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Death in Vienna: The Death of Erich Rebasso

In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency. Its purpose was unusual — the father of four young children was blowing the whistle on himself.

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Death in Vienna: The death of Erich Rebasso
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In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency.

Its purpose was unusual — the father of four young children was blowing the whistle on himself.

“I deeply regret having been used for criminal purposes and I am willing to submit the matter to the required criminal review,” Rebasso’s five-page confession concluded.

But it had all come apart. Rebasso admitted he had been used to launder tens of millions of dollars. He explained that, for over a year, he had been accepting payments from Russian criminals and had sent the funds to other bank accounts at their instruction. Then 45, Rebasso specialized in advising Russian clients on how to do business in the West. He had an excellent reputation as a fast, reliable, and discreet partner, and he spoke Russian fluently.

As it turns out, those criminals were using companies that were part of the Troika Laundromat. The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank. Some of the accounts Rebasso wired to belonged to two of the system’s core offshore companies: Industrial Trade Corp. and Nixford Capital Corp.

Between December 2006 and February 2008, Rebasso used 150 individual transactions to send almost US$ 96 million to laundromat accounts at Ukio Bankas, a Lithuanian bank.

Many of the reasons specified for the transfers made little sense for a law firm. Along with trades involving “fruits and vegetables,” “consumer goods,” and “electronic goods,” Rebasso is even listed as buying “frozen herring” from companies with Ukio bank accounts. More likely, the description was a red herring aimed at Ukio’s compliance department.

Rebasso’s own Austrian bank accounts were held at Raiffeisenlandesbank Niederösterreich-Wien (RLB). Though the bank investigated his large transfers, it appeared to take no further action for two years — at which point it finally pressed him to stop.

The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank

Rebasso’s confessional letter had little effect. While police looked into the matter, it was two years later when they informed him that they had stopped the proceedings because they believed any potential crime had happened outside their jurisdiction and been committed by foreigners.

Two years after that, Rebasso was dead.

The Sheremetyevo Fraud

According to his statement, Rebasso’s involvement in the money laundering scheme began on a visit to Moscow in November 2006 where he was introduced to Viatcheslav Dremin, a Russian businessman. Dremin told him that he provided financial services to Russians who needed to transfer funds abroad. But the official system for sending money across borders was very bureaucratic, he said, and he needed to speed up the process. He wanted Rebasso to act as his trustee in Vienna to help him move the money faster.

The lawyer accepted. Soon, two Vienna bank accounts belonging to his Austrian company, Schulhof Investigation (later renamed Sostegno), began receiving large sums from companies Dremin represented, along with instructions on where to send them. In every instance, he received his directions via an anonymized email address.

Rebasso worked on behalf of three insurance companies registered in Dagestan, a troubled North Caucasus republic within the Russian Federation.

At least some of the money appeared to be of criminal origin.

One of the companies Dremin represented, National Insurance, was directed by Russian businessman Maxim Vedenin. In 2011, Vedenin would be sentenced to 19 years in prison for robbery and the murders of two prostitutes.

Prior to that, Vedenin’s company had received money from a widely-known fraudulent scheme involving fuel at Moscow’s Sheremetyevo airport that OCCRP uncovered in 2012.

Between 2003 and 2008, Moscow’s busiest airport bought fuel through a long chain of intermediaries that grossly inflated its cost. According to court documents, phantom companies earned at least $200 million in unnecessary markups in 2006 and 2007 alone. The Russian government lost more than 1 billion rubles ($40 million) in tax revenue from the scheme. The higher fuel costs also meant higher airplane ticket prices for the travelling public.

A portion of the money generated by the scheme was laundered through the Troika Laundromat. Vedenin’s company, National Insurance, received some of the proceeds, and then sent them on to Rebasso’s company.

The Austrian lawyer then sent the funds into the Troika Laundromat, using it as a money laundering system. Over the same period, between December 2006 and March 2007, he sent $19.4 million to the accounts of Nixford and Industrial Trade Corp. To justify the transfers to the bank, he provided false invoices indicating he had bought “consumer goods” from the Troika Laundromat companies, or was simply paying “for bills.”

All but one of Dremin’s companies have been dissolved, and he couldn’t be reached for comment.

Raiffeisen Looks In

Despite Rebasso’s efforts to mask his money transfers as legitimate trade deals, his own bank began to investigate the financial activity in the spring of 2007.

On March 15, Rebasso’s office received a letter from his bank’s legal department inquiring about a “sharp increase in transaction amounts” on one of his accounts. The bank wanted to know on whose behalf Rebasso was acting.

A few days later, Rebasso responded in a letter, explaining that he was handling “foreign payments” for three Russian insurance companies. He also provided their names, their information from the Russian commercial register, and evidence of his business relationship with them.

The bank appears to have been satisfied with Rebasso’s explanation, because afterward, his transfers continued.

(A representative of RLB said the bank could not comment on its clients and that it had complied with all anti-money-laundering obligations.)

A Last Client

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

He opened three new RLB accounts for his company, Schulhof, to handle the anticipated load. The accounts were denominated in U.S. dollars, euros, and Russian rubles and soon, more money started to pour in. Once again, Rebasso received his instructions from an anonymous e-mail address, this time identified only by a sequence of digits.

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

Over two months near the beginning of 2008, Rebasso wired $68.3 million in 106 individual transfers to a bank account owned by Vantrel Invest Ltd., a New Zealand–registered shelf company.

Vantrel doesn’t appear to be a Troika Laundromat company; rather it is an intermediary that sent millions on to the Laundromat. (Vantrel’s bank account was held at Ukio Bankas, where many Laundromat companies held their accounts.) Documents related to the transactions said they were to buy mobile phones, though this explanation is almost certainly another fiction.

In his confessional letter, Rebasso told the Austrian police that he stopped working for the Russians in 2008. It isn’t known how much money he took for his services.

“I ended this activity at the end of February,” he wrote. “Among other reasons, primarily because the scope overwhelmed my control options.”

His hesitation appeared to be only part of the truth.

In fact, that month, Rebasso’s Austrian bank, RLB, had had enough. His transactions had apparently triggered another serious review, and senior executives told Rebasso he would need his own banking license to continue such large transfers.

The Finlist Fraud

Though he had stopped working with his Russian partners, Rebasso’s troubles were just beginning. He appeared to have become an unwitting facilitator of a fraudulent investment scheme.

According to his letter, in June 2008, Rebasso started receiving emailed complaints from ordinary Russians who said their savings had been stolen.

Rebasso described the correspondents as “rather simple-minded, not very wealthy people who were baited with internet ads.”

Apparently, the victims of the scheme had been offered what appeared to be lucrative investment opportunities through a platform called Finlist Forex Found. Then, without Rebasso’s knowledge, they were instructed to send their money to the accounts of his Austrian company, Sostegno.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins.

Now the victims were furious, demanding repayment of money he had already sent on to the Laundromat.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins

Rebasso got in touch with Mirgunov and asked what was happening. The Russian told him he would fix the problem and reimburse anyone who had lost money. But he never did, and by the end of the year, Rebasso sent his letter to the Federal Criminal police.

