To kick off our series on the top 10 lobbying operations by African actors in the United States, we look at the attempt by Egypt to slow the ... operations of Ethiopia's GERD dam project on the Nile. Just days after Biden's victory, Egypt's Ambassador to DC hired former congressman Ed Royce of US law firm Brownstein Hyatt Farber Schreck at $65k a month to lobby congress.
On Sunday 3 October, the International Consortium of Investigative Journalists (ICIJ) revealed the Pandora Papers – the most significant leak of tax-haven documents since the Panama Papers.
Working with 600 journalists in 117 territories, the ICIJ has obtained 11.9m files that reveal secret deals, hidden assets and illicit money flows in tax havens across the world.
Rich and influential people continue to use the offshore financial system to dodge taxes and launder money. The reports revealed that 78 politicians across the African continent had offshore companies in secrecy jurisdictions, including Kenya’s President Uhuru Kenyatta.
Seven members of Kenyatta’s family, a dynasty that has shaped Kenyan politics since the country’s independence, have been linked to at least seven offshore companies and foundations.
The Pandora Papers reveal that members of the Kenya family, who control assets of over $30m, own three properties in the UK – including one which was, until last summer, rented out to Emma Hardy, a member of the UK parliament. They bought the properties with the help of Panamanian law firm Aleman, Cordero, Galindo & Lee to hide their extensive investment portfolio whilst Kenyatta has positioned himself as a leader that stands against corruption.
Private banks ties
The family also used the services of Union Bancaire Privée (UBP), the largest private bank in Switzerland, which caters to some of the world’s wealthiest clients.
UBP has had its share of scandals, having previously been involved in the Madoff scandal in 2009 and later in 2012 when they were fined by the US Department of Justice for “conspiring with US taxpayers to evade US tax through an array of sham entities, structured transactions, nominees and bank services designed to disguise the true ownership of foreign accounts and other assets”.
It was through UBP that the Kenyatta’s set up three foundations, one each for Uhuru, Ngina and Uhuru’s brother Muholo.
Kenyatta responded to the Pandora Papers on Monday through State House Spokesperson Kanze Dena. He said, “These reports will go a long way in enhancing the financial transparency and openness that we require in Kenya and around the globe. The movement of illicit funds, proceeds of crime, and corruption thrive in an environment of secrecy and darkness.”
Trust in Panama
Panamanian trusts allow trustees to transfer wealth from one generation to another, tax-free. The beneficiaries are typically completely private, allowing account holders to operate in secrecy.
Officials from Angola, Nigeria, South Africa and other countries will be responding to the backlash as the ICIJ and its partners expose opaque deals.
The law firm Aleman, Cordero, Galindo & Lee told the ICIJ’s media partner Finance Uncovered that it has not provided services to the Kenyattas’ foundations since 2014. The foundations were eligible for suspension under Panamanian law for failing to pay annual taxes, said the firm.
The history of the Kenyatta clan
Jomo Kenyatta, Kenya’s first prime minister and Uhuru’s father, created a legacy that has helped his children reach positions of power. His son Peter Muigai became an assistant minister of foreign affairs, and his cousin Ngethe Njoroge served as high commissioner to the United Kingdom.
An uncensored 1978 US Central Intelligence Agency document called the “Africa Review” describes the family’s then unpopular “economic monopoly”. Members of the Kenyatta clan not only occupied positions of government but also positions of power in large companies. The document states, “to protect the holdings of its members and the family, the government blocked every parliamentary attempt to limit land ownership”.
This monopoly coincided with a land resettlement scheme designed by the British government to redistribute land to Kenyan farmers. Instead, over fifteen years, the family greatly expanded its commercial and agricultural portfolio – overseas and domestically.
The majority of this property seemed to be owned by Mama Ngina Kenyatta, Jomo’s fourth wife. Over the years, she amassed an estimated 115,000ha, including a 13,000ha ranch in Kiambu District, two tea plantations and three sisal farms.
Personal vs. political agenda
In an interview last month with senior editors in Nairobi, President Kenyatta said: “It is unfortunate that amongst us (politicians), there are those who will sacrifice [Kenyans’] interests over personal political agenda. I believe these are the things that Kenyans need to be wary of.” The President is due to step down in 2022 after eight years in office.
In 2012, he resigned as the country’s finance minister after the International Criminal Court (ICC) ruled that he should stand trial for his involvement in the violent aftermath of the December 2007 polls. The five counts against him included orchestrating murder, rape, forcible transfer and persecution, but the ICC eventually dropped them due to insufficient evidence.
Politicians across Africa have been implicated in the growing Pandora Papers scandal that jarringly reflects the inequality gap on the continent. Officials from Angola, Nigeria, South Africa and other countries will be responding to the backlash as the ICIJ and its partners expose opaque deals.
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