draining development.pdf - Khazar University

The Kleptocrat’s Portfolio Decisions 445equipment and the need to replace obsolete facilities. Delivery was specifiedto be within 30 days after the contract came into force. Payment wasto be made by means of a 20 percent down payment, 20 percent afterinspection by letter of credit, and 60 percent after delivery by letter ofcredit.An account was opened at ABN-AMRO in Basel, Switzerland, and asecond account was opened at KBC Bank Brugge in Bruges, Belgium.The latter was called BK (Betti Katumbi was the wife of Moses Katumbi,Soriano’s brother). The attorney general’s claim was for US$20 millionpaid into the ABN-AMRO account and the KBC account. This amountwas allegedly stolen from Zambia by virtue of the conspiracy.Despite the fact that Zambia was supposed to be the borrower underthe September agreement, the first down payment of US$10 million, alsopaid in September 1999, was paid by Zambia, not received by Zambia asthe borrower. It was credited to the ABN-AMRO account as advised bySoriano. Subsequent payments were made between December 1999 andNovember 2001. A total of US$2.8 million was transferred to the ABN-AMRO account, and US$17.5 million to the KBC account.Soriano had suggested that the purchase of the arms was related to aneed to defend Zambia from threats from Angola and the DemocraticRepublic of Congo. In these circumstances, the official concerned said hefelt compelled to sign the documents even though the facility agreementwas not beneficial to the government and the manner in which theagreement had been brought to him was not in accordance with properprocedures: a familiar story. In the event, no arms were purchased, andthe court was satisfied that the monies paid into the two accounts simplydissipated.All payments into the bank accounts originated from the MOF andwere authorized by Stella Chibanda. Soriano authorized onward paymentsfrom the accounts. In the judgment, Soriano was found liable forUS$20 million, plus US$1 million personally received by him. Chiluba,Chungu, Chibanda, and one other coconspirator were also found liablefor the US$20 million. The firms of solicitors were found liable for sumsactually received: US$1.3 million by Meer Case, and US$450,000 by CaseMalik. 32There have been press reports indicating that enforcement of thejudgments has run into serious difficulties, particularly in Zambia. On