The Beginning of the End

The police forwarded the case to the public prosecutor’s office in Vienna. Nothing appeared to happen. On Dec. 3, 2010, two years after his complaint, Rebasso was notified that police had ended their case. It had been dismissed because the public prosecutor decided the case was outside Austrian jurisdiction. “Foreign acts of foreigners,” the statement read.

Rebasso’s own story was nearing its end.

In late July 2012, as he walked from his office to his Mercedes SUV in an underground parking lot, he was ambushed by two men. His car was later found empty in a different location, and shortly after his disappearance, his family received a demand: The kidnappers wanted a 435,000–euro ransom. After no deal was reached, Rebasso’s body was found three weeks later in a forest near Vienna. Austrian authorities concluded that he had been suffocated, probably while he was taken into a headlock.

Soon afterward, two former Moscow police officers were arrested and charged in connection with the ransom demand — but not for Rebasso’s kidnapping and murder. They were sentenced to eight and nine years in prison, respectively.

It’s still unclear who ordered Rebasso’s murder and why, though media and police speculated that victims of the investment fraud had hired the officers to recover the money.

More than six years later, the exact circumstances of Rebasso’s death are still unclear.

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The authors are investigative reporters with OCCRP

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation but also in carrying the baggage that comes with being black in America.

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US
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The United States of America has excelled in projecting an extraordinary image of itself as a free nation with a thriving democracy, where anyone can come and work their way towards a better life through civic participation. However, what the past few years in particular have peeled away betrays a somewhat different truth: that voting in the United States is hard and getting steadily more so. And there’s one group of people who face a particular set of difficulties when seeking to cast their ballot: African immigrants.

Some historic context is needed regarding voting issues within the US. First and foremost, there is a historic precedent of voter suppression in the US that is unequaled within the modern Western world. Much of the targeting of such efforts has directly affected African Americans and people of colour. After slavery was abolished, states would go to incredible lengths to suppress the black vote, including implementing taxes on voting, forcing black people to produce extraneous forms of personal and family identification and making would-be black voters pass vaguely worded and lengthy “literacy tests” in order to cast their ballot. These systems, a part of the infamous Jim Crow laws, were struck down as illegal in 1965 when the country passed the Voting Rights Act.

In the years that followed, those who sought to seek the vote sought out ways to circumvent the law and keep the voter turnout low. Since the latter half of the 20th century, high voter turnout translated to a more liberal result. Take, for example, that a Republican presidential candidate has won the popular vote once since 1988 (George W. Bush in 2004). In the cases of the victories of Donald J. Trump in 2016 and George W. Bush, they skated to victory through the electoral college; a system that traces its roots to suppress the popular vote.

When looking at US politics, it isn’t as much a matter of high voter turnout as it is who comprise the voters that are showing up to vote. The most telling demographic, the group with the highest disparity of aligning with Democrats over Republicans, is African Americans. Hillary Clinton carried the black vote by an 80 point margin – 88 per cent to 8 per cent over Trump in the 2016 election. This margin, coupled with the United States becoming more, not less, diverse has left those seeking to suppress the vote scrambling for answers.

In 2013, efforts to suppress voters gained a major boost when the US Supreme Court overturned section 4(b) of the Voting Rights Act, which outlined that states and districts that had previously been involved in voting discrimination needed pre-clearance of the validity of their electoral processes. The conservative judges ruled this as unconstitutional, that the section “punished” states for past mistakes, not for possible future successes. Justice Ruth Bader Ginsberg dissented strongly, stating that “throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.”

The Voting Rights Act had been brought before court in the wake of a series of issues across the US, primarily having to do with controversial voting ID laws, reports of voter suppression and other forms of disenfranchisement. In a theme that runs across America’s election process, the black community was disproportionately affected.

This brings the issue to focus on African immigrants in the United States. The issue of immigration in the United States has currently brought the federal government to a shutdown for over a month. There is constant rhetoric from the Trump administration targeting illegal immigrants as a major obstacle to the security and economic future of the United States. The issues of building a border wall with Mexico and continuing to provide guaranteed safeties (such as the Deferred Action for Childhood Arrivals programme, which offers protections to the children of illegal immigrants into the US) are being used as bargaining chips at the government level.

A difficult time

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

African immigrants in the US are a small but rapidly rising group. The increase has been marked since 1970, especially amongst sub-Saharan Africans. According to the Pew Research Center, the number of African-born individuals heading to the US increased nearly 250 per cent between 2000 and 2015, from 881,000 up to 2,060,000. Africans are also the fastest growing demographic among black immigrants, increasing by 137 per cent between 2000 and 2013.

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

In the US, a major aspect of any voting rights issue is where in the US you’re living. Different states hold different standards, different regulations and varying requirements. When examining how voting standards impacts African immigrants, there needs to be a brief examination of where African immigrants live.

The five states with the highest African immigrant population are California, New York, Texas, Maryland and Virginia. Cities such as Atlanta, Georgia and Minneapolis also have high numbers of such migrants. This is where context becomes even more important; California and New York are known as more immigrant-friendly destinations, and their major metropolitan areas are regarded as “sanctuary cities” for illegal immigrants. New York and Minnesota don’t require a photo ID whereas California may require one for a first-time voter (newly-naturalised US citizens are always first-time voters). Maryland holds a similar policy.

Texas, Virginia and Georgia, on the other hand, are a different matter entirely. Virginia requires a valid photo ID in order for an individual to vote in person. Texas and Georgia are both mired in controversy over the stringent regulations put in place regarding the standards for voter IDs. The state of Texas is currently mired in litigation over the voter ID laws, with opponents arguing that it disproportionately impacts minorities.

In Georgia, where over 70,000 African immigrants reside in the Atlanta metropolitan area, the man who was presiding as the Secretary of State (the office which controls the conducting of elections, a possible conflict of interest) won narrowly and controversially over Stacey Abrams, who would have been the first black woman elected to be a state governor in the US. Abrams repeatedly made claims that there was voter interference, particularly amongst black precincts, where electronic voting was in disarray and reports of voter suppression were rampant. These claims had much of their basis in and around Atlanta, Georgia.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult. The paperwork hoops to jump through are staggering. On average, it takes an immigrant a minimum of five years of continuous residency to become a naturalised US citizen. In cases that need further legal counsel, it can take even longer as the legal side of American immigration courts have become steadily more choked and congested in the new millennium.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult.

For immigrants, the issues surrounding voter ID can often be much murkier. For instance, immigrants can gain driver’s licenses within the United States, which is one of the key forms of identification needed in states with more stringent regulations. This doesn’t mean that immigrants have the appropriate information explained to them regarding the IDs being obtained. The African Advocacy Network of California notes that although driver’s licenses are applied for successfully by immigrants who aren’t naturalised, the fact that they are still unable to vote due to their status isn’t explained to them. This can lead to immigrants attempting to vote, unknowingly engaging in an illegal act of fraud. The penalties for such fraud in the US are harsh. Both illegal and legal immigrants can face deportation if found to be involved in fraudulent voting. Cases of actual voter fraud involving illegal immigrants are incredibly rare, but that doesn’t stop Trump from repeatedly claiming that Hillary Clinton won the popular vote because of millions of “illegals” somehow managing to cast ballots.

