Three years after Biden administration officials tightened sanctions on a billionaire Israeli mining executive over his corrupt business practices in the Democratic Republic of Congo, they have reversed course, offering the executive a deal they hope will increase sanctions. Supplies of metals vital to electric vehicles.
The plan would allow executive Dan Gertler to sell his remaining shares in three large copper and cobalt mining operations in Congo.
Once Gertler sells his position, the Biden administration hopes that Western-leaning companies will be more willing to invest in Congo, perhaps making more cobalt supplies available to the United States as automakers race to increase domestic battery production.
But some State and Treasury officials strongly opposed the effort, saying Mr. Gertler should not be allowed to profit from the Biden administration’s deals. argued earlier Defrauded Congolese citizens of more than $1 billion in mining revenue.
Mr. Gertler, the son of one of Israel’s largest diamond dealers, began investing in Congo nearly three decades ago. He eventually became one of the Central African country’s largest mining rights holders and became the target of accusations that he enriched himself at the expense of the world’s poorest people.
Mr. Gertler did not respond to a request for comment through his attorney.However, Mr Gertler has long disputed corruption charges, arguing that his investments in Congo were above board and provided the country with billions in taxes and create thousands of jobs.
Those pushing for the settlement in the Biden administration see it as a solution to U.S. competitive disadvantages that will only grow as automakers continue to expand production of electric vehicles. This is also in line with the government’s policy stance of embracing alternative energy solutions to fossil fuels.
But it also shows that when efforts to hold individuals accountable for their actions conflict with the political and economic interests of nations, world leaders tend to acquiesce in compromises.
Currently, Chinese mining companies own or hold major stakes in most cobalt production bases in Congo. 76% produced Global metal supply last year.The last major U.S. mining company pulled out of Congo in 2020, as The electric vehicle revolution is on the rise.
Two senior Biden administration officials who were not authorized to speak publicly said they believed Western companies would continue to avoid investing in Congolese mining as long as Gertler remained involved, given ongoing concerns about corruption in the industry. There. They said the proposed deal would bring a “fresh start” to Congo and help the country’s broader fight against corruption.
But human rights activists have publicly questioned the plan.
“It seems absurd to relax sanctions now, giving Gertler a free pass to profit from ill-gotten gains,” said Anneke van Woudenbergis the executive director of RAID, a nonprofit that monitors mining deals in Congo and other countries. “The deal left Gertler rich, unscathed and irresponsible – with little regard for those who mattered most: the people of the Democratic Republic of Congo.”
The proposed deal comes as the Biden administration takes office Tariffs are being planned A range of Chinese imports, including electric vehicles and advanced batteries, are part of a recent wave of protectionism by Republicans and Democrats.
The State Department did not respond to a request for comment, but officials involved in the negotiations and on Capitol Hill confirmed to The New York Times that objections were raised within the department.
Now, according to senior Biden administration officials, Mr. Gertler’s lawyers have presented a “framework” over the past week that would allow him to make good on his kaben copper co., ltd. and mutanda mining corp.both primarily owned by Switzerland-based Glencore, and Metcole RTR,Right now Partially owned By the Government of Kazakhstan.
Mr Gertler no longer holds formal ownership of the Glencore mine; this The company acquired his stake in 2017, but he still receives royalties from the copper and cobalt production at these plants. Biden administration officials estimate that Mr. Gertler’s business entities currently earn about $110 million a year in royalties from Congo, even though he is subject to U.S. sanctions that prevent global banks from doing business with him and limit his ability to buy and sell business investments. .
These three mining operations Cobalt alone produces nearly 30% of the world’s cobalt, which is important for long-distance electric vehicles as it helps enable batteries to hold more charge.They are also the world’s main source of copper, a metal The demand is growing The AI revolution is driving the construction of new data centers filled with copper wires.
As a condition of allowing the asset sale, Mr. Gertler will be required to issue a detailed statement about any remaining assets in Congo, which will then be reviewed by independent auditors. Half of the proceeds from the asset sales will be held in escrow while the review is ongoing. Any remaining assets Gertler attempts to hide could be confiscated by the government there.
Mr. Gertler must quit too Lawsuits against human rights leaders In Congo who has criticized His role in the local mining industry, such as Jean Claude Mputu, spokesman for Not for Sale in the Congo, object to the deal.
