Liberian Flag Registry Linked to Conflict Diamonds

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(Rapaport…June 17, 2002) U.S. Congressman Frank Wolf (R-Virginia), a member of the House Armed Services Committee, spoke out in favor of ending support for Liberia’s flag registry because Liberian President Charles Taylor uses the revenues to fund the conflict diamond trade. Wolf’s speech was delivered on June 13 before the House Armed Services Committee Special Oversight Panel on the Merchant Marine.

“As long as Charles Taylor has access to the financial resources, the people of West Africa will continue to be threatened by wars, humanitarian disasters and misery,” Wolf said.

Wolf cited UN reports that indicate that revenues from Liberia’s flag registry played a role in facilitating the illicit trade in conflict diamonds by helping to fund shell companies that integrate illicit stones into the pipeline. Wolf also cited UN reports suggesting that flag registry funds were channeled to the Taliban and al-Qaida. Liberia has hosted a U.S. based shipping registry since 1949 and now ranks second, behind Panama, in total shipping tonnage in U.S. ports.

The following is the full text of Congressman Wolf’s speech:

Thank you, Mr. Chairman. I want to thank you and the rest of the committee for giving me the opportunity to testify on an issue of vital importance both to the long term stability of West Africa and to our country’s national security interests. Mr. Chairman, I am specifically here to talk about Liberia, its maritime flag registry, and its relationship to Liberia’s despotic President, Charles Taylor.

Today I want to focus on several issues. First, I want to outline for the committee the record of Charles Taylor and why it is urgent that our government take all steps to deny Mr. Taylor the means to maintain his grip on Liberia. Also, I want to discuss the implications that Liberia has for our national security interests in light of Mr. Taylor’s relationship with international arms dealers and even terrorist networks, including al-Qaida. Finally, it is critical that we are able to guarantee that the Liberian flag registry revenues are transparent and are going toward the needs to the people of Liberia, who have suffered so much. If we cannot guarantee this, it should be shut down.

Because of the time limitation, I will only be able to offer you a brief glimpse into these issues. Therefore, I would like to submit additional information to the committee including several news reports and excerpts from three United Nations Security Council reports on the Liberian Sanctions that outline the connections between Charles Taylor, his revenue from the Liberian maritime flag registry, conflict diamonds, the humanitarian disaster in West Africa and international terrorism. Read in their entirety, these reports and investigations lead to one conclusion — in the past the Liberian flag registry has been implicated in contributing to the continued reign of Charles Taylor, the leader one of the most brutal, murderous and dangerous regimes in the world. In short, there is blood on the flag, Mr. Chairman.

Mr. Chairman, Charles Taylor’s rise to power has been characterized by violence. In Polish author Ryszard Kapuscinski’s work, The Shadow of the Sun, the chapter on Liberia is titled, “The Cooling Hell.” Kapuscinski describes coming upon children from Charles Taylor’s infamous Small Boys Units, child soldiers that Taylor recruited to fight for his insurgent group during the Liberian civil war. Kapuscinski writes:

“I haven’t walked a hundred meters and I’m already surrounded by small boys with swollen faces and bleary eyes, sometimes missing an arm or a leg. They beg. These are former soldiers from Charles Taylor’s Small Boys Units, his most frightful divisions. Taylor recruits small children and gives them weapons. He also gives them drugs, and when they are under the influence, he makes them attack. The stupefied youngsters behave like kamikaze fighters, throwing themselves into the heat of the battle, advancing straight into flying bullets, getting blown up by mines. When they become addicted to the point of uselessness, Taylor throws them out. Some of them reach Monrovia and end their short lives in ditches or on garbage heaps, consumed by malaria or cholera, or by jackals.”

After Charles Taylor became the president in 1997, his ruthless tactics did not change. Mr. Chairman, this is a picture taken while I was traveling with my colleague Tony Hall in December 1999 in Sierra Leone. This 2-year-old girl was just one of the many victims of the Revolutionary United Front otherwise known as the RUF. It is a criminal insurgent group started and supported by Charles Taylor which terrorized civilians in Sierra Leone by engaging is mass amputations, murder, rape and torture. Taylor’s interest in promoting and supporting the RUF insurgency was driven by greed — Sierra Leone’s vast diamond resources. Victims told us that when the RUF would arrive in a village, they would ask their victims if they wanted a long sleeve or a short sleeve and amputate accordingly.

The civil war in Sierra Leone took nearly 100,000 lives and left almost 2 million people as refugees. Finally, after United Nations and British intervention, today the situation seems to be temporarily stabilizing as Sierra Leoneans recently participated in elections. For Taylor’s culpability in Sierra Leone, the UN Security Council finally voted to place sanctions on Liberia, which remain in effect today.

