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Oil in Uganda: US Court denies bail for Sam Kutesa-linked Chinese investor

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A US federal judge days ago denied Patrick Ho Chi-ping’s push to drop most of bribery charges against him, another setback for the former Hong Kong minister’s legal battle.

The decision, handed down by New York Southern District judge Loretta Preska on Friday, means that Ho, detained in the US for eight months so far, will face all eight counts of bribery and money laundering at trial in November.

Ho was arrested in New York last November and later charged with offering US$2.9 million (HK$22.8 million) worth of bribes to government officials in Africa to advance oil and development rights in Uganda and Chad for Shanghai-based CEFC China Energy.

The accounts to which the money was sent were respectively designated to Ugandan foreign minister Sam Kutesa and former Senegalese foreign minister Cheikh Gadio.

He allegedly gave Kutesa US$500,000 (about Shs 1.9 trillion) to secure him oil contract for a Shanghai-based multibillion-dollar conglomerate that operates internationally in the energy and financial sectors.

Ho allegedly paid Sam Kutesa, the money via wires transmitted through New York to an account designated by Kutesa in Uganda. The bribe was paid on or about May 6, 2016, after Kutesa finished his term as president of the U.N. General Assembly, the complaint said.

Ho is alleged to have provided the Ugandan official with gifts and promises of future benefits, including offering to share the profits, the compliant further states. Prosecutors said the bribe was meant to secure business advantages for the energy company, which was not identified in court papers, and potential acquisition of a Ugandan bank.

He reportedly wanted Kutesa to connect the said energy company to the president of Uganda Yoweri Museveni and thereby assist the company to obtain lucrative opportunities in Uganda’s energy sector.

The complaint states that before ending his term at the UN, Kutesa traveled to China and appointed the Chairman of the said company as a special advisor to the President of the General Assembly.

He then obtained a promise that the energy company would provide a donation to support the re-election campaign of President Yoweri Museveni.

The Department of Justice said the NGO is based in Hong Kong and Virginia and holds “Special Consultative Status” with the United Nations Economic and Social Council. The Court was told that Ho headed an NGO funded by the energy company.

Angel M. Melendez, the head of New York’s Department of Homeland Security office, said Ho used his position as a consult to the U.N. Economic and Social Council to further the bribery schemes and offered millions of dollars in bribes disguised as charitable donations to gain business advantages.

Acting U.S. Attorney Joon H. Kim for the Southern District of New York said Ho’s alleged Ugandan scheme was hatched in the halls of the United Nations in New York, when the country’s current foreign minister served as the President of the U.N. General Assembly, and then continued unabated upon his return to Uganda.

Kutesa was elected President of the United Nations General Assembly’s 69th session in June 2014. Ho first met Kutesa on October 19 at the United Nations, months after he began his tenure at the UN General Assembly.

Ho’s legal challenge fails

After several unsuccessful attempts to get bail since his arrest, Ho stepped up his legal challenge against US prosecutors by applying to have six of the eight charges against him dropped, and almost all evidence against him discounted.

Preska also denied Rosenberg’s contention that remittances from an HSBC account in Hong Kong to a Mashreq Bank account in Dubai controlled by Gadio – via an HSBC account in the US and then a Mashreq account in the US – did not violate FCPA. In order to do so, the lawyer argued, the funds would have had to originate from a US-based account or have landed in a US-based account as the transactions’ final stage.

The judge ruled FCPA was violated when funds landed in the US HSBC account and when they were remitted from the US Mashreq account.

On the matter of the movement of money, the prosecution said: “All that matters for purposes of this statute is that the funds go from outside the United States to inside the United States, or vice versa, even if transported by hand-delivery.

“The manner of that movement of funds is irrelevant.”

Preska also batted down a motion by Edward Kim of Krieger Kim & Lewin LLP, another member of Ho’s team, to suppress evidence in the form of emails and text messages from the defendant’s electronic devices. Kim argued that such “non-testimonial evidence” is not admissible because law enforcement officials obtained them before reading Ho his Miranda rights.

In her ruling, Preska said the electronic communications were only reviewed after a search warrant was issued, adding that “there was probable cause to issue a search warrant”.

The officers who detained Ho requested the password for the iPad and cell phone he was carrying at the time only to put the devices in aeroplane mode “so they could not be wiped remotely”.

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