19

PAYING FOR THE WAR

GOMA, ZAIRE, NOVEMBER 1996

“Illegal, illegal! What the hell does ‘illegal’ mean?” Mwenze Kongolo responded when I asked what he thought about the “illegal exploitation” of Congolese resources by foreign companies and states. Mwenze had been the powerful interior minister under Laurent Kabila, and he was himself a shareholder in several mining deals. “We needed money to finance the war. We used our mines and resources to stave off foreign aggression. Is that illegal?”¹

Many have come to criticize the deals struck between Kabila’s government and states in the region to finance the war. Others have condemned Rwandan and Ugandan profiteering during their occupation of the eastern Congo between 1998 and 2002. As usual, a coarse brush was used to paint these different forms of involvement with the same broad strokes, sacrificing nuance for caricature. For all the states involved, economic interests played a role but were woven into a complex web of domestic and regional, political and corporate considerations. In some cases, politicians did exploit natural resources for personal profit; in others, they did so to finance the war and government operations, although often by very dubious means. Foreign governments and companies were involved, but again, in a wide variety of forms, ranging from direct complicity to more tangential responsibility.

The first invasion of the Congo in September 1996 had everything to do with security and geopolitical concerns and only little to do with business. It was Mobutu’s support of Angolan, Ugandan, and Rwandan rebels that provoked the incursion, not his neighbors’ greed for the Congo’s minerals. As the rebellion advanced, however, money soon became a decisive factor.

As parts of the country became independent of control from Kinshasa, they slashed import and export taxes by 70 percent. Goma became a hotbed of entrepreneurship, as investors from all over the world were attracted to the region. Doing business with the rebels at that time was a risky proposition. No large corporations threw their weight behind Laurent Kabila, afraid that Mobutu could make a comeback and they would be perceived as turncoats. This opened the door for risk-seeking entrepreneurs not confined by the strictures of large, publicly owned corporations.

Jean-Raymond Boulle fit this profile. He was one of the first prominent entrepreneurs to get in touch with the AFDL rebellion in the early months of 1997, when the rebellion controlled no more than a thin sliver of the eastern border region. Boulle had a typical profile for investors in the Congo: erudite, adventurous, and risk-seeking. A soft-spoken forty-seven-year-old from Mauritius, Boulle had been educated in South Africa and the United Kingdom. He drove a Bentley and had settled in a mansion in Monaco, but he was no stranger to the rough-and-tumble of African mining. He had become involved in the business at an early age, following his mother, who had been an experienced diamond dealer; he had gone to work for the South African diamond giant De Beers in Zaire and Sierra Leone in the 1970s. Frustrated by the company’s bureaucracy, he left to start his own company in 1981. In 1994, he had his big break, when one of his geologists stumbled by accident on the world’s largest nickel deposit in Voisey Bay, Canada, while he was prospecting for diamonds. After stiff bargaining, Boulle sold the concession, walking away with $400 million, which he promptly invested in a new company, American Mineral Fields, a joint venture with a land surveyor from Hope, Arkansas, the hometown of President Clinton. Boulle was never too shy to remind potential partners where his company was based and to mention that he had met Clinton on several occasions, including at his inauguration celebration at the White House.²

When the war broke out, no major investor had been actively mining in the Congo in years. At the same time, however, the Belgian and Congolese state had already invested billions over the years in prospecting and conducting feasibility studies. This considerably reduced the risk for private capital. Companies could buy known quantities of copper and cobalt, anticipating roughly how much surface rock needed to be removed, water needed to be dredged, and infrastructure needed to be renovated or installed. In some cases, foreign businessmen colluded with officials from Gécamines, the state-owned mining corporation, to obtain their technical evaluations and feasibility studies. “They rewrote them, put their letterhead on top, and then simply said that they had done a technical study,” a former Gécamines official, who—like most mining officials—refused to be named for this book, told me.³

Boulle had already attempted to get involved in mining under Mobutu, obtaining two mining concessions that contained an estimated $20 billion in copper and cobalt.⁴ But Mobutu had canceled the contracts, handing one of them to Anglo American, the continent’s largest mining conglomerate. Rankled by the dictator, Boulle, who worked in tandem with several brothers, reached out to Mobutu’s opponents. When Kisangani, the country’s third biggest city, fell in March 1997, Boulle made his move, shutting down his office in Kinshasa and opening a diamond trading house in an area controlled by the AFDL. “Do you wait until everybody gets here and be last or do you get in early?” his brother Max Boulle told the press at the time. “We’ve made a conscious decision to get in early.”⁵

