South Sudan’s neighbours help launder the loot from its civil war

“IAM NOT a rich man,” pleaded Paul Malong, the ex-chief of South Sudan’s army, in an interview on Kenyan television. Shaking his head, he denied having plundered state coffers or being responsible for war crimes committed by his troops. “I am just a family man,” he explained.

Really? The UN Security Council says he is implicated in the torture, abductions, rape and mass killings by men under his command. The Sentry, a watchdog backed by George Clooney, an actor, says that Mr Malong owns at least two big houses in Uganda and a $2m mansion in a gated community in Nairobi.

Since South Sudan’s independence in 2011 its leaders have pillaged the country (see article). Nearly $7bn has gone missing since 2012, reckons Kenya’s Institute of Economic Affairs, a think-tank. Petrodollars vanish. Powerful wrongdoers are seldom punished.

Partly because the state is easy to plunder, big men fight for control of it. South Sudan’s conflict, which started five years ago on December 15th, has caused perhaps half a million deaths, mostly by aggravating hunger and disease. Neighbours have hosted peace talks, paid for by donors. But they have done little to stop the laundering of the loot.

Much of this has been parked in Kenya and Uganda. The Sentry claims that both Salva Kiir and Riek Machar, South Sudan’s president and vice-president, who were on opposing sides in the civil war, have expensive homes in Nairobi. Both deny it. The watchdog also claims that Mr Kiir is building a lakeside mansion in a resort town near Addis Ababa, the capital of Ethiopia.

South Sudan is now more or less at peace, thanks to a power-sharing deal struck in September between Mr Kiir and Mr Machar. But corruption risks undermining the fragile calm.

The prospect of a new transitional government in May 2019 has already led to a rise in last-minute looting by those worried that they will soon lose power, says a source in Juba, the capital. A report by a UN Panel of Experts raised concerns that oil firms were making large prepayments for oil that is yet to be produced. Although not necessarily corrupt, these deals are presumably concluded with those currently in power, rather than with those who will take over. “It looks like they were offshoring money very rapidly, ” says Klem Ryan, who served on the panel. Other resources such as teak and gold are also smuggled out of South Sudan. Some of the proceeds go to rebel groups and government forces.

International sanctions, first imposed in 2015 on a handful of generals from both sides, have done little to curb the theft. In August Gabriel Jok Riak, the new head of South Sudan’s army, appeared as guest of honour at a private university in Uganda, in violation of a travel ban. He also travelled to Kenya in April for medical treatment. For two years after he was placed under sanctions by the UN, his Kenyan bank account was not frozen. Kenya’s financial authorities have yet to take any action against banks suspected of holding South Sudanese loot. Both Kenya and Uganda lobbied against America’s efforts to impose UN sanctions, despite paying lip service to them, says Zach Vertin, the author of a new book about the war.

There are signs that the West is getting tougher about enforcing sanctions. In a visit to Uganda in June an American Treasury official warned local banks that they would be cut off from America’s financial system if they did not stop South Sudanese bigwigs from buying property with dodgy cash. Kenya’s banks may soon be “grey-listed” by the Financial Action Task Force, the world’s primary anti-money-laundering body, which would discourage other banks from dealing with them.

But David Ndii of Africa Economics, a think-tank in Nairobi, doubts regional authorities will ever really clamp down. “Money-laundering is very big business,” he says. “There is absolutely no domestic political interest to rock the boat.”