Are Local Commercial Banks and CBL Engaged in Money Laundering?

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It would appear that the “hala hala” provoked by the alleged disappearance of billions of Liberian dollar banknotes would not go away anytime soon. Investigations conducted by this newspaper have raised questions to which answers may not be forth coming, probably not at all. The key question which now arises is whether local commercial banks as well as the Central Bank of Liberia (CBL) are involved in money laundering activities. Claims by Finance Minister Tweah that the alleged disappeared money was actually infused in the Liberian economy says virtually nothing more beyond bare denials that any money has gone missing. The Daily Observer has repeatedly requested evidence of how that money was infused in the economy, but such information has not been forthcoming.

This newspaper for example has sought and seeks to know whether there is a paper trail showing how much in newly printed banknotes was deposited in the CBL’s vault in 2018, the date it was deposited, which banks and forex bureaux received said money from the CBL for infusion in the economy and, of course, concern is also about the US$25 million allegedly infused since Governor Patray assumed office. These concerns aside, this newspaper is greatly troubled by facts showing that to raise money, the Liberian Government has been selling bonds and treasury bills to the public.

In 2018 the CBL realized an amount of L$6 billion from the sale of securities and bonds according to the Bank’s own records. Now, that amount divided by the current official exchange rate of 150, yields an amount equivalent to 40 million US dollars. From all indications the transaction appeared not to have been recorded on the CBL’s records and this newspaper demands to know why. This newspaper also demands to know who were the buyers/purchasers of the securities and bonds sold by the Central Bank of Liberia?

Were the buyers the local commercial banks or some obscure entities who prefer to remain anonymous? Assuming, argumentum the buyers were indeed the local commercial banks we can rightly infer that local commercial banks are engaged in money laundering activities in concert with government officials or with government itself. We hold this argument relying on the strength of IMF reports that local banks were not willing to honor government’s financial instruments including loan proposals and debts from government’s contractors because government was and has been delinquent in meeting its obligations.

So, if government is selling securities to local commercial banks because it has a critical and urgent need for cash, why were the commercial banks refusing to accept Government of Liberia financial instruments? This is indeed contradictory and needs some explanation. Else, how then can the CBL be expected to enforce anti money laundering policies? Such questionable transactions which appear indistinguishable from and analogous to money laundering could very well open the door to inflows of funds from terrorist related sources. And we do not need to remind government of the implications and the unforeseen consequences they portend.

As it appears, this “Pro Poor” government is treading right in the footsteps of its predecessor even as it continues to excoriate the Sirleaf government for a host of ills including alleged culpability in the disappearance of billions of newly printed Liberian dollar banknotes. Under President Sirleaf, a dangerous precedent of the Central Bank deliberately not recording receipts of cash transactions was begun and this had to do with the sale of securities. Given the above, this newspaper would like to know what the role of the Board of Governors in such matters was.

Did the Board of Governors ever question why cash receipts were not being officially recorded as revenue and did the Board take any steps to correct these missteps on the part of the CBL? It can be recalled that Liberia, under the rule of jailed former Liberian President Charles Taylor, was often described as “Charles Taylor Incorporated. This was because rather than rebuilding legitimate state institutions, he instead embarked on a program of bastardization of legitimate state institutions and transforming them into instruments of personal control. His “White Flower” mansion and residence became the virtual depository of the Central Bank.

And this was the case of virtually every other state institution under Taylor’s reign. During his reign, Liberia became a pariah state and hub for the export of armed violence including fighters, arms trafficking and money laundering in the sub-region. This situation of course drew the attention of the international community to the point where their unaddressed concerns invited sanctions on the regime of Charles Taylor. There are growing concerns nowadays that the country is becoming a haven for money laundering activities as suggested by the unexplained but alleged disappearance of billions of Liberian dollar banknotes under the watch of the CDC led government.

Deliberately choosing to not officially record cash receipts as revenue is troubling and must be stopped. Also, the leadership of the Central Bank of Liberia, including members of its Board of Directors, must be reminded of their responsibility under the law which compels them to act to prevent the institution from incurring loss and or indulging in criminal behavior. Anything short of this is completely unacceptable and President Weah, at whose feet the buck stops, must act to end it lest he be accused of collusion with others in criminal activities, particularly money laundering. And President Weah must realize that he does not have the luxury of time to address himself to these issues.

14 COMMENTS

  1. Hey Junior Stewart, can YOU tell me who in their right mind are using their hard earned money to buy Liberian government bonds (t-bills)? Avowed socialists? Or Liberians at gun point??

    Under our military government, Master Sargeant Doe and his Planning and Economic Minister, Dr. Togba Nah Tipoteh extorted millions and millions of US dollars from hard working Liberians at gun point !!!.

