In Congo, Gertler's diamond monopoly became politically controversial and was cancelled months after Joseph Kabila came to power. Still, he has continued to land profitable deals ever since. Shimon Cohen, Gertler's London-based public relations advisor, told me that his "family trusts have invested or brought over $2 billion of investment into the mining sector" in Congo over the past 15 years. Public records and documents released late last year by a British parliamentarian show that in the past several years the Congolese government secretly sold vast mining assets on the cheap (Cohen denies that they were undervalued) to various British Virgin Islands-registered shell companies, several of which are linked to Gertler. "Gertler's philosophy is that everyone has a price and can be bought," the Kroll report said.
Today, Gertler is the best-connected foreigner in Congo, enjoying "a close friendship with the president," according to Cohen. He was one of the few Westerners invited to Joseph Kabila's 2006 wedding, and in June 2011 he joined the president on the VIP tribune during Independence Day celebrations. "Dan Gertler is a friend," Antoine Ghonda, a close aide to Kabila, told the Sunday Times. "The way our president works, he has close contacts and protects them." For his part, Gertler has called Kabila "the most promising new president in the world -- a new Mandela." That's not a view shared by most observers. "[S]tate security forces continued to act with impunity throughout the year, committing many serious abuses, including unlawful killings, disappearances, torture, rape and engaging in arbitrary arrests and detention," the U.S. State Department's 2010 human rights report, released last year, says of Kabila's Congo. "Government corruption remained pervasive."
With vast mineral deposits worth an estimated $24 trillion, though, including enormous amounts of cobalt, copper, and gold, Congo has irresistible appeal to companies like Glencore, which has around $4.5 billion at stake there in three holdings.
Operating in the country is simply not possible without high-level political protection, and Gertler offers it for Glencore, according to sources and public accounts. One former Glencore employee described the company and Gertler as "totally enmeshed" in Congo. Gertler, this person told me, "managed the entire relationship between Glencore and Kabila and the Congolese government," with Glasenberg, the CEO, flying into Kinshasa or Lubumbashi on a private jet to meet with him. Gertler's spokesman Cohen says that his client "has never been personally engaged in business enterprises with Glencore." However, records I examined show an extensive set of financial dealings between firms in which Glencore and Gertler hold significant stakes, a fact confirmed by Buerk, Glencore's spokesman. Cohen acknowledges that Gertler is "an advisor" to a private consulting company called Fleurette, registered in Gibraltar and "owned by a trust for the benefit of the [Gertler] family," which happens to have a "long-standing business relationship with Glencore." Glencore and Gertler are shareholders in Katanga Mining; Glencore's stake alone was worth around $2.7 billion at the time of its IPO -- Glencore's fourth-largest equity holding. They both held stakes as well in Nikanor, a copper and cobalt company that Glencore provided most of the financing to purchase in exchange for exclusive rights to sell all the mineral output. (Nikanor was acquired by Katanga in January 2008 for $452 million.)
Glencore has not been keen to advertise its relationship with Gertler. It has, however, offered him a series of discreet, complex, and remarkably profitable deals. In one case, Glencore sold stock in Katanga Mining at roughly 60 percent of its market value to Ellesmere Global Limited, a British Virgin Islands firm whose "ultimate owner is a trust for the benefit of the family members of Dan Gertler," according to Canadian insider-trading records. Ellesmere quickly sold it back to Glencore at close to full market price, netting a profit of about $26 million. "These purchases turned out to be good investments," Buerk said. Corporate records I obtained show that in another deal, a subsidiary 50 percent owned by Glencore waived its rights of first refusal to acquire an additional stake in Mutanda Mining, a copper and cobalt producer, from Gecamines, Congo's state-owned mining company, and instead recommended that the shares be sold to one of the offshore firms owned by Gertler's family trust. It's not clear why Glencore's subsidiary would have passed on the offer, because business records and documents suggest that Gertler's trust picked up the Mutanda shares for a fraction of their value. "We preferred to invest our money in developing Mutanda -- building the mines and the plant," Buerk said in an email explaining why Glencore did not buy the shares.
However much Gertler has made through his firms' deals with Glencore, Glencore has clearly profited too, given the huge portfolio it has accumulated in Congo. That, my sources told me, is exactly the point.
"Glencore has a Gertler everywhere," the former Glencore employee says. "That's standard."
FOR GLENCORE, PARTNERING with operators like Gertler is not a chance occurrence. On the contrary, it reflects the company's modus operandi: gaining access to resources through gatekeepers who have intimate connections to senior-level decision-makers. Such gatekeepers, whether agents, business partners, or the heads of service companies it uses, offer a way to navigate life on the frontier, a place where, Glencore warned investors, they should not be surprised by what happens. After all, the company's IPO prospectus notes dryly, "[S]ome of Glencore's industrial activities are located in countries where corruption is generally understood to exist."
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