Ultimately, under the plan, Mr. Gertler could obtain a “general license” from the United States that would broadly reopen international financial markets to him around the world. Officials have said sweeping sanctions could be reimposed if he is again accused of corruption.
Biden officials acknowledged that the deal was motivated by a desire to find stronger economic ties with Congo and aid for the country, which has been plagued by corrupt mining deals and abusive child labor in makeshift mines.
The Biden administration has pledged Help with finances this Expand rail network It will connect Congo and neighboring Zambia to Angola in the South Atlantic. Such ties could allow large mines in Congo and Zambia to supply battery manufacturing plants in the United States or allied countries more directly.
But so far, no major U.S. mining company has publicly disclosed plans to reinvest in Congo.
Amos Hochstein, President Biden’s adviser on energy security, has been the most active in pushing for an agreement with Gertler. Mr. Hochstein has also been working closely with other countries to expand access to African cobalt and copper mines for Western-leaning players.
“When we said we were going to the moon, no one knew ‘How are we going to get there?'” Mr Hochstein said in January When attending a mining industry event in Saudi Arabia Contains discussion with mining industry representatives from Congo. “We just said we would. We did it. This is how we achieve the energy transition.”
Two U.S. government officials involved in the negotiations objected to Hochstein’s role, suggesting he was trying to force others in the government’s foreign policy and human rights departments to bend to his will. But senior Biden administration officials noted that the White House has always played a coordinating role in major sanctions cases.
Questions have also been raised on Capitol Hill. “The Biden administration refuses to be transparent about the framework of any agreement on this issue or who will guide this policy,” Sen. Jim Reish, R-Idaho, said in a statement to The Times. “Key The question is: What prevents Gertler from explicitly returning to the Congo in the current or future administration?”
Gertler developed close ties with former President Laurent Kabila and his son Joseph Kabila, who became president after his father was killed, and for decades Gertler’s ties to Congo have been those with Washington. A source of tension.
Mr Gertler targeted for sanctions December 2017 – in the first year of the Trump administration – as the Treasury Department claimed Congo was “Opaque and corrupt mining and oil deals“Involves the billionaire who received the money at a discount due to his connections to the Kabila family.
Mr. Gertler began fighting back almost immediately.he hired a Legal and lobbying team include both at one time Alan Dershowitzformer Harvard Law Professor, and Louis J. Freeformer fbi director Appeals arrive directly Treasury Secretary Steven T. Mnuchin and others in the Trump administration.
Shortly before Trump left office, the Treasury Department Take action to ease sanctions Without public notice, Gertler argued to U.S. officials through his lawyers and associates in Israel that it served some “national security interest” to allow him to once again engage in global dealings.
By March 2021, the Biden administration Reimpose comprehensive sanctions,assertion Grant relief to Mr. Gertler used to be”inconsistent with the powerful foreign policy interests of the United States Fight corruption around the world. “
Mr. Gertler has always struggled. This time, he invited Congolese President Félix Tshisekedi, who wrote to Biden in 2022 urging the United States to lift sanctions.
“If foreign investors believe that sanctions are a dead end for the liquidation of their entities and the cessation of activities, then this anxiety will certainly lead to the disappearance of foreign direct investment in Congo.” Mr Tshisekedi wrote.
Last year, Mr. Gertler wrote an article series of letter He told Congolese, European and U.S. human rights leaders that the sanctions had had “serious consequences” and that he was prepared to sell remaining Congolese assets to lift the penalties.
“The essence of sanctions is not just punishment,” he writes in the book. one letter. “Similarly, for sanctions regimes to be effective, they should promote positive change.”
Rights groups said they had no objection to Mr Gertler disposing of his remaining financial stake in mines and other assets in Congo. But they said he should be forced to abandon them.
“There is substantial documentary evidence that Mr. Gertler engaged in corrupt activities in the Democratic Republic of Congo,” said Not for sale statement issued by Congo, the document was provided to the Biden administration to oppose the proposed deal. The group demanded that Mr. Gertler “not derive further financial benefit from the illegally obtained assets.”
But Biden administration officials say that expectation is unrealistic: Mr. Gertler already earns royalties and is unwilling to simply part with his investment.
