Pieces in the Jigsaw: Logging, money laundering and the DPM

Belden Namah

"I was a business man before I was an MP," Belden Namah, Deputy Prime Minister of PNG has often stated.  "I'm in the multi-billion dollar logging business."

And so he is. 

He's also an investor in luxury overseas properties, a big gambler and owns other unrelated overseas businesses and flies in private aircrafts.

If all of those things, spoken in the same sentence, don't ring any alarm bells…they ought to.

Logging

The World Bank, this week, released a press statement about illegal logging and its proceeds. It states that in some countries up to 90% of logging is illegal.

Some logging, though, is legal and is just another innocuous business enterprise, isn't it?

Well… not really.

It's been 25 years since there was a Commission of Inquiry into logging in PNG - the conclusions were damning and there's no evidence anything has changed. 

Carried out by Justice Thomas Barnett, the report found that the industry was "unpoliceable" and "beyond reform."

So damaging to the industry were the findings that they were never tabled in parliament and there is no copy of the report still extant in PNG.  The original documentation (to be used as evidence) was destroyed in a suspicious fire at the PNG Finance Department building around 1990.

Will such a Commission of Inquiry ever happen again in PNG?  Well not while the Minister for Forestry and Climate Change is himself a "Multi-billion-dollar logger."

The Barnett Report documented a corrupt practice called 'transfer pricing'.  Assets for sale, (logs) are undervalued at point of harvesting but sold for an inflated price at point of sale (overseas).  The difference is pocketed and the company avoids, tax, landowner royalties and other obligations. 

It could be why, according to DavidFedele's documentary Bikpela Bagarap thatlandowners in Saundaun, where he filmed and from where Namah logs, were lessthan happy with their lot and felt cheated. Barnett made his own similar findings. He talked of a …"disillusioned and bewildered people," and"…money 'leaking' from the trust accounts.'

For the multi-billion-dollar logging company the persistent problem with transfer pricing is how to account for all those ill-gotten gains?  

The company needs to make the money seem like it comes from legitimate sources - they need to 'launder' the money.

Money Laundering

The Barnett Report mentioned centres like Singapore and Hong Kong as places that were often used to store corrupt monies before they're cleaned up.  And, in spite of the publicity 'transfer pricing' gained from the report the practice purportedly continues unabated.

ON 22 NOVEMBER 2011, WHEN THE LOGGING, DEPUTY PRIME MINISTER OF PAPUA NEW GUINEA, MINISTER FOR FORESTRY AND CLIMATE CHANGE WAS SUPPOSED TO BE IN PARLIAMENT HE WAS FINISHING OFF HIS 'BUSINESS' IN SINGAPORE AND HONG KONG.

He returned to PNG on 23 November and was back in parliament on 24 November.

Just 5 days later, the incident with the Falcon Jet occurred.  It was on the way home from Malaysia - allegedly carrying a large amount of cash. 

Could this have been the culmination of the 'business' being attended to in Singapore and Hong Kong just the week before?  Just asking.

Apparently, on the Falcon Jet along withBoito, Basil, Namah and lawyer Bonny Nimai, were three Malaysians purported tobe the investors in the Bewani Palm Oil plantation in Namah's electorate.

It is interesting to note that a new report on money laundering compiled by Australian regulator AUSTRAC identified that smuggling cash across borders "…is a common [unsophisticated] money laundering method around the world."

It can't be that hard really if you have a private plane and your political status gives you a measure of protection, can it?

As for the Malaysians, I wonder which particular company they were from, as PNGBlogs has already posted an article that alleges that the same 'deal' had been done twice with two separate companies and, somewhere, $10 million dollars had gone missing.  Wherever that money has ended up, it will also need to be laundered.

Furthermore, the Special Agricultural Business Leases (SABLs) usually for Palm Oil plantations, are highly controversial and the subject of an inquiry.   

Blind Freddy knows that so many are just a back-door entrée into the "multi-billion dollar logging business." 

Nevertheless the Bewani Oil Palm Company was granted a 10-year tax holiday because they had to first clear the land (of trees).  Ha!  What're the chances that that's all they'll do?

But getting back to money laundering and the Falcon Jet, another named method to launder money was to use 'Professional's' -through lawyers' trust accounts, for example.  I could make the connection for you, dear reader, but I'm sure you're way ahead of me, and more than capable of making your own.  

Past sins - unrepented?

The past sins (alleged) of Namah keep coming back to haunt him, such as his escapade at the Star Casino last April, recently uncovered by Sydney Morning Herald that Namah's lawyers have categorically stated to be a case ofmistaken identity.

The trouble with that defence is that casinos in Australia have very rigid regulations to abide by.  In the high-rollers room where Namah was allegedly playing last April AUSTRAC has stated that:

" …in these rooms,…casinos closely monitor and track VIP and high-stakes gaming activity."

Why? Because casinos are one of the main vehicles for money laundering. 

Money can easily be passed off as legitimate winnings.  Authorities are aware of this.

David Chaikin, an academic at Sydney University and the author of a book titled Corruption and Money Laundering explained that money-laundering legislation was originally devised to attack the financially powerful and corrupt.  He further noted that it invariably led to those in political power.

However, when you have a high-profile player, such as a politician from a neighbouring country, politics tends to clash with law enforcement and good international relations start needing to be factored in. 

Chaikin also pointed out that Australian governments have historically tended to handle casinos with kid gloves as they were a significant source of revenue.

"There has been no real rigor in carrying out enforcement," he stated.

Under those circumstances it makes an overseas casino quite an attractive proposition to launder some ill-gotten gains, especially for a visiting politician. 

How much money did you take away with you last April, Mr Namah? 

Where is it now? 

Where did it come from in the first place? 

Just asking.

Luxury acquisitions.

Buying luxury items, such as real estate, is also a recognised method of money laundering according to AUSTRAC

AT THE END OF OCTOBER LAST YEAR NAMAH WAS ON THE GOLD COAST MEETING WITH REAL ESTATE AGENTS.

This is not new behaviour for the nowDeputy Prime Minister, for in 2009, he was in Samoa buying up $5 million ofproperties. 

While Namah's lawyers maintained that he was buying the Samoan properties for a business partner in Australia, the Samoa Observer told of how Namah and his"partner" viewed one property together. 

She liked it so much that they bought it on the spot, apparently.  This contradicts Namah's claim of a distant 'third party'.  And, although Namah threatened to sue the newspaper he never did. 

The editor responded to the threat and demand for an apology by saying "…we advise that the story…is factual, it is the truth, and it is in the public interest…we see there is nothing to apologise for."

Nevertheless, nothing came of the investigation into this property buying and its suspected links to money laundering.

Why not? The Samoan authorities certainly suspected money laundering.

Legitimate businesses

Still in Samoa, the same woman that hadloved one of the Samoan properties so much that Namah bought it, also partneredhim in a financing business 'Paradise Financing.'  By this time Mara Wilson Namah was known asBelden's 'Samoan wife'.

Laundering money through legitimate businesses can be effective.  Lending out the suspect dollars and getting repayments in clean money certainly would muddy the waters regarding the provenance of the capital.

Samoan authorities and international agencies had their suspicions. Their investigations were stymied at the PNG end apparently. 

What does the Leadership Code Commission of PNG say about all this?

Why is the Ombudsman's Commission silent? 

Is Belden Namah "above the law?"

With his recent substantial attack on the PNG judiciary, I guess the law is now what he says it is.

By Susan Merrell Via PNG Blogs