, South Africa, Uganda, the United Kingdom, and many more.
• Ties to the president: Many of the military leaders named in The Sentry’s report share personal or commercial ties with President Salva Kiir, who regularly intervenes in legal proceedings targeting his staunchest friends and allies. All but two have commanded troops that committed grave human rights violations, starting with the December 2013 mass atrocities in Juba that launched a long and bloody civil war.
• Human rights violators: Many of the military leaders profiled in The Sentry’s report have committed egregious human rights violations with near total impunity since the country’s independence, according to the United Nations and the African Union. Most secured top government posts after commanding troops who committed major abuses, and some have been shareholders in corporations publicly linked to corruption scandals.

Policy recommendations

The report details recommended actions to hold corrupt military leaders accountable and develop a pathway out of kleptocracy:

• Tools of financial pressure. The international community—especially the African Union, European Union, United Nations, United Kingdom, and United States—should sustain network sanctions, improve anti-money laundering measures and asset seizure and recovery efforts, and increase domestic and international investigations to stem the flow of the proceeds of corruption out of South Sudan. Financial pressure strategies must provide accountability, promote the peace process, and disrupt spoiler activity.
• Corruption-sensitive security sector reform, oversight, and transparency. Anti-corruption measures must be at the heart of any security reform program that hopes to increase incentives toward peace in South Sudan. Increased oversight and transparency around officials’ asset declarations and military procurement processes, as well as the inclusion of independent auditors, inspectors general, and ethics units in each branch of the military, could reduce the corruption that fuels violence. Legislative oversight bodies must be independent and empowered. The SPLA Act of 2009 should be revamped to include guidance on procurement processes, independent oversight within the Ministry of Defense, and National Legislature oversight. In accordance with the constitution, no militias should exist outside of official structures. Oversight, competitive bidding processes, and enforcement of the rule of law are required to dismantle the system of corruption and impunity that exists within military and para-military structures.
• Accountability and the peace process. The transitional government should establish and empower a hybrid anti-corruption commission to prosecute the crimes committed during the course of the civil war, as stipulated by the peace agreement. If the government fails to establish the court, the international community should apply pressure and help stand up a hybrid court to hold perpetrators accountable for gross human rights violations. This court should also be able to prosecute economic crimes.

Read the full report “Making a Killing”: https://thesentry.org/reports/making-a-killing

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, +1 310 717 0606, This email address is being protected from spambots. You need JavaScript enabled to view it.

ABOUT THE SENTRY
 

The Sentry is an investigative and policy team that follows the dirty money connected to African war criminals and transnational war profiteers and seeks to shut those benefiting from violence out of the international financial system. By disrupting the cost-benefit calculations of those who hijack governments for self-enrichment in East and Central Africa, the deadliest war zone globally since World War II, we seek to counter the main drivers of conflict and create new leverage for peace, human rights, and good governance. The Sentry is composed of financial investigators, international human rights lawyers, and regional experts, as well as former law enforcement agents, intelligence officers, policymakers, investigative journalists, and banking professionals. Co-founded by George Clooney and John Prendergast, The Sentry is a flagship initiative and strategic partner of the Clooney Foundation for Justice.

Learn more at www.TheSentry.org.