The subsidiary of an Ohio, United States, company knowingly bust US sanctions on President Robert Mugabe and his deputy by supplying them with packaging material and when asked to sign an undertaking not to break the financial sanctions the managing director said he would rather resign.
Tichafa Ndoro of Greif said he had been supplying Mugabe’s poultry and pig farms, Kutama Farms, with packaging material for 15 years.
Mugabe paid through cheques from his personal bank accounts.
Ndoro said the company no longer accepted cheques but Mugabe and his deputy Joseph Msika whom he supplied with similar packaging material were exceptions.
He said the head office in Ohio was aware of his business transactions.
Ndoro said the company had asked all managing directors of its foreign offices to sign a code of conduct, which among other things required the managing directors to abide by US sanctions, but he had not signed.
He had told his superiors that he would rather resign.
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SENIOR AFRICA DIRECTOR C. COURVILLE
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TREASURY FOR J. RALYEA AND B. CUSHMAN
COMMERCE FOR BECKY ERKUL
E.O. 12958: DECL: 06/14/2015
SUBJECT: US SUBSIDIARY CONFESSES SANCTIONS SINS
Classified By: Charge d’Affaires, a.i., Eric T. Schultz under Section 1
¶1. (C) The Managing Director of the Zimbabwe branch of
Greif, an Ohio-based packaging company, told poloff on June
14 that his branch had been knowingly violating US financial
sanctions for several years by providing services to Robert
Mugabe and other specially designated nationals (SDNs).
Tichafa Ndoro said his head office in Ohio was aware of the
transactions. Confronted with the seriousness of these
apparent violations, Ndoro returned to the Embassy on June 15
with the company’s domestic financial officer and Zimbabwe
lawyer, who contended that Greif should not be subject to the
executive order. End Summary.
Executive Comes Clean on Sanctions
¶2. (C) A member of the American Business Association of
Zimbabwe (ABAZ), Ndoro telephoned poloff on June 13 initially
requesting that emboffs brief an American official from their
South Africa office, Rob Zimmermann, who plans to visit
Zimbabwe next week on an orientation tour. Recalling a
letter sent by the Embassy to all ABAZ member reminding them
of US financial sanctions, Ndoro also asked if he could meet
with poloff to learn more about the sanctions and possible
implication on Zimmerman’s trip. Poloff shared with Ndoro
that there were no sanctions against travel to Zimbabwe.
During this initial phone conversation, Ndoro told poloff
that he had recently received a check “from the office of the
vice president.” Poloff agreed to meet with him the next day.
¶3. (C) On June 14, Ndoro told poloff that his company has
been providing packaging material to one of Mugabe’s poultry
and pig farms, named Kutama Farms, for the past 15 years.
Ndoro remarked that he often stared in disbelief at the
checks, which were written from Mugabe’s personal bank
accounts. He also stated that Greif had recently received a
check from Vice President Joseph Msika for similar packaging
material. Although the company no longer accepted checks
from ordinary clients, Ndoro said that he made exceptions for
Mugabe and Msika.
¶4. (C) Poloff advised Ndoro of the financial sanctions
against Mugabe, Msika, and other high-ranking GOZ officials.
Ndoro responded that he was already aware of the executive
order. Seeking to justify his actions, he asked how his
company was supposed to turn down the President of Zimbabwe.
Moreover, other US companies involved in the agricultural
sector, such as Olivine and Pioneer Seed, were also violating
the sanctions. The executive even mentioned that some in his
office had suggested that the sanctioned individuals develop
ways to disguise their involvement.
Notified Head Office of Violations
¶5. (C) Ndoro told poloff that he had notified his head
office in Ohio that he was selling to SDNs. He did not
indicate what response if any response came from the U.S.
office. Ndoro stated that Greif headquarters had recently
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asked all managing directors of its foreign offices to sign a
code of conduct, which among other things required the
managing directors to abide by U.S. sanctions. Ndoro was the
only executive not to sign the document, noting that he told
his superiors that he would sooner resign.
Arguing Against Sanctions’ Applicability to Greif
¶6. (C) A tighter-lipped Ndoro returned to the Embassy on
June 15 with the company’s Zimbabwe lawyer, Susan Brighton,
and finance manager, Herbert Pasipamire, to urge the
sanctions’ inapplicability to the Zimbabwe branch’s
activities. The group argued that the branch conducted its
operations entirely in Zimbabwe and was not considered a U.S.
company under Zimbabwean law. Moreover, they said most of
Greif’s stockholders were based in the Netherlands. (N.B.
Which also maintains financial sanctions against Mugabe and
his regime.) The trio said they would furnish more detailed
information on Greif’s corporate structure relevant to the
company’s domicile as it may pertain to sanctions.
¶7. (C) The group urged further that sanctions not be applied
in Greif’s case on policy grounds. They maintained that
barring the company’s business with sanctioned individuals
would lead either to reduced sales and layoffs and/or the
eventual take-over of the branch by ruling elite interests.
They feared a rash of law enforcement actions by GOZ
officials should they cut off sanctioned individuals,
followed by the possible incarceration of branch principals.
The damage to the company and its workforce would punish
“innocents” without appreciable impact on those targeted.
¶8. (C) We plan to develop more information on Greif and its
possible sanctions violations, and will report accordingly.
Given the local office’s very open posture and willingness to
share information, an approach to the company’s potentially
more cautious headquarters in Ohio at this time could prove
counter-productive. In the same vein, we can’t rule out that
knowledge of our interest in this case will get into the
public domain. However, we believe this could serve to
reinforce publicly our commitment to pressing and isolating
those targeted by the President’s executive order.