Monrovia – Charles Sirleaf, the son of former President Ellen Johnson-Sirleaf and the former Executive Governor Milton Weeks spent the weekend behind bars, moments following the release of two major reports – an Independent Review Report funded by the U.S. government and prepared by Kroll Associates Inc and the Special Presidential Task Force – regarding allegations of the disappearance of new Liberian Dollar banknotes and the controversy surrounding the disbursement of US$25 million intended to mop-up excess Liberian dollars on the market in stabilize the rapidly increasing exchange note between the Liberian dollar and the United States dollars.
Report by Rodney D. Sieh, [email protected]
Mr. Abraham Darius Dillon, Chair of Political Affairs in the opposition Liberty Party says while the arrest of Sirleaf, Weeks and others is welcomed, any form of selective justice should be rejected. “There should be no sacred cows!! Whilst we support the arrest of past govt officials linked to the “missing” money report, we demand arrest of current govt officials that are also linked to mishandling and squandering of the “$US25 million as revealed in the same report. We demand the arrest of Finance Minister Samuel Tweah, Central Bank Governor Nat Patray and all others involved for further investigation and prosecution where necessary.”
Risks Cited in Both Reports
Both reports point discrepancies in the handling of both funds which have been the subject of massive security over the past year since the administration of President George Manneh Weah assumed office last January.
The Kroll analysis of delivery documentation provided by the Central Bank of Liberia (CBL) confirmed that new banknotes totaling L$15.506 billion were received into the CBL’s reserve vaults. While the Kroll report found no information to support allegations that a container of banknotes went missing, it does point out several discrepancies. The report raises concerns regarding the overall accuracy and completeness of the CBL’s internal records and identifies systemic and procedural weaknesses at the CBL, and identifies shortcomings in Liberia’s fiscal and monetary management processes that are longstanding and continue to the present day.
Kroll found 1.9 billion or US$12 million discrepancy on December 10 and December 28, 2017, delivery. Additionally, $55,000 and $160,000 discrepancy between what is confirmed received by the money changer and what is reported given by CBL, a huge disparity, analysts say, warrants an investigation.
Section 3.2.7 of the Kroll report, captioned Discrepancies in relation to “Mop-up” Exercise vividly placed a three-count indictment on President Weah’s Technical Economic Management Team (TEMT) Headed by Samuel D. Tweh and old man Nathaniel Patray.
The report noted: “The approach taken by the CBL to implement the USD Mop-Up exercise, whereby small Teams of bank personnel directly purchased LDR from local businesses and Foreign Exchange Bureaus in exchange for USD notes, created an enhanced level of risks with respect to: i) potential misappropriation of banknotes, ii) potential opportunity for money laundering and iii) potential execution of transactions with illegal businesses”. Consequently, there is a risk that significant funds were unaccounted for by the CBL, and Kroll therefore recommends that this matter merits further understanding”.
The detailed report by the Special Presidential Investigation Team (PIT) on the infusion of US$25 million to mop up excess Liberian dollars recommended that given the many discrepancies noted in the manner in which the mop-up exercise was conducted in relation to the infusion of the US$25 Million into the Liberian economy and the time and resource limitations of the PIT-TC, the investigation, that the TEMT and CBL put a HALT to the exercise, and that a forensic investigation of the entire mop-up exercise be conducted.
Finance and Development Planning Minister Samuel Tweah was head of the Economic Management Team that designed the process which involves DIRECT MOP-UP through the direct engagement with businesses and nonbanking institutions to directly exchange United States dollars with Liberian dollars.
President Weah, on July 16, 2018, announced the infusion of US$25 million to mop-up excess Liberian dollars on the market in stabilize the rapidly increasing exchange note between the Liberian dollar and the United States dollars and mandated the Technical Economic Management Team (TEMT) and CBL to implement the exercise.
The DIRECT MOP-UP exercise targeted three categories of businesses/nonbanking institutions, namely: Major Importers, Small Business Holders, and Major Foreign Exchange Bureaus.
