How FBI investigators uncovered plot to sell off Crane Bank

COURT | The US Federal Bureau of Investigation (FBI) was a busy bee in Kampala in 2017 as part of wide investigations in which investigators combed websites, emails and landmarks linked to Foreign Affairs minister Sam Kutesa, his wife Edith Gasana Kutesa, Bank of Uganda deputy governor Louis Kasekende and other officials.

The Bureau assigned Special Agent Thomas P McNulty to investigate allegations of corruption and money laundering against Patrick Chi-Ping Ho, a Chinese official accused of bribing African leaders, including President Museveni and his bother-in-law Sam Kutesa, to gain advantage in business dealings of companies he was associated with.

Kutesa was president of the UN General Assembly from 2014 to 2015 but his office in New York turned into Ho’s dining and lounging room where the former Hong Kong minister discussed businesses for China Energy Fund Committee that he headed.

Sendo Cleaners

The FBI got wound of Ho’s suspicious activities and tapped phone and emails of the Chinese official and Kutesa with investigating finding threads that saw them widen targets on Edith, Kasekende and another unnamed central bank official.

Special Agent McNulty told the South District Court in a 54-page affidavit that email and phone call details of the officials under investigation were obtained pursuant to one or more judicially-authorised search warrants.

The affidavit says that Edith emailed Ho on March 17, 2015, regaling him for the time they spent in discussing different opportunities of investing in East Africa and in Uganda in particular. She suggested a raft of ideas to the Chinese energy official for consideration.

“We talked about banking sector with possibility of acquiring a bank and also engaging Bank of Uganda in a deeper reflection about creating a direct link between our currencies, a project for which I would be happy to facilitate and we should discuss this further when we meet in Hong Kong,” the court document quotes Kutesa’s wife’s email.

Edith, who married Kutesa in August ten years ago, also suggested to the Chinese to be connected to a company that offers a mobile payment service, “to discuss the possibility of franchising their technology in Uganda or find any other arrangement for my company to use their system to provide e-ticketing to the transportation system.”

“I have asked if you could help my company find an investor,” added Edith, who is identified on one of the website of an organisation on whose board she serves as an economist with an outstanding professional career in local and international economic and financial development.

Agent McNulty said the company Edith referred to as “my company” is one on whose website she is listed as chief executive. The FBI agent said the company offers cashless mobile financial platform.

However, attempts to dig into the said company were futile as it appears any information about the person of Edith has been redacted or completely wiped clean. The only other company on which Edith is said to have been a chief executive was the sham ‘Uganda Foundation’ whose website has since been deleted.

Besides telecoms, the only other companies that off cashless mobile financial platforms are mainly startups by young geeks and others like PayWay, WorldRemit and Beyonic.

Ho lays intentions

While Edith was blinking at the prospect of getting her hands on the $500,000 bribe, Ho was baying for business leeway with eyes on a bank that he later said was a priority for their investment and business partnership with the Kutesa family.

“Please allow me to reiterate our decision and strategies re Africa. The Energy Company would like to partner with your family enterprise and would like to invest through you and with your family businesses (and the President’s) who can be the local operators,” Ho wrote to Edith on May 27, 2016.

“The key is to get the bank in Uganda up and running to become the first offshore Reminbi (Chinese money) exchange centre in Africa. Then we can establish relationship through this bank in Uganda with other banks in Chin, and this route of cash flow to Africa would enable us to invest in a host of ventures. Please relay this to [the Ugandan Foreign Minister] and to the President. Please look into the opportunity with the Global Bank.”

With her appetite whetted with the bribe, Edith was willing to do anything at this point. She contacted Ho to present him with the opportunity to acquire Crane Bank and to guide him through the “very confidential and urgent process.”

This proposal, at least a year-and-a-half before Crane Bank was liquidated, means the plans to sell the commercial bank was already in motion. It is not clear if the central bank had already considered Crane Bank Limited, then owned by businessman Sudhir Ruparelia, as under capitalised.

However, Agent McNulty noted that Edith was willing to pay back the bribe in kind by setting the agenda and oiling the tricky paths toward acquisition of Crane Bank. As part of this effort, Edith had already introduced Ho and his delegation to central bank officials, including Deputy Governor Louis Kasekende.

On October 13, 2016, Edith emailed Ho with the subject, “Opportunity to invest in Banking Sector.” She said the central bank official Ho had met during his visit had contacted her side to inform the Chinese group about the possible acquisition of Crane Bank.

“But as you know, selling a bank is a very confidential and urgent process,” she said, providing the website of Crane Bank for perusal and assessment and instructed HO to express the Energy Company’s interest in writing to Kasekende.

“It is imperative that that letter is sent by close of the business today through email,” Edith said.

Agent McNulty said in his affidavit that press reports in October 2016 indicated that the central bank had taken over administration of Crane Bank, which until then had been partly owned by a bank headquartered in England.

“I know from publicly available sources that the Ugandan Bank ultimately was not acquired by the Energy Company,” McNulty’s affidavit says.

While the affidavit gives the impression that the liquidation of Crane Bank had sucked up Ho’s team leading to loss of interest, Edith appears to have not given hope of handing over the same bank to the Chinese.

From the background, she worked with central bank officials to avail more information about the in-administration Crane Bank to Ho’s team. She emailed Ho on October 24, 2016, copying in Kasekende, to continue with Crane Bank agenda.

Ho later wrote a brief email to Kasekende, asking him to send the information, believed to be Crane Bank status including assets and liabilities, by email. A central bank official later emailed Ho the information he was seeking.

The official asked Ho if his team was still interested in the acquisition of Crane Bank. Around that time, the central bank was looking for a prospective buyer of Crane Bank assets and liabilities. Ho forwarded the email to his team and Agent McNulty noted that the Chinese officials shared it among themselves but it appears they never took keen interest as dfcu Bank took over Crane Bank in January.

Edith Gasana, who married Minister Kutesa in August 2008 in Kampal, debuted her career at the European Union Commission that she left with the grade of anexpert and the United Nations Development Programme where she occupied senior leadership positions.

She left these organisations in 1994, to contribute to the reconstruction efforts after the 1994 Genocide against the Tutsi, her country of origin. In Rwanda, Edith has served as Chief of Staff in the Ministry of Planning, Permanent Secretary in the Ministry of Finance and Economic Planning, and Managing Director of the Development Bank of Rwanda.

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