The DIS Laundromat!

INTERPOL’s definition of money laundering is: “any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources”

Immediately following his release on bail the Managing Director of Kgori Capital Bakang Seretse has been spilling the beans on illicit DIS transaction, which he claims has given rise to the charges of money laundering involving P250 million against him and his colleagues by the DCEC. In his public statement, published in local media and his letter of resignation from Kgori Capital, seen by this publication, Seretse describes a sinister plot aimed at tarnishing his image and to destroy his career. This publication analyses his statements and explores the unanswered questions.
The National Petroleum Fund Order states that it was established under Sadique Kebonang’s Ministry to meet (a) the engineering, construction and operational costs of the strategic storage facilities for Government fuel; (b) purchase petroleum products for the Government’s strategic oil stocks; (c) stabilize prices charged by the oil industry; (d) meet insurance premiums in respect of the insurance of Government’s strategic oil installations and oil stocks.  The Fund’s management committee includes representatives of the Ministry of Minerals, Energy and Water Affairs, Department of Energy Affairs, Finance and Development Planning and the Managing Director of Stanbic Bank Botswana.  The Order also stipulates that all disbursements from the Fund should be used solely for oil and petroleum industry related activities.
• Did the Director General of the DIS Isaac Kgosi flout the legislative Order by requesting the P250 million allocation to fund petroleum storage facilities when he subsequently changed its use to finance the purchase of weapons for the intelligence agency?
• Was the change in allocation done deliberately to enable the DIS to avoid adhering to PPADB procedures, which are mandated even on projects for national security by the DIS?
• During the 2017 budget allocation the DISS was allocated P337 million and was subsequently allocated an additional P15.5 million under the supplementary budget passed in parliament. Why did the DIS need P250 million from the Petroleum Levy Fund outside of its allocated budget?
• Seretse’s statement to the media indicates that, “following the approval of funding by government, (the) DIS requested that I, through a company I owned with Botho Leburu should warehouse the funds for them for two reasons. The first was that the funds were unlikely to be all utilized before the end of the financial year and therefore they (the funds) needed to be ring-fenced to avoid forfeiting it to the treasury.” One Member of Parliament says that no government institution is allowed to ring-fence any public funds. In any event, any surplus public funds are returned every financial year end, is the DIS director not aware that any budget can be requested back and carried over to the next financial year to complete the projects initially intended for?
• Is it true that the money was intended to construction of petroleum tanks or was this a subterfuge to convince government to release the funds?
• Has the DISS tabled before parliament a comprehensive report on the wildlife poaching and human/drug trafficking to ascertain the urgency commanded in his letter of diverting the petroleum funds?
• Does Wildlife and anti-poaching fall under the mandate of the DIS?
• The paper trail reveals that all the documents required for processing payments were done and completed over a three day period in August. Can this be the most efficient government ministry in the history of Botswana or was there powerful influence to speed up the processes?
• In addition the paper-trail indicates that the correspondence between officials and Seretse, referred to him as the MD of Kgori Capital. The company’s address was used and referred to as the Fund Manager. Seretse says Kgori Capital has nothing to do with the transactions. He has however not explained why the company is (CC’d) on savingrams and whether the company Khulaco Ltd which received the funds, despite his claims that it was a front for the DIS was also the Ministry’s Fund Manager?
• It has not been explained in what capacity Khulaco was receiving funds directly from the Ministry. Was it assumed that as a front for the DIS it would not be the subject of scrutiny?
• The Director of Energy authored a savingram instructing the managing director of Kgori Capital, Bakang Seretse advising him to receive P250 million for the funding of DIS petroleum storages. He indicated that the beneficiaries bank details will be Khulaco Ltd at Capital bank. It is not clear who authorised the Director of Energy to deposit the funds into this company’s account?
• Government organisations use the CTO fuel depots across the country. As a state organ it is not clear why the DISS has its own isolated fuel storage facilities?
• A fundamental revelation from the documents, is that the petroleum levy funds were requested and diverted to procure weapons, a purpose which violates the Fund statutory Order. Minister Kebonang has since distanced himself from the change of use, will he request for the Funds to returned and used for their rightful purpose?
• According to the Charge Sheet the individual managing directors of the companies have since been charged with money laundering.  Why have the companies not been charged as well since, a company acts through its directors and it is a legal entity involved in an alleged illicit transaction?
• Seretse says that the President, the Minister of Energy, Permanent Secretary to the President, Director of Financial Intelligence Agency and the DCEC Director were all aware of request by the DIS. Questions also arise as to whether they also knew about the diversion of funds to procure weapons? If they were not aware, has the DIS gone rogue?
• Tshekedi Khama’s Ministry of Wildlife and Tourism holds the primary mandate on anti-poaching activities. In parliament yesterday Tshekedi did not indicate that he had been informed on plans to procure anti-poaching weaponry.
• Seretse states that he was directed to make payments in Israel for drones and anti poaching equipment and that there was nothing unlawful about the instructions as the money rightfully belonged to the DIS. The Petroleum Fund Levy is 13.5 thebe per litre money collected from the voting public when fuelling their vehicles and these public funds do not belong to the DIS.
• While he states that he only learnt of the new intended use of the funds, to buy weapons at a later stage he does not explain the terms of engagement of the initial contract between himself and government. He does not explain whether the new directive to pay Israeli weapons manufactures was in breach or not of the initial terms of the contract he was given?
• There has been no disclosure of the End User Certificate, required for all international armament transactions, a document that Seretse would have been obliged to issue on legitimate arms purchases.
• Seretse does not explain why Khulaco was favoured in this deal amongst other local companies?
• Seretse says the allegations of money laundering are false and that they are a ploy to humiliate him in a larger fight between DCEC, FIA and DIS. He asks why they did not bother calling the President to establish the truth? Has the President and the Intelligence Oversight Committee’s been summoned by the DCEC to answer for the fund allocation and military purchases?
• If indeed the DCEC is seeking to implicate Kgosi, apart from the President, who has the power to instigate allegations implicating a number of people in power in such a fashion?
• It is also not clear why the DIS, the five ministerial committee members of the Petroleum Fund have not been called to make statements regarding the investigation?
• Seretse in both his public statement and his letter of resignation, has promised reveal all the confidential documents in his possession in an effort to clear his name in court. Will the Prosecution apply to seal the court proceedings in the interests of national security to the detriment of the public’s right to know?
• The asset management firm Kgori Capital, managed by Seretse indicated in its market analysis report in July that it  anticipates that the newly introduced fuel tax, in addition to the existing one, will eat into the National Petroleum Fund by P48 million every year and with time could result in an increase of the retail price for petrol. Seretse has distanced the company from this dealings.