The United States Government is following progress in the corruption and money laundering case docket against Directorate of Intelligence and Security Services (DISS) Director General Isaac Kgosi. The US Department of State reported in its 2014 Human Rights report for Botswana that, “several newspapers published information leaked from a DCEC investigation of Isaac Kgosi. The documents allegedly demonstrated substantive links to corruption and money laundering.”
The report further observes that, “at year end Kgosi retained his position and the DCEC had not initiated any actions against him.”
Kgosi’s entry on the Human Rights report is believed to have been gleaned from secret diplomatic demarches filed by the American embassy in Botswana, signalling America’s interest in Kgosi’s corruption case. In almost the same breath, the US Department of State report suggests lack of commitment by Botswana government towards combating money laundering. The report raised for the second consecutive year concern that the Financial Intelligence Agency (FIA) was not operational.
In its report on Botswana last year, the US department of State noted that “the Government of Botswana enacted AML legislation to establish a financial intelligence unit, the Financial Intelligence Agency (FIA), in 2009, but it is still not operational as of late 2013. As of the fall of 2013, the FIA had a new director; only four, insufficiently trained technical staff; and a need for analytical software. As such, it was neither receiving nor analyzing suspicious transaction reports (STRs), deferring instead to the Directorate on Corruption and Economic Crime (DCEC).”
In its latest report, the US department of State reported that, “the FIA (Financial Intelligence Agency) is not an investigative organ and has no police powers. The FIA is to collect, analyse, interpret and disseminate financial information to identify potential domestic and international criminal activity including money laundering and terrorist financing. The Minister of Finance and Development planning appoints the director of FIA but the organisation was not fully staffed or operational by the year end. In 2013 the Eastern and Southern African anti- money laundering Group cited the country as not being in full compliance with Financial Action Task Force standards, in part because of the minister’s failure to issue regulation that would allow FIA to become fully operational.
This is also the second time the US Department of States is raising issue with Botswana’s lax money laundering controls. Last year in its report for 2013, the US Department of State expressed concern that the Botswana government had refused to release statistics on the number of suspicious bank transactions reports (STRs) filed by local banks.
The US Department of State disclosed in its 2013 report that “unlike in previous years, the Government of Botswana has declined to release statistics on the number of STRs filed in 2013.”
The US State Department stopped short of publicly bashing Botswana for refusing to disclose the extent of money laundering in the country saying, “The government should ensure it regularly produces and reports the statistics necessary for others to verify any progress in implementing the existing elements of the country’s Anti Money Laundering and Combating of Financing Terrorism (AML/CFT) regime.
Sunday Standard investigations have revealed that the Directorate of Intelligence and Security Services (DISS) which runs a multi-million Pula cash Special Fund controlled by the Director General Isaac Kgosi has been responsible for a number of suspicious bank transactions.
Then the American government observed that Botswana had yet to implement an internationally accepted anti-money laundering and terrorist finance (AML/CTF) regime. The report stated that “in 2011, the Eastern and Southern Africa Anti-Money Laundering Group placed Botswana under enhanced monitoring.”
It also emerged in the US Department of State report that even under Anti Money Laundering and the Combating of Financing Terrorism regime which is being implemented; senior government officials can still get away with money laundering because none of the laws contains requirements related to politically exposed persons (PEPs).
In financial regulation, “politically exposed person” (PEP) is a term describing someone who has been entrusted with a prominent public function, or an individual who is closely related to such a person. PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
The latest US Department of State report on Botswana further states that, “in July parliament passed an asset forfeiture law, the Proceeds and Instruments of Crime Act. The Act provides a mechanism to seize property associated or purchased with laundered money or otherwise illicit funding. The Act was awaiting presidential assent and did not have implementing regulations as of September.”
The report also raised the issue of financial disclosure among senior public officers: “there are no formal financial disclosure laws; however, in 2009 a presidential directive required all cabinet ministers to declare their interest, assets and liabilities to the President. Critics contended that policy did not go far enough to promote transparency and financial declaration by senior officials should be available to the public.
