While South Sudanese people are starving by the tens of thousands and war rages on, a small group of senior military officers have gotten rich. This brief from The Sentry presents the case of one influential general whose military strategies helped create the famine. This general’s case illustrates how the deliberate absence of the rule of law provides the potential for immense financial benefits for the leaders of South Sudan’s regime and how current incentives favor extreme violence and grand corruption over peace and good governance.
A recent U.N.-declared famine in South Sudan’s Unity state has left 100,000 people at immediate risk of dying of starvation.[i] All told, an estimated 7.5 million people in South Sudan—more than half the country’s population—urgently need assistance.[ii] The cause of this famine is not a mystery. Government and rebel forces have used specific tactics to produce mass displacement and famine in South Sudan, particularly through the massive cattle raids undertaken by government-backed forces, attacks on agricultural areas, and the seeding of intercommunal violence beyond clashes between government forces and armed opposition groups.[iii]
The names of the men who are responsible for planning and executing a brutal military campaign in Unity state in 2015—an offensive that laid the groundwork for the outbreak of the famine—are not secret. According to the U.N. Panel of Experts on South Sudan, the offensive was planned and executed by a group of senior military officials who were close to South Sudanese President Salva Kiir.[iv] Furthermore, while much of the country starves, some of these same military officers appear to have been getting rich. They profit from insider deals, move their fortunes through large international banks, and often use their children to keep their names off of company records. Many of these senior officials do not appear to conceal their fortunes from other insiders, as they often do business together and own homes close to one another outside South Sudan.[v]
Lt. Gen. Malek Reuben Riak is one of the senior generals that the U.N. panel has identified as responsible for the violence in Unity state that directly led to the famine. A close examination of his business activities helps illustrate the warped incentives that motivate senior military officials in South Sudan. Looking at this illustrative example of just a slice of corrupt economic activity by just one of the leading generals demonstrates how deeply the incentives favor violence and instability over peace and democratic governance.
Lt. Gen. Reuben Riak was promoted by President Kiir to Deputy Chief of Staff of the Sudan People’s Liberation Army (SPLA) in January 2013. Lt. Gen. Reuben Riak held that position—which involved a central role in weapons procurement for the national army—for the first several years of the civil war, until March 2016, when he became Deputy Chief of Staff of the SPLA for Training. On May 24, 2017, President Salva Kiir promoted Lt. Gen. Reuben Riak to Deputy Chief of Defense Staff and Inspector General of the army. According to South Sudan’s national budget, in 2014 and 2015, the salary for a general of this rank was approximately $40,000 per year, including a housing stipend.[vi]
But procuring weapons and planning brutal military offensives are only Lt. Gen. Reuben Riak’s day job.
As reported in War Crimes Shouldn’t Pay in September 2016, The Sentry has documents that show $3.03 million moving through Lt. Gen. Reuben Riak’s personal bank account—a U.S. dollar-denominated account at Kenya Commercial Bank (KCB)—between January 2012 and early 2016. Financial transactions reviewed by The Sentry and discussed in its September 2016 report showed millions of dollars passing through Lt. Gen. Reuben Riak’s personal bank account at KCB, including more than $700,000 in cash deposits and large payments from several international construction companies operating in South Sudan. These payments came from companies backed by Chinese, Lebanese, and Turkish investors. These include hundreds of thousands of dollars in payments and cash deposits into the account since the war in South Sudan began in December 2013. In that same period, over $1.16 million was withdrawn from Lt. Gen. Reuben Riak’s account, in his own name or as “cash.” Lt. Gen. Reuben Riak also has acquired stakes in numerous companies incorporated in South Sudan, including engineering and energy companies.[vii]
Information provided to The Sentry after publication of its September 2016 report provides more clarity about the nature and extent of Lt. Gen. Reuben Riak’s business operations in South Sudan and his links with multinational corporations, banks, and foreign politicians. This report uses this new information to take a closer look at Lt. Gen. Reuben Riak’s business activities. One important finding is that Lt. Gen. Reuben Riak controls a private business called Mak International Services that sells explosives to private companies operating in South Sudan—an arrangement that has been not only endorsed but also promoted on an exclusive basis by the military in which he holds a key leadership role.[viii] According to other documents reviewed by The Sentry, Lt. Gen Reuben Riak also sits, along with several other senior generals, on the board of a holding company that has joint ventures with foreign investors and appears to be active in South Sudan’s mining and construction sectors.[ix] This Sentry report also reviews documents detailing how Lt. Gen. Reuben Riak’s family members appear to be representing his interests on several commercial ventures, often alongside the family members of other senior government officials in South Sudan.[x] This report also examines documents that purport to show that Lt. Gen. Reuben Riak and members of his family jointly own businesses with members of the political elite in neighboring Ethiopia, Kenya, and Uganda.
