Drugs and Money-Laundering

While experience sadly shows high-profile drug-related cases to despairingly drag or dwindle out, can we hope the investigative agencies are able and encouraged to probe fully the latest affair?

By Jan Arden

Without prejudice to any suspect party in the recent highly mediatised catch in the North of the biggest consignment of heroin and cannabis, to the tune of about 300 kgs and a reported market value of some Rs 3.5 billion, we have read with some amazement in the press and through the ICAC attachment order, how a relative newcomer to high-sea fishing with annual operating losses for the past few years, has risen from rags to riches which are yet to be fully valued : some 8 fishing vessels, several fast boats, a fleet of luxury cars, pieces of prime real estate and houses, not to mention entry into the horse-racing business, part of these assets having been acquired through a semi-extensive network of ‘prête-noms’. If the question is flagged here, it is because it raises several questions about which we may expect to know more as the enquiry progresses.

First, about the identities of the « financial barons » who had the reserves, which must have been consequential, for such a massive deadly order through this sea-borne channel. Will the question elude the combined investigative powers of our three agencies and their associates, such as the National Security Services, the Gambling Regulatory Authority or the Financial Intelligence Unit at a time when the country is under the radar of the IMF/FATF for its investigative capacities in complex money-laundering and drug-related scams?

Second, it would not be beyond common sense of movie-goers to suss out that no drug overlord(s) would be naive enough to gamble some Rs 300-500 million in the biggest drug cargo so far, as a first-time operation. Which suggests at least some testing of this relatively new channel must have taken place, corroborating perhaps with the progressive acquisition of illicitly acquired wealth. This would weaken the case of our agencies being diligent and relentless trackers of big drug trafficking and the associated money-laundering at such visible scales through various means, ranging from property through casinos, gambling and gaming.

In any case, it is a disturbing thought that what is caught, through our own diligence or tip-offs, may be but the tip of an iceberg and that Mauritius is getting better known as a « plaque tournante » for drug and other illicit activities including money-laundering. The layman can only note that major recent high-profile drug catches, from the « tractopelle » affair, through the fast-boat beaching on reefs in the North, to the Dewdanee-Kistnah affair, are worryingly, either the result of tip-offs or accidental and that there were strong whiffs of political patronage in some cases at least.

In effect then, this case takes us back to the report known as the Lam Shan Leen report, which had already identified the drug entry points as being air or sea-borne, with vulnerable spots being the airport, the port and the threats posed by fishing vessels offloading drug packages several miles off our coastlines, to be picked up at convenient times by conniving speed-boat skippers and/or owners. The report had also highlighted the common money-laundering mechanisms we see evidenced today at the gambling and horse-racing levels, recommending a profound restructuring of the ADSU into a new structure.

Government for reasons of its own has preferred soldiering on with existing structures, including the ADSU and the GRA, and studiously avoided questions or investigations about political patronage from its own close ranks and circle of advisors. While experience sadly shows high-profile drug-related cases to despairingly drag or dwindle out, can we hope the investigative agencies are able and encouraged to probe fully the latest affair?

* * *

Slippery Pitch for Finance

Every Minister of Finance uses his best skills to prepare public opinion for difficult decisions that his upcoming national budget may include and occasionally mask or keep under wraps any pleasant surprises targeting some parts or the whole population. Last year, the fears and uncertainties around our collective first experience with the Covid-19 pandemic gave the Minister’s top-team (including the Bank of Mauritius Governor) leeway to freely dip their hands in our Central Bank reserves for an Rs 80 billion contribution towards an artificially balanced budget. Now that the IMF has rather imperiously slammed the door on any further use (or abuse) of this controversial device, pregnant with dangerous side-effects, the Ministry’s manoeuvring room has considerably narrowed.

This comes at a time when we may have dried up a variety of generous foreign assistance from traditional friendly sources, most notably India, China, the Middle East and EU countries, some used to promote high-profile or prestige projects with limited evidence of socio-economic usefulness. The atmosphere of buoyancy in public spending has not been helped by the massive levels of intolerable excesses revealed this year, as in previous years, by the Director of Audit, even if his checks into some major public purse expenditures were controversially but effectively curtailed through various means.

The atmosphere has been further vitiated by revelations of bamboozling contracts during the worst episodes of the pandemic, where more than one billion rupees were dished out without any records of decision-making being kept. High-profile judicial enquiries around suspicious deaths revealed other caches of highly questionable contracts to political agents and cronies. Were it not for the difficult circumstances for thousands of distressed families and the economic burden imposed on a tottering country, the reported stories would verge on a farce.

On the question of the pandemic, there were legitimate grounds for government to feel satisfied that by end 2020 the collective efforts of policies, health personnel and the population had met with reasonable success although there were dire warnings of a more infectious second wave elsewhere. They went unheeded as were calls for vaccine pre-ordering, leaving us largely unprepared when that second wave gate-crashed the island’s entry points.

It stands to reason that a physically isolated island with only two limited access points at the port and airport, with limited flights, strict entry point testing and effective quarantine procedures should have kept us out of harm’s way in 2021 or rapidly circumscribed any unwanted viral penetration. Whether imprévoyance of the authorities or the prospects of early vaccination made for a collective lowering of guards, transmitted from authorities to the wider public, remains a moot point.

Unfortunately, today we face the worst predictions of vaccine scarcity, the contagious cases are nearly double last year’s levels and Health authorities remain tight-lipped about incoming flights or passengers and the existing variants inside the country. Without going into recent allegations of tragic public health negligence and renal dialysis failures, the business operators, the SMEs, the population at large and our public finances have taken the public Health curved ball smack on, each month of delayed opening costing country finances some Rs 10 billion.

Not the sort of news the Minister of Finance would have wished for during 2021, even less at budget time. The pitch was slippery enough with negative perceptions around our financial, banking and offshore sectors as a whole and the continued negative listings by international agencies like the FATF/IMF and the EU and UK. After the IMF wry scolding, we wonder if a news item that technical defence of our case will be stewarded by the Governor of the BoM is designed to elicit confidence. Budget goodies may therefore be perfunctory and difficult fiscal and monetary policy decisions could be unavoidable.

It is in this tricky context that the Minister of Finance has to bat out, sketching necessary fundamental reforms and future paths for injecting hope into our avenues of economic development.

* Published in print edition on 18 May 2021

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