TEMP/CBL Deviated from Practice
According to the PIT analysis of the implementation Report submitted by the TEMT/CBL, institutions/businesses participated and received from CBL, a total of US$14 million in exchange for a total of L$2,151,363,99.00 from July 17, 2018 to September 18, 2018. Refer to Exhibit 42 for TEMT/CBL Implementation Report.
The PIT report breaks down the disbursements of the US$14 million is as follows:
A total of US$5.6 million was sold to institutions/businesses to the Major Importers category; A total of US$1.4 million was sold to institutions/businesses in the Small Business Holders category and a total of US$7 million was sold to institutions/businesses in the Major Foreign Exchange Bureaus category.
The investigations established through review of documents, interviews and physical verification that the TEMT/CBL deviated from best practice which calls for the use of legitimate banking institutions and licensed Foreign Exchange Bureaus or SAE AUCTION for said exercise. Instead, the TEMT/CBL carried out DIRECT MOP-UP by engaging Foreign Exchange Bureaus and local businesses other than the Commercial Banks.
The report also revealed that the TEMT/CBL demarcated Monrovia and its environs into 6 zones and assigned Team to each zone as follows: Team 1- 5 these Teams were not given any lists, but randomly visited the premises of businesses and foreign exchange bureaus in their assigned area for the exercise; Team 6 – Central Monrovia/Major Importers: this team was given a lot of major importers. Members of the Team visited the premises of these businesses and collected their Liberian dollars in exchange for United States dollars at the exchange rate provided by CBL. This team was stationed at CBL and served businesses and foreign exchange bureaus within Central Monrovia.
The investigation established that here were no standard criteria set for the participation of businesses and foreign exchange bureaus in terms of their legitimacy (e.g. legally registered, licensed, tax compliant, etc.).
The investigation also established that the principle of KNOW YOUR CUSTOMER (KYC) was not observed throughout the mop-up exercise thereby creating room for illicit exchange or money laundering.
The PIT also reported that a review of the report submitted to the investigation by the six (6) Teams responsible for the disbursement/exchange of the United States dollars with the Liberian dollars whom that some Foreign Exchange Bureau and businesses were not duly registered, while other businesses received cash without proper identification. For example, report submitted by the Leader of Team 2, Mr. Kontar Richards, shows that there was no evidence of transactions with business entities, such as business registration document and address of these entities. There are several summary sheets in hand writing which do not have any indication that these vendors money and/or signed for it.
According to PIT, some businesses/institutions in the three categories mentioned above received lesser amounts then what was reported by CBL. For example, the Union Local Forex Bureau located on Carey Street received a total of US$5,500.00 on two separate occasions (US$3,000 on July 17, 2017 and US$2,300.00 on August 16, 22017) then what was reported by CBL in its report as the total amount received US$161,900.00 (US$103,720.00 on July 17, 2018 and US$58,400.00 on August 16, 2018). Refer to Exhibit 44 for Union Local Forex Bureau Administrator Response.
Regarding the accounting for Foreign Currency Banknotes, the investigation determined that the TEMT/CBL sold the total of US$14 million in exchange for the total of L$2,151,363,898.00 between the periods July 17, 2018 to September 18, 2018 and that the TEMT/CBL deviated from the conventional best practice which calls for the use of legitimate banking institutions and licensed Foreign Exchange Bureaus or SALE AUCTION.
Instead, PIT reported that the TEMT/CBL carried out DIRECT MOP-UP PROCESS by engaging some Foreign Exchange Bureaus and some local businesses other than the Commercial Banks. “The TEMT/CBL failed to set standard criteria for the participation of businesses in terms of their legitimacy (e.g. duly registered businesses and or tax compliance, etc.) and the principle of KNOW YOUR CUSTOMER (KYC) was not observed throughout the mopped-up exercise thereby creating the platform for illegal business dealers to clean their illegal money.
Reports Offer Reason for President to Act
Mr. Mo Ali, Assistant Secretary General of the former ruling Unity Party told FrontPageAfrica Sunday that the damning findings of the PIT and Kroll report, particularly involving TEMT, headed by Minister Tweah, is more than enough reason President Weah should act.