The case of Lt. Gen. Reuben Riak illustrates a broader pattern in South Sudan in which powerful officials work closely together in a relatively small network and preside over the country’s violent kleptocratic system of government. They get rich while the rest of the country suffers the consequences of a brutal civil war and a horrific famine. Their business interests often intersect with one another and with those of officials in neighboring countries, undermining the credibility of diplomatic processes designed to promote peace and possibly compromising those involved in negotiations. Protecting this network’s position in power means continued access to rent-seeking opportunities as well as continued impunity for corruption and involvement in human rights abuses.
The case of Lt. Gen Reuben Riak does not just support the case that top South Sudanese officials are getting rich off of conflict. The case also illustrates the significant untapped leverage held by the international community vis-à-vis these officials. Documents reviewed by The Sentry indicate that Lt. Gen. Reuben Riak has used international banks to move millions of U.S. dollars and he conducts business with international investors.[xi] Foreign governments—especially the U.S. government—are in a position to curb his ability to access the international financial system. This is because virtually all transactions that are conducted in U.S. dollars pass through the U.S. financial system, even if only for a split second. As a result, the U.S. government has jurisdiction over these financial flows and, in turn, the ability to scrutinize and stop them. This report concludes by presenting how the U.S. and other governments can more effectively use the tools of financial pressure—namely sanctions and anti-money laundering provisions—to impose steep consequences on the top officials who are responsible for South Sudan’s horrific civil war and resultant famine. In this case, the United States should impose network sanctions (i.e., asset freezes targeting a network of individuals and entities, rather than a single person) on Lt. Gen. Reuben Riak and the companies he owns or controls.
[i] Integrated Food Security Phase Classification, “Localized famine and unprecedented levels of acute malnutrition in Greater Unity – almost 5 million people in need of urgent assistance,” February 20, 2017, available at http://www.ipcinfo.org/fileadmin/user_upload/ipcinfo/docs/1_IPC_Alert_6_SouthSudan_Crisis_Feb2017.pdf.
[ii] U.N. Office for the Coordination of Humanitarian Affairs (OCHA), “South Sudan: Humanitarian Snapshot April 2017,” available at http://reliefweb.int/sites/reliefweb.int/files/resources/170508_South_Sudan_Humanitarian_Snapshot_April_2017.pdf.
[iii] See, for example, George Clooney and John Prendergast, “South Sudan’s Government-Made Famine,” The Washington Post, March 9, 2017, available at https://www.washingtonpost.com/news/global-opinions/wp/2017/03/09/south-sudans-government-made-famine/?utm_term=.5f29b091777e.
[iv] U.N. Security Council, “Final report of the Panel of Experts in accordance with paragraph 18 (d) of resolution 2206 (2015),” S/2016/70, p. 19, January 26, 2016, available at http://www.un.org/ga/search/view_doc.asp?symbol=S/2016/70.
[v] This case is discussed in detail in The Sentry, “War Crimes Shouldn’t Pay: Stopping the looting and destruction in South Sudan” (Washington: September 2016), available at https://thesentry.org/reports/warcrimesshouldntpay/.
[vi] Government of South Sudan Ministry of Finance, Commerce, Investment & Economic Planning, “Approved Budget Tables Financial Year 2014/15,” August 2014, p. 36, “Security [forces]” table, available at http://grss-mof.org/wpcontent/uploads/2014/08/RSS-Approved-Budget-Book-2014-15.pdf. Some current and former South Sudanese government officials have told The Sentry that senior officials can find ways of supplementing their income through per diem payments and expense accounts. However, any such sources of income have not been accounted for in South Sudan’s national budget.
[vii] This case is discussed in detail in The Sentry, “War Crimes Shouldn’t Pay,” pp. 43-45.
[viii] Letter from Wu Kaibing (Chief Representative, China Wu Yi Engineering (S S) Co., Ltd.), October 18, 2016.
[ix] An October 20, 2010 resolution by the Board of Directors of Bright Star International Corporation Limited provides Gen. Malual Ayom with “special power of attorney” and authorizes him to form a joint venture with Double “A” Construction (SS) Co. Ltd. The document is signed by Oyay Deng Ajak, Bior Ajang Duot, James Hoth Mai, Pieng Deng Kuol, Malek Reuben Riak, and Salva Mathok Gengdit.
[x] Articles of Association for Eastern Mountain Ltd., March 6, 2012; Articles of Association for All Engineering, October 21, 2015; Jubilee Bank Company Ordinary Resolution No. 1 of 2013, May 27, 2013.
[xi] The Sentry, “War Crimes Shouldn’t Pay,” pp. 43-45