Yesterday we took a brief introductory look at ethically challenged hedge funder Daniel Och, who’s had more than his share of brushes with the law, both foreign and domestic. Some of the many legal actions against Och have been triggered by his transactions with iniquitous regimes – transactions that even his profit-hungry employees, investors, and shareholders found distasteful. Let’s start with Zimbabwe’s gangster president, Robert Mugabe. In 2008, while U.S. authorities, in the name of human rights, were striving to isolate Mugabe financially from the rest of the world, Och’s firm, Och-Ziff Capital Management, and a handful of equally venal confederates gave the dictator $100 million for platinum-mining rights. Shortly afterwards, Och provided 75% of the funding, or $150 million, for a Zimbabwean mining enterprise. The U.S. Treasury Department sanctioned one of Och-Ziff’s accomplices in these operations, while both the Department of Justice and Securities and Exchange Commission investigated Och-Ziff.
Several sources indicate that the money Och stuffed in Mugabe’s pockets enabled the despot, whose government had been bankrupt, to steal the 2008 Zimbabwean election – because he was able to use the cash “to buy votes and unleash a campaign of brutal repression in an election in which he [had previously] faced almost certain defeat.” One commentator described the deal this way: Och “raised $100M for Mugabe’s weapons and torture-chambers in exchange for a sweetheart deal on the country’s platinum mines.” Another source calls it “surprising that Och-Ziff was willing to finance the Zimbabwean loan despite the likelihood that Mugabe, whom Western governments opposed implacably, would use it to fuel repression.” People who know Och, however, weren’t surprised.
Then there’s Muammar Qaddafi, the late, unlamented leader of Libya, from whose sovereign-wealth fund Och accepted a $300 million investment – a breach of U.S. anti-bribery laws. Last December, it was reported that U.S. investigators were probing Och’s Libya deals, with a focus on “a multimillion-dollar payment…they believe was funneled in part to a friend of Col. Moammar Gadhafi’s son.”
Och has also been deeply involved with the not-so-democratic Democratic Republic of the Congo (DRC), investing in a mining scheme to the tune of some $234 million – a violation of the Foreign Corrupt Practices Act that brought subpoenas from both the SEC and the Department of Justice. Also, in collaboration with a shady offshore firm, Och-Ziff made a secret loan to Guinea that a former Guinean minister described as “a bribe” – which might put it, too, at odds with the Foreign Corrupt Practices Act. As of last August, Och-Ziff was under investigation for its deals with both Zimbabwe and the DRC, including allegations that it had deliberately and illegally tried to cover its dirty tracks. Indeed, it was reported in August that because of Och’s foreign-corruption issues, class-action lawyers were “circling…Och-Ziff Capital Management Group like a posse of Indian braves whooping around a wagon.”
Could anyone deserve a scalping more?