Hunt for Liberia’s missing billions uphill task for investigators

How much money did Charles G. Taylor, the deposed president of Liberia, siphon out of his destitute, war-shattered country, and where is it?

For almost seven years, since an international warrant was issued for his arrest, the search has stretched from the mangrove swamps and diamond fields of West Africa to Swiss banks and shell corporations — a state-of-the-art version of the sweeping asset hunts that have accompanied the fall of autocrats since the shah of Iran’s demise in the 1970s.

Investigators have crawled in the dirt under porches and buildings in this impoverished capital to seek out financial records.

They have confronted bankers and government officials on four continents.

They have cross-referenced mazes of documents charting the transfer of millions of dollars into and out of dozens of accounts.

But they have come up dry for any money in Mr Taylor’s name.

In fact, four years ago, Mr Taylor was classified as “partially indigent” by the Special Court for Sierra Leone at The Hague, where he is charged with instigating murder, mutilation, rape and sexual slavery during intertwined wars in Liberia and Sierra Leone that claimed more than 250,000 victims from 1989 to 2003.

That has left donor nations — the United States being the largest — to cover his monthly $100,000 legal bill and the broader costs of his $20 million trial.

But the investigators push on, and a review by the International Herald Tribune of court transcripts, bank records, and newly available government receipts and confidential prosecution memos indicates why they are reluctant to give up the hunt.

Some of the records show how the country’s largest timber company sent tax payments to Mr Taylor’s private account rather than the national treasury.

Others trace huge payments made by the dominant cellphone company to people suspected of being Taylor cronies.

Others depict a web of front companies and banks from Hong Kong to New York involved in the movement of millions of dollars into Mr Taylor’s accounts in Liberia.

“Money would go to an arms dealer or an ally and from there to a money management firm and then back to Liberia, then cashed out and moved to another bank account,” said Thomas R. Creal, an accountant from Chicago who for five years has led the search for the United Nations.

Retained by Liberia, he and three law firms are developing a new strategy involving filing civil damage claims against companies, governments and international banks that they contend aided Mr Taylor in illegal transactions.

The goal, after investigators have succeeded in freezing only about $8 million held by Taylor relatives and associates, is to win judgments for Liberia even if Taylor accounts cannot be found.

The estimates of hidden wealth — believed to have been extracted from Liberia’s timber and diamond trades, its international merchant shipping registry, tax coffers and the government of Taiwan — run from as high as $3 billion to a middling range of $280 million. Mr Taylor’s own estimate is zero.

Last year, the flamboyant former warlord taunted prosecutors in court, dismissing the financial investigations as efforts to demonise him.

“I challenge any human being or organisation in this world — I mean this planet — to bring one bank account that Charles Taylor has money in,” he said. “I have heard the prosecutor blatantly lie, saying, ‘We found millions.’ Bring the millions here.”

Stephen Rapp, the US ambassador at large for war crimes and a former chief prosecutor on the case, said the hunt could continue for years.

“You will never find an account listed under Charles Taylor,” he said. “In all of these asset recovery cases of former leaders who have been accused of corruption or worse, it has taken a long time to achieve recovery. So this is not going to end.” In the banking world, investigators call high-profile targets, like deposed heads of state or military officials, P.E.P.’s — “politically exposed persons.” Financially speaking, Mr Taylor is one of the most elusive.

The list has included Slobodan Milosevic of Yugoslavia, Ferdinand Marcos of the Philippines and Sani Abacha, the Nigerian military dictator who pocketed as much as $5 billion through front companies and Swiss bank accounts, Swiss investigators say.

Since 1999, the Nigerian government has recovered more than $700 million with Switzerland’s assistance.

The Taylor hunt has gone on as he has been imprisoned for four years in a Dutch detention — a long way down from when he ruled with a showman’s flair, dressing in traditional African robes, cream safari suits or white vestments at a mass “Liberia for Jesus” prayer rally in 2002.

Mr Taylor, who favours pinstripe suits in court and is a recent convert to Judaism, vehemently dismisses the criminal charges as based on “lies.”

The grisliest accusations came from an admitted former death squad commander, Joseph Marzah, known as Zigzag, who described orders from Mr Taylor to engage in cannibalism and ritualistic eating of enemies.

UN peacekeepers in Sierra Leone were also targets, he testified, saying Mr Taylor urged his fighters to eat “them as pork.”

Financial suspicions about him go back to 1983, when he was fired for embezzling nearly a million dollars while a government administrator.

As a renegade warlord in the ’90s, he controlled diamond-rich regions, timber concessions, rubber plantations and iron ore deposits.

As president, he directed large timber companies to wire as much as $2 million of their taxes to a personal account with the Liberian Bank for Development and Investment, according to Liberian bank records.