Since the AFDL had shut down all other diamond dealers in town, Boulle was able to turn a handsome profit. In return, he reportedly paid the rebels $1 million in “advance taxes” on the diamonds.⁶ Diamond traders were so desperate to sell their diamonds that they literally broke down the door of Boulle’s office. The Mauritian also allowed the rebellion to continue using his corporate Lear jet, although he later claimed that it had been commandeered. In April 1997, after the AFDL had seized control of Lubumbashi, the country’s mining capital, they awarded Boulle with the mining deals that Mobutu had recently called into question. In return, the Mauritian mining magnate was supposed to dole out an $80 million down payment, a quarter of which he reportedly advanced to the AFDL.⁷

Other mining executives soon followed Boulle’s lead. The Swedish venture capitalist Alfred Lundin, who, like Boulle, had already been in negotiations with Mobutu’s government, began talks with the AFDL over the country’s greatest mining prize, the Tenke Fungurume mine, in March 1997. Tenke was widely acclaimed as the largest copper mine in the world, with an estimated $26 billion in copper reserves. Lundin gave the rebels $50 million up front as a down payment, which was supposed to go to the state mining company.⁸ “There are moments in the history of mining when you can make deals like this under excellent terms,” Lundin said at the time.⁹ Indeed, the terms were not bad: In return for $250 million paid to the Congolese state and a $1.5 billion investment in making the mine functional, Lundin would be able to operate tax-free and retain a 55 percent share in the mine.¹⁰

Were these deals illegal? Possibly. After World War II various war crime tribunals found German and Japanese companies guilty of crimes of pillage, either through the direct seizing of assets or by buying goods that had been stolen by others. In one case, for example, the U.S. military tribunal at Nuremberg found the manager of a German mining company guilty for having carried out excavation in a coal mine in Poland that he had been granted by the Nazi government. ¹¹ In the Congo, Boulle and Lundin also signed deals with rebels, not with the legitimate government. Moreover, the cash down payments—amounting to perhaps $70 million—came at a crucial time for the rebellion, two months before it reached the capital, covering the cost of the final push.

The Congo is often referred to as a geological scandal. This is not an exaggeration. In the late 1980s, it was the world’s largest producer of cobalt, third largest producer of industrial diamonds, and fifth largest producer of copper. It has significant uranium reserves—infamous for having contributed to the Hiroshima bombs—as well as large gold, zinc, tungsten, and tin deposits.

Like so many of the country’s problems, the mismanagement of these assets dates back to colonial times. In 1906 already, the Belgian government gave the Société générale de Belgique, a powerful trust affiliated to the state, a mining tract of 13,000 square miles in Katanga, the size of Belgium.¹² Under the exceedingly favorable terms of the deal, the company would get a ninety-nine-year monopoly over any mineral deposits it could identify in the next six years. It was also granted the management of the state railroad line that would help export the copper and cobalt ore, for which the colonial state would provide local labor. Société générale set about creating the three most powerful companies in the Belgian Congo: the Upper Katanga Mining Union, the Bas-Congo to Katanga Railroad Company, and the International Forest and Mining Company. Mineral and agricultural exports from the Congo fueled the creation of some of the biggest Belgian conglomerates and personal fortunes, developing the Antwerp port and creating a copper smelting industry.

Mobutu nationalized the Upper Katanga Mining Union in 1967 and rebranded it Gécamines, while other mining companies in the Kivus and Katanga were also converted into state-owned enterprises. The government proceeded to use the mining company as a cash cow, systematically milking it for money to fund Mobutu’s patronage network instead of reinvesting earnings in infrastructure and development. In order to carry out this scheme, the autocrat forced all mineral exports to be sold through a state mineral board, which would then hand over its revenues to the state treasury. Nonetheless, thanks to rising world copper prices, Gécamines remained the country’s largest source of employment and income, providing over 37,000 jobs at its peak, running thirteen hospitals and clinics, and contributing to between 20 and 30 percent of state revenues.

A confluence of factors brought about Gécamines’ demise in the 1990s. Copper prices plunged as low-cost producers such as Chile stepped up production and world demand dipped. The army pillages of 1991 and 1993, along with the ethnic purging of Kasaians from Katanga in 1993, drove much of the experienced expatriate staff out of Gécamines and contributed to the cutting of foreign development aid that had helped prop up the ailing mining sector. Finally, the years of mismanagement took their toll. In 1990, the huge underground Kamoto mine collapsed, leading to an abrupt drop in production of 23 percent. Exports declined from a high of 465,000 tons in 1988 to 38,000 tons just before the war, while cobalt production slipped from 10,000 to 4,000 tons in the same period. Similar trends affected all other mineral exports, leading to a vertiginous contraction of the country’s GDP by 40 percent between 1990 and 1994.

