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MTN faces fresh Taliban payoff allegations in US court

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 08 Jun 2020

Pressure is mounting on MTN Group as it faces fresh allegations in an amended lawsuit that the telco “was a particularly aggressive practitioner of protection payments” to terror group al-Qaida in Afghanistan.

MTN is being accused of violating US anti-terrorism laws.

In the 498-page court complaint, MTN is accused of declining to use armed guards to protect its towers, opting to purchase cheaper “security” by buying it from the Taliban.

The court documents say MTN’s public statements reflect its practice of paying protection money. According to the complaint, MTN paid the Taliban when it was, in its own words, “not a target”.

It is alleged that MTN negotiated its “protection payments in direct discussions between MTN Afghanistan’s security department and Taliban commanders”.

The initial complaint was filed in a US federal court in December on behalf of families of US citizens killed in attacks in Afghanistan.

Africa’s largest mobile operator denies the allegation. It filed a motion to dismiss in the case.

Commenting on the latest development, MTN group president and CEO Rob Shuter says: “We are reviewing the new material in consultation with our legal advisers but remain of the view that we conduct our business in a responsible and compliant manner in all our territories. As a result, we intend to continue to defend our position.”

The telco says in a ‘motion to dismiss’ it filed in April 2020, MTN asked a US court to end the lawsuit and grant a judgement in MTN’s favour for two independent reasons.

“These were because the court lacks jurisdiction over MTN, which does not operate in the United States, and because the complaint does not allege any conduct by MTN that would have violated the US Anti-Terrorism Act.”

“Now that the complaint has been amended with additional allegations, MTN anticipates filing another ‘motion to dismiss’ to take these new allegations into account. While MTN is reviewing the new material, it does not change the fundamental defects in the case explained in the April motion,” reads an MTN statement.

Under US law and procedures, MTN is not permitted at this stage of the lawsuit to challenge or contest the factual allegations made against the company, so the motion to dismiss filed in April focused on the lack of jurisdiction and the legal insufficiency of the claims.

Further accused

Other multinational firms, including security firm G4S, US infrastructure group Louis Berger and consultancy Janus Global, which operated in Afghanistan and Iran between 2009 and 2017, were also named in the filing.

Complainants allege MTN paid bribes to al-Qaida and the Taliban to avoid investing in expensive security for its transmission towers.

The alleged payments helped finance a Taliban-led insurgency that led to the attacks in Afghanistan between 2009 and 2017, the accusations say.

The amended application filed on Saturday says the “logic behind MTN’s protection payments partially matched the logic motivating the other defendants. The MTN defendants intended to harm American interests in Afghanistan, and supporting the Taliban allowed them to do so.”

In addition, it says MTN had economic motivations similar to those of the other defendants.

MTN has become one of the world’s most valuable telephone companies by “wading into nations dealing with war, sanctions and strife”, claims the complaint, and its success in unstable markets, including Afghanistan, yielded profits.

“MTN is now, due to this business model, ‘bigger by some measures than its US counterparts’.”

Furthermore, the complaint alleges: “While MTN was achieving rapid growth in Afghanistan, the cellular-telephone sector provided a critical source of financing for the Taliban. As reported by the Wall Street Journal in 2010, telephone industry executives themselves say operators or their contractors routinely disburse protection money to Taliban commanders in dangerous districts.

“That’s usually in addition to cash that’s openly passed to local tribal elders to protect a cell tower site − cash that often also ends up in Taliban pockets.”

Specifically, the court papers say the Taliban asked MTN to “pay monthly protection fees in each province, or face having their transmission towers attacked”.

The going rate was “usually in the range of $2 000 per tower, per month, but it depends on who controls the zone around each tower”. In some areas, the complaint claims, MTN made payments to local Taliban commanders in exchange for protection.

“In others – such as Helmand and Kandahar – MTN operated in a Taliban-controlled environment in which protection payments must go directly to Quetta.”

The evidence against MTN is said to have been gathered by the Afghan Threat Finance Cell (ATFC) – a multi-agency intelligence organisation − in Afghanistan from 2008-2012.

“The ATFC generated intelligence products, memorialised in Drug Enforcement Agency Form 6 and Intelligence Information Reports, describing the common practice among Afghan telecommunications firms of paying the Taliban. According to the ATFC’s evidence, MTN Afghanistan was the worst offender of all the companies,” reads the complaint.

Furthermore, it says: “The ATFC confirmed MTN Afghanistan’s frequent insurgent payments both in interviews with MTN employees and in wire intercepts collected by the Afghan government’s Sensitive Investigative Unit.”

In witness interviews with ATFC investigators, “MTN employees admitted MTN Afghanistan paid insurgents not to threaten its cell towers. They justified those payments by appealing to MTN’s commercial interests: MTN sources told the ATFC that it was cheaper to pay the Taliban than it would have been to rebuild the towers in the face of Taliban threats.”

In its rebuttable of the case in April, MTN, which has a global footprint in 22 countries, said it remains of the view that it conducts its business in a responsible and compliant manner in all its territories “and, as reflected in the motion to dismiss, intends to defend its position accordingly”.