Said Ali: “Minister Tweah designed, directed and implemented the unorthodox and corrupt system of direct mop-up exercise of LRD that led to thievery and possible money laundering as indicated in both the local and international reports. Hon. Tweah therefore bears culpability because his actions and inactions opened up a flawed gate of frauds. Min. Tweah should therefore face justice just as others are.”
In his own defense, Minister Tweah, interviewed by PIT on October 19, 2018, at the Headquarters of the Liberian Anti- Corruption Commission (LACC) offered the following response as documented by the PIT:
“In reference to the utilization and infusion of the US$25 million into the economy to stabilize the exchange rate, Hon. Tweah told the investigation that the total of US$14 million has been used to mop up the total of L$2.2 billion from the market. Hon. Tweah said the TEMT chaired by him did not use the conventional auction method by using the commercial banks. According to him, the aim of the exercise was to target monies in the hand of business people and not monies already in the banking system. He said this was the reason his team targeted business people and major forex bureaus, and not to go through the commercial banks. Hon. Tweah said the category of businesses that benefited from the mop-up exercise are: Major Importers, Small Business Holders and Major Forex Bureaus.”
Contradicting Explanations
Minister Tweah’s explanation contradicts what President Weah told the nation when he delivered his annual message in January.
The President said: “As a short-term quick fix, the Government approved $25 million United States dollars to enable the Central Bank to intervene in the foreign exchange market. As of December 2018, a total of $17 million United States dollars was used for the intervention, which significantly contributed to the general stability in the exchange rate for the past six months (July to December 2018). The balance $8 million United States dollars is reserved by the CBL as a precautionary intervention fund.”
Questions and unanswered questions resulting from the two reports have prompted calls for the Weah-led government to ensure that the issues cited in both findings are addressed.
In a statement Sunday, the Liberia Council of Churches while welcoming the release of the LD16B missing money reports by the Government of Liberia and the United States Embassy through USAID last week, said commended the Presidential Investigation Team (PIT) set up by the President of Liberia and the USAID-sponsored Kroll international financial firm for the tireless efforts put into compiling and releasing the investigative reports.
The LCC acknowledges several outstanding and concerning issues presented by the investigative reports to include the whereabouts of the reported LD2.6 Billion excess printed materials reflecting a strong difference between new banknotes reportedly received at the CBL to the tune of LD15.506 billion and documented printed volumes of LD18.1 billion, the extremely troubling US$25 Million Mop-up exercise transactions, poor documentation of financial transactions at the Central Bank of Liberia (CBL), the differences in three (3) CBL operational vaults balances, and the lack of full Legislative approval for printing the approximately LD18.1 billion banknotes to replace the legacy or old bank notes from the market, amongst others.
LCC: Probe All Implicated in Reports
The statement noted: “The Liberia Council of Churches calls on the Government of Liberia to ensure that the fight against impunity and/or sleaze is profound and comprehensive by ensuring that everything is done to bring to justice ALL implicated in the two investigative reports. The LCC calls on Liberians and the public in general to remain calm and engage in orderly manners as this financial drama of enormous consequence unfolds before our eyes. We assume that all accused are innocent until proven guilty.”
Mr. George Wisner, a former Assistant Minister for Afro-Asian Affairs at the Ministry of Foreign Affairs and former Executive Director of the National Investment Commission said in a recent Op-ED that both reports point to endemic corruption, institutional failure, lack of patriotism, and entrenched patronage. “These indictments go beyond narrow political considerations, religious creed, or philosophical persuasion and should put a scar on the conscience of all of us – politicians, Civil Society, Religious Community, and parents. The damning conclusions reached by the reports indict many of our leaders, past and present, of doing more for themselves and their parochial interests to the exclusion of the vast majority of the Liberian people who are shackled in destitution and continue to languish in poverty and misery. They exploit the ignorance and vulnerability of our people and create an illusion of redemption only to feed on the sweat, blood, and tears of the very people.”