Pressured by donors to relinquish the state’s grip on the economy and desperate for revenues, Mobutu allowed his prime minister, Kengo wa Dondo, to begin gradually privatizing the mining sector in 1995. Most of the contracts that were later negotiated with the AFDL, including the American Mineral Fields and Lundin agreements, were amendments to and confirmations of deals that had already been struck with Mobutu’s government in 1996. The notion that the war was fueled by international mining capital eager to get its hands on the Congo’s wealth does not hold water; the war slowed down privatization of the sector by a decade, as insecurity and administrative chaos prevented large corporations from investing. It was not until 2005 that major new contracts in Katanga were approved and investors began to invest significant funds.

Kabila’s antipathy toward free-market capitalism shone through in other ways. The rebellion applied its half-Marxist, half-liberal approach to mining, adopting a slipshod policy that imposed harsh conditions on large foreign companies while favoring shadowy investors who often lacked the resources and expertise necessary to develop mining concessions. Kabila was not happy with the huge copper and cobalt deposits that had been doled out—according to the government, the president had never actually put pen to paper on the deal—to American Mineral Fields, and he suspended the negotiations. His minister of mining accused two of the biggest mining companies, De Beers and Anglo American, of “monopolism” and “lack of social responsibility” and stripped them of some of their Congolese assets.¹³ The government began demanding that any foreign investor provide 15 percent of the planned investments as a nonrefundable cash payment up front and that they keep the involvement of expatriate staff to a strict minimum. It put the largest existing mine, the collapsed Kamoto polygon, up to an open tender but then forced the six companies that applied to work together as a consortium to develop the asset. Not surprisingly, the deal collapsed. “C’était un désastre,” a Gécamines official told me, holding his head in his hands. “Laurent Kabila? Mon Dieu.”

Soon, however, this approach had exhausted itself. Together with his Rwandan partners, Kabila revived an idea he had from his days as a maquisard in the 1970s and created a parastatal company called the Mixed Import-Export Company (COMIEX). Before arriving in Kinshasa in May 1997, Kabila had funneled a total of at least $31 million in private and state capital into COMIEX accounts at two Rwandan banks in Kigali.¹⁴ The funds included the $25 million down payment from Lundin, $3.5 million from the state mining company, and several hundred thousand dollars from a state coffee plantation in North Kivu.

The idea of creating a large holding company to manage the ruling elite’s interests in the economy was not a new idea. In Rwanda, the RPF ruling party had a wide-ranging network of investments in banking, real estate, and industry through companies such as Tristar and Prime Holdings. In Ethiopia, the government would pursue a similar model. This allowed the government to dominate and benefit from the private sector without having to subject its activities and financial transactions to the public scrutiny required of state-owned companies. COMIEX initially functioned as the rebels’ bank, but Kabila did not fuse the company with the Central Bank when he came to power in Kinshasa. “COMIEX was never registered as a parastatal and put under the official control of the state,” Mabi Mulumba, the auditor general at the time, remembered. “It was a private trust run by people close to President Kabila, but entirely created with state assets.”¹⁵

One of Kabila’s lawyers remembers having warned the president against funding a private company with state resources. The president laughed and told him, “But this law you are talking about, it is man who made it, no?”¹⁶

When the second Congo war broke out on August 2, 1998, President Laurent Kabila knew that he didn’t have the resources or the army to beat back the Rwandan troops who were rapidly approaching the capital. Their indigence was underscored when Kabila sent an urgent delegation to Luanda to plead for military assistance to repel the Rwandan offensive. “First pay us the debt that you owe us,” the Angolan foreign minister told the envoys, referring to a $6 million debt Kabila owed for military support during the first war.¹⁷ The Congolese government also owed the Zimbabwean government over $5 million for deliveries of weapons and equipment, and it was clear that neither country would be willing to spend the resources needed without something in return.

Like an entrepreneur trying to fend off bankruptcy, Kabila started putting up his country’s most valuable assets as collateral to secure further loans. He transformed COMIEX into a sprawling conglomerate that struck up partnerships with the Zimbabwean and Angolan state in massive timber, petroleum, mining, banking, and agricultural projects. In Harare, President Mugabe copied his comrade’s business plan, setting up his own privately registered, state-run hybrid called, somewhat ironically, Operation Sovereign Legitimacy (OSLEG), through which he intended to funnel investments and any eventual profits.