Illegal immigrants in Trump’s America

The Obama administration was noted for its strict approach to illegal immigration, deporting hundreds of thousands between 2009 and 2017. That same administration, however, did focus on expanding a programme called the H1-B visa, which encouraged workers from outside of the United States to enter the country to work. Many prominent corporations, including Amazon, Google and Microsoft, heavily leaned on the programme as it eased the transition for professionals to gain a foothold in the US workforce. In addition, the H1-B programme made the path to a Green Card visa (an initial step towards US citizenship) markedly smoother, encouraging immigrants to engage in the process of becoming a citizen.

The Trump administration, on the other hand, has taken a significantly different approach. The current White House passed an executive order titled “Buy American, Hire American” that directly encourages American companies to hire only the most skilled workers from outside of the United States. This will have a long-term impact on the number of H-1B applicants who can head down the path of gaining citizenship.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it. Under this administration, the U.S. Citizenship and Immigration Service (U.S.C.I.S.) has created a new task force to look into cases and possibly “denaturalise” citizens for often muddied reasons, such as making a clerical mistake on a form. In essence, this leaves millions of naturalised United States citizens’ status at the discretion of officials appointed under the Trump administration, one noted for its blatantly anti-immigrant rhetoric.

A prominent path to Green Card visas for African immigrants is the Diversity Lottery programme, which grants visas to citizens from all over the world. Given the administration’s track record, it comes as little surprise that the White House has looked repeatedly into cutting the programme entirely. As egregious as this is, perhaps the repeated ransom holding of the so-called “dreamers” (children of illegal immigrants born in the United States and granted legal protections) is even more insidious. Trump has made a repeated talking point of ending protections for the dreamers, even going so far as to offer continued protection as a bargaining chip for $5.7 billion of funding for a border wall in January of this year.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it.

So how does this apply to African immigrants, specifically? The numbers indicate that immigrants from sub-Saharan Africa are the fastest growing group, and that the vast majority of this immigration has occurred after 1960. This translates into African immigrants having less of an established civic network than other immigrant groups in the US.

Less civic engagement

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse. One example saw the city of San Francisco engaging with members of the African immigrant community to get involved with the local school board elections, despite many holding illegal immigrant status. Illegal immigrants worry about what will happen to their information and whether it will end up in the hands of Immigration and Customs Enforcement (ICE).

This is compounded by the constant shifting and swirling of regulations surrounding immigration within the US. Frankly put, in America, thing currently seem extremely uncertain. Those who would have gained the path to citizenship by being granted immigration visas are suddenly on the outside looking in. Immigrants from Libya, Sudan and Somalia (the three African nations affected under the Trump administration’s travel ban targeting Muslim-majority nations) are suddenly unsure of their status.

Noticeably, despite all of his talk of walls and increased military presence, Trump has not issued a travel ban to a Latin American country. The current administration is seemingly preoccupied with all things immigration, how to stop it, how to grandstand from it, how to flex political muscle by stopping it. In fact, in 2017, despite overall numbers of deportations falling, ICE deported a record number of African immigrants, more than double of the total from 2016. There were reported instances of poor treatment and abuse of deportees by ICE agents. While the numbers are comparatively small, increases in deportation can push African immigrant communities even farther outside of the democratic process. What was the number one country for African immigrant deportations from the US? Somalia.

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse.

Ilhan Omar, herself a Somali immigrant to the US, is now a first-term Congresswoman from Minneapolis, Minnesota. Her election is an indication of a potential future of US politics: that African immigrants can find a voice in politics, in part due to the rallying of their communities. She’s become an outspoken advocate for the Somali community in Minnesota while continually deriding the Trump administration’s anti-immigration policies.

Since her election, Omar has been a frequent target of scathing criticism from the conservative media and the Republican Party, who have even claimed that some of her pro-Palestine comments are blatantly anti-Semitic. While her election to the US Congress is historically significant (she’s the first African-born refugee in the history of the United States Congress), Omar is still just one member of Congress, one voice for an ever-growing population that seems ever-more targeted by executive orders of the Trump administration. Think of it this way: Omar wouldn’t be able to enter the US under the travel ban of Muslim majority countries passed down by Trump.

In essence, this message to newcomers to the US is: DON’T BOTHER GETTING ENGAGED BECAUSE THE CONSEQUENCES COULD OUTWEIGH YOUR EFFORTS. To those emigrating to the US from Africa, this messaging can appear even more insidious, as Adoubou Traore (who himself emigrated from the Ivory Coast), the director of the African Advocacy Network in San Francisco outlines: “Many Africans have inherent doubts about the legitimacy of elections, they’re a headache, their experience makes them not believe that their voices matter. When there is no guarantee that their information won’t be subject to being exploited, from their view: what’s the point?” There isn’t much that would prevent them from holding such views in America. It becomes a community question of why organise if doing so can only lead to more headache?

With issues surrounding racism against black people in America being dissected and moved further towards prominence in national dialogue, it would, at least on the surface, seem as though the communities of African Americans would provide a steady ally for Africans adjusting to life in America. Unfortunately, this is often not the case. There is a noted divide between Africans and black Americans, one that many coming to the US find difficult to bridge. Some of this gap is historically entrenched, some of it is due to the truly lacking breadth of coverage in the US education system regarding African history and culture. The awkward truth is: Africa as a topic in the US is regarded as a monolithic punch line to a bad joke, and is hardly rendered an after-thought in terms of democratic engagement.

In terms of vulnerability to less-than-democratic interests, there are myriad of groups in the United States that could use additional legal and outreach protections. Practically anywhere in America that can’t be categorised as white and suburban finds itself victim to voter suppression efforts. In the US context, the black community is systematically targeted the most.

Laws are seemingly rolled out in force yearly in dozens of states, implementing further restrictions and using scare tactics, lies and intimidation to influence local and national elections with a conservative slant.

The unavoidable truth is that Africans in the US find themselves at an ugly modern crossroads: the centuries of subversive efforts to reduce the so-called “urban” vote at a crossroads with the modern iteration of all-American xenophobic fervour. Though growing fast in population, the democratic influence has not kept stride.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank
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At first blush, Ruben Vardanyan and Armen Ustyan have nothing in common beyond their Armenian roots.

Vardanyan is a wealthy Russian banker who once led Troika Dialog, the country’s largest private investment bank. He’s spoken at the World Economic Forum in Davos and spent tens of millions of dollars on philanthropic projects in his native Armenia. Ustyan is a seasonal construction worker who shares a chilly apartment with his wife and parents in northern Armenia when he isn’t renovating flats in Moscow.