    Under a “Saving Bond” scheme, hard working Liberians like me were forced to purchase government I.O.U notes (bonds) with sunny promises of paying me back the face value plus interest!! The face value (without interest) of my Saving Bond in 1981 or 1982 (I can’t remember the year) was US$1,500. Thirty year later, the Liberian government have yet to honor these “saving bonds” from us (involuntary buyers)!

    I for one will never purchase another Liberian Government Bond even at gun point! And would advice others to do the same.

  2. Mr. Martin Scott,
    Why are you changing such an important issue to one of your usual debates of socialism versus capitalism?
    On your assertion that our big brother, Dr. Tipoteh was President Doe’s adviser on instituting the social security program, please check your facts.
    I think brother Stewart raised two important issues that you, a financial analyst, should be helping the Liberian people to understand the financial transactions.
    For example, if the commercial banks did not honor other government’s financial requests, including lending monies to contractors performing services for the government, why on the hand the same banks are lending monies to the government by purchasing bonds and, bills?
    Most importantly, why the Central Bank is not recording the receipts of monies and the related liabilities?
    Please give your recommendations pertaining to the issues of commercial banks purchasing bonds, and the Central Bank is not documenting the financial transactions.
    Thanks.

  3. Hey Comrade J. Nikita Zaza, what facts do I need to check? Isn’t it a fact that your big brother (Tipoteh) was the brain behind the National Savings Bond scheme? Isn’t it a fact that Tipoteh went on the air (radio) to announce the government IMPOSED extortion scheme (national savings bond) on hard working Liberians? Where the hell were you? Chasing Lorma women in Lofa?? Please tell me where my facts are incorrect.

    Regarding commercial banks, is it ILLEGAL for them to purchase worthless government bonds?? Or is the CBL using its police power to FORCE commercial banks to buy worthless government bonds? If your answer is no to both questions, why are you worrying about their business decisions (to buy worthless government bonds or not lend money to contractors performing services for the government)??

    By the way, have you read your big brother (Tipoteh) tribute to “Karl Marx @200”? Check out theperspective.org

  4. For your information Martin Scott, I also paid into the National Savings Bond Scheme and not Dr. Tipoteh’s Savings Bond Scheme, howbeit he served as Planning Minister at the time of its introduction and even granted he was the originator of the idea as you claim.

    Certificates for those bonds were issued in the name of the Republic of Liberia and to date it remains a GOL obligation although it is suspected to have been removed from the books as a liability.

    The point which you seem to miss is what you rhetorically asked. Individuals or Institutions buying those “worthless” bonds may not be of sound minds so the question is what is the motive for doing so? The facts show that bonds have been sold and without questioning the motives of the buyers, we must however question the motives of CBL officials for not recording such transactions officially on the books?

    Perhaps the alleged disappearance of such amounts of cash as well as the unaccounted for sale of bonds mean little or nothing to you sitting from your comfort zone in the US and completely divorced from the harsh realities on the ground.

    That to me is why you tend to treat such pressing national concerns with such trivia. Which Liberian in his right mind, counter posing your question, will treat such issues in such flippant manner?

  5. Hey Junior Stewart, how do YOU know that “in 2018 the CBL realized an amount of L$6 billion from the sale of securities and bonds” but did NOT record the sale on its books? Have YOU seen their (CBL) LATEST financial statement? Also, what KIND of securities and bonds did they sell?? Worthless T-bills and bonds issued by the Government of Liberia?? Please enlighten me.

  6. Martin Scott, let me remind you as the good Christian I know, about the story of Lazarus who Christ rose from the dead. Following Lazarus’ death, his relatives, according to custom, wrapped his body in layers of linen.

    When Christ arrived at his home, according to Scriptures, he commanded that the relatives unwrap the body themselves rather than have him (Christ) do it on their behalf. Only after, did he raise Lazarus from the dead.

    In short, Martin, if you want or seek enlightenment or seek to be awaken to the truth, you, as a financial analyst should first do your research by scrutinizing the CBL’s own records and tell me what you find. Only after doing this, will it be possible to receive the enlightenment you truly seek.

  7. Martin Scott,
    The audited financial statements for 2016 and 2017 do not show any recording of treasury bonds and, or treasury bills the Central Bank of Liberia sold in those two years. Without the 2018 audited financial statements, do you believe that the Central Bank did record money it received for stabilizing the economy? Also, the Central Bank of Liberia did not disclose any information about the L$16B printed in 2016 and 2017. Sir, someone can rely on previous actions and, or inactions to predict. So, until the Central Bank of Liberia can provide evidence that it has changed its approach and it has begun to record financial information, I agree with the writer’s statement that CBL did not record the sale of L$6 bonds sold in 2018.

  8. Comrade J. Nikita Zaza, are you implying that the CBL SOLD government T-bills and T-bonds in 2016 and 2017, but did NOT record the sale on their AUDITED financial statement (balance sheet)? How do YOU know?? Are you PRIVY to insider information? If so, who’s your source?? Also can you tell me how much money did the CBL ” received for stabilizing the economy”? And where did it come from??