The assets involved were enormous: OSLEG went in fifty-fifty with COMIEX in a timber business that received 3,800 square miles from the Congolese state to log, as well as in Sengamines, one of the country’s most lucrative diamond concessions. Several banks were set up to manage the cash flows to and from these various projects, and shares in the front companies were reserved for parliamentarians and ministers in both governments.¹⁸ The management of Mugabe’s corporation OSLEG included the commander of the Zimbabwean Defense Forces, General Vitalis Zvinavashe, as well as the minister of defense, along with top officials in the state mining company and minerals marketing board.¹⁹

This kind of business climate favored enterprising, rough-mannered, and unscrupulous businessmen. Billy Rautenbach fit this mold. A former race car driver and the son of a wealthy Zimbabwean trucking magnate, Rautenbach took over the family business when his older brother died in an accident, and he set up lucrative car dealerships throughout southern Africa. He was known for his sharp temper. “He used to run the company by yelling at people. All day he would yell at people,” a former business associate told me.²⁰ Over the years, he accumulated charges in South African courts ranging from customs fraud to theft to involvement in the murder of a former business rival. The murder charges were later dropped and Rautenbach eventually settled for the fraud charges, paying $5.8 million in fines.²¹

In September 1998, Laurent Kabila’s government handed the entire Central Mining Group over to Rautenbach to manage as part of a deal with its Zimbabwean allies. Gécamines officials lamented Rautenbach’s bad temper and the fact that he cherry-picked the best ore, instead of systematically excavating the rock, which damaged the long-term profitability of his Kakanda mine. “He brought in these new machines that weren’t appropriate for the job,” one Gécamines official who was there at the time complained, “and picked holes throughout the concessions. It looked like a half-exploded minefield!”²² Mining analysts were particularly outraged with the immense size of the concession that Rautenbach had obtained. There was no way that he would be able to work on more than a small part of the concession. In the meantime, some of the most lucrative copper and cobalt deposits in Africa lay fallow.

President Kabila was initially happy with Rautenbach’s performance, as he was one of the few people who seemed to be able to squeeze any profit out of the various moribund state-run companies, and just months later made him the director of Gécamines. “Kabila would be on the phone every week with Rautenbach, asking him for more money for the war,” one Gécamines employee remembered.

Rautenbach did not perform poorly at first. By one estimate, he made $20 million from the Kababankola processing facility alone over eighteen months, while in Likasi he was processing 150 tons of cobalt a month, worth $6 million.²³ “He kicked ass, got people to work, and cranked out production,” another mining executive remembered.²⁴ However, Rautenbach was out to make quick cash, as was the government, and did not reinvest much of his earnings into the upkeep of infrastructures. By the end of 1999, Gécamines’ mineral production had fallen, and creditors were seizing shipments in order to pay back debts. Moreover, Rautenbach had made powerful enemies by laying off 11,000 state workers and canceling all previous marketing agreements for cobalt, transferring them to one London-based company. In March 2000, Kabila replaced the Zimbabwean with a local businessman.

Similar deals proliferated, usually featuring dubious businessmen and getrich-quick schemes. In 2000, John Bredenkamp, a Zimbabwean arms dealer who has been involved in busting sanctions on Zimbabwe, obtained six concessions with estimated mineral reserves of $1 billion. He gave a down payment of $400,000 and promised 68 percent of net profits to the Congolese and Zimbabwean governments. The same year, another South African entrepreneur with a criminal record, Niko Shefer, met with President Kabila and obtained a deal to trade diamonds through Thorntree Industries, a joint venture with the Zimbabwean army. Shefer’s rap sheet included setting up a pyramid scheme with an evangelical church in Florida and a five-year prison sentence for fraud in South Africa. This time, Shefer was intent on taking advantage of a discrepancy between the official and the black-market exchange rates in the Congo to profit from diamond trading. A South African intelligence report details a conversation between Shefer and a potential business partner:

The official exchange rate is currently $1 = CF [Congolese Francs] 4.5. The unofficial (referred to as “parallel”) rate is $1 = CF 28. Most foreign imports come in at the parallel rate. KABILA has agreed that Thorntree can buy Congolese Francs at $1 = CF 16 whilst diamond and gold purchasing will be conducted at the official rate. This mechanism will create huge margins that will give Thorntree a distinct advantage over its competitors. KABILA agreed to this proposal because he will personally receive 30 per cent of Thorntree’s discount. SHEFER estimates that CF 40 to 60 million a month will be needed to cover the requirements of initial buying operations....

The potential margin is very attractive. For example, at the end of November [1999], I saw a package of 3000 carats, 80% gemstones, bound for the Oman-backed company. The parcel was worth $2.5 million; they paid the CF equivalent of $200,000.²⁵

It is difficult to know exactly how much money the various actors involved made. According to UN estimates, between 1998 and 2001 the Congolese government took roughly a third of Gécamines’ profit to fund the war effort, sending tens of millions of dollars to the Zimbabwean government to cover its military expenses.²⁶ The International Monetary Fund, working from incomplete budgetary data that probably excluded some revenue, concluded that at the height of the war in 2000, the Congolese government was spending 70 percent of its expenditures on “sovereign and security items,” a budget line that was managed entirely by the presidency and dedicated mostly to the war.²⁷ That amounted to over $130 million for that year alone. Some money also went directly to paying the Zimbabwean army—both Rautenbach and Bredenkamp gave money directly to Zimbabwean army commanders to pay for their bonuses, as well as for food and medicine for the soldiers.²⁸