Ustyan’s name and a copy of his passport appear in the bank documents for an offshore shell company that played a role in Troika’s system. The company was one of at least 75 that formed the complex financial web, which functioned from 2006 to early 2013. Over that period, Troika enabled the flow of US$ 4.6 billion into the system and directed the flow of $4.8 billion out. Among the counterparties on these transactions were major Western banks such as Citigroup Inc., Raiffeisen, and Deutsche Bank. The dozens of companies in the system also generated $8.8 billion of internal transactions to obscure the origin of the cash.But Ustyan’s signatures on documents he says he’s never seen draw a direct line to Troika — and to a financial Laundromat that shuffled billions of dollars through offshore companies on behalf of the bank’s clients, many of whom were members of Russia’s elite. The system enabled people to channel money out of Russia, sidestep restrictions in place at the time, hide their assets abroad, and launder money. It also supplied cash to Russian President Vladimir Putin’s friends and powerful oligarchs, and enabled criminals to mask the illicit origins of their cash.

(Citigroup didn’t respond to a request for comment on this story; Raiffeisen declined to comment, citing client confidentiality; and Deutsche Bank said it had “limited access” to information about Troika client transactions and couldn’t comment on specific businesses for legal reasons.)

At the time, Vardanyan was Troika’s president, chief executive officer, and principal partner. He enjoyed a reputation as a Western-friendly representative of Russian capitalism, known for working to improve the country’s business environment and for co-founding the Moscow School of Management Skolko

As with the previous Laundromats, many of the large transactions were made on the back of fictitious trade deals. The bogus deals were invoiced variously as “goods,” “food goods,” “metal goods,” “bills,” and “auto parts.” All the invoices included in the leak were signed by proxies and sent from Troika.ru email addresses. Meanwhile, employees at Troika were setting up the opaque financial system — dubbed here the Troika Laundromat because of its resemblance to previous money laundering schemes uncovered by OCCRP.

This portrait of the operation emerges from a trove of leaked banking transactions and other documents obtained by OCCRP and the Lithuanian news site 15min.lt, and shared with 21 media partners.

As a whole, the data set includes over 1.3 million banking transactions from 238,000 companies and people, as well as thousands of emails, contracts, and company registration forms. This analysis of Troika’s network is based on a subset of the data.

In an interview, Vardanyan said his bank did nothing wrong and that it acted as other investment banks did at the time. He stressed that he couldn’t have known about every deal his enormous bank facilitated for its clients. Reporters found no evidence that he was ever investigated or accused of any wrongdoing by authorities. His signature was found on only one document in the entire scheme, in which he gives a loan to a Troika Laundromat company.

Vardanyan described the system as a private wealth management service.

Referring to the constellation of offshore companies that comprised the Laundromat, he said: “Those are technical service companies of Troika Dialog clients, among them, mine.”

“It could be called a ‘multi-family office,’” he said. “A similar practice still exists at foreign banks. Most of their clients work through international companies. I repeat: We always acted according to the rules of the world financial market of that time … Obviously, rules change, but measuring a market in the past by today’s laws is like applying modern compliance standards to the time of the Great Depression. You’ll agree that this distorts the true situation.”

Asked about the fictitious trade deals, Vardanyan said Troika Dialog’s revenue topped 2 trillion rubles from 2006–2010 ($63–85 billion, depending on currency fluctuations) and that he “couldn’t possibly know about all the deals in a company of this size.”

Though such practices were considered business as usual in Russia at the time, specialists note that systems like the Troika Laundromat can have serious repercussions.

The schemes stunt national economic development, undermine human security, and diminish the quality of life for people left behind, said Louise Shelley, director and founder of George Mason University’s Terrorism, Transnational Crime, and Corruption Center and author of the book “Dark Commerce.”

“Money laundering countries, particularly in the developing world, are losing enormous amounts of capital that are needed for infrastructure development, education, health, [and] the development of new businesses, of entrepreneurship,” Shelley said. “With this much money lying overseas, you can do all sorts of malicious things. You can interfere in electoral processes. You can help pay for fake news.”

Criminal Services

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

In addition, the Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

One of these schemes, known as the Sheremetyevo Airport fuel fraud, took place from 2003 to 2008 and artificially inflated aviation fuel prices while depriving the Russian state of more than $40 million in tax revenue. The scheme led to a hike in plane ticket prices. More than $27 million was sent by companies involved in the fraud to Troika Laundromat accounts. Vardanyan has not been implicated in the scheme and said he had no knowledge of it. In 2010, two years after the fraud ended, Troika Dialog began consulting for the airport along with Credit Suisse.

A second significant criminal inquiry tied to the Laundromat, from which $17 million ended up in the system, involves a tax avoidance scheme allegedly perpetrated by several Russian insurance companies. A man named Sergei Tikhomirov was accused of concluding false service contracts with the insurers as a pretext for having them send him large sums of money, which his accusers say he cycled through several accounts before depositing it abroad or cashing in. A portion of the money ended up in the Laundromat. (Tikhomirov did not respond to phone calls seeking comment.)

Roldugin didn’t respond to an email requesting comment, and Vardanyan said that he knew of the cellist, but was not aware that he had any business dealings with Troika.In a third case, at least $69 million went to companies associated with Sergei Roldugin, a Russian cellist and one of Putin’s best friends, who became famous after his vast unexplained wealth was revealed by OCCRP, the International Consortium of Investigative Journalists, and other media partners in the Panama Papers project. Some of the money that Roldugin’s companies received from the Laundromat originated in a massive Russian tax fraud exposed by Sergei Magnitsky, a Russian lawyer who died in jail after revealing it.

The Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Companies involved in the fraud exposed by Magnitsky moved more than $130 million through the Troika Laundromat. In fact, hundreds of millions of dollars went into and out of the Laundromat for unknown purposes.

Vardanyan said he was not aware of any of these transactions.

“Understand, I’m no angel,” he said. “In Russia, you have three paths: Be a revolutionary, leave the country, or be a conformist. So I’m a conformist. But I have my own internal restraints: I never participated in loans-for-shares schemes, I never worked with criminals, I’m not a member of any political party. That’s why, even in the ’90s, I went around with no security guards. … I’m trying to preserve myself and my principles.”

Vardanyan and his family were among those who received money from the Laundromat. More than $3.2 million was used to pay for his American Express card, went to accounts belonging to his wife and family, and paid school fees for his three children in Great Britain.

Asked about these sums, Vardanyan said the offshore companies Troika created serviced his own companies in addition to the bank’s clients.

Troika as Capstone

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Like all investment banks, Troika handled stock and bond issuance, initial public offerings, and acted as an underwriting agent. It also had a strong relationship with the local office of Citibank Inc., with up to 20 percent of Troika’s new investors coming via the American behemoth. That made New York-based Citibank Troika’s biggest “external agent,” according to a 2006 interview with Troika co-founder Pavel Teplukhin. (Citibank didn’t respond to requests for comment.)Established in the early 1990s, Troika Dialog became Russia’s largest private investment bank. It operated under Vardanyan’s leadership until 2012, when it was purchased by Sberbank, the nation’s largest state-owned lender.

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Other major international banks, including Credit Suisse and Standard Bank Group, did significant business with Troika as well.

Starting in 2006, Troika employees began putting together the pieces of the Troika Laundromat.

Four essential elements are needed to build a functioning Laundromat: a bank with low anti-money laundering compliance standards; a maze of secretive offshore companies to hold accounts at the bank; proxy directors and shareholders for both the companies and the accounts; and the so-called formation agents that can quickly create, maintain, and dissolve the offshore companies as needed.

