Maputo — A New York jury on Monday acquitted Jean Boustani, a senior sales executive of the Abu Dhabi based Privinvest group, of all three charges he was facing in connection with the scandal of Mozambique's "hidden debts".
This term refers to the loans of over two billion US dollars that three fraudulent, security linked Mozambican companies - Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) - obtained from the banks Credit Suisse and VTB of Russia, based on illicit loan guarantees issued by the previous Mozambican government under the then President Armando Guebuza.
The American prosecutors could show, with a massive haul of intercepted emails and bank documentation, that at least 200 million dollars of the loan money was spent on bribes and kickbacks, and that Boustani was a key figure in this, paying off Credit Suisse bankers and Mozambican officials, including the then Finance Minister Manuel Chang.
Boustani made no attempt to deny the veracity of the documents - indeed, he helped the court decode them, since Privinvest used various acronyms and aliases for the Mozambican recipients of its money.
Thus the person referred to as "tres beijos" (three kisses) is Isaltina Lucas, former deputy finance minister, while NUY is Filipe Nyusi, then the presidential candidate of the ruling Frelimo Party, and now President of the Republic. Boustani said Privinvest paid two million dollars to Nyusi for his 2014 election campaign (though the FBI could only track one million). An additional four million supposedly went to Frelimo, again for the 2014 campaign.
Boustani accepted that payments had been made - but never used the term "bribe". He preferred to call them "fees".
But, as prosecuting attorney Hiral Mehta put it, "You can call them what you want. Success fees. Influence fees", he said. "They are bribes. You pay government officials in connection with projects that they're on? A CEO of the project you are working with? Or the guy signing the guarantees? It is bribes. Plain as day".
But Boustani did not face charges of bribery and corruption. The federal prosecutors charged him with conspiracy to commit money laundering, wire fraud and securities fraud.
One of the main planks in the defence case was that the crimes did not take place in the United States, and Boustani had never set foot in the US before. Therefore, he could not be guilty.
Three of the jurors, including the foreman, speaking on condition of anonymity, told the Bloomberg agency that they did not see how federal prosecutors in Brooklyn had the authority to prosecute crimes that had not occurred in their jurisdiction.
This was despite exhaustive explanations by the prosecution that Boustani did not have to be physically present in the United States to commit financial crimes under US law. It was enough for the conspirators to use elements of the US financial system (such as US corresponding banks).
The crime of wire fraud, prosecuting attorney Mehta explained, involves the use of international or intestate wires, including phone calls, e-mails and all forms of electronic communication. Boustani did not have to send the wires personally, he just had to cause them to be sent.
Similarly with securities fraud - Boustani had masterminded the issuing of the Ematum bonds (for a total of 850 million dollars). But he did not have to sell the bonds personally. Repeatedly US investors took the witness stand to testify that they purchased the bonds in New York, and said they would never have done so, if they had known about the bribes and kickbacks involved in the scheme. In the view of the prosecution, that was enough to convict Boustani of securities fraud.
The jurors seems to have paid less attention to other defence arguments. One was the claim that Mozambique is "a very corrupt country", and that anyone investing in the Proindicus or Ematum debt knew that. Defence lawyer Randall Jackson even alleged that Mozambique had told investors "we are a corrupt country, corruption should be assumed in any transaction you are going to engage in. Don't invest if that's going to be a problem for you".
Of course, no Mozambican government has ever made any such statement to potential investors.
The New York court has no choice but to release Boustani, since under the US system the prosecution cannot appeal, even against a manifestly perverse verdict.
But the court now has to sentence the three Credit Suisse bankers, Andrew Pearse, Detelvina Subeva, and Surjan Singh, who entered guilty pleas to conspiracy charges and admitted taking bribes from Boustani. Will they receive prison terms for taking the bribes, while the man who they said offered the bribes walks away scot free?
The US prosecutors must also decide whether to pursue the case against the others named in the indictment, particularly Manuel Chang, who has been under police custody in Johannesburg since 29 December 2018, fighting against extradition to the US.
On 1 November, the High Court in South Africa's Gauteng province rejected the decision by the former South African justice minister Michael Matsupha to extradite Chang back to Mozambique.
That opened the way to a possible decision to extradite Chang to the US - but the matter is now in the hands of Matsupha's successor, Ronald Lamola.
The US prosecutors to date have shown no sign that they are willing to drop the case against Chang. Putting Chang on trial in New York would involve a new jury not bound by the decision of the Boustani jury.
Chang would also be at a financial disadvantage. Boustani could call on the resources of Privinvest to pay for top ranking New York defence lawyers and to pay about 1.5 million dollars for expert witnesses. It is unlikely that such resources will be available to Chang.