    Until YOU, the accuser, provide proof that the CBL sold GOL T-bills and T-bonds, I don’t believe a damn thing you’re saying.

    By the way, is the CBL required to disclose, on its balance sheet. “any information about the L$16B printed in 2016 and 2017”, sitting in a “missing container”???

  9. Read the CBL’s audited financial statements since it appears you have not done. It is indeed difficult to understand a layman like me can make such observations while you the financial expert claim not to see except of course you are mischief making.

    This forum is intended for serious debate on issues of grave concern to our country. And to tell you the truth you are doing a disservice to your country by trivializing the issues by, for example placing derisive labels on names of people and questioning the right of Liberians to access accurate information about state entities and institutions.

    Why should the CBL not be required, as a public institution to provide the public , through annual and other reports, information about its operations? Pray tell me then what is Transparency all about?

    Lest I forget, you question whether the CBL did infuse money to stabilize the economy. The answer is Yes and since you demand to know how such information came by, let me inform you that the CBL under Governor Patray publicly announced it was infusing 25m USD to stabilize the economy. Had you accessed the CBL’s website you would have found this information and perhaps more.

    But when you fail to do yourself some measure of due diligence on national issues and begin to attack personalities rather than the issues, casting aspersions, trivializing the issues or attributing unworthy motives to those raising issues of probity and transparency, what do you leave the public to conclude- that because when it is from Saint Martin, it’s gotta be Good-far better than Sethi ehn?

  10. Mr. Martin Scott,
    I have provided my review of the Central Bank of Liberia audited financial statements of 2016 and 2017. Also, I attached links to CBL audited financial statements of 2016 and 2017 and CBL annual reports of 2016 and 2017. More so, I included the CBL schedule showing the cash it received from the sale of treasury bonds and treasury bills sold from 2014 through 2018.

    Your review should show to you that CBL did not record any information about the L$16B and, or information about the cash it received from the sale of securities. Most importantly, the external audit firms (PWC and KPMG) did not provide any information about the financial transactions of CBL receiving L$16b for the government of Liberia. Also, the external firms did not mention any information that CBL sold securities in 2016 and 2017, yet the two external audit firms expressed unqualified Opinions.

  11. Hey Comrade J. Nikita Zaza, what YOU failed to understand is that, there’s a HUGEEEe difference between a GOL (government of Liberia) SELLING Treasury Bond and a CBL (central bank of Liberia) SELLING Treasury Bill or bond. The schedule you included says “Gol Treasury Bond (2014 to Present)”. That means that those bonds were issued by the GOVERNMENT of Liberia, and not the Central Bank of Liberia, as you want us to believe.

    Look. When the GOL issued bond and sell bills or bonds, it should be recorded on its (Gol) books. In order words, the issuance and SALE of the “Gol Treasury Bond (2014 to Present” should be recorded on the government books (Ministry of finance), not on the CBL Books (balance sheet)!!! For example, in 2013, when the CBL SOLD and redeem its T-bills to commercial banks, it was recorded on their Financial Statements. See the CBL Financial Statement (statement of cash flow-investing activities) Also see the “CBL Treasury Bill (2013-2015)” schedule. There’s none for 2016 and 2017.

    So, if the CBL did NOT issue or sell any securities in 2016 and 2017, why should their external auditors mentioned it unqualified Opinions??

    By the way, how do YOU know the CBL received L$16B, and not LB$9B or L$5B??

  12. Mr. Martin Scott,
    The Central Bank of Liberia is the custodian of all monies of the Republic of Liberia. More so, the Central Bank of Liberia sold these securities and not the Finance Minister of Liberia.
    Please visit the Central Bank of Liberia 2017/19 Economic Anslysis and you shall find the information about the sales of securities by the Central Bank.

  13. Comrade J. Nikita Zaza, I am NOT talking about the fact that “Central Bank of Liberia is the custodian of all monies of the Republic of Liberia.” What I am talking about is the DIFFERENCE between the “Government of Liberia (GOL) Treasury Bill (2013 to Present)” VERSUS “Central Bank of Liberia (CBL) Treasury Bill 2013 to 2015”

    If you say that “Central Bank of Liberia sold these securities and not the Finance Minister of Liberia (Ministry of Finance)”, can you tell me when (what year) were they (CBL) BOUGHT them??? I want to go to the CBL Financials and see them (the purchases) with my own 2 eyes!! Also, where can I find your “Central Bank of Liberia 2017/19 Economic Analysis”??

  14. Clarification: 2nd paragraph…”If you say that “Central Bank of Liberia sold these securities (GOL T-bills) and not the Finance Minister of Liberia (Ministry of Finance)”, can you tell me when (what year) were they (GOL T-bills) BOUGHT by the CBL???”

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