The bank orchestrated all of these components of the Troika Laundromat, in addition to directing the money flows and fake trade deals that made up its operations.

The pivotal mechanism was based on trade: Shell companies created bogus invoices for non-existent goods and services to be purchased by other companies in the system. The practice provides a fig leaf of legitimate economic activity that makes the transactions appear less suspicious to regulators.

Al-Qaida founder Osama bin Laden used a similar system to move money around the Middle East, she said.“You’re disguising an illegal payment by pretending that it is linked to a shipment of goods,” said Shelley, the George Mason corruption expert. “The trade-based system is one of the most central parts of money laundering in the world today.”

If Troika was the capstone of the Laundromat, its cornerstones were three British Virgin Islands-based shell companies: Brightwell Capital Inc., Gotland Industrial Inc., and Quantus Division Ltd. Brightwell’s first known transaction was on April 12, 2005. Gotland was established on Feb. 17, 2006, and Quantus followed six months later on Aug. 23.

An analysis of these companies’ banking records reveals how they put the Laundromat together: Starting in 2006, they made numerous small payments to a formation agent called IOS Group Inc. to create the dozens of companies that comprised the complete Laundromat. IOS didn’t respond to requests for comment.

The three cornerstone companies then continued making payments to IOS ranging from 40 to almost 5,000 euros over almost six years to keep the entire network operating. Over that span, the total reached over 143,000 euros.

Quantus, for example, paid formation and maintenance fees for the British Virgin Islands-based Kentway SA. This company was later used, among many others, to send millions of dollars to Sandalwood Continental Ltd., a company connected to Sergei Roldugin, the cellist, and one of Vladimir Putin’s oldest friends.

Quantus’ involvement with Kentway demonstrates the many ways in which the Laundromat companies were interconnected. In this case, after first helping establish Kentway, Quantus then funded it with money that Kentway forwarded to Roldugin’s company.

The Bank

To direct the flow of funds through the Laundromat, Troika needed a commercial bank to host accounts for the companies involved. And it needed that bank to avoid looking too closely at the contracts and trades Laundromat businesses used to justify moving money from one offshore company to another.

Troika chose Lithuania’s Ukio Bankas for the job. (The Lithuanian lender would later be seized by the country’s National Bank in 2013 for engaging in risky deals and failing to follow regulators’ orders.) Ukio is known to have set up accounts for 35 companies used in the Troika Laundromat, and likely more.

Because Lithuania wasn’t yet using the euro, Ukio needed correspondent accounts at European banks, such as the Austrian Raiffeisen or the German Commerzbank AG, to handle euro-denominated transactions. Those two lenders and many other large European and U.S. financial institutions accepted Laundromat money, though they did sporadically inquire about the nature of some transactions. After prodding by one of the correspondent banks, for example, some Ukio compliance officers made inquiries about Laundromat payments that didn’t make commercial sense.

“What is the essence of this transaction? We have a contract (attached), but to be honest, I don’t really get what’s happening,” one officer wrote, adding an unhappy face, in relation to a payment that went to a company associated with Roldugin.

By this point, the money had already left Ukio’s accounts.

Asked why Ukio was chosen as the banker for the offshore companies Troika created, Vardanyan said it was just one of about 20 banks Troika used around the world.

The Armenian Proxies

A central figure in many of the transactions involving the Laundromat companies was Armen Ustyan. Far from being an investment banker, Ustyan, 34, works seasonally as a construction worker in Moscow.

Ustyan said he had never heard of Dino Capital SA, the Panama-based Laundromat company whose Ukio bank account was registered using his signature. A copy of his passport was attached, but Ustyan insisted he had no idea how it got there. Ustyan’s signature can be found on contracts and banking paperwork in the Troika Laundromat along with those of a few other Armenians. Wearing an old military jacket and hat, he sat down with reporters this January in his cold living room to answer questions about high finance.

At his mother’s request, he wrote his signature on a piece of paper and concluded that the one associated with Dino Capital had probably been forged.

The Armenian said he knew none of this, though he did recall a slim connection to Troika Dialog: While in Moscow looking for work, Ustyan stayed with a Russian Armenian whose brother he said worked for the investment bank and helped him find employment. In addition to having his signature associated with Dino Capital’s bank account, Ustyan is also listed as an attorney authorized to sign contracts on the company’s behalf, and his signature appears on at least $70 million worth of financial agreements.

The Moscow address is indeed that of Nerses Vagradyan, a Russian citizen of Armenian descent. Nerses’ brother, Samvel Vagradyan, is a director of a Russian company that received millions of dollars from Brightwell, a core Laundromat company. A Samvel Vagradyan is also mentioned on Vardanyan’s website as a donor to the banker’s charitable causes. It’s unknown whether Samvel really worked for Troika.

Neither of the Vagradyan brothers could be reached for comment. Ustyan said he doesn’t believe they used his identity.

Another Armenian front man in the Laundromat appears to be Edik Yeritsyan. His identity was used to register an account at Ukio for the Cyprus-based Popat Holdings Ltd. This company was involved in Laundromat transactions worth millions of dollars.

Yeritsyan told OCCRP that he lost his memory three years ago after a car accident and doesn’t remember some parts of his life. However, Ustyan said that he and Yeritsyan lived together in the same flat they were renovating in Moscow.

This article was first published by The Organized Crime and Corruption Reporting Project (OCCRP) a global network of investigative journalists.

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Not My Brother’s Keeper: Forces That Have Kept the Luyia People Apart

Luyias have never been able to take advantage of their numbers to gain or forge strong, collective political mileage. They have been unable to put their eggs in one basket to negotiate for their community. To understand the story of the Luyias of Kenya, one has to analyse their history from pre-colonial days to date, and particularly the impact of colonial events, ideology and administration.

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Not My Brother’s Keeper: Forces That Have Kept the Luyia People Apart
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The Luyia community has produced more vice presidents than any other Kenyan community. Musalia Mudavadi was appointed vice president in 2002 for 90 days, Wamalwa Kijana in 2003 for seven months and Moody Awori was also Mwai Kibaki’s vice president between 2003 and 2007. But has this ever translated into any political clout or force? That has always been the big question of the day.

Luyias have never been able to take advantage of their numbers to gain or forge strong, collective political mileage. They have been unable to put their eggs in one basket to negotiate for their community. To understand the story of the Luyias of Kenya, one has to analyse their history from pre-colonial days to date, and particularly the impact of colonial events, ideology and administration.

Before the Luyia nation was cobbled together as a political necessity in 1943, several Luyia clans, such as the Bukusu, Banyala, Batsotso, Idakho, Isukha Kisa, Marama and Wanga, were originally Luo, Kalenjin or Masaai. In fact, a whole community like the Tachoni was originally part of the highland Nilotes who were incorporated through inter-marriage with the Bantu. This history does not make any of the clans less Luyia. Indeed, the entire community is an amalgamation of Bantu and Nilotic genealogy, bound by a common linguistic and cultural orientation acquired through adoption or assimilation. There are more than 800 Luyia clans to date, existing as units with fluid boundaries, joined together by a thin mosaic band of cultural and linguistic similarities.

