South Sudan oil money corruptly funds civil war, say reports

By MarketsAssociated Press

South Sudan's state-owned oil company has been "captured by predatory elites" and is being used to fund the country's civil war, including a government-aligned militia accused of human rights abuses, according reports by two investigative organizations.

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Millions of dollars in oil revenue are being funneled from Nile Petroleum into the nation's national security service, footing the bill for the war, now in its fifth year, says Global Witness, in a report released Tuesday.

More than $80 million was paid to South Sudanese politicians, military officials, government agencies, and companies owned by politicians and members of their families, according to The Sentry, an investigative group co-founded by George Clooney. The oil company made security-related payments from March 2014 until June 2015, according to The Sentry, which obtained a log of payments kept by the Ministry of Petroleum and Mining.

The United States calls the reports' findings deeply disturbing.

"Oil profits should be fueling the development of the country and not be corruptly used to buy arms to further destroy it. South Sudan's resources should be used to benefit the people of South Sudan and leaders have a duty to put the interests of their people above their own," Mark Weinberg, public affairs officer of the U.S. Embassy told The Associated Press.

Nile Petroleum is directly controlled by South Sudan's President Salva Kiir and his "inner circle," according to the Global Witness report, based on confidential documents and firsthand testimony.

Akol Koor, head of the internal security bureau and a member of Nile Petroleum's board of directors, has provided the militia with weapons paid for by funds from the oil monopoly, said the report.

Nile Petroleum denies funding any military activity and says the money is being used for community projects such as roads, schools and hospitals.

"We can't fund militia, it's not part of our job," said Yiey Puoch Lur, the company's public relations director. He suggested Global Witness had "forged" the documents.

South Sudan has Africa's third-largest oil reserves, with an estimated 3.5 billion barrels. Yet after five years of civil war, which has killed tens of thousands and displaced millions, the country is also in an economic crisis. Lawmakers have long accused government officials of using oil money for personal gain instead of helping the local population.

"The money's not being kept in the country," said a member of parliament, who spoke on condition of anonymity for fear of his safety. Government officials are embezzling oil revenues into offshore accounts, he said.

The United States, the European Union and the international community should counter South Sudan's "violent kleptocracy" by investigating top officials and imposing "network-focused sanctions," urged The Sentry.

J.R. Mailey, The Sentry's special investigations director, told AP that "cutting off top officials and their facilitators' access to banks and foreign currency is key to building the leverage needed to end the war."