Sunday, September 27, 2020

Inside Kgosi’s shady dealings with state owned enterprises

Botswana Unified Revenue Services (BURS) investigators who are conducting a lifestyle audit on former Directorate of Intelligence and Security Services Director General, Isaac Kgosi were this week trying to get to the bottom of how the former spy chief managed to pull off an “off the books” electricity connection of his farm in Maboane to the Botswana Power Corporation (BPC) grid.

The farm which is in the Kweneng District about 60 kilometers north of Jwaneng has been turned into a fortress complete with state of the art CCTV cameras and is linked to the BPC electricity grid via a dedicated power -line running approximately 30 kilometers with an estimated cost running into millions of Pula. Sources inside the BPC told the Sunday Standard that the BURS have already made a formal inquiry about the BPC deal which is believed to have been concluded at the highest level. The sources further reveal that even some senior managers are in the dark about the deal and the BPC Chief Financial Officer, Cross Kgosidiile who responded to BURS enquiries insisted there was no such deal because there are no company records detailing the transaction because it was an off the books deal. The deal is believed to be just the tip of an iceberg on how the former DIS boss used his power to have his way with state owned enterprises.

BHC

The sleuths who are investigating Kgosi’s alleged corrupt dealings are also still trying to wrap their heads around why the former DIS boss’ company, Silver Shadow is operating from a house listed as owned by the Botswana housing Corporation (BHC). There are suspicions that this may be linked to the massive “straw owner” scheme operated by Kgosi which he used to carry out a series of shady and covert “off the books” transactions running into hundreds of millions of Pula with the BHC.

A straw owner is a person who owns a business or property on someone else’s behalf by portraying legal ownership of the property or business to hide the true owner of the property or business. Investigations have also revealed how the DIS put together a straw owner scheme to circumvented Botswana Housing Corporation regulations and procedures and purchased properties to a value in excess of One Hundred and Thirty million Pula (P130 000 000.00). BHC has received payment for the property but has been unable to transfer the property to the spy agency as the former Director General was removed from office before providing the housing corporation with the details of the shelf companies into which the properties were to be held.

Internal documents in possession of the Sunday Standard reveal that subsequent to receiving payment, questions were raised by BHC into the authority of the DIS to own property under its own name as its governing legislation has no provision for the spy agency to own property.

According to information obtained by this publication, BHC demanded that the former Director General provide proof of authority to transfer the property into the organisations name or into the name of private companies that did not appear to have government shareholding.

Government entities and organs are required to be authorised by legislation to own property in their own name to enable registration of a title deed at Deeds Registry.

Unable to provide the authority, Kgosi had undertaken to provide the housing corporation with various privately owned shelf companies into which he claimed the property could be transferred.

The scheme involved a series of “off the books” private companies that would have either fictitious persons as shareholders and directors or real persons acting as fronts for the DIS under the guise of “national security.”

Documents reveal that despite some property having been paid for over three years ago, they remain on the BHC asset list which has raised audit concerns for the parastatal.

In 2014 Kgosi, under increasing scrutiny due to media revelations arising from DCEC investigations into allegations of corruption, revealed as part of his “Save Isaac Kgosi Campaign” that the use of front companies was a common practice in the international intelligence community.

BTC

Investigations have turned up information that the former DIS Director General was not only one of the biggest private shareholders in the publicly listed Botswana Telecommunications corporation with stock valued at millions of pula, but also used his power to bend the corporation to his will. It has emerged that the Botswana Stock Exchange (BSE) listed BTC colluded with the DIS under Kgosi to set up a PRISM-esque system which would enable the spy outfit to monitor all telecommunications communication and internet traffic with or without a warrant. Investigations have further revealed that BTC may be caught in the fall out of Kgosi’s “off the books” accounting practices.

Concerns within BTC were raised during the installation of the massive DIS data collection project that is estimated to have cost over three hundred and fifty million pula (P350 000 000.00).

The project which involved various companies providing specialised services each working individually and separately under the guidance of DIS and BTC ran into difficulties when service providers failed to meet the IT specifications demanded by the project sponsors (DIS and BTC.)

Information obtained by the Sunday Standard reveals that the DIS instructed the service providers to use specific locally authorised software agents for eastern European IT providers.

In at least one instance the Kgosi designated local software agent was not authorised by the software designer and copyright owner to install the software and modify it for compatibility with local systems. The failure of the single software component cost an estimated twenty million Pula (P20 000 000. 00) which BTC refused to pay due to its reporting obligations as a publicly listed company.

Records obtained by the Sunday Standard reveal a series of concerns raised by BTC to the DIS over the lack of compliance with procedure and PPADB legislations.

The BTC/ DIS project seeks to establish a central data capture base for all internet traffic in Botswana. The installation of both the hardware and software at BTC was authorised as a communication hub for “inter government information sharing.” The project was however expanded at the instruction of the DIS to copy the more robust US “PRISM” data capture programme.

Established in 2007 the US “PRISM” programme was revealed to the public in 2013 by Edward Snowden. According to testimony presented at Congressional hearings initiated by the Snowden revelations, the United States National Security Agency (NSA) uses “PRISM” to monitor all telecommunications communication and internet traffic with or without a warrant.

DEBSWANA

Investigations have revealed that Kgosi’s company, Silver Shadows received P200,000 from Debswana in 2010. Kgosi said in the interview with DCEC investigator, Don Mckenzie that the money was a contribution from Debswana to pay for “belts and helmets” from Tiger Lily. Kgosi’s company, Silver Shadows paid P137, 000 to Tiger Lily.

Surprisingly Debswana’s group security manager’s version was completely different from Kgosi’s statement. He claimed that the hefty Silver Shadows money was paid to sustain and support DIS for investigation of their former employee and others who were said to be preparing a major heist on a Debswana convoy.

A closer inspection of the Debswana documents and the mining giant’s relations with Silver Shadows reveal a different story from what the two men claim about the P200,000. Silver Shadows was contracted to consult for security services for Debswana. Kgosi had presented Silver Shadows as the only organisation with ‘High Level Security Clearance’ by government to execute such security services. Curiously, it was the DIS under Kgosi that assigned security companies their ratings. It further emerged that Kgosi was in a business relationship with Debswana managing director, Blackie Marole at the time. Marole told DCEC investigators that he did not remember signing anything although his signature appears on the approval for the consultancy to Silver Shadows. Marole had financial interests with Kgosi in Sediba Properties and BelaBela Quarries.

Debswana is a joint venture company between the government of Botswana and De Beers.

RELATED STORIES

Read this week's paper

Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.