Before the Luyia nation was cobbled together as a political necessity in 1943, several Luyia clans, such as the Bukusu, Banyala, Batsotso, Idakho, Isukha Kisa, Marama and Wanga, were originally Luo, Kalenjin or Masaai. In fact, a whole community like the Tachoni was originally part of the highland Nilotes who were incorporated through inter-marriage with the Bantu.

The political union between these clans has eluded them since the formation of the word “Abaluyia” in 1943. In essence, Luyia ethnicity did not exist before then. British ethnographers called all tribes in western Kenya “Kavirondos”, a pejorative term resented by the Luyia, Luo, Kalenjin, Kisii, Kuria, and Teso. The fight by these communities to redeem their respective ethnic pride was somewhat achieved when the name Kavirondo was expunged from official use and replaced by “Nyanza”, which in some Luyia dialects means “a large water body”. What we refer to as Western Kenya was then called North Nyanza.

Most of these clans that shared closely related ethnic polity did not have a centralised system of traditional governance. Around the Second World War, traditional leaders in pre-colonial Kenya realised the world had changed, and with it political parameters. Only organised societies with definite ethnic identities could survive and possibly benefit politically by bandying together. The so-called Luyia communities were not spared the effects of this political idea.

According to Encyclopedia Britannica, the word Luyia was first proposed by the local African Mutual Assistance Association in 1930 and adopted by the North Kavirondo Central Association in 1935, although some sub-communities’ elders rejected it. Their opposition gradually waned and the name started gaining currency.

In 1940, the Abaluyia Welfare Association was born, partly to popularise the name “Abaluyia” as a first step to creating a super ethnic identity. Shortly afterwards, a language committee was formed, and following its recommendations in 1943, the Luyia nation was born. It was formally adopted to describe a federation of lexically- related Bantu sub-tribes as a distinct tribal group living in the western part of Kenya.

According to Shadrack Bulimo, a Kenya-born ethnographer based in Edmonton Canada, “midwifing the super tribe was the easy bit; nurturing and developing socio-cultural institutions to anchor an impregnable system with national ethos, has evaded Abaluyia tribesmen for three generations. Over the years, talk of Luyia unity has waxed and waned depending on prevailing political temperatures, in a cyclical pattern that continues even today especially during electioneering.”

“Luyia unity is a favourite subject among politicians whenever elections are looming, but the same leaders are unwilling to jump into one political vehicle to harmonise the region’s socio-economic interests,” Bulimo argues.

Origins

The word Luyia is derived from Oluyia (the variation being Oluhya), which generically means a fireplace or hearth. It is believed that in pre-colonial Luyialand, members of a family, lineage or clan congregated around a bonfire in the evening to exchange the day’s news, or simply tell stories about war or clan matters. If a stranger joined them, they would ask, “Which Oluyia do you belong to?” to establish where the person was from in order to guard against threatening strangers or enemy infiltration.

Besides a family hearth, each clan had a common village gathering place where elders assembled to honour a village summon. This way, Oluyia also served as a village court where important matters were discussed, argued and adjudicated. It derived a different meaning but for a similar purpose. The village’s largest tree replaced the individual family’s hearth and became the focal point of Oluyia during the day. Gradually, when people said they were going for a meeting at Oluyia they meant the village common ground, rather than the literal fireplace. (Note the spelling of the word “Oluyia” without the “h”. The first Arabs encountered by Luyias are to blame for being unable to pronounce the word “Luyia” hence corrupting it by adding the letter “h” in their writing. Eventually, the new spelling came to be and was gradually adopted by scholars.)

The word Luyia is derived from Oluyia (the variation being Oluhya), which generically means a fireplace or hearth. It is believed that in pre-colonial Luyialand, members of a family, lineage or clan congregated around a bonfire in the evening to exchange the day’s news, or simply tell stories about war or clan matters.

The other meaning of Oluyia is both micro and macro. Those who share a fireplace as a lineage or clan belong to the same Oluyia (micro meaning). Thus when a group of clans come together they form Aba-luyia (sub-tribe) or Aba-luyia (macro-tribe). Nowadays the Abaluyia or Luhya generally means people who speak any of the closely- related 18 dialects found in Busia, Kakamega, Bungoma and Vihiga counties.

However, this group of 18 related nations have had distinct experiences under colonialism, and specifically under the various Christian missions. The missionary church played a huge role in the politics of the Luyia community and in the developments and cleavages of Luyia identity.

The Kenya-Uganda Railway reached Kisumu (then known as Port Florence) in 1901. Two years later, the Quakers (Friends Mission) started a mission hospital and primary school at Kaimosi in Tiriki. The Quakers would quickly become dominant in the area because, apart from evangelising, they introduced vocational training that imparted employable skills like carpentry, tailoring, masonry and machining to the natives.

A defining moment in the political history of Luyias had just been established. And somehow, the seed of discord among the community had also been sowed.

In the early 20th century, the various missionary societies active in the area concluded that competition for native souls was unhealthy and confusing, so they agreed to carve out spheres of jurisdiction in the region, just like during the “Scramble for Africa” when European powers did the same.

Under this pact, the Church Missionary Society – later called Church of the Province of Kenya (CPK) and today the Anglican Church of Kenya (ACK) – was assigned to evangelise among the Luo and the Marama. The Church of God was assigned Bunyore, Kisa and Butsotso. Friends African Mission (Quakers), with its headquarters in Kaimosi, was assigned Maragoli, Bukusu and Tiriki. Catholics were to concentrate on Wanga, Isukha and Idakho; the Mill Hill Fathers – also Catholic – anchored their mission at Mukumu in Isukha. The Pentecostal Assemblies of God (PAG) from Ontario, Canada, through Otto Keller, later established the mission at Nyangori. (Nyang’ori is located about 15km from Kisumu at the confluence of Nyanza, Rift Valley and Western Province.) Keller soon became very popular because he introduced drumming, which attracted locals to his church and annoyed Quakers who were already dominant in the area.

In the early 20th century, the various missionary societies active in the area concluded that competition for native souls was unhealthy and confusing, so they agreed to carve out spheres of jurisdiction in the region, just like during the “Scramble for Africa” when European powers did the same.

The Church Missionary Society (Anglicans) started a mission at Maseno, led by James Jamieson Willis and Hugh Saville, to preach to the Luo people. Maseno School later developed into one of the best centres of academic excellence in Kenya. Having been established at a borderline, many neighbouring Luyia boys were enrolled into the mission alongside Luos. After all, inter-marriage between the Luo and Luyia had existed along the Maseno borderline.

The British appointed Nabongo Mumia as paramount chief of the region in 1913. Nabongo Mumia acquired the first bicycle in 1910, making him the first Luyia to do so, and since then, the item has remained a precious possession amongst the Luyias. Mumia was also the first Luyia to own a motor car. He retired in 1926 and died in 1949 aged 100 years, and was buried at Itokho in Mumias. The first sewing machine was introduced in 1916 by the Singer Company, which sold it to the Irish CMS Missionary at Butere. Modernity or “civilization” had arrived in Luyialand.

