Lawyers, lobbyist in money-laundering report take the Fifth at hearing

A pair of lawyers and a lobbyist used their Fifth Amendment rights Thursday when called to a hearing before Congress on suspected money-laundering for allegedly corrupt African politicians and their relatives.

All three witnesses — Michael Berger, George Nagler and Jeffrey Birrell — said they could not answer questions because they could incriminate themselves and were excused by Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee on Investigations, who was holding the hearing.

Thursday’s hearing came after a 330 page-long report was released by the subcommittee detailing how African officials and their associates — who are suspected of becoming wealthy off bribery and other corruption — used their U.S. contacts to undermine anti-money laundering safeguards and transfer millions of dollars in and out of U.S. banks. Aides to Levin as well as to the panel’s ranking member, Sen. Tom Coburn (R-Okla.), worked on the report.

Under the 2001 Patriot Act and other subsequent measures, banks have to carefully monitor their business with the officials, known as “politically exposed persons,” or PEPs, but many other professions do not. That has left gaping loopholes for money-laundering into the United States, according to Levin and others.

For example, Nagler and Berger helped Teodoro Nguema Obiang Mangue, the son of Equatorial Guinea President Teodoro Nguema Obiang Mbasogo, set up shell companies to move funds for him in and out of the United States, says the report. Obiang, using American lawyers, real estate agents and escrow agents, ended moving more than $110 million in suspect funds here, buying a $30 million Malibu mansion and a $38.5 million Gulfstream jet along the way, according to the report.

Birrell helped the late Omar Bongo, who was president of Gabon, by accepting more than $18 million in wired funds to his company, the Grace Group, the report says. Birrell then used the money to buy Bongo six armored vehicles and six C-130 military cargo aircraft from Saudi Arabia, according to the report.

Pivoting off the report, Levin is calling for tougher restrictions to stop money laundering and not allow PEPs circumvent the system through other means.

“Stopping the flow of illegal money is critical, because foreign corruption damages civil society, undermines the rule of law, and threatens American security,” the Michigan senator said in his opening statement.

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