US company knowingly broke sanctions to do business with Mugabe

The subsidiary of an Ohio, United States, company knowingly bust US sanctions on President Robert Mugabe and his deputy by supplying them with packaging material and when asked to sign an undertaking not to break the financial sanctions the managing director said he would rather resign.

Tichafa Ndoro of Greif said he had been supplying Mugabe’s poultry and pig farms, Kutama Farms, with packaging material for 15 years.

Mugabe paid through cheques from his personal bank accounts.

Ndoro said the company no longer accepted cheques but Mugabe and his deputy Joseph Msika whom he supplied with similar packaging material were exceptions.

He said the head office in Ohio was aware of his business transactions.

Ndoro said the company had asked all managing directors of its foreign offices to sign a code of conduct, which among other things required the managing directors to abide by US sanctions, but he had not signed.

He had told his superiors that he would rather resign.

Full cable:

Viewing cable 06HARARE724, US SUBSIDIARY CONFESSES SANCTIONS SINS

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RR RUEHMR

DE RUEHSB #0724/01 1661732

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R 151732Z JUN 06

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 0222

INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

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RUEHAR/AMEMBASSY ACCRA 1085

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RUEATRS/DEPT OF TREASURY WASHDC

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RUFGNOA/HQ USEUCOM VAIHINGEN GE

RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK

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RUEHBS/USEU BRUSSELS

RUCNDT/USMISSION USUN NEW YORK 1455

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000724

SIPDIS

SIPDIS

AF/S FOR B. NEULING

SENIOR AFRICA DIRECTOR C. COURVILLE

STATE PASS TO OFAC

TREASURY FOR J. RALYEA AND B. CUSHMAN

COMMERCE FOR BECKY ERKUL

E.O. 12958: DECL: 06/14/2015

TAGS: PGOV KFPC PREL ZI

SUBJECT: US SUBSIDIARY CONFESSES SANCTIONS SINS

Classified By: Charge d’Affaires, a.i., Eric T. Schultz under Section 1

.4 b/d

——-

Summary

——-

¶1. (C) The Managing Director of the Zimbabwe branch of

Greif, an Ohio-based packaging company, told poloff on June

14 that his branch had been knowingly violating US financial

sanctions for several years by providing services to Robert

Mugabe and other specially designated nationals (SDNs).

Tichafa Ndoro said his head office in Ohio was aware of the

transactions. Confronted with the seriousness of these

apparent violations, Ndoro returned to the Embassy on June 15

with the company’s domestic financial officer and Zimbabwe

lawyer, who contended that Greif should not be subject to the

executive order. End Summary.

———————————-

Executive Comes Clean on Sanctions

———————————-

¶2. (C) A member of the American Business Association of

Zimbabwe (ABAZ), Ndoro telephoned poloff on June 13 initially

requesting that emboffs brief an American official from their

South Africa office, Rob Zimmermann, who plans to visit

Zimbabwe next week on an orientation tour. Recalling a

letter sent by the Embassy to all ABAZ member reminding them

of US financial sanctions, Ndoro also asked if he could meet

with poloff to learn more about the sanctions and possible

implication on Zimmerman’s trip. Poloff shared with Ndoro

that there were no sanctions against travel to Zimbabwe.

During this initial phone conversation, Ndoro told poloff

that he had recently received a check “from the office of the

vice president.” Poloff agreed to meet with him the next day.

¶3. (C) On June 14, Ndoro told poloff that his company has

been providing packaging material to one of Mugabe’s poultry

and pig farms, named Kutama Farms, for the past 15 years.

Ndoro remarked that he often stared in disbelief at the

checks, which were written from Mugabe’s personal bank

accounts. He also stated that Greif had recently received a

check from Vice President Joseph Msika for similar packaging

material. Although the company no longer accepted checks

from ordinary clients, Ndoro said that he made exceptions for

Mugabe and Msika.

¶4. (C) Poloff advised Ndoro of the financial sanctions

against Mugabe, Msika, and other high-ranking GOZ officials.

Ndoro responded that he was already aware of the executive

order. Seeking to justify his actions, he asked how his

company was supposed to turn down the President of Zimbabwe.

Moreover, other US companies involved in the agricultural

sector, such as Olivine and Pioneer Seed, were also violating

the sanctions. The executive even mentioned that some in his

office had suggested that the sanctioned individuals develop

ways to disguise their involvement.

———————————-

Notified Head Office of Violations

———————————-

¶5. (C) Ndoro told poloff that he had notified his head

office in Ohio that he was selling to SDNs. He did not

indicate what response if any response came from the U.S.

office. Ndoro stated that Greif headquarters had recently

HARARE 00000724 002 OF 002

asked all managing directors of its foreign offices to sign a

code of conduct, which among other things required the

managing directors to abide by U.S. sanctions. Ndoro was the

only executive not to sign the document, noting that he told

his superiors that he would sooner resign.

——————————————— —-

Arguing Against Sanctions’ Applicability to Greif

——————————————— —-

¶6. (C) A tighter-lipped Ndoro returned to the Embassy on

June 15 with the company’s Zimbabwe lawyer, Susan Brighton,

and finance manager, Herbert Pasipamire, to urge the

sanctions’ inapplicability to the Zimbabwe branch’s

activities. The group argued that the branch conducted its

operations entirely in Zimbabwe and was not considered a U.S.

company under Zimbabwean law. Moreover, they said most of

Greif’s stockholders were based in the Netherlands. (N.B.

Which also maintains financial sanctions against Mugabe and

his regime.) The trio said they would furnish more detailed

information on Greif’s corporate structure relevant to the

company’s domicile as it may pertain to sanctions.

¶7. (C) The group urged further that sanctions not be applied

in Greif’s case on policy grounds. They maintained that

barring the company’s business with sanctioned individuals

would lead either to reduced sales and layoffs and/or the

eventual take-over of the branch by ruling elite interests.

They feared a rash of law enforcement actions by GOZ

officials should they cut off sanctioned individuals,

followed by the possible incarceration of branch principals.

The damage to the company and its workforce would punish

“innocents” without appreciable impact on those targeted.

——-

Comment

——-

¶8. (C) We plan to develop more information on Greif and its

possible sanctions violations, and will report accordingly.

Given the local office’s very open posture and willingness to

share information, an approach to the company’s potentially

more cautious headquarters in Ohio at this time could prove

counter-productive. In the same vein, we can’t rule out that

knowledge of our interest in this case will get into the

public domain. However, we believe this could serve to

reinforce publicly our commitment to pressing and isolating

those targeted by the President’s executive order.

SCHULTZ

(58 VIEWS)