The Bukusu were the only Luyia community to openly resist the colonialists in 1895. They built Chetambe Fort in Webuye to reinforce their battle with the white man. The British fought back their warriors in 1895, ending the Bukusu resistance. To date, Bukusus perceive themselves as brave warriors.

The Quakers and their mission

Islam was also present in Luyialand, and was brought to Wanga by Arab traders en route to Buganda in 1902. Beyond Wanga, there was little success in spreading the religion to the rest of Luyialand. Since Swahilis raided Bukusus for slaves, they met stiff resistance and hence few Bukusu converted to Islam. In Nabongo Mumia’s court, the Swahili occupied an envious position in the colonial administration. They were employed as tax collectors, informers and circumcisers of Wanga Muslims convertees, despite being associated with cunningness and corrupt practices. Today many Luyias refer to Abawanga as Abaswahili (implying cunning and untrustworthy people).

But it was the American Quakers Mission, which was dominant in the area, that became the site of major social transformation. The mission at Kaimosi was situated on a hill called Hill of Vision, which the locals referred to as Javujilachi (holy hill). The Quakers’ vision was premised on four pillars: education, health, industry and evangelism. Their arrival marked a radical approach that was different from that of earlier evangelists who only preached the gospel without investing in vocational and educational infrastructure.

Kaimosi was established in Tiriki where believers did not initially resist the American missionaries. (They especially enjoyed and appreciated the health facilities.) Yet things took a turn for the worse when the Quakers began to question the traditional Tiriki way of life. The backlash was so severe that by 1910, only eleven Tirikis remained as converts. With time, the missionary efforts were combined with other colonial instruments like schooling, waged labour, taxation, property laws and urbanisation. Christianity disrupted traditional social practices like marriage and circumcision.

But it was the American Quakers Mission…that became the site of major social transformation. The mission at Kaimosi was situated on a hill called Hill of Vision, which the locals referred to as Javujilachi (holy hill). The Quakers’ vision was premised on four pillars: education, health, industry and evangelism.

The Tirikis found themselves in a deep quagmire when their land was forcefully acquired by the missionaries, and when their culture was maligned and disrupted. They coexisted as uneasy neighbours with the Quakers, who they now disliked for their stand on polygamy and traditional culture. It meant that other Luyia communities gradually found refuge at the Kaimosi mission. Girls who sought refuge after running away from forceful suitors arrived at Kaimosi. Another sticking point was the presence of many non-Tiriki, especially Maragoli, as workers to the missionaries. This fostered the feeling that the mission favoured “outsiders”.

Where the Tiriki lost, the Maragoli gained. With a huge population occupying a small area, they migrated in droves to live among the Tiriki in Kaimosi, becoming a sizeable minority. As early as 1904, the Maragoli made up the majority labour force at Kaimosi, a trend that has continued to date.

At this point, Kaimosi was the only intermediate school in Luyialand where the rest of the sub-clans had to go for education past Standard 3. On arrival, they came face to face with the perceived Maragoli dominance at the mission, which caused resentment. Led by the Bukusu, the other communities felt that they were “there to be seen and not to be heard”. Most of the leading schools in Luyialand were either established or affiliated to Quakers; these included the Musingu, Kaimosi and Lugulu schools. However, the first government school (Kakamega High School) was built in 1932.

In any case, the Maragoli were the first Luyia to take advantage of the new economic and social opportunities presented by colonialism. They were among the first to join schools, so the Quakers found it easier to work with them as opposed to the Tiriki. Consequently, the Quakers, led by Emory Rees and his wife Deborah, arrived at Vihiga from South Africa, and between 1903 and 1926 they learnt the Maragoli language and translated the Bible and school texts. This made conversion to Christianity among the Maragoli much easier. To date, most Christian hymnals among the Luyia are written and sung in their language.

The Maragoli started drifting from their traditional ways after 1910 with the arrival and influence of the Quakers. They for instance gradually started to drift from traditional circumcision ceremonies altogether, preferring western medical practices. Their purview of customary belief systems also changed dramatically. Conversion to Christianity or adoption of Western values had no negative social backlash among them. Maragolis, hence, became the first amongst equals in the eyes of the missionaries and other Luyias.

In Kaimosi, the Quakers mission would gain even more prominence in 1927 when it was the centre of a Pentecostal revivalist rebellion led by native Africans. The discontent simmered until the missionaries met with rebels and they had no choice but to expel some members who went ahead to establish the African Spiritual Church (Dini Ya Roho). In 1942, Daudi Zakayo Kivuli also founded his own church: The African Israel Nineveh Church. He installed his wife Rebecca as the High Priestess and when she died in 1983, her grandson John Mweresa Kivuli, took over as the current High Priest. Their followers are noted for wearing white turbans.

In 1946, Dini Ya Musambwa (Religion of Ancestral Spirits) was established by Elijah Masinde as a protest movement against Christian churches, which preached against ancestral sacrifices and polygamy. The Bukusu revere him as a prophet (omung’osi). In 1957 another splinter group led by Saulo Chabuga formed the African Divine Church in Maragoli. By 2008 they had around 25,000 churches spread out in Kenya, Uganda and Tanzania.

After several misunderstandings and clamour for autonomy, the Kaimosi Quakers transferred the boys’ school from the Tiriki and Maragoli to the Bukusu, renaming it Friends School Kamusinga in the heart of Bukusuland in Kimilili. The seeds of future disunity were planted by that simple action. Bukusus started seeing themselves as equal to Maragolis, at least on the education (read civilisation) front.

Meanwhile, the Catholic missionaries tolerated local customs like polygamy, drinking alcohol and dancing at funerals. Locals in Isukha and Idakho who wanted to continue with this way of life found refuge amongst the Catholics, who did not condemn these practices too loudly. When they tried to replicate their success in Maragoli, they met stiff resistance – the Maragoli were already firmly embedded with the Quakers. The only Catholic mission arrived in the form of Maragoli Girls’ Secondary School at Mbale set up by Mill Hill Missionaries, and this was as late as 1971.

The Tiriki resistance to Christianity was finally broken when Chief Paul Amiani joined the Salvation Army in 1932, and by the sheer force of his personality built strong followers, offering the much-needed alternative to Quaker dominance. Through him, the Tiriki elders accepted their youth to undergo both Christian and traditional initiation ceremonies. They also embraced education as an engine for personal and economic development. But as they did this, the horse (read Maragoli) had already bolted with the diadem of “modernity”.

In fact, when the idea of forming an “Abaluyia” identity was mooted in 1943, resistance came from the Maragoli community, who made it known to all and sundry that the Maragoli were not part of the Luyia nation – they were simply Maragoli. Nevertheless, the Maragoli never formally or officially asked for the name to be expunged from the list of communities that form the Luyia nation, leaving them firmly included.

