FBI probe into the Guptas could have extensive reach - TechCentral

FBI probe into the Guptas could have extensive reach

On Thursday morning, the Financial Times reported that the FBI had “opened an investigation into US links to South Africa’s Gupta family”. The FT noted that the “US probe has focused, in part, on Ashish and Amol Gupta, who are nephews of the South African-based brothers and are US citizens”.

While these two Gupta nephews may provide the link, partner at Herbert Smith Freehills, Peter Leon, believes the investigation is unlikely to begin and end with them.

“The important issue from a US perspective is whether any of the Guptas or their companies were involved in money laundering, which is treated as racketeering in the US,” he says. “As I understand US law, if any wire transfers are made using the US banking system, the US department of justice will have jurisdiction on all those involved.”

This means that the Gupta brothers who currently resident in South Africa are not immune from prosecution in the US.

“If they themselves are involved, they could fall within the scope of the investigation,” he says. “You can’t escape the long arm of the US department of justice. It is too strong, too efficient and too ferocious.”

The news of the FBI investigation was welcomed by Corruption Watch, which has been arguing for some time that international authorities should get involved in investigating the allegations around state capture. The organisation’s executive director, David Lewis, points out that there are definite indications in the Gupta e-mails that foreign entities may have been used to launder money.

“Corruption in this country has manifestly involved foreign bank accounts and companies registered elsewhere,” says Lewis. “It was just a matter of time before these enforcement agencies, which have laws that don’t allow their banks, currencies, or companies registered in their countries to be used for this purpose, started looking into it.

US jurisdiction

“Even though all of the originating acts of corruption may be have been perpetrated in South Africa, if there was a US-registered company involved, if there was a company with a listing in New York involved, if US currency was used to remit funds that were illegally acquired, then they are within US jurisdiction, regardless of who they are and whose citizens they are,” Lewis explains.

While the FBI’s investigation has been positively received by those wanting to see the state capture allegations thoroughly investigated, it also serves as something of an indictment on South Africa’s own law enforcement agencies.

“It means that the National Prosecuting Authority (NPA) is discredited in this process so far, frankly,” says Leon. “Unfortunately the NPA, which should be independent, impartial and prosecute without fear or favour, does none of those things because it appears in thrall to the current administration. Unfortunately this has a long tail. It can’t be entirely blamed on the Zuma administration, because the Mbeki and Motlanthe administrations got rid of the former head of the NPA, Vusi Pikoli as a result of the prosecution of Jackie Selebi. So the problem in fact started earlier on.

“But the good thing is that countries such as the US and the UK have very effective anti-corruption mechanisms if there is any jurisdictional link to them,” Leon adds.

Lewis agrees that the NPA has failed to live up to its responsibilities.

“The really distressing thing is that you would have expected an enquiry like this to originate in our own country and then to draw in foreign law enforcement agencies, whose own laws have been broken, to support us in enforcing our own laws,” Lewis says. “But they are not investigating in our country and that is a real problem.”

Political interference

According to Leon, the critical issue is that the head of the NPA is currently appointed by the president. Unfortunately this allows for political interference.

He compares the situation in South Africa to that of Brazil, where two former presidents and the current president are being investigated for corruption by a truly independent prosecuting authority.

“Since the return of democracy to Brazil at end of the 1980s, the federal prosecuting authority has been completely protected from political interference,” says Leon. “Unfortunately that is not the case here. So what you have in South Africa is a dependable head of the NPA who does not act independently. While we have an independent judiciary, if the NPA is not independent that creates a serious problem for the rule of law.”

This is why Corruption Watch has been actively trying to involve international law enforcement.

“We try to get international authorities involved because we recognise that our NPA and Hawks are unlikely to do this themselves,” says Lewis. “Unfortunately the state of those agencies is the most serious impediment the country faces in dealing with grand corruption.”

  • This article was originally published on Moneyweb and is used here with permission


  1. They got to start at the top and work down! All affiliated should be investigated. The Zombie primes his cadres and his cult to believe there is a Western conspiracy. SA turning into another African crime operated country.

  2. Why on earth do FBI need to investigate Guptas. They aren’t US citizen, they are doing their business in SA and not US or UK.

  3. mphafane.bosch on

    FBI do have the right to prosecute if their authorization, money or any other resource is used in illegal activity. But Hain on the first place didn’t had any right to send a letter to British Financial Authority on the matters of our country. State capture is out issue and FBI is not welcomed here.

  4. FBI should definitely not intervene in our matters. The letter sent by Hain is a revenge tool against Dlamini Zuma and Gupats are deliberately being dragged in the matter.

  5. FBI is investigating against Guptas so that they can prove them culprit with the fake reports of NPA and Hawks and can claim the R12 million stolen money to be belonged to US and it should be given back to US treasury instead of SA treasury.

  6. mphafane.bosch on

    The investigation is already going to cost too much and they will have another opportunity to loot the money of taxpayer’s.

  7. Who is going to pay them for the investigation? Do FBI will charge US for investigation on the matter of SA? What if the top officials that Hain said to had asked him to sent the letter to Britain have given them the money?

  8. West is long known for its shrewd nature too.. It would be worthwhile to see the cards of FBI

  9. FBI is an ace card used Rupert by backing Peter Hain and now our investigating teams are supporting it as well.

  10. West has always captured the countries and destroy it in the same way. First they send a business person to establish their business in a country and make corrupt leaders to change policies according to their interests. And when they failed to do so they captured the media but their propaganda didn’t worked through media as well so now they have sent FBI to instigate regime change.

  11. Now if you had just read the story before commenting, you would have found:
    “Even though all of the originating acts of corruption may be have been
    perpetrated in South Africa, if there was a US-registered company
    involved, if there was a company with a listing in New York involved, if
    US currency was used to remit funds that were illegally acquired, then
    they are within US jurisdiction, regardless of who they are and whose
    citizens they are,…”

  12. Well then the NPA should have investigated those “Western” companies also, no?

    How are things in your tweet farm today?

  13. Embrace our Banana Republic on

    Question 1: What did the “West” build?
    Question 2: What did the “West” destroy?

    Now ask yourself the following 2 questions:
    Question 1: What did the ANC build?
    Question 2: What did the ANC destroy?

    So here is a bit of self study: Weigh up the answers and decide for yourself if the “West” is the villians that corrupt African politicians make them out to be?

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