Other money transfers circumvented the Congolese state and went straight to Harare. According to one account, Rautenbach sent between $1.5 and $2 million a month to government officials back home.²⁹ According to several high-ranking Zimbabwean officials, when Rautenbach was removed from the leadership of Gécamines in March 2000, he threatened to reveal exactly how much President Mugabe and Justice Minister Mnangagwa had made during his tenure at the Congolese parastatal.³⁰

In the end, like everything in the Congo at the time, the Zimbabwean profiteering degenerated into a piecemeal approach, as Zimbabwean government officials took advantage of their military links to conduct private business. In October 1998, state-owned Zimbabwean Defense Industries obtained a $53 million contract to supply the Congolese government with food and equipment, much of which would be transported by General Zvinavashe’s private transport company.³¹ The head of the state weapons manufacturer, Colonel Tshinga Dube, also took advantage of his contact in the Congo to set up his eponymous diamond mining company, Dube Associates—apparently not too concerned with hiding his conflict of interest—in the Kasai province, although without much success.³²

By the time of the second Congo war, Mugabe was beleaguered by trade union strikes, food riots, and mounting inflation. He had also just embarked on a move that would come to dominate the next decade of Zimbabwean politics and bring him enemies from all corners of domestic and international politics: the expropriation of 45 percent of the country’s commercial farmland from its mostly white owners. After eighteen years in power, some of his former allies had begun to openly question his leadership. Dzikamayi Mavhaire, a powerful parliamentarian, moved to amend the constitution, arguing that Mugabe should be limited to two five-year terms. “The president must go,” he told an open session of Parliament. The government Herald newspaper also began running surprisingly critical editorials, fustigating the land redistribution policy.³³

In this context Mugabe was eager to maintain the loyalty of key allies, particularly in the security services. As the economy at home shrunk, so did opportunities for domestic patronage. The Congo war provided the opportunity he needed to keep his collaborators happy and busy elsewhere. This explains the urgency with which the Congolese and Zimbabweans set up their joint ventures and how easily Zimbabwean officials gave up on getting their debts reimbursed through the mining ventures.

At the end of the day, and despite the considerable profits that some Zimbabwean businessmen and officers made, Operation Sovereign Legitimacy did not get a good return on its investments in the Congo. Lured by the promise of vast mineral deposits, the Zimbabwean generals did not realize that rich veins of turquoise copper and blue cobalt were locked up in layers of granite and slate. Unable to finance the billions of dollars of infrastructure rehabilitation and investment needed, Zimbabwe had to content itself with smaller deals—slag heaps, artisanal diamond production, and small-scale mining. Many loans given to the Congolese government were never paid back, and Rautenbach, like other clever businessmen, preempted much of his profits going to Harare through some accounting technicalities. He would sell the ore to one of his offshore holding companies at production price, reducing any profits that could have been taxed by the Congolese state or shared with his Zimbabwean backers to almost zero.³⁴ “Zimbabwe ended up with the dirty end of the stick,” Professor Kampata, an official in the Congolese ministry of mines, told me. “The Congo, at least, got what it wanted: military assistance.”³⁵

The Zimbabweans did not want to invest the billions of dollars needed to get the various diamond mines, copper processors, and timber mills up and working again. In the Senga Senga diamond mine, the Zimbabwean-appointed managers tried to run the elaborate mining equipment on diesel, which they imported over thousands of kilometers, instead of investing in repairing the nearby hydroelectric plant. At the Kababankola mine, Bredenkamp’s managers contented themselves with carting off and processing the tailings and slag heaps that were left over from previous mining operations; any further excavation was deemed too expensive. The Zimbabwean Electricity Supply Authority thought it could make money through hydroelectric power production on the Congo River, but here again they would have had to invest billions in refurbishing turbines and setting up power lines.³⁶ As for the enormous logging concession in northern Katanga, the Zimbabwean managers could not attract the investors they needed to buy trucks and, above all, fix the hundreds of miles of roads that were needed to export the timber.

The promised mining El Dorado failed to materialize.

As Kinshasa leveraged its copper, cobalt, and diamond mines to obtain Zimbabwean support, the Rwandans and their RCD allies funded their military operations in the Congo largely by trading in Congo’s gold, coltan (used for capacitors in cell phones and video game consoles), tin, and diamonds. The key difference is that a racket run largely by Rwandans and their allies, not by Kinshasa, was perceived as foreign exploitation, a strange distinction given that Laurent Kabila had been brought to power by the Rwandans and had not been confirmed by elections.

To understand mining in the eastern Congo, airports are a good place to start. Given the collapse of roads and railways in the country, planes were often the only way to get from one place to another.