Pulling apart

Culturally, attempts to have what is often referred to as spoken standard Luyia have often hit a snag because no single dialect is understood by all sub-communities. Still, those who live in close geographical proximity tend to understand each other more easily, creating a pattern which can be sub-divided into four cluster areas: Cluster one – Logooli, Nyole, Tiriki; Cluster two – Isukha, Idakho, Kisa, Wanga, Batsotso and Marama; Cluster three – Bukusu, Tachoni, Kabras, Abanyala (Kakamega); and Cluster four – Samia, Marachi, Abakhayo, Abanyala (Busia). According to scholar Abraham Mirimo, “all Luyia dialects share a core lexical structure and only minor inflection in suffixation and prefixation divided them”.

Talk of Luyia unity and two groups strongly come to mind – the Bukusu and the Maragoli, who are always believed to be pulling apart. Is it a coincidence that they are also the most migratory and daring of all Luyia sub-nations? Sample this. The Bukusu are mainly found in Bungoma and Trans-Nzoia. They are the most populous of the Luyia sub-nations, forming about 20 per cent of the estimated six million Luyia population. (The name Bungoma is derived from Bongamek, a Kalenjin tribe that originally occupied the territory.) In the 10th Parliament, they had seven MPs representing their domiciled interest in Kanduyi, Bumula, Webuye, Sirisia, Kimilili, Tongaren, Kwanza and Saboti. Their presence is spread out and overlaps into Trans-Nzoia, Kakamega and Uasin Gishu counties.

Culturally, attempts to have what is often referred to as spoken standard Luyia have often hit a snag because no single dialect is understood by all sub-communities. Still, those who live in close geographical proximity tend to understand each other more easily, creating a pattern which can be sub-divided into four cluster areas…

Maragolis are also found beyond the boundaries of Vihiga County. In 1927 they ventured into Uriri in Migori County. The international language encyclopedia Ethnologue, Issue no.16, even lists the Maragoli as a tribe in Tanzania, across the border from Migori. A contingent of Maragoli immigrants settled in Bunyoro, Uganda in 1958 following an agreement between the British colonial government and the Kingdom of Bunyoro. Now estimated at around 35,000, the Maragoli were even allocated land at Kigumba in Kiryandogo district but are now spread to Ntoma and Masindi. They have an unofficial pressure group led by one Eliakimu Adola pushing for their official recognition as a fully-fledged Ugandan tribe, having settled there for over half a century.

Masinde Muliro, a Bukusu, proved quite a principled and fair leader who earned respect across the community. Born at Matili near Kimilili in 1920, he was among the founders of the FORD party, which struggled against President Daniel arap Moi’s one-party tyranny. Muliro instantly became the quintessential Luyia leader and is immortalised by a university in Kakamega, the Masinde Muliro University of Science and Technology (MMUST). On August 27, 2011, the government declared him a national hero.

Muliro came from the Bakokho clan, and his political defining moment came in 1975, when he voted against a government report into the murder of JM Kariuki. He was the only cabinet minister to do so. Peter Kibisu, an Assistant Minister for Labour and MP for Vihiga, also voted against the report. An angry President Jomo Kenyatta sacked both Muliro and Kibisu, tossing them into the political wilderness. Once again the Bukusu and Maragoli had proved their political mettle within the Luyia nation.

After Muliro’s sacking, Moses Substone Budamba Mudavadi stepped into his large shoes. By virtue of his close association with President Moi, Mudavadi – a Maragoli – wielded immense power that was felt across Luyialand and beyond. Wycliffe Musalia Mudavadi has followed as a titular Luyia leader, but his “gentle” mien attracted detractors who until today feel he lacks “fire in his belly”. Musalia, though, proved them all wrong in 2007, when under the ODM party he delivered 18 seats as the party’s torch bearer. So far he has cut his own apron strings by launching the Amani National Congress (ANC).

Another leader who earned respect across the Luyia community was the late Michael Christopher Kijana Wamalwa. Though raised a Bukusu, his roots can be traced to the Sabaot. Wamalwa’s father, Senator William Chemayek Ngeywo, was a Sabaot who changed his name to Wamalwa to get a missionary education as the Sabaot suffered discrimination in those days. (“Chemayek” in the Sabaot and indeed Kalenjin language is “alcohol” and its equivalent in naming is “Wamalwa” in Lu-bukusu.) Michael’s mother, Esther Nekesa, however, was a Bukusu from the Baengele clan. His Sabaot roots did not matter as he was raised Bukusu, underscoring that the Luyia nation is a confluence of Kalenjin, Maasai, Luo and Bantu ethnicities

Although political unity has been a slippery path for Luyias, their most astounding success has occurred outside politics. The Abaluyia United Football Club (AFC Leopards) was formed in 1964. All teams under the sub-tribal banners agreed to merge and form one team. You can be sure everything was smooth until the Maragolis opted to remain autonomous by keeping their Maragoli United Football Club. Still, the club remains the only veritable symbol of Luyia unity where leading personalities have always sought to be elected chairman or patron. Player unity on the pitch helped it to succeed in the East African region.

The Luyia have adequate social tools to unify them into one coherent force: inter-marriages, esikuti dance, Ingwe (leopard) as a tribal totem and other symbols. However, that all Luyias actually found themselves conjoined by colonialists makes it very difficult to lump them socio-culturally, politically and economically. They actually came from different directions and met within the boundaries of the so-called Western Province. Since they do not trace their lineage to one ancestor, like the Gikuyu with Mumbi or the Luos with Ramogi as their patriarch, it was arguably a convergence for convenience.

The Bukusu and Maragolis are undoubtedly great achievers among the Luyia sub-nations. Compared to other Luyia sub-nations, they know how to position themselves politically. Whereas Bukusus consider themselves warriors, Maragolis carry themselves as the elites of Luyialand who were the first to “see the light” when others were still in darkness. The two communities are also perceived to be haughty and domineering, a trait that repels both Maragolis and Bukusus from other Luyias. They have nowadays morphed into two great, conjoined siblings and none is ready to let go.

The Luyia have adequate social tools to unify them into one coherent force: inter-marriages, esikuti dance, Ingwe (leopard) as a tribal totem and other symbols. However, that all Luyias actually found themselves conjoined by colonialists makes it very difficult to lump them socio-culturally, politically and economically.

Indeed none is ready to be seen as subordinate to the other. They both have produced Vice Presidents in Kijana Wamalwa and Musalia Mudavadi, and in community leaders Masinde Muliro and Moses Mudavadi, and it appears as if they are always on a permanent ‘check-mate alert mode’. The recognition of Muliro in the naming of the biggest university in Luyialand located in Kakamega the headquarters of Luyias was perceived to be a scoop of sorts for the Bukusus. In addition, the biggest public park that convenes political rallies – Muliro Gardens – ‘the biggest Oluyia’ was also named after the great son of Bukusuland.

After all these years of push and pull based on historical and post-independent seeds of discord, it is clear that the elusive Luyia unity is still a long shot.

My friend James Wasike says, “as long as the Maragoli are always on standby to throw a spanner in the Bukusu works and vice-versa, Luyia unity will still remain a mirage”. Alternatively, as long as the Bukusu still harbour the Kaimosi grudge, where they were looked down upon by the Maragoli who are in any case their historical competitors, the Luyia nation will not be able to truly say: ‘I am my brother’s keeper’.

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