For years, though, Charles Taylor’s trail of misery was thought to be confined only to a small corner of West Africa. Only recently, though, we learned that the terror of Charles Taylor went beyond West African shores. In November, The Washington Post and several other media outlets outlined in detail how the RUF in Sierra Leone transferred “blood” diamonds to al-Qaida operatives in Liberia who then traded them for cash in the European diamond market. These terrorists include Ibrahim Bah, a Libyan-trained former Senegalese rebel who is cited as the Sierra Leonian rebels’ primary diamond dealer. Charles Taylor himself is directly implicated in these reports for taking commissions on all deals made between the RUF and the al-Qaida network.

Taken together, all of these facts point to an inescapable conclusion. Not only will the people of Liberia and West Africa continue to suffer as long as Charles Taylor is in power. But, the importance of preventing Charles Taylor from obtaining sources of revenue to run his international criminal enterprise is now a matter of national security. As long as Charles Taylor has access to the financial resources, the people of West Africa will continue to be threatened by wars, humanitarian disasters and misery.

Which brings me to the issue at hand for this committee — the relationship between Charles Taylor’s criminal state and the Liberian flag registry and its implications on our national security.

The United Nations and several news reports have revealed that the revenue obtained from the Liberian flag registry and the company that runs the registry, the Liberian International Ship and Corporate Registry, known as LISCR, made payments that violated the UN sanctions on Liberia.

Also, the United Nations has reported that LISCR was set up precisely so that Charles Taylor would have immediate access to the flag registry funding. While estimates vary, according to the October 2001 UN report, the flag registry accounts for approximately 50 percent to 75 percent of Liberia’s annual revenue.

The distinction between whether this money goes to Liberia and its legitimate needs or Charles Taylor and his international criminal enterprise is of immense importance. If the flag registry can be effectively audited and “ring fenced” and these funds used for legitimate purposes, then I believe the flag registry should be saved. But so far, as the UN reports and the many news stories indicate, that has not happened. Instead, the revenue from the registry is still controlled by the “Executive Mansion,” meaning Charles Taylor.

Besides the troubling consequence that the exploitation of the flag registry has for Liberia’s people, the UN reports also indicate that the lack of transparency surrounding Liberian finances may have troubling national security implications for the U.S. government as well. For instance, the UN reports document how certain portions of the flag registry revenue were channeled to the notorious arms dealer, Victor Bout, who has connections to the Taliban, al-Qaida and Abu Sayyeef, the radical Muslim group in the Phillipines.

Finally, the UN reports implicate the registry in playing a role in facilitating the illicit trade in conflict diamonds through the use of shell companies that trade in the so-called “blood” diamonds. The UN’s December 2000 report states that “a physical check of the Monrovia street addresses given by most of these firms revealed that there were no such companies, and no such addresses. Courier firms in Monrovia, however, have in the past been instructed to route correspondence for these addresses to the International Trust Company (ITC), which in January 2000 changed its name to the International Bank of Liberia Ltd. Since then, mail addressed to the companies in question has been forwarded to the newly established Liberian International Ship and Corporate Registry (LISCR) which now handles the Liberian maritime registry. This means that if the companies in question are more than shells, they are not physically present in Liberia, and none of the diamonds in question were either mined in, or passed through, Liberia.”

Mr. Chairman, I believe that if we can get guarantees that the Liberian flag registry can be put to legitimate uses for the people of Liberia, it should be preserved. But this notion cannot ignore an undeniable reality of today — Charles Taylor runs Liberia as a personal fiefdom, deciding what to do with the revenues from all state ventures.

Just last year his personal control was codified in a new law that states, “The President of the Republic of Liberia is hereby granted the sole power to execute, negotiate and conclude all commercial contracts or agreements with any foreign or domestic investor for the exploitation of the strategic commodities of the Republic of Liberia.” It is not surprising that Liberia is often referred to as Charles Taylor Inc.

Mr. Chairman, I want to close by leaving the committee with a final thought. Since my visit to Sierra Leone, I have been deeply concerned abount the plight of the citizens of that region. Looking at the little girl in this picture, it is unconscionable that anyone could justify a business relationship with Charles Taylor. But beyond this humanitarian concern, the links between al-Qaida and other international terrorist activity and Charles Taylor put this entire matter in a new light. We need a guarantee that Charles Taylor can no longer exploit this resource. A financial relationship no longer just supports a brutal African dictator causing misery for a far away people; it tacitly supports a terrorist organization dedicated to the destruction of the United States.

Thank you for allowing me to testify and I welcome any questions you may have.

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