Pierre Olivier was an institution in Goma.³⁷ The son of a local chief who had worked for the Belgian colonial administration, he has chestnut-colored eyes and big, muscular features that make his limbs seem oversized, almost bloated. I got to know him over several years; he could often be found on local soccer fields on the weekend, protecting the goal line and chatting with friends. He had been taught to fly by his father, who had had a passion for hunting. In the late 1970s, when the hinterlands of the Kivus only hosted a quarter of its current population, they would take a small Cessna to overgrown airstrips in the jungles of Walikale and Maniema to camp out in the wilderness and hunt for antelope and hippopotamus. In some places, pygmy trackers with bows and poison arrows would accompany them; once, he remembered, a local chief with a feathery headdress came to meet them, borne on a palanquin.

By age fourteen, Pierre had learned to fly and shoot a double-barreled shotgun. When he was sixteen, he and his father founded their own airplane company, flying merchandise into jungle towns to the west of Goma and taking bags of minerals and palm oil out. They would land on roads and on bumpy, dirt airstrips overgrown with elephant grass. “Back then, our only problem was paying off Mobutu’s thugs,” he said, laughing. “That was problem enough.”³⁸

As soon as the second war started in August 1998, it was clear that there had been a shift in motivation. “Business,” Olivier said emphatically. “The first war had been about getting rid of the refugee camps and overthrowing Mobutu. The second was about business.”

The security imperative was still present for Rwanda. The northwest of their country was engulfed in a brutal insurgency, led by Rwarakabije’s Hutu rebels. But the second war was a much more costly exercise, involving up to 35,000 Rwandan soldiers who became bogged down in trench and counterinsurgency warfare hundreds of miles into the Congolese jungle. In addition, some Rwandan businessmen, together with leading RPF politicians, had become aware that there were hefty profits to be made in the Congo, particularly in the minerals trade.

Rwanda’s shifting priorities became clear to Pierre in his flights. He flew their troops into mining areas, where Rwandan commanders would be in charge of loading tons of tin and coltan into airplanes. Pierre proceeded to count towns off on his thick fingers: “Lulingu, Punia, Kalima, Kindu, Walikale—we emptied the minerals stockpiled there at the beginning of the second war. There was so much ore, it took us weeks.”³⁹

This first phase of profiteering targeted the low-hanging fruit, assets that were easily converted into cash. Between November 1998 and April 1999, the Rwandan army and its RCD allies removed between 2,000 and 3,000 tons of tin ore and up to 1,500 tons of coltan from the warehouses of SOMINKI, a state-run mining company active in the Kivus, worth between $10 and $20 million, depending on the grade of the ore.⁴⁰ The Congolese commander of the RCD troops, Jean-Pierre Ondekane, brazenly entered the Central Bank offices in Kisangani and seized between $1 million and $8 million in Congolese francs, which he then dispatched to Kigali.⁴¹ Similar looting was carried out in the area controlled by the Ugandan army.

For the most part, this initial pillage targeted state companies and large businessmen. In many towns the Rwandan troops were relatively disciplined and even arrested or executed soldiers who stole. The occupying army, however, had a difficult time maintaining logistics chains into the deep Congolese forest, and they often granted advancing columns the right to sustain themselves through pillage. A Belgian missionary based in Kongolo, northern Katanga, described the arrival of Rwandan troops there:

Going from house to house, they first stole everything they could find for food, including goats and chickens. For firewood, they took furniture that they found in the houses, even the cradles! Afterwards, as they were installing themselves for a long period, they stole beds, mattresses and sheets. They also got their hands on generators and heavy material, sending these home to Rwanda by road and air.... They took more than five hundred gallons of fuel and two vehicles belonging to the medical service, not to mention the beating and injury of the parish priest and the theft of his belongings.⁴²

The occupying forces then set up structures through which they could extract new resources. In the area occupied by the Rwandans, this was done systematically, by controlling all stages of mineral production, from the digging to air transport to the export company in Kigali. The Rwandan army sent hundreds of prisoners—mostly Hutu who had been accused of taking part in the genocide—from jails in western Rwanda to work in coltan, gold, and tin mining pits. “You should have seen the look on the faces of those people,” Pierre said, recalling the ones he transported. “They were sad, exhausted, depressed.” Elsewhere, the diggers came voluntarily and were paid for their work, but were often supervised by soldiers. At the landing strips, it was always Rwandan soldiers or their RCD allies who accompanied the shipments of coltan and cassiterite (unrefined tin ore).

