- Dan Gertler is an Israeli billionaire who acquired mining and oil licenses at knock-down prices from the Democratic Republic of Congo (DRC) government or state-owned mining companies, which he then sold to multinational companies and sometimes even back to the Congolese government itself, making huge profits.
- Gertler’s operations generated in only two years more than $1.36 billion of loss for the DRC, according to the U.S. Treasury Department.
- In 2017, the United States sanctioned Gertler for corruption, banishing him from the U.S. dollar banking system.
- As a result of a memorandum of understanding between Gertler and the DRC government, Felix Tshisekedi, DRC president, officially requests an end to U.S. sanctions
Earlier this year, 25 Congolese and international civil society organizations wrote a letter to the U.S. secretary of state, calling on the United States government to maintain sanctions against diamond trader Dan Gertler. Since reaching a settlement requiring Gertler to hand over several valuable mines and oil concessions, the Democratic Republic of Congo’s government — backed by some local civil society groups — says the sanctions have had the desired effect and should be lifted. Anti-corruption groups in the country say no.
The concern is legitimate: On Jan. 15, 2021, as former President Donald Trump was leaving office, Treasury Secretary Steven Mnuchin granted the Israeli businessman a one-year license to do business with U.S. entities and access frozen money in U.S. accounts. The one-year delay was meant to allow the U.S. administration to examine the evidence provided by Gertler before deciding on the final lifting of the restrictions. That move generated strong criticism from human rights groups and Democratic lawmakers.
A few months later, the Biden administration canceled the license, arguing that the measure “is inconsistent with America’s strong foreign policy interests in combating corruption around the world, specifically including U.S. efforts to counter corruption and promote stability in the Democratic Republic of the Congo,” U.S. State Department spokesman Ned Price said in a statement.
But there is nothing to say that it can’t happen again. When contacted, the U.S. State Department and U.S. Treasury office did not respond to our request for an interview.
The origin of the sanctions
Starting in 1997, Gertler acquired mining and oil licenses at knock-down prices from the Congolese government or state-owned mining companies, which he then sold to multinational companies and sometimes even back to the Congolese government itself, making huge profits.
In 2021, Congo Is Not For Sale, a coalition of 16 anti-corruption organizations, calculated that Gertler’s Ventora Group would earn massive royalties from just three of the mining projects he’s gained an interest in: Kamoto Copper Company (KCC), Mutanda and Metalkol.
“We estimate that Gertler will receive at least $1.76 billion in royalties between 2021 and 2039. That’s an average of more than $254,000 per day over the next 19 years.”
In December 2017, the United States sanctioned Gertler for corruption and involvement in human rights violations. The sanctions, levied under the Global Magnitsky Act, mean U.S. citizens face up to 20 years in prison if they do business with Gertler. U.S. banks are required to block and report every transaction involving the businessman or his companies. These sanctions also affect non-U.S. banks, as dollar transfers generally go through correspondent banks in the US.
But in May 2022, Congolese President Félix Tshisekedi wrote to his U.S. counterpart Joe Biden asking for the sanctions to be withdrawn.
“This letter is intended to be a plea for the removal of Mr. Dan Gertler and his group from the Global Magnitsky Act. Indeed, since the objective of the sanctions enshrined in the Global Magnitsky Act has been achieved, in that it has forced Mr. Gertler and his group to comply with good practices in the mining and hydrocarbons sector of the Democratic Republic of Congo, we believe that they no longer need to be imposed, lest they have a negative impact on the economic interests of our country,” Tshisekedi wrote in a letter obtained by the New York Times.
Since then, several Congolese NGOs came out in support of the government’s call for lifting sanctions against Gertler.
“The restitution of assets can only be done if the sanctions against Dan Gertler are removed, this is part of the conditions contained in the agreement signed by the Congolese state,” explained Georges Kapiamba, coordinator of the Congolese Association for Access to Justice (ACAJ). He was referring to the memorandum of understanding signed Feb. 24, 2022, between the DRC government and the Ventora Group, controlled by Gertler.
