Congo Battle Looms Over White House

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WASHINGTON – When President Bush meets today at the White House with the president of the Republic of Congo, discussion is expected to focus on the genocide in Darfur and on upcoming matters before the U.N. Security Council, of which Congo is a member.

But looming in the background of the meeting is a legal battle over more than $100 million in debt that the African nation owes creditors.

Lawyers for one of Congo’s creditors, Kensington International Limited, a New York-based investment firm, are now preparing for a trial set to proceed this year in the Southern District of New York alleging that the French bank BNP Paribas and Congo’s national oil company, SNPC, conspired to defraud the republic’s creditors by disguising profits from its oil exports and funneling the largess to the pockets of current and former government officials. Executives from BNP Paribas gave sworn testimony before congressional committees in 2005 on their role in managing Iraqi oil revenues under the U.N. oil-for-food program.

The Beltway battle pits two former Reagan administration officials and hawkish defense intellectuals, Kenneth Adelman and Michael Ledeen, on either side of the issue of President Sassou-Nguesso’s legitimacy. Kensington’s parent concern, Elliott International Capital Advisers, hired a Washington based public relations firm, DCI Group, to target Mr. Sassou-Nguesso on the eve of his visit. On June 1, the former deputy to President Reagan’s ambassador to the United Nations and a paid consultant to DCI, Kenneth Adelman, released a letter to Secretary of State Rice calling Mr. Sassou-Nguesso a “Marxist dictator.” The DCI Group publishes the Web site Tech Central Station.

“I am disappointed in the Presidential reception since I took President Bush’s Inaugural words seriously – that every dictator in the world had to fear American disapproval,” Mr. Adelman wrote. “How then can the likes of Sassou-Nguesso – given his long record of brutality, Marxist politics, and stunning rip-offs – be given the biggest prize of American approval, a White House meeting with the President?”

Mr. Ledeen, who is advising the Congolese president in his capacity as an associate of the law firm Trout-Cacheris, asked yesterday, “Does he not know that Sassou voluntarily called elections he would lose and did lose? That doesn’t sound like a Marxist-Leninist dictator to me.” Mr. Ledeen, who has known Mr. Sassou-Nguesso since the late 1980s, added, “The story is that this terrific African diplomat has been invited to meet with the president on the basis of his outstanding diplomacy on Darfur. He is the chairman of the Organization of African Unity. The conversation I imagine will focus on the U.N. Security Council, because Congo is on the Security Council.”

On June 1, the White House spokesman, Tony Snow, said that Mr. Bush and Mr. Sassou-Nguesso would discuss the May 5 cease fire over Dar fur and discuss possible NATO assistance to the African Union mission in Sudan. He also said the two leaders would discuss “ways to strengthen democracy and improve the lives of the Congolese people.”

When asked for comment yesterday on Mr. Ledeen’s remarks, Mr. Adelman insisted that Mr. Sassou-Nguesso has served as the republic’s president for 17 years. He then asked, “He is a great diplomat? I don’t know what that means. Darfur is solved? Where is this giant of diplomacy?”

According to a BBC timeline of events for Congo, Brazzaville, Mr. Sassou-Nguesso allowed for multi-party elections in 1992 that resulted in the presidency of Pascal Lissouba. Fighting soon broke out and Mr. Sassou-Nguesso recaptured power in 1997 and forced Mr. Lissouba to flee Brazzaville. In 1999 the rebels and the government signed a ceasefire and Mr. Sassou-Nguesso allowed members of rival militias into the security forces. However, in 2002 he won re-election after barring almost all of his political rivals from running for office.

The 2005 Freedom House report on the Republic of Congo describes the country as “partly free,” and says it made improvements on human rights in 2004 after reaching a ceasefire with anti-government militias.

A government spokesman for the Republic of Congo, Alain Akouala, yesterday said he was puzzled by Mr. Adelman’s letter. “As far as we know, this was the first time Mr. Adelman’s concerns about the Republic of Congo have been expressed in public,” Mr.Akouala said. “We welcome Mr. Adelman’s interest in Congo’s legitimate pursuit of debt relief and we would be glad to host him to a first-time visit to Brazzaville. But, we wonder if also if Mr. Adelman isn’t somehow linked with an attempt to tarnish the government of Congo’s credibility by vulture fund creditors that have made a number of exaggerated claims regarding the government’s pursuit of debt relief.”

The “vultures” to which Mr. Akoula referred are the international creditors that include Kensington International Limited, which purchased between 1998 and 2000 $120 million in Congolese debt at a high discount and has, with other creditors, dispatched an army of lawyers to London, New York, and Paris, to try to collect. Should Kensington win its lawsuit in America, the Republic of Congo would be liable to pay up to $360 million, as the civil racketeering statute under which the creditors are suing, known as RICO, awards triple damages.

“It’s curious that people who cannot account for billions of dollars of oil revenue are out there calling people names,” a senior portfolio manager at Kensington International Ltd., Jay Newman, said yesterday in an interview. A senior executive with Kensington yesterday estimated that the Republic of Congo earns $3.5 billion annually from its oil exports.

Last year the World Bank determined that the Republic of Congo would be eligible for debt forgiveness under its Highly Indebted Poor Counties program. However, further steps in achieving that debt forgiveness would be suspended until the country’s books became more transparent.

Mr. Akoula yesterday touted his country’s progress in economic and financial reform. “Over the past year, the Republic of Congo has met a number of the important milestones set by international financial institutions towards improving transparency in governance,” he said.


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