According to Pierre, only several businessmen close to Kigali were allowed to ship minerals out from the Rwandan-controlled mines. “They monopolized the mines,” he insisted. Benjamin Serukiza, the former RCD vice governor of South Kivu, confirmed this: “I had to mediate between local businessmen and the Rwandan brigade commander here. He only wanted to allow one Rwandan trader, who was close to the Rwandan government, to have access to the mine. He said it was for security reasons, but we knew it wasn’t.”⁴³

The initial profits, however, were nothing compared to what was to come. “Everything changed in 2000, when the coltan price soared,” Pierre Olivier remembered. It was a fluke. That year, the information technology bubble coincided with heightened demand for cell phones and the Christmas release of a Sony PlayStation console. Demand for tantalum, the processed form of coltan, had been rising steadily for years, but now the markets got caught up in a buying frenzy. Within months, the local market price of tantalum shot up from $10 to $380 per kilo, depending on the percentage of ore content, while the world price peaked at $600 per kilo of refined tantalum.⁴⁴ Dozens of comptoirs—mineral trading houses—opened up in Bukavu and Goma to take advantage of the coltan rush.

That rush injected millions into the local economy. Exports from the eastern Congo and Rwanda soared to somewhere between $150 and $240 million in 2000 alone, and profit margins were high.⁴⁵ Cities in the region were flush with cash, and wild rumors circulated of small-time traders becoming millionaires within months. As most Congolese do not have domestic bank accounts, their investments went overseas or were put into local real estate, fueling a construction boom. Everywhere you looked there was scaffolding made out of eucalyptus saplings, especially along the popular lakefront properties. The nightclubs were full, and patrons paying in hundred-dollar bills were not uncommon.

Olivier had his own stories of opulence. In 2000, in the middle of the coltan boom, he flew to Kigali, where a sullen man in a cheap suit boarded the plane with a jeep-load of battered cardboard boxes, sealed with cheap tape. It was evening, and the man insisted on sleeping onboard the airplane, along with several of his bodyguards, before flying to Bukavu the following day. It was only when his customer was disembarking that the strange man approached him with an impish smile and confided to him: He had been sleeping on $15 million in Congolese and U.S. bills, he cackled, and hurried off. “Cash flow,” Olivier said, shaking his head, “was always a huge problem. The banks didn’t work, so people had to travel with tens of thousands of dollars on them.”

The coltan price stayed high between June 2000 and July 2001, producing record profits for the RCD, the Rwandan government, and their business associates. Some researchers estimate that net profits made by Rwandan companies could have been as high as $150 million for this period for coltan alone, while other researchers calculate total profits made off the minerals trade at $250 million per annum throughout their occupation.⁴⁶ For Rwanda, whose entire annual budget was $380 million at the time, this income made its expensive involvement in the Congo possible. President Kagame himself described their involvement in the Congo as “self-sustaining.”⁴⁷ He was more than right. Rwanda’s official military budget was $55 million in 2001, almost a third of total spending, but the London-based International Institute for Security Studies put the real amount at $135 million.⁴⁸

But was it just about sordid greed? Were the vampires sucking blood just to quench their grisly thirst, or was there a more nuanced explanation? Individual Rwandan commanders did get rich—it was difficult not to notice the influx of luxury SUVs and the construction of elegant houses in Kigali during the war. Nevertheless, for the most part, the profits facilitated the war. The Rwandan government had an army of 60,000 soldiers to pay and supply. At the same time, the regime was facing its own political challenges. Its first two prime ministers had defected, along with dozens of high court judges, ministers, diplomats, army officers, and even soccer players. They all protested widespread abuses by the security services, a repressive political climate, and a general authoritarian drift. Like many one-party regimes that faced stiff opposition, the Rwandan Patriotic Front increasingly resorted to patronage and repression to deal with dissent.

“It would be a mistake to see this just as personal greed,” the former high-ranking RCD officer told me. “They were very organized; they provided military escorts to mineral shipments so that we couldn’t stop them at the border; they decided which businessmen could do business. But I also saw Rwandan officers jailed and beaten for having stolen money!”⁴⁹ Indeed, according to one human rights report, despite the profits coming out of the Congo, civil servants in Rwanda were asked to give up to one month’s salary per annum as contribution to the war effort.⁵⁰ For many Rwandans, from the presidency down to the school teacher, the war in the Congo was an ideological project, not just an opportunity to plunder.

The government set up a Congo Desk within the external intelligence office that dealt with all aspects of Congo operations. Anyone interested in doing business in the Congo would have to pass through the Congo Desk, which would help them with security and to obtain tax exemptions. “There were many Rwandan businessmen who came to the Congo to do business—this is true,” Patrick Karegeya, who as intelligence chief played a key role in providing protection, told me. “But it was all legal business, there was nothing illegal about it.”⁵¹

Nonetheless, many of these companies had close family or financial ties to the Rwandan government, employing army officers as directors or allotting substantial shares to the party. Rwanda Metals, a company that the ruling party controlled, was the main buyer of minerals from the eastern Congo, and the managing director was appointed directly by the presidency. There was also a host of smaller companies, such as Great Lakes General Trade, which was comanaged by Major Dan Munyuza, an influential RPA officer who worked for the external intelligence office. The chief of security for Rwanda in the Congo, Major Jean Bosco Kazura, was a partner in another Kigali-based company that imported coffee and diamonds from the Congo. According to UN investigators, General James Kabarebe himself would sometimes coordinate the purchase and transport of coltan, tin, and gold through Rwanda.⁵²

“I was just doing business,” Pierre responded when I asked him if he had any regrets about working with the rebels and mining companies during the war. That is the usual refrain echoed by businessmen throughout the war zone. “In any case,” the burly pilot continued, “all the flights for the rebels we did were pretty much at gunpoint.”

