Hassan Sheikh Mohamud, President of Somalia, addresses the 68th United Nations General Assembly at U.N. headquarters in New York

Hassan Sheikh Mohamud, President of Somalia, addresses the 68th United Nations General Assembly at U.N. headquarters in New York (POOL, / July 15, 2014)


VIENNA/NAIROBI (Reuters) - A United Nations panel that monitors compliance with U.N. sanctions on Somalia has accused the country's president, a former minister, and a U.S. law firm of conspiring to divert Somali assets recovered abroad, according to a new report.

    The Somalia and Eritrea Monitoring Group, an 8-person committee, disclosed the findings in a confidential report to the U.N. Security Council's Somalia/Eritrea sanctions committee. Reuters reviewed a copy of the 37-page document.

    The U.N. Monitoring Group said the information it has gathered so far "reflects exploitation of public authority for private interests and indicates at the minimum a conspiracy to divert the recovery of overseas assets in an irregular manner."

    Most of the overseas assets were frozen at the outset of the civil war in 1991 and include cash and gold held in banks during two decades of chaos and conflict in Somalia, as well as government properties on foreign soil.

What the monitors describe as a conspiracy involved the U.S.-based law firm Shulman Rogers, President Hassan Sheikh Mohamud and his office, former foreign minister Fawzia Yusuf H. Adam, as well as two other individuals whom the monitors said acted as liaisons between Shulman Rogers and Somalia.

If the findings are accurate, the monitors' report could cast a pall over President Mohamud and potentially scare off foreign donors who have pledged billions to rebuild his shattered nation after two decades of chaos.

    All those accused of involvement in the plan to divert assets have denied any wrongdoing. Several accused the chairman of the Monitoring Group, Jarat Chopra, of dubious investigative methods and making baseless assertions.

     Former foreign minister Adam, who is now a lawmaker in the Somali parliament, said she never profited from the Shulman Rogers contract and that she had not pressured Yassur Abrar, Somalia's former central bank governor. "As a foreign minister, my role was to build the image of Somalia, not to conspire and defame my name and that of my government."

The president's office said it could not comment in detail on the allegations in the report because it has not been made public.

    Shulman Rogers reacted strongly to the Monitoring Group's report about its role in the alleged conspiracy - which it has not seen - as well as the group's assessment that the arrangements for recovering Somali assets were "contrary to the public good." Jeremy Schulman said "the public good of Somalia has been well served by the work we have done." He blamed the findings in the report on the group's Chairman Chopra, saying he was not a "reliable source for truthful information about the goings-on in Somalia."

    Chopra said he stood by the group's findings and declined to comment further.

    In February, Reuters reported on some of the findings that have now been raised in the Monitoring Group's report. The Reuters story focused on last year's resignation by Somalia's central bank governor, which threw Western donors into a quandary over supporting a government they need to fight al Qaeda's local allies.

    A 2013 U.N. Monitoring Group report said individuals in Mohamud's government used the Somali central bank as a personal "slush fund", with an average 80 percent of withdrawals made for private purposes. The presidency and the then-central bank governor Abdusalam Omer have strongly denied that accusation..

    In its latest report, the Monitoring Group said that "a complex architecture of multiple secret contracts, which defied a separation of powers between the Presidency and the Central Bank, created the opportunity and rationalization for the misappropriation of public resources."

     "'Pie-cutting' of overseas assets by those involved in the project entailed retention of excessive percentages and direct payments from recovered assets as well as attempts to circumvent deposits in the Central Bank of Somalia," it added.


FLED FROM MOGADISHU

Abrar, the former central bank governor who was also a former Citigroup vice president, quit last October after seven weeks on the job, alleging she had been pressured to sign a contract with Shulman Rogers that she feared could invite corruption at the central bank.

    According to the new report, she sent her resignation from Dubai after fleeing from Mogadishu out of fear for her safety.

    The Monitoring Group said it had followed up on a number of Abrar's allegations and her concerns about the contract and the planned scheme for the recovery of Somalia's overseas assets.