His defence is that the money did not go to him personally but to buying black-market weapons to thwart a UN weapons embargo aimed at quelling his brutal wars with insurgent warlords and, through other warlords, Sierra Leone.

Liberian legislators, said Mr Taylor’s family spokesman, Sando Johnson, authorised Mr Taylor “to put money into a special account to fight the war.”

In court testimony, Mr Taylor said bluntly, “The country is at war. This is our remedy.”

He holds an asset any P.E.P. would envy.

“He has a very common name,” said Daniel Thelesklaf, director of the International Centre for Asset Recovery in Switzerland. “One English bank made a search of his name and found about 16,000 hits. It’s really like finding the needle in the haystack.”

One place Mr Taylor used his name was at the Liberian Bank for Development and Investment in Monrovia.

From 2000 to 2003, when his presidential salary was $24,000, records obtained by Mr Creal show more than $24 million moving into and out of the account, passed from foreign banks, with Citibank in New York acting as the clearinghouse and processing the transfers.

Most of the money came from the government of Taiwan — more than $20 million in eight payments made while it was jockeying to maintain Liberia’s diplomatic recognition against fierce competition from China.

In a statement, the Taiwan Foreign Ministry said that the money was earmarked for Aids medicine, a children’s centre, vocational training and charity contributions.

In court, though, Mr Taylor said the funds covered military salaries, Balkan arms deals and the airlift of wounded bombing victims.

Michel Lu, a Taiwan diplomat, said in an interview that his government offered “deep regret” for a “humiliating” turn of events.

He said that, internationally isolated, it was under tremendous pressure from Mr Taylor, who “threatened to cut off relations,” and that it had since discarded cheque book-style diplomacy.

Citibank, which has been criticised for its role in the clearinghouse transactions involving Liberia, has defended its activities.

The bank “fully complied with all applicable laws and US and international best practices in place at the time,” said a bank spokesman, Adam Castellani.

He said the bank, which processes thousands of transfers daily, “works continually to strengthen its own correspondent banking due diligence processes.”

What happened to the money is not clear.

By the time of Mr Taylor’s indictment in 2003, his Liberian bank accounts were largely drained, sometimes with groups of men taking out as much as $1.3 million in cash in a single withdrawal, Mr Creal said.

“Frankly speaking,” said Mr Lu of Taiwan, “nobody can tell you where it went.”

UN investigators said they believed that Mr Taylor also extracted money from companies that operated in Liberia and needed his good will.

Secret owner

They have pressed in Liberian courts for information about the entwined companies PLC Investments and Lonestar Communications, suspecting they could be a continuing source of income for Mr Taylor.

Lonestar, the nation’s leading cellphone company, was essentially a monopoly for four years, controlled by two Taylor financial advisers through PLC, a holding company, a UN report says.

They sold 60 per cent of Lonestar to a Lebanese group, Investcom, which in turn was acquired by a South African cellphone company, MTN Group, in 2006.

Mr Taylor’s former vice president, Moses Blah, and other former ministers testified before the government’s Truth and Reconciliation Commission that Mr Taylor became a secret part owner in Lonestar and granted it an exclusive licence to run a mobile network, dismissing officials who urged an open market.

Since then, Mr Creal has found records of huge Lonestar cheques issued to junior employees whom he suspects were allies of Mr Taylor.

Low-level PLC employees who earned less than $5,000 a year received enormous cheques in 2007 and 2008, a UN report says.

One of them, who earned about $1,800 yearly, received checks for $1.22 million. Others received more than $2 million in cheques until 2008.

A search warrant turned up bank statements that showed cheques deposited by the employees in another Liberian bank, Ecobank, and the money being drawn out immediately in cash.

In an e-mail message, Frans Joubert, chief executive of Lonestar, said, “Lonestar cannot comment on issues regarding shareholders and shareholding companies.”

Mr Taylor’s spokesman, Mr Johnson, asserted there was no hidden Lonestar investment. “Complete foolishness,” he said.

This year, the impoverished Liberian government retained Mr Creal and other legal advisers on a contingency basis to explore civil suits against more than a score of companies and banks, on the premise that they were “aiders and abettors” who helped Mr Taylor move money illegally or without following banking regulations.

Offshore accounts

The strategy is, in part, an acknowledgement that they may never find money attached to Mr Taylor himself, which many of them believe is hidden in offshore accounts outside their grasp.

Mr. Taylor’s trial, in its second year, is slowly proceeding toward a verdict. He faces an unspecified sentence in a British prison if convicted.

Liberia’s president, Ellen Johnson Sirleaf, a Taylor supporter-turned-harsh-critic, said that recovering money will be hard.

“Mr Taylor ran this country like it was his personal fiefdom,” she said in an interview. “Resources were given to people in a manner that pleased him, and there were no systems or institutions.”