It was difficult not to believe the good-natured pilot. He laughed. The subtext read: Of course you had to cut corners, bribe people, deal with dubious clientele. But this is the Congo—if we didn’t get our hands dirty once in a while, we would be out of business.

He had a point. According to a World Bank study, if you paid all of your taxes in the Congo—a full thirty-two different payments—you would be dishing out 230 percent of your profits.⁵³ In other words, you can only survive by cutting corners. The tax system had lost its overall coherence, as revenue-collecting agencies had proliferated over the years, each using exorbitant tax rates as blackmail to obtain bribes. The tax code was never intended to be followed; the state had created regulations that begged to be broken and had dreamt up its own subversion, pushing a large part of the economy into the informal sector so that individuals could profit.

The individuals who profited were, obviously, those in charge. During rebel rule in the eastern Congo, the businessmen who prospered were, for the most part, those who curried favor with the political and military leaders. “We all had our friends in the rebel high command we could call up when we had problems,” Pierre Olivier said. “They needed us because we flew for them. We needed them because they were the bosses.” Did he feel uncomfortable about this symbiosis? “That’s the way things work. Did I have a choice?”

Business in the Congo required a healthy dose of pragmatism. For many, cutand-dry morality was out of place here. This conundrum became clear to international charities, as well, which set up their bases in Goma to provide food and health care to victims of the violence. Many rented the houses of businessmen close to the rebels, as they, of course, had the nicest compounds with sumptuous gardens, often overlooking the lake. Humanitarian groups also used trucking companies and shopped for groceries in stores linked to the military enterprise. It was almost impossible to avoid.

Similar moral dilemmas affect affluent western consumers, as well. It wasn’t just Congolese and Rwandans who made a fortune. The minerals were transported, processed, and consumed by companies and consumers elsewhere, especially in Europe, Asia, and the United States. In some cases, these companies had close relationships with rebel groups. For example, the Belgium-based company Cogecom bought tin and coltan directly from the RCD monopoly, sending money into RCD coffers. Another joint venture by American and Dutch businessmen, Eagle Wings Resources, engaged Paul Kagame’s brother-in-law as its local representative, which gave it easier and cheaper access to the Congolese minerals. These companies then sold their minerals on to large processing companies, including U.S.-based Cabot Corporation, Chinese Ningxia, and German H. C. Starck. The transport was assured by multinational logistics companies such as the state airline of Belgium, Sabena, while financing was supplied by large regional banks and, in one case, by Citibank.⁵⁴

This supply chain was unearthed by UN investigators and other analysts, triggering an immediate reaction from international business circles. Some denied allegations outright; others protested that there was nothing illegal about buying or transporting minerals from the eastern Congo. This is partly true. International law does little to regulate human rights abuses associated with trade. The Organization for Economic Co-operation and Development (OECD) put forward Guidelines for Multinational Enterprises, but these are voluntary, and violations have few consequences. Some countries, like the United States, have domestic laws that can be used to hold companies based there responsible for their conduct overseas. A wave of lawsuits, for example, was filed in U.S. courts in the 1990s and 2000s based on the Alien Torts Statute, but plaintiffs have to prove that companies had not only knowledge of abuse but also intent, which is difficult to prove even about companies directly involved with rebels, let alone those four steps removed along the supply chain. Some international lawyers argue that companies can be held liable under international law for buying misappropriated goods, much the way one can be charged in domestic courts for purchasing stolen goods, but this logic has not gained much traction outside of UN tribunals.⁵⁵

In other words, consumers are not held responsible for the conditions under which minerals are produced. In the Congo, despite the occasional hue and cry raised by the media, corporate responsibility has been largely ignored—the supply chain is more convoluted, passing through traders, brokers, smelters, and processing companies. The tin and coltan that come from the Congo are mixed with those from Brazil, Russia, and China before they make it into our cell phones and laptops. There is a burgeoning consensus in international law that we should care about the conditions under which the products we consume—sweatpants, sneakers, and even timber—are produced. If we can hold companies accountable for their business practices, we will give an incentive to the Congolese government to clean up the mining sector. The “conflict minerals” legislation signed into law by President Obama in July 2010 is a step, albeit a small one, in the right direction.