The billionaire agreed to hand over mining licenses for three mines — Moku Gold, Iron Mountain, and Sanzetta — and exploration licenses for two oil blocks in Lake Albert. The memorandum also committed the Congolese government to providing assistance to support Gertler’s efforts to have the sanctions against him lifted, once the named assets were returned. With Gertler having handed over the assets, the government was keeping its promise by sending this letter to Biden.
What does the DRC have to gain from the withdrawal of sanctions?
But Jimmy Kande, western Africa director of the Platform to Protect Whistleblowers in Africa (PPLAAF), one of the organizations that signed the letter to the U.S. Treasury, said the government should publish the full text of the agreement. “This is a contract that we believe has terms that are to the disadvantage of the Democratic Republic of Congo. It is important that the DRC comes out of this amicable arrangement as a winner. The contract has not been made public in its entirety. We continue to push for this to be the case.”
Analyzing the parts of the 2022 memorandum that have been made public, Congo Is Not for Sale noted that Gertler would retain interests in other hugely valuable mining assets in DRC despite obtaining them under questionable circumstances. The memorandum committed Gertler to paying more than 249 million euros ($269 million) from royalties on KCC, but nothing on the other companies he would hold on to. In addition, DRC must reimburse Ventora 240.7 million euros ($260 million) and state-owned mining company Gécamines owed Fleurette Group (another Gertler company) 192 million euros ($207.5 million) from a loan.
Contradicting the Congolese government’s assertion that sanctions have achieved the desired result, Global Witness and PPLAAF released a report in 2021 based on documents provided by two whistleblowers showing how Gertler has tried to evade sanctions through a network centered on Afriland First Bank in the DRC.
“This network had allowed the sending of financial flows of millions of dollars to Europe and Israel and the acquisition of new mining assets in the DRC,” according to PPLAAF.
The documents came from two Afriland employees, Gradi Koko Lobanga and Navy Malela Mawani. After alerting their hierarchy, the two whistleblowers were threatened and decided to leave the DRC. Afriland has since sued them on charges of offense against public safety and criminal conspiracy — charges that the whistleblowers’ defense organization considers exaggerated. Yet, they were sentenced to death. They now live under protection, in exile, with no prospect of immediate return to the country.
When contacted to answer the alleged disadvantage of this agreement, the DRC government did not respond to our interview requests.
The costs of corruption
“For us, it is important that the sanctions can be maintained. This money is important for the Democratic Republic of Congo. This money represented, at the time, 30-40% of the Congolese budget, and when you look at the challenges that the DRC is facing in terms of infrastructure, hospitals that are lacking, schools that are lacking, roads that are not built, public employees that are not paid, this money could solve some of these problems,” Kande told Mongabay.
Several of the extractive contracts for which Gertler is accused of corruption in the DRC are also linked to environmental damage. The KCC operates copper and cobalt mines at Kolwezi, in the central province of Lualaba. African Resources Watch (Afrewatch), a Congolese NGO that works to protect human rights and the environment from natural resource extraction, published a 2021 report on the impacts of a series of acid spills into rivers surrounding the company’s mines.
Afrewatch interviewed members of nearby communities who said the Luilu River turned black for about a week and emitted a suffocating smell. Interviewees said they suffered from eye and throat irritation as well as itching skin. Farmers reported damage to their fields and dead fish floating in the surrounding ponds even though KCC says they contained the spills and established contact with affected communities.
For Kande, this was not surprising. “When companies are steeped in corruption, it is not uncommon for them to break the rules in other areas,” he said.
Gertler may have transferred some mining and oil holdings back to the Congolese government, but anti-corruption NGOs argue that removing the sanctions he is subject to could send a message of impunity to the companies he collaborates with, leaving the door open for